EXHIBITS
                                   ========

                                                              EXHIBIT NUMBER 11

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARY
STATEMENT RE:  COMPUTATION OF PER SHARE EARNINGS

                                              For the Three Months                  For the Nine Months
                                                Ended March 31,                       Ended March 31,
                                              ---------------------                 --------------------
                                                                    Amounts in thousands
                                                                                 
                                                 2001          2000                  2001          2000
                                                -------       -------               -------       -------
Net income                                       $6,560        $5,762               $18,125      $16,738
Weighted average common shares
  outstanding                                    10,550        11,252                10,594       11,429

Basic earnings per common shares                  $0.62         $0.51                 $1.71        $1.46
                                                =======       =======               =======      =======
Total weighted average common shares
  outstanding                                    10,550        11,252                10,594       11,429

Unvested shares of Recognition and
Retention Plan and common stock
  equivalents due to dilutive
  effect of stock options                           662           415                   573          568
                                                -------       -------               -------      -------
Total weighted average common shares and
  common share equivalents utilized for
  diluted earnings per share                     11,212        11,667                11,167       11,997
                                                =======       =======               =======      =======
Diluted earnings per common share and
  common share equivalents                        $0.59         $0.49                 $1.62        $1.40
                                                =======       =======               =======      =======

                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549
                               FORM 10-Q

[x]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended March 31, 2001

                                  OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

     For the transition period from                 to

     Commission file number 0-27782

                    DIME COMMUNITY BANCSHARES, INC.
        (Exact name of registrant as specified in its charter)

DELAWARE                                               11-3297463
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                      Identification Number)

209 HAVEMEYER STREET, BROOKLYN, NEW YORK                 11211
(Address of principal executive offices)                    (Zip Code)

                            (718) 782-6200
         (Registrant's telephone number, including area code)

Indicate  by check mark whether the registrant (1) has filed  all  the  reports
required to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding  12  months  (or  for  such  shorter  period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1)  YES  X    NO ___

Indicate  the number of shares outstanding of each of the issuer's  classes  of
common stock, as of the latest practicable date.

     CLASSES OF COMMON STOCK     NUMBER OF SHARES OUTSTANDING, APRIL 30, 2001

           $.01 Par Value                        11,358,989

                                     -2-

                          PART I - FINANCIAL INFORMATION

                                                                         PAGE
                                                                        -----
Item 1.  Financial Statements

         Consolidated  Statements  of  Condition  at  March 31, 2001
             (Unaudited) and June 30, 2000                                  3
         Consolidated Statements of Operations for the Three and Nine
             Months Ended March 31, 2001 and 2000 (Unaudited)               4
         Consolidated Statements of Changes in Stockholders' Equity
             for the Nine Months Ended March 31, 2001 and Comprehensive
             Income for the Three and Nine Months Ended March 31, 2001
             and 2000 (Unaudited)                                           5
         Consolidated  Statements of Cash Flows for the Nine Months
             Ended March 31, 2001 and 2000 (Unaudited)                      6
             Notes to Consolidated Financial Statements (Unaudited)         7

Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                   8-23

Item 3.  Quantitative and Qualitative Disclosure About Market Risk         23

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                 24
Item 2.  Changes in Securities and Use of Proceeds                         24
Item 3.  Defaults Upon Senior Securities                                   24
Item 4.  Submission of Matters to a Vote of Security Holders               24
Item 5.  Other Information                                                 24
Item 6.  Exhibits and Reports on Form 8-K                                  24
         Signatures                                                        25
         Exhibits

EXPLANATORY NOTES:  Statements contained in this Quarterly Report  on Form 10-Q
relating  to  plans,  strategies,  economic  performance and trends, and  other
statements that are not descriptions of historical facts may be forward-looking
statements within the meaning of Section 27A of  the Securities Act of 1933 and
Section  21E  of  the  Securities  Exchange  Act  of  1934.    Forward  looking
information is inherently subject to various factors which could  cause  actual
results  to  differ  materially  from  these estimates.  These factors include:
changes in general, economic and market  conditions, legislative and regulatory
conditions, or the development of an adverse  interest  rate  environment  that
adversely affects the interest rate spread or other income anticipated from our
operations  and  investments.   We  have  no obligation to update these forward
looking statements.

As used in this Form 10-Q, "we" and "us" and  "our"  refer  to  Dime  Community
Bancshares,  Inc.  and/or  its  consolidated  subsidiaries,  depending  on  the
context.

                                     -3-

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS EXCEPT SHARE AMOUNTS)

                                                                                                       
                                                                                             AT MARCH 31,
                                                                                                 2001                  AT JUNE 30,
                                                                                              (UNAUDITED)                 2000
ASSETS:                                                                                      ------------              -----------
Cash and due from banks                                                                           $20,737                  $15,371
Investment securities held to maturity (estimated market value of $4,038 and
   $17,351 at March 31, 2001 and June 30, 2000, respectively)                                       4,009                   17,489
Investment securities available for sale:
    Bonds and notes (amortized cost of $89,715 and $109,057 at March 31,
    2001 and June 30, 2000, respectively)                                                          89,795                  105,316
Marketable equity securities (historical cost of $14,238 and $14,948 at
    March 31, 2001 and June 30, 2000, respectively)                                                15,512                   15,805
Mortgage backed securities held to maturity (estimated market value of
    $10,134 and $13,263 at March 31, 2001 and June 30, 2000, respectively)                          9,954                   13,329
Mortgage backed securities available for sale (amortized cost of $442,009
    and $438,160 at March 31, 2001 and June 30, 2000, respectively)                               447,538                  429,361
Federal funds sold                                                                                 35,817                    9,449
Loans:
    Real estate                                                                                 1,868,616                1,713,552
    Other loans                                                                                     7,208                    7,648
    Less: Allowance for loan losses                                                               (15,397)                 (14,785)
                                                                                             ------------              -----------
    Total loans, net                                                                            1,860,427                1,706,415
                                                                                             ------------              -----------
Loans held for sale                                                                                   221                      100
Premises and fixed assets, net of accumulated depreciation                                         14,675                   14,771
Federal Home Loan Bank of New York Capital Stock                                                   44,382                   42,423
Other real estate owned, net                                                                          432                      381
Goodwill                                                                                           56,792                   60,254
Other assets                                                                                       66,236                   71,675
                                                                                             ------------              -----------
TOTAL ASSETS                                                                                   $2,666,527               $2,502,139
                                                                                             ============              ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Due to depositors                                                                              $1,333,215               $1,219,148
Escrow and other deposits                                                                          54,653                   35,161
Securities sold under agreements to repurchase                                                    455,603                  434,027
Federal Home Loan Bank of New York advances                                                       542,500                  555,000
Subordinated notes payable                                                                         25,000                   25,000
Other liabilities                                                                                  33,294                   26,634
                                                                                             ------------              -----------
TOTAL LIABILITIES                                                                               2,444,265                2,294,970
                                                                                             ------------              -----------
STOCKHOLDERS' EQUITY:
Preferred stock ($0.01 par, 9,000,000 shares authorized,
    none outstanding at March 31, 2000 and June 30, 2000)                                              -                        -
Common stock ($0.01 par, 45,000,000 shares authorized, 14,644,338 shares and
    14,583,765 shares issued at March 31, 2001 and June 30, 2000,
    respectively, and 11,358,389 shares and 11,664,174 shares outstanding
    at March 31, 2001 and June 30, 2000,  respectively)                                               145                      145
Additional paid-in capital                                                                        151,005                  150,034
Retained earnings                                                                                 145,310                  133,769
Accumulated other comprehensive income (loss)                                                       3,679                   (6,309)
Unallocated common stock of Employee Stock Ownership Plan                                          (6,483)                  (6,853)
Unearned common stock of Recognition and Retention Plan                                            (3,381)                  (4,324)
Common stock held by Benefit Maintenance Plan                                                      (2,449)                  (1,790)
Treasury stock, at cost (3,285,949 shares and 2,919,591 shares at March 31,
    2001 and June 30, 2000, respectively)                                                         (65,564)                 (57,503)
                                                                                             ------------              -----------
TOTAL STOCKHOLDERS' EQUITY                                                                        222,262                  207,169
                                                                                             ------------              -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                     $2,666,527               $2,502,139
                                                                                             ============              ===========

See notes to consolidated financial statements

                                     -4-

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)

                                                                 FOR THE THREE MONTHS                 FOR THE NINE MONTHS
                                                                    ENDED MARCH 31,                      ENDED MARCH 31,
                                                              ---------------------------          ------------------------
                                                                                                
                                                                 2001               2000              2001            2000
                                                              --------            -------          --------         -------
INTEREST INCOME:
Loans secured by real estate                                   $35,315            $30,489          $102,935         $86,585
OTHER LOANS                                                        145                158               482             468
INVESTMENT SECURITIES                                            1,821              2,231             6,293           7,375
MORTGAGE-BACKED SECURITIES                                       7,240              7,569            21,806          23,278
FEDERAL FUNDS SOLD                                               1,282              1,478             3,395           4,725
                                                              --------            -------          --------         -------
   TOTAL INTEREST  INCOME                                       45,803             41,925           134,911         122,431
                                                              --------            -------          --------         -------
INTEREST EXPENSE:
Deposits  and escrow                                            12,596             11,194            37,015          33,548
Borrowed funds                                                  16,240             13,985            48,542          38,849
                                                              --------            -------          --------         -------
   TOTAL INTEREST EXPENSE                                       28,836             25,179            85,557          72,397
      NET INTEREST INCOME                                       16,967             16,746            49,354          50,034
PROVISION FOR LOAN LOSSES                                           60                 60               680             180
                                                              --------            -------          --------         -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES             16,907             16,686            48,674          49,854
                                                              --------            -------          --------         -------
NON-INTEREST INCOME:
Service charges and other fees                                   1,149                939             3,201           3,040
Net gain (loss) on sales and redemptions of
    securities and other assets                                      1                (40)              791             (54)
Net gain (loss) on sales of loans                                    2                 (2)                2             (10)
Other                                                            1,049                545             2,780           2,067
                                                              --------            -------          --------         -------
   TOTAL NON-INTEREST INCOME                                     2,201              1,442             6,774           5,043
                                                              --------            -------          --------         -------
NON-INTEREST EXPENSE:
Salaries and employee benefits                                   3,542              3,601            10,194          10,557
ESOP and RRP compensation expense                                  770                936             2,187           3,125
Occupancy and equipment                                          1,031                941             3,065           2,823
Federal deposit insurance premiums                                  63                 65               189             297
Data processing costs                                              452                424             1,343           1,264
Goodwill amortization                                            1,154              1,154             3,462           3,462
Other                                                            1,773              1,690             5,514           5,178
                                                              --------            -------          --------         -------
   TOTAL NON-INTEREST EXPENSE                                    8,785              8,811            25,954          26,706
                                                              --------            -------          --------         -------
INCOME BEFORE INCOME TAXES                                      10,323              9,317            29,494          28,191
INCOME TAX EXPENSE                                               3,763              3,555            11,369          11,453
                                                              --------            -------          --------         -------
        NET INCOME                                              $6,560             $5,762           $18,125         $16,738
                                                              ========            =======          ========         =======
EARNINGS PER SHARE:
   BASIC                                                         $0.62              $0.51            $1.71            $1.46
                                                              ========            =======          ========         =======
   DILUTED                                                       $0.59              $0.49            $1.62            $1.40
                                                              ========            =======          ========         =======

See notes to consolidated financial statements

                                     -5-

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE
INCOME (UNAUDITED)    (IN THOUSANDS)

                                                                                     
                                                                                                     FOR THE NINE
                                                                                                     MONTHS ENDED
                                                                                                    MARCH 31, 2001
COMMON STOCK (PAR VALUE $0.01):                                                                    ---------------
Balance at beginning of period                                                                                $145
                                                                                                  ----------------
Balance at end of period                                                                                       145
                                                                                                  ----------------

ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of period                                                                             150,034
Stock options exercised                                                                                        600
Amortization of excess fair value over cost - ESOP stock                                                       371
                                                                                                  ----------------
Balance at end of period                                                                                   151,005
                                                                                                  ----------------

RETAINED EARNINGS:
Balance at beginning of period                                                                             133,769
Net income for the period                                                                                   18,125
Cash dividends declared and paid                                                                            (6,584)
                                                                                                  ----------------
Balance at end of period                                                                                   145,310
                                                                                                  ----------------

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET:
Balance at beginning of period                                                                              (6,309)
Change in unrealized gain (loss) on securities available for sale
   during the period, net of deferred taxes                                                                  9,988
                                                                                                  ----------------
Balance at end of period                                                                                     3,679
                                                                                                  ----------------

EMPLOYEE STOCK OWNERSHIP PLAN:
Balance at beginning of period                                                                              (6,853)
Amortization of earned portion of ESOP stock                                                                   370
                                                                                                  ----------------
Balance at end of period                                                                                    (6,483)
                                                                                                  ----------------

RECOGNITION AND RETENTION PLAN:
Balance at beginning of period                                                                              (4,324)
Purchase of common stock                                                                                      (503)
Amortization of earned portion of RRP stock                                                                  1,446
                                                                                                  ----------------
Balance at end of period                                                                                    (3,381)
                                                                                                  ----------------

BENEFIT MAINTENANCE PLAN:
Balance at beginning of period                                                                              (1,790)
Common stock acquired by BMP                                                                                  (659)
                                                                                                  ----------------
Balance at end of period                                                                                    (2,449)
                                                                                                  ----------------

TREASURY STOCK:
Balance at beginning of period                                                                             (57,503)
Purchase of 366,358 shares, at cost                                                                         (8,061)
                                                                                                  ----------------
Balance at end of period                                                                                   (65,564)
                                                                                                  ----------------

See notes to consolidated financial statements

STATEMENTS OF COMPREHENSIVE INCOME:
                                                                                                  
                                                    THREE MONTHS ENDED  THREE MONTHS ENDED  NINE MONTHS ENDED  NINE MONTHS ENDED
                                                       MARCH 31, 2001     MARCH 31, 2000     MARCH 31, 2001      MARCH 31, 2000
                                                    ------------------  ------------------  -----------------  -----------------
Net Income                                                      $6,560              $5,762            $18,125             16,738
Reclassification adjustment for securities sold,
   net of taxes of $29, during the three months
   ended March 31, 2000, and $(348),and $603 during
   the nine months ended March 31, 2001 and 2000,                   -                   33               (408)               708
   respectively.
Net unrealized securities gains (losses) arising
   during the period, net of deferred  taxes of
   $2,726 and $(1,730) during the three months ended
   March 31, 2001 and 2000, respectively and
   $8,857 and $(4,367) during the nine months
   ended March 31, 2001 and 2000, respectively.                  3,199              (2,031)            10,396             (5,127)
                                                    ------------------  ------------------  -----------------  -----------------
Total comprehensive income                                      $9,759              $3,764            $28,113            $12,319
                                                    ==================  ==================  =================  =================

See notes to consolidated financial statements

                                     -6-

 DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                                                          FOR THE NINE MONTHS
                                                                                                             ENDED MARCH 31,
                                                                                                     ----------------------------
                                                                                                                   
                                                                                                       2001                  2000
                                                                                                     -------              -------
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                         (In Thousands)
Net Income                                                                                           $18,125              $16,738
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net loss (gain) on investment and mortgage backed securities sold                                       (756)               1,314
Net gain on sale of other assets                                                                         (35)                 (37)
Net loss on sale of loans held for sale                                                                   -                    10
Net depreciation and amortization                                                                        657                  841
ESOP and RRP compensation expense                                                                      2,187                3,125
Provision for loan losses                                                                                680                  180
Goodwill amortization                                                                                  3,462                3,462
Increase in loans held for sale                                                                         (121)                  -
Increase in other assets and other real estate owned                                                  (3,087)              (2,625)
Decrease in other liabilities                                                                          6,660               12,260
                                                                                                     -------              -------
Net cash provided by operating activities                                                             27,772               35,268
                                                                                                     -------              -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in Federal funds sold                                                                  (26,368)              (28,215)
Proceeds from  maturities of investment securities held to maturity                                    3,000                   45
Proceeds from  maturities of investment securities available for sale                                  9,220              130,422
Proceeds from calls of investment securities held to maturity                                         10,500               10,000
Proceeds from calls of investment securities available for sale                                       20,175                2,400
Proceeds from sales of investment securities available for sale                                        1,729               21,772
Proceeds from sales of mortgage backed securities available for sale                                      -                 1,955
Proceeds from sales of mortgage backed securities available for sale                                      -                35,816
Purchases of investment securities available for sale                                                (10,265)            (133,811)
Purchases of mortgage backed securities available for sale                                           (56,596)             (44,455)
Principal collected on mortgage backed securities held to maturity                                     3,374                6,271
Principal collected on mortgage backed securities available for sale                                  52,866               54,955
Net increase in loans                                                                               (154,692)            (264,737)
Purchases of fixed assets                                                                               (818)                (611)
Purchase of Federal Home Loan Bank stock                                                              (1,959)             (13,195)
                                                                                                     -------              -------
Net cash used in investing activities                                                               (149,834)            (221,388)
                                                                                                     -------              -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in due to depositors                                                         114,067              (23,271)
Net increase (decrease) in escrow and other deposits                                                  19,492               (5,074)
Proceeds from (Repayment of) Federal Home Loan Bank of New York Advances                             (12,500)             275,000
Increase (Decrease) in securities sold under agreements to repurchase                                 21,576              (45,993)
Cash dividends paid                                                                                   (6,584)              (5,799)
Exercise of stock options and tax benefits of stock options and RRP                                      600                  164
Purchase of common stock by Benefit Maintenance Plan and RRP                                          (1,162)              (1,171)
Purchase of treasury stock                                                                            (8,061)             (10,751)
                                                                                                     -------              -------
Net cash provided by financing activities                                                            127,428              183,105
                                                                                                     -------              -------
INCREASE IN CASH AND DUE FROM BANKS                                                                    5,366               (3,015)
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD                                                          15,371               17,801
                                                                                                     -------              -------
CASH AND DUE FROM BANKS, END OF PERIOD                                                               $20,737              $14,786
                                                                                                     =======              =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes                                                                             6,548               12,654
                                                                                                     =======              =======
Cash paid for interest                                                                                80,740               70,708
                                                                                                     =======              =======
Transfer of loans to Other real estate owned                                                             228                  429
Change in unrealized gain (loss) on available for sale securities,                                   =======              =======
    net of deferred taxes                                                                              9,988               (4,418)
                                                                                                     =======              =======

See notes to consolidated financial statements

                                     -7-

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

1.   NATURE OF OPERATIONS

   Dime  Community Bancshares, Inc. is a Delaware corporation organized
in December 1995 at the direction of the Board of Directors of The Dime
Savings Bank  of  Williamsburgh  (referred to as the Bank), a federally
chartered savings bank, for the purpose of acquiring all of the capital
stock of the Bank issued in the Bank's conversion from a federal mutual
savings bank to a federal stock savings bank on June 26, 1996.

   The Bank has been, and intends  to  continue  to  be,  a  community-
oriented  financial institution providing financial services and  loans
for housing  within  its  market areas. We maintain our headquarters in
the Williamsburgh section of  the borough of Brooklyn.  As of March 31,
2001, the Bank has seventeen additional offices located in the boroughs
of Brooklyn, Queens, and the Bronx, and in Nassau County.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   In our opinion, the accompanying  unaudited  consolidated  financial
statements contain all adjustments (consisting only of normal recurring
adjustments)  necessary  for  a  fair  presentation  of  our  financial
condition  as  of  March  31,  2001,  the results of operations for the
three-month and nine-month periods ended  March 31, 2001 and 2000, cash
flows for the nine months ended March 31, 2001  and  2000,  changes  in
stockholders'  equity  for  the  nine  months  ended March 31, 2001 and
comprehensive income for the three-month and nine-month  periods  ended
March 31, 2001 and 2000.  The results of operations for the three-month
and  nine-month  periods  ended  March  31,  2001  are  not necessarily
indicative of the results of operations for the remainder  of the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with accounting principles  generally
accepted  in  the  United  States of America (referred to as U.S. GAAP)
have  been  omitted  pursuant to  the  rules  and  regulations  of  the
Securities and Exchange Commission.

   The preparation of financial statements in conformity with U.S. GAAP
requires management to  make  estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date  of the financial statements and the
reported amounts of revenues and expenses  during the reporting period.
Actual  results  could  differ  from  those  estimates.  Areas  in  the
accompanying  financial  statements  where  estimates  are  significant
include the allowance for loans losses and the  carrying value of other
real estate.

   These   consolidated  financial  statements  should   be   read   in
conjunction  with  our  audited consolidated financial statements as of
and for the year ended June 30, 2000 and notes thereto.

3.   TREASURY STOCK

   During the nine months  ended March 31, 2001, we repurchased 366,358
shares of our common stock into  treasury.  The  average  price  of the
treasury shares acquired was $22.00 per share, and all shares have been
recorded at the acquisition cost.

4.   RECENTLY ISSUED ACCOUNTING STANDARDS

     ACCOUNTING  FOR  TRANSFERS  AND  SERVICING OF FINANCIAL ASSETS AND
EXTINGUISHMENTS  OF  LIABILITIES - In September,  2000,  the  Financial
Accounting Standards Board  issued  Statement  of  Financial Accounting
Standards No. 140 "Accounting for Transfers and Servicing  of Financial
Assets  and  Extinguishments  of  Liabilities,"  ("SFAS 140") replacing
Financial  Accounting  Standards  Board Statement No.  125.   SFAS  140
revises the standard for accounting  and  reporting  for  transfers and
servicing   of   financial   assets  such  as  receivables,  loans  and
securities, factoring transactions,  wash  sales,  servicing assets and
liabilities, collateralized borrowing arrangements,  securities lending

                                     -8-

transactions, repurchase   agreements,   loan   participations,   and
extinguishments  of  liabilities.   The  new  standard  is   based   on
consistent   application   of   a  financial-components  approach  that
recognizes the financial and servicing  assets  a  company controls and
the liabilities a company has incurred, derecognizes  financial  assets
when  control  has  been  surrendered and derecognizes liabilities when
extinguished.    SFAS   140   provides    consistent   guidelines   for
distinguishing transfers of financial assets  from  transfers  that are
secured borrowings.  SFAS 140 is effective for transfers, servicing  or
extinguishments   occurring   after  March  31,  2001,  except  certain
provisions  relating  to  the accounting  and  disclosure  for  secured
borrowings and collateral for  which  the  effective  date  is June 30,
2001.   SFAS  140  is  not expected to have a material impact upon  the
Company's consolidated financial statements.

ITEM 2.    MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

   Dime Community Bancshares, Inc. is a Delaware corporation and parent
corporation of The Dime Savings  Bank  of Williamsburgh (referred to as
DSBW or the Bank), a federally chartered  stock savings bank.   We were
organized in December 1995 at the direction  of  the Board of Directors
of the Bank for the purpose of acquiring all of the  capital  stock  of
the  Bank  issued  in  the conversion of the Bank from a federal mutual
savings bank to a federal stock savings bank.

SELECTED FINANCIAL HIGHLIGHTS AND OTHER DATA
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                                FOR THE THREE MONTHS                      FOR THE NINE MONTHS
                                                                   ENDED MARCH 31,                          ENDED MARCH 31,
                                                           ---------------------------               ---------------------------
                                                                                                             
                                                             2001                 2000                 2001                 2000
                                                           ------               ------               ------               ------
PERFORMANCE AND OTHER SELECTED RATIOS:
Return on Average Assets                                     1.00%                0.95%                0.94%                0.94%
Return on Average Stockholders' Equity                      11.97                10.98                11.31                10.57
Core Return on Average Stockholders' Equity             11.69                10.26                11.10                10.05
Stockholders Equity to Total Assets                          8.34                 8.53                 8.34                 8.53
Tangible Equity to Total Tangible Assets                     6.10                 6.33                 6.10                 6.33
Loans to Deposits at End of Period                         140.72               134.63               140.72               134.63
Loans to Earning Assets at End of Period                    74.36                70.50                74.36                70.50
Average Interest Rate Spread                                 2.24                 2.41                 2.30                 2.51
Net Interest Margin                                          2.74                 2.88                 2.73                 2.93
Average Interest Earning Assets to average interest        109.26               110.18               108.98               110.11
bearing liabilities
Core Non-interest Expense to Average Assets              1.13                 1.22                 1.14                 1.27
Core Efficiency Ratio                                   38.74                40.87                39.53                41.03
Effective Tax Rate                                          36.45                38.16                38.55                40.63
Dividend payout ratio                                       32.20                34.69                35.19                35.00
AVERAGE TANGIBLE EQUITY                                  $156,041             $150,727             $149,187             $148,816
PER SHARE DATA:
Reported EPS (Diluted)                                       0.59                 0.49                 1.62                 1.40
Core EPS  (Diluted)                                      0.57                 0.46                 1.59                 1.33
Cash dividends per share                                     0.19                 0.17                 0.57                 0.49
Stated Book Value                                           19.57                17.22                19.57                17.22
Tangible Book Value                                         13.97                12.48                13.97                12.48
CASH EARNINGS DATA :
Cash Earnings                                               8,690                8,058               24,393               23,944
Cash EPS (Diluted)                                           0.78                 0.69                 2.18                 2.00
Core Cash EPS  (Diluted)                                 0.76                 0.66                 2.15                 1.93
Cash Return on Average Assets                                1.33%                1.32%                1.27%                1.34%
(TABLE CONTINUED ON NEXT PAGE)

                                     -9-

                                                                FOR THE THREE MONTHS                      FOR THE NINE MONTHS
                                                                   ENDED MARCH 31,                          ENDED MARCH 31,
                                                           ---------------------------               ---------------------------
                                                                                                             
                                                             2001                 2000                 2001                 2000
                                                           ------               ------               ------               ------
Cash Return on Average Stockholders' Equity                 15.86                15.36                15.23                15.11
Core Cash Return on Average Stockholders' Equity        15.57                14.64                15.02                14.60
Cash Non-interest Expense to Average Assets              1.02                 1.07                 1.02                 1.09
Cash Efficiency Ratio                                   34.72                35.73                35.58                35.37
ASSET QUALITY SUMMARY:
Net charge-offs                                               $45                  $24                  $68                 $536
Non-performing Loans                                        2,752                2,569                2,752                2,569
Other real estate owned                                       432                1,069                  432                1,069
Non-performing Loans/Total Loans                             0.15%                0.16%                0.15%                0.16%
Non-performing Assets/Total Assets                           0.12                 0.15                 0.12                 0.15
Allowance for Loan Loss/Total Loans                          0.82                 0.89                 0.82                 0.89
Allowance for Loan Loss/Non-performing Loans               559.48               573.18               559.48               573.18
REGULATORY CAPITAL RATIOS: (BANK ONLY)
Tangible capital                                             6.03%                5.50%                6.03%                5.50%
Leverage capital                                             6.03                 5.50                 6.03                 5.50
Total risk-based capital                                    12.68                10.71                12.68                10.71
EARNINGS TO FIXED CHARGES RATIOS
Including interest on deposits                               1.36x                1.37x                1.34x                1.39x
Excluding interest on deposits                               1.64                 1.67                 1.61                 1.73

 Amounts exclude gains and losses on sales of assets, and other significant
     non-recurring income or expense items.

 In calculating these ratios, non-interest expense excludes goodwill and
     core deposit intangible amortization.  The actual efficiency ratio and
     ratio of non-interest expense to average assets were 45.84% and 1.34%,
     respectively, for the three months ended March 31, 2001, 48.33% and 1.45%,
     respectively, for the three months ended March 31, 2000, 46.90% and 1.35%,
     respectively, for the nine months ended March 31, 2001, and  48.43% and
     1.49%, respectively, for the nine months ended March 31, 2000.  Amounts
     exclude non-cash expenses related to goodwill and core deposit intangible
     amortization and compensation expense related to stock benefit plans.

 In calculating these ratios, non-interest expense excludes non-cash
     expenses related to goodwill and core deposit intangible amortization and
     compensation expense related to stock benefit plans.

LIQUIDITY AND CAPITAL RESOURCES

   Our primary sources of  funds  are deposits, proceeds from principal
and  interest  payments  on  loans,  mortgage-backed   securities   and
investments,  borrowings,  and,  to  a lesser extent, proceeds from the
sale  of fixed-rate mortgage loans to the  secondary  mortgage  market.
While maturities  and  scheduled  amortization of loans and investments
are a predictable source of funds,  deposit flows, mortgage prepayments
and  mortgage loan sales are influenced  by  interest  rates,  economic
conditions and competition.

   Our primary investing activities are the origination of multi-family
real estate  mortgage  loans,  and  the purchase of mortgage-backed and
other  securities.   Increases  in interest  rates  during  the  period
January 2000 through December 2000  resulted  in  a decline in our loan
origination  activity.   Interest  rate  declines  during   the  period
December 2000 through March 2001 resulted in an increase in origination
activity  during  the  quarter  ended March 31, 2001.  During the  nine
months ended March 31, 2001, our  real estate loan originations totaled
$246.2 million compared to $390.8 million  for  the  nine  months ended
March  31,  2000.   Purchases  of  investment securities totaled  $10.3
million for the nine months ended March  31,  2001  compared  to $133.8
million  for  the nine months ended March 31, 2000, while purchases  of
mortgage-backed  securities  totaled  $56.6 million for the nine months
ended March 31, 2001 compared to $44.5  million  during the nine months
ended  March 31, 2000.  During the nine months ended  March  31,  2000,
purchases  and  sales of investment securities available exceeded their
typical levels due  to  our

                                     -10-

maintaining  higher levels of shorter-term
investment securities near December 31, 1999,  in response to liquidity
concerns related to the Year 2000.

   Funding for loan originations and security purchases during the nine
months  ended  March  31, 2001, was obtained primarily  from  principal
repayments on loans and  mortgage-backed securities, deposit growth and
maturities and calls of investment  securities. Principal repayments on
real estate loans and mortgage-backed securities totaled $154.1 million
during the nine months ended March 31, 2001, compared to $193.5 million
during the nine months ended March 31,  2000.   Interest rate increases
during  the  period  January  2000 through December 2000  significantly
slowed  principal  repayment  rates  on  both  real  estate  loans  and
mortgage-backed  securities  during   this  period,  particularly  loan
prepayments.   Maturities  and calls of investment  securities  totaled
$42.9 million during the nine  months  ended March 31, 2001, and $142.9
million during the nine months ended March  31,  2000.  During the nine
months ended March 31, 2000, we were concerned over  the  potential  of
excessive  deposit  outflows  due  to  customer  concerns over possible
computer problems upon turning to the Year 2000.  In order to alleviate
liquidity concerns that could have resulted in the  event  of excessive
deposit  outflows,  we  maintained  a  significant level of short-term,
liquid investments during this period.   As a result of the rollover of
these  short-term  securities,  our  level of  security  purchases  and
maturities were considerably higher during  the nine months ended March
31, 2000, than would have otherwise been planned.

   Deposits increased $114.1 million during the nine months ended March
31,  2001,  compared  to a decrease of $23.3 million  during  the  nine
months ended March 31,  2000.  The increase in deposits during the nine
months ended March 31, 2001  reflects  both increased marketing efforts
over  the  past  twelve  months which have helped  generate  additional
deposit balances in both certificate  and  non-certificate accounts, as
well as an apparent consumer trend to move monies  out  of mutual funds
and  into  depository  institutions.   The greatest growth during  this
period has been realized in our money market  accounts, which increased
$70.0  million  during  the  nine  months ended March  31,  2001.   The
decrease  in deposits during the nine  months  ended  March  31,  2000,
reflected the  runoff  of  higher-cost  certificate of deposit accounts
that were gathered from rate promotions during  the  fiscal  year ended
June 30, 1997.  The decline during this period also reflected  the sale
of  $19.0  million in deposits at our Gates Avenue, Brooklyn branch  in
November, 1999.   Deposit  flows  are affected by the level of interest
rates, the interest rates and products  offered  by  local competitors,
and  other  factors.   Certificates  of  deposit that are scheduled  to
mature in one year or less from March 31,  2001 totaled $487.0 million.
Based  upon  our  current  pricing  strategy  and   deposit   retention
experience,  we  believe  that we will retain a significant portion  of
such deposits.

   Stockholders equity increased  $15.1  million during the nine months
ended  March  31, 2001, due to the addition  of  net  income  of  $18.1
million and the  change  of  $10.0  million in the after-tax unrealized
gain  (loss)  on available for sale securities  from  a  loss  of  $6.3
million at June  30,  2000 to a gain of $3.7 million at March 31, 2001.
These increases to equity  were  partially  offset by cash dividends of
$6.6 million and treasury stock repurchases of  $8.1 million during the
same  period.   During  the  nine  months  ended  March  31,  2001,  we
repurchased  366,358  shares  of  our common stock into  treasury.  The
average price of the treasury shares acquired was $22.00 per share, and
all shares have been recorded at the acquisition cost.

   As  of  March  31,  2001,  we had 344,016  shares  remaining  to  be
repurchased under our Seventh Stock Repurchase Program.  Based upon the
closing market price of $27.25  per  share  for  our common stock as of
March 31, 2001, we would utilize approximately $9.4 million in funds in
order to repurchase all of the remaining authorized  shares  under  the
Seventh Stock Repurchase Program.

   On  April  19, 2001, we declared a cash dividend of $0.19 per common
share to all shareholders of record on April 30, 2001. This dividend is
payable on May 8, 2001.

   At March 31, 2001, the Bank's liquidity ratio was 10.5%.  The levels
of the Bank's short-term  liquid  assets  are  dependent  on the Bank's
operating, financing and investing activities during any given  period.
We  monitor  our liquidity position on a daily basis. Excess short-term
liquidity is invested  in  overnight

                                     -11-

federal  funds  sales and various
money  market  investments.  In the event that we should require  funds
beyond our ability to generate  them  internally, additional sources of
funds  are  available  through the use of  the  Bank's  $783.5  million
borrowing limit at the FHLBNY.  At  March 31, 2001, the Bank had $560.0
million in short- and medium-term advances  outstanding  at the FHLBNY,
and a remaining borrowing limit of $223.5 million.

   The  Bank  is  subject  to  minimum  capital regulatory requirements
imposed by the OTS, which requirements are,  as a general matter, based
on  the  amount  and composition of an institution's  assets.  Tangible
capital must be at  least 3.0% of total tangible assets and total risk-
based capital must be  at  least 8.0% of risk-weighted assets.  Insured
institutions  in  the  strongest  financial  management  condition  are
required to maintain Tier  1  capital  of  not  less than 3.0% of total
assets  (the  "leverage  capital  ratio").   For all other  banks,  the
minimum leverage capital requirement is 4.0%,  unless a higher leverage
capital  ratio  is  warranted by the particular circumstances  or  risk
profile of the institution.   At  March  31,  2001,  the  Bank  was  in
compliance   with   all  applicable  regulatory  capital  requirements.
Tangible capital totaled  $153.7  million,  or  6.03% of total tangible
assets, leverage capital  was 6.03% of adjusted assets, and total risk-
based capital was 12.68% of risk weighted assets. In addition, at March
31, 2001, the Bank was considered "well-capitalized" for all regulatory
purposes.

ASSET QUALITY

   Non-performing loans (loans past due 90 days or more as to principal
or interest) totaled $2.8 million at March 31, 2001,  compared  to $4.4
million at June 30, 2000.  The decline primarily reflects the repayment
in  full  of  one non-performing loan with an outstanding principal  of
$1.6 million during the period.  We also had 39 loans totaling $513,000
delinquent 60-89  days  at  March  31,  2001,  as  compared  to 25 such
delinquent  loans totaling $754,000 at June 30, 2000.  The majority  of
the non-performing  loans and loans delinquent 60-89 are represented by
FHA/VA mortgage and consumer  loans,  which  possess  small outstanding
balances.

   Under U.S. GAAP, we are required to account for certain  loan modifications
or  restructurings  as  ''troubled-debt  restructurings.''  In  general,   the
modification   or   restructuring   of  a  debt  constitutes  a  troubled-debt
restructuring if we, for economic or  legal  reasons related to the borrower's
financial difficulties, grant a concession to  the  borrower that we would not
otherwise   consider.    We   had   two   loans  classified  as  troubled-debt
restructurings at March 31, 2001, totaling  $3.6 million, compared to one such
loan totaling $700,000 at June 30, 2000.  During  the  quarter  ended December
31,  2000,  we  added  one  non-residential  real estate loan to troubled-debt
restructurings.  This loan was delinquent 60 days  at  September 30, 2000, and
was brought current on all interest through October 2000,  shortly after which
time  we  entered  into  a  payment  restructuring  agreement as a  result  of
weaknesses in the short-term cash flows surrounding the underlying collateral.
Under the terms of this restructuring agreement, repayments  of  all principal
and  interest  are scheduled to commence in April, 2002, and conclude  at  the
stated maturity  of  the loan in July, 2003.  In connection with this loan, we
added a provision of $500,000  to  our  allowance  for  loan losses during the
quarter  ended  December  31,  2000.   This  loan is also deemed  impaired  in
accordance with SFAS 114 at March 31, 2001.

   The remaining $700,000 troubled-debt restructuring loan is currently
on  accrual status and it has been performing in  accordance  with  the
restructuring  terms for over one year.  The current regulations of the
Office of Thrift  Supervision require that troubled-debt restructurings
remain classified as such until either the loan is repaid or returns to
its original terms.

   SFAS  114  provides   guidelines   for   determining  and  measuring
impairment in loans. For each loan that we determine  to  be  impaired,
impairment is measured by the amount the carrying balance of the  loan,
including all accrued interest, exceeds the estimate of fair value.   A
specific  reserve  is established within the allowance for loan losses,
to the extent of impairment.   Generally,  we  consider  non-performing
loans  to  be  impaired loans. The recorded investment in loans  deemed
impaired  was  approximately   $4.0  million  as  of  March  31,  2001,
consisting of four loans, compared  with $2.6 million at June 30, 2000,
consisting of three loans.  The average  balance  of impaired loans was

                                     -12-

$3.7 million for the nine months ended March 31, 2001  compared to $1.2
million for the nine months ended March 31, 2000.  The increase in both
the  current  and average balance of impaired loans resulted  primarily
from the addition  of  the  $2.9 million troubled-debt restructuring to
impaired status during the quarter  ended  December 31, 2000, which was
partially offset by the removal from impairment  of  the  $1.6  million
non-performing  loan  that  was  paid  in full during the quarter ended
March  31, 2001.  At March 31, 2001, reserves  totaling  $807,000  have
been allocated within the allowance for loan losses for impaired loans.
At March 31, 2001, non-performing loans exceeded impaired loans by $1.2
million.   This  difference  is  comprised of the previously noted $2.9
million troubled-debt restructuring  loan, which, while not included in
non-performing loans at March 31, 2001,  is  deemed impaired, and which
is partially offset by $1.7 million of one-to  four-family, cooperative
apartment and consumer loans, which, while on non-accrual  status,  are
not  deemed  impaired.   This  $1.7  million  in  one-  to four-family,
cooperative apartment, and consumer loans are not deemed impaired since
they have outstanding balances less than $227,000, and are considered a
homogeneous  loan  pool  that  are  not  required  to be evaluated  for
impairment.

   The  balance  of  other  real  estate  owned ("OREO") was  $432,000,
consisting  of 6 properties, at March 31, 2001  compared  to  $381,000,
comprised of  7  properties  at  June 30, 2000.  During the nine months
ended March 31, 2001, one property  with a recorded balance of $228,000
was transferred into OREO, and was partially  offset by the sale of two
properties  with  aggregate recorded balances of  $45,000  during  this
period.

   The  following table  sets  forth  information  regarding  our  non-
performing  loans,  non-performing assets, impaired loans and troubled-
debt restructurings at the dates indicated.

                                                                                  
                                                                      AT MARCH 31, 2001         AT JUNE 30, 2000
                                                                     ------------------         ----------------
                                                                                    (Dollars In Thousands)
NON-PERFORMING LOANS:
   One- to four-family                                                           $1,533                   $1,769
   Multi-family and underlying cooperative                                        1,040                    2,591
   Cooperative apartment                                                             54                       54
   Other loans                                                                      125                        7
                                                                     ------------------         ----------------
TOTAL NON-PERFORMING LOANS                                                        2,752                    4,421
TOTAL OREO                                                                          432                      381
                                                                     ------------------         ----------------
TOTAL NON-PERFORMING ASSETS                                                      $3,184                   $4,802
                                                                     ==================         ================
TROUBLED-DEBT RESTRUCTURINGS                                                     $3,624                     $700

TOTAL NON-PERFORMING ASSETS AND TROUBLED-DEBT
   RESTRUCTURINGS                                                                 6,808                    5,502
IMPAIRED LOANS                                                                    3,964                    2,591
TOTAL NON-PERFORMING LOANS TO TOTAL LOANS                                          0.15%                    0.26%
TOTAL IMPAIRED LOANS TO TOTAL LOANS                                                0.21                     0.15
TOTAL NON-PERFORMING ASSETS TO TOTAL ASSETS                                        0.12                     0.19
TOTAL NON-PERFORMING ASSETS AND TROUBLED-DEBT
   RESTRUCTURINGS TO TOTAL ASSETS                                                  0.26                     0.22

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2001 AND JUNE 30, 2000

   ASSETS. Our assets  totaled $2.67 billion at March 31, 2001, an increase of
$164.4 million from total  assets  of  $2.50  billion  at  June 30, 2000.  The
growth  in  assets  was  experienced  primarily  in  real estate loans,  which
increased  $155.1 million since June 30, 2000.  The increase  in  real  estate
loans resulted

                                     -13-

primarily from real estate loan originations of $246.2 million
during the nine months  ended  March  31,  2001,  of which $215.2 million were
multi-family and underlying cooperative loans.  Real  estate  loan origination
levels,  which  had declined from April 2000 through December 2000,  increased
from January 2001  through  March  2001  as  a  result  of  recent declines in
interest  rates.   While  real  estate  loan origination levels have  recently
declined,  our  loan  portfolio  has  still  increased   as   a  result  of  a
corresponding  decline in prepayment levels.  Both the decline in  origination
and prepayment levels  have  resulted  from the interest rate increases during
the period January, 2000 through December,  2000. Principal repayments on real
estate  loans increased during the period January  2001  through  March  2001,
compared  to  the  levels  experienced  from April 2000 through December 2000.
This  increase has also resulted from recent  reductions  in  interest  rates,
which have increased loan re-financing activities.

   Mortgage-backed  securities  available  for  sale  increased  $18.2 million
during  the  nine months ended March 31, 2001.  Of this total increase,  $14.3
million resulted  from  the  increase in the market value of these securities.
Federal funds sold increased $26.4  million  due  to increased deposit inflows
near month- end during March 2001, as these funds had  not yet been applied to
higher-yielding investments as of March 31, 2001.

   Offsetting  these  increases was a decline of $29.3 million  in  investment
securities held to maturity  and  available for sale.  We experienced calls of
$30.7 million on these securities during the nine months ended March 31, 2001,
as a result of recent declines in interest  rates.   These funds were utilized
to fund loan originations and purchase mortgage-backed securities.

   LIABILITIES.  Total liabilities increased $149.3 million  during  the  nine
months ended March 31, 2001, due primarily to an increase of $114.1 million in
deposits.  The growth  in  deposits  resulted from both the success of various
sales and marketing activities during  the  past  twelve months, as well as an
apparent consumer trend to move monies out of mutual funds and into depository
institutions.   The  sales and marketing activities targeted  growth  in  non-
certificate balances (with  particular emphasis upon money market and checking
accounts)  and  customer  households   (with   a   focus   upon   relationship
development).  In addition, escrow and other deposits increased $19.5  million
during this period as a result of growth in mortgage escrow funds.  The growth
in  deposits  and escrow were utilized to fund the growth in loans during  the
period, with excess  deposit flows retained in federal funds sold at March 31,
2001.  Borrowings, which  grew $9.1 million during the nine months ended March
31, 2001, were experienced  solely  in  securities  sold  under  agreement  to
repurchase  transactions.  These borrowings were utilized to fund purchases of
mortgage-backed  securities  during the period.  Within borrowings, securities
sold  under  agreement  to repurchase  increased  borrowings  increased  $21.6
million during the nine months  ended March 31, 2001, due to a recent increase
in  capital leverage transaction purchases,  while  FHLBNY  advances  declined
$12.5  million,  as  deposit  growth  has  provided adequate funding for asset
growth during the period.

     STOCKHOLDERS' EQUITY.  Stockholders equity increased $15.1 million during
the nine months ended March 31, 2001.  See "Liquidity and Capital Resources."

   CAPITAL LEVERAGE STRATEGY. As a result of  the  initial  public offering in
June,   1996,   our   capital  level  significantly  exceeded  all  regulatory
requirements.  A portion  of  the  "excess"  capital  generated by the initial
public  offering  has  been  deployed  through the use of a  capital  leverage
strategy  whereby  we  invest  in  high  quality   mortgage-backed  securities
(referred to as leverage assets) funded by short term  borrowings from various
third  party  lenders  under  securities  sold under agreement  to  repurchase
transactions.  The capital leverage strategy generates additional earnings for
us  by virtue of a positive interest rate spread  between  the  yield  on  the
leverage  assets  and  the  cost of the borrowings.  Since the average term to
maturity of the leverage assets  exceeds  that  of the borrowings used to fund
their purchase, the net interest income earned on  the leverage strategy would
be expected to decline in a rising interest rate environment,  and increase in
a falling rate environment.  To date, the capital leverage strategy  has  been
undertaken  in  accordance  with limits established by our Board of Directors,
aimed  at enhancing profitability  under  moderate  levels  of  interest  rate
exposure.   Due to increases in interest rates during the period January, 2000
through December  2000,  which  have  resulted in less favorable interest rate

                                     -14-

spreads on capital leverage transactions,  we  reduced  our  activity in these
transactions.  Additionally, as our capital ratios decline, we expect that our
emphasis   on  increasing  the  overall  level  of  these  transactions   will
accordingly  decline.   During  the  three  months  ended  March  31, 2001, we
purchased  $56.6  million  in  mortgage-backed  securities  under  the capital
leverage strategy in response to interest rate declines, which made the spread
between the leverage asset and borrowing more favorable.

COMPARISON OF THE OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH  31, 2001
     AND 2000

   GENERAL.  Net  income  was $6.6 million during the three months ended March
31, 2001, an increase of $798,000  over  net income of $5.8 million during the
three months ended March 31, 2000.  During  this  period,  net interest income
increased  $221,000,  non-interest income increased $759,000 and  non-interest
expense declined $26,000,  resulting  in  increased  pre-tax  income  of  $1.0
million.   Income  tax expense increased $208,000 as a result of the increased
pre-tax income.

   NET INTEREST INCOME.   The  discussion of net interest income for the three
months ended March 31, 2001 and  2000,  presented  below,  should  be  read in
conjunction  with  the  following  table, which sets forth certain information
relating to our consolidated statements  of  operations  for  the three months
ended  March 31, 2001 and 2000, and reflects the average yield on  assets  and
average  cost  of liabilities for the periods indicated. Such yields and costs
are derived by dividing  income or expense by the average balance of assets or
liabilities, respectively, for the periods shown. Average balances are derived
from average daily balances.  The  yields  and  costs  include  fees which are
considered adjustments to yields.

                                     -15-

ANALYSIS OF NET INTEREST INCOME (UNAUDITED)

                                                                For the Three Months Ended March 31,
                                           --------------------------------------------------------------------------------------
                                                                2001                                           2000
                                           --------------------------------------------------------------------------------------
                                                                                                     
                                                                             AVERAGE                                      AVERAGE
                                               AVERAGE                        YIELD/           AVERAGE                     YIELD/
                                               BALANCE        INTEREST         COST            BALANCE        INTEREST      COST
                                           ------------      ---------      ---------        ----------      ---------    -------
Assets:                                                                  (DOLLARS IN THOUSANDS)
  Interest-earning assets:
    Real Estate Loans                    $1,829,188        $35,315           7.72%       $1,607,406        $30,489       7.59%
    Other loans                                   6,977            145           8.31             7,499            158       8.43
    Mortgage-backed securities              438,322          7,240           6.61           464,420          7,569       6.52
    Investment securities                   119,517          1,821           6.09           148,691          2,231       6.00
    Other                                        79,444          1,282           6.45            97,631          1,478       6.06
                                           ------------      ---------      ---------        ----------      ---------    -------
      TOTAL INTEREST-EARNING ASSETS           2,473,448        $45,803           7.41%        2,325,647        $41,925       7.21%
                                           ------------      =========                       ----------      =========
     NON-INTEREST EARNING ASSETS                146,895                                         107,245
                                           ------------                                      ----------
TOTAL ASSETS                                 $2,620,343                                      $2,432,892
                                           ============                                      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
  INTEREST-BEARING LIABILITIES:
    Now and Super Now                           $25,446            $75           1.20%          $26,886            $78       1.17%
    Money Market accounts                       192,345          2,058           4.34           112,893          1,230       4.38
    Savings accounts                            355,879          1,778           2.03           380,271          1,927       2.04
    Certificates of deposit                     656,790          8,685           5.36           627,488          7,959       5.10
    Borrowed funds                            1,033,257         16,240           6.37           963,143         13,985       5.84
                                           ------------      ---------      ---------        ----------      ---------    -------
      TOTAL INTEREST-BEARING LIABILITIES      2,263,717        $28,836           5.17%        2,110,681        $25,179       4.80%
                                           ------------      =========                       ----------      =========
  Checking accounts                              61,045                                          58,965
  Other non-interest-bearing liabilities         76,399                                          53,397
                                           ------------                                      ----------
      TOTAL LIABILITIES                       2,401,161                                       2,223,043
  STOCKHOLDERS' EQUITY                          219,182                                         209,849
                                           ------------                                      ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                    $2,620,343                                      $2,432,892
                                           ============                                      ==========

NET INTEREST INCOME/ INTEREST RATE
   SPREAD                                                  $16,967           2.24%                         $16,746       2.41%
                                                             =========                                       =========
NET INTEREST-EARNING ASSETS/ NET
   INTEREST MARGIN                         $209,731                          2.74%         $214,966                      2.88%
                                           ============                                      ==========
RATIO OF INTEREST-EARNING ASSETS
   TO INTEREST-BEARING LIABILITIES                                             109.26%                                     110.18%

  In computing the average balance of loans, non-accrual loans have been
      included.

  Includes securities classified "held to maturity" and "available for sale."

  Net interest rate spread represents the difference between the average rate
      on interest-earning assets and the average cost of interest-bearing
      liabilities.

  Net interest margin represents net interest income as a percentage of
      average interest-earning assets.

                                     -16-

RATE/VOLUME ANALYSIS

                                                                 THREE MONTHS ENDED
                                                                   MARCH 31, 2001
                                                                    COMPARED TO
                                                                 THREE MONTHS ENDED
                                                                   MARCH 31, 2000
                                                                INCREASE/ (DECREASE)
                                                                      DUE TO
                                                                       
                                                   VOLUME              RATE             TOTAL
                                               --------------      ------------     -------------
  Interest-earning assets:                                   (DOLLARS IN THOUSANDS)
    Real Estate Loans                                  $4,255              $571            $4,826
    Other loans                                           (11)               (2)              (13)
    Mortgage-backed securities                           (429)              100              (329)
    Investment securities                                (441)               31              (410)
    Other                                                (283)               87              (196)
                                               --------------      ------------     -------------
      Total                                            $3,091              $787            $3,878
                                               ==============      ============     =============
  Interest-bearing liabilities:
    NOW and Super Now accounts                            $(5)               $2               $(3)
    Money market accounts                                 849               (21)              828
    Savings accounts                                     (131)              (18)             (149)
    Certificates of deposit                               347               379               726
    Borrowed funds                                      1,003             1,252             2,255
                                               --------------      ------------     -------------
      Total                                             2,063             1,594             3,657
                                               --------------      ------------     -------------
Net change in net interest income                      $1,028             $(807)             $221
                                               ==============      ============     =============

   Net  interest  income  for  the three months ended March 31, 2001 increased
$221,000 to $17.0 million from $16.7  million  during  the  three months ended
March 31, 2000. This increase was attributable to an increase  of $3.9 million
in  interest income, which exceeded the increase of $3.7 million  in  interest
expense.  The net interest rate spread declined 17 basis points from 2.41% for
the three  months  ended  March  31,  2000 to 2.24% for the three months ended
March 31, 2001, and the net interest margin  declined  14  basis  points  from
2.88% to 2.74% during the same period.

   The decline in interest rate spread and net interest margin both reflect  a
37  basis  point increase in the average cost of interest bearing liabilities,
resulting primarily  from an increase in the average cost of borrowed funds of
53 basis points and certificate of deposit accounts of 26 basis points.  These
interest rate increases all reflect increases in general interest rates during
the period January 1,  2000  through  December 31, 2000.  The narrowing of the
interest rate spread and net interest margin  also  reflects the $70.1 million
increase in average borrowed funds, which possess the  highest average cost of
interest bearing liabilities.  These borrowings have been  utilized  to fund a
portion  of  our  loan  growth during the period.  Our issuance, on April  12,
2000, of $25.0 million in  subordinated  notes  with a stated annual coupon of
9.25% also contributed to the growth in interest expense on borrowed funds.

   During the three months ended March 31, 2000,  the  Federal Reserve Bank of
New  York  increased its overnight borrowing rate by 25 basis  points  on  two
different occasions,  moving  from a beginning rate of 5.50% to an ending rate
of 6.0%.  This rate was subsequently  increased  an additional 50 basis points
during the period April 2000 through December 2000 to 6.5%, which is where it
stood at December 31, 2000.  During the three months ended March 31, 2001, the
Federal Reserve Bank of New York reduced its federal  funds  borrowing rate by
50  basis  points  on  three  different  occasions, moving from the  beginning
overnight borrowing rate of 6.5% to 5.0% as  of  March  31, 2001.  Because the
majority  of our interest earning assets and interest bearing  liabilities  do
not reprice daily, we experience delays

                                     -17-

in recognizing the effects of interest
rate movements.   As  a result, despite the significant reductions in interest
rates  by the Federal Reserve  Bank  of  New  York,  which  have  brought  the
overnight  borrowing rate at March 31, 2001 below its level at March 31, 2000,
our overall  yield  on  interest  earning  assets and cost on interest bearing
liabilities were higher during the quarter ended  March  31,  2001 compared to
March 31, 2000.

   Currently, our liabilities possess a shorter average term to  maturity than
our  assets.   For  example,  approximately  $283.0 million of our outstanding
borrowings as of March 31, 2001, are scheduled  to  mature  prior  to June 30,
2001.   Since  our  liabilities  possess  shorter average maturities than  our
assets,  we anticipate that the reduction in  interest  rates  will  favorably
impact our  net interest income in the upcoming six months.  See "Quantitative
and Qualitative Disclosure About Market Risk."

   INTEREST INCOME.   Interest  income  for  the  three months ended March 31,
2001, was $45.8 million, an increase of $3.9 million from $41.9 million during
the three months ended March 31, 2000. The increase  in  interest  income  was
attributable  to  increased  interest  income  on  real  estate  loans of $4.8
million.    The   increase  in  interest  income  on  real  estate  loans  was
attributable primarily to an increase of $221.8 million in the average balance
of real estate loans,  resulting  from  $341.8  million  of  real estate loans
originated during the twelve-month period ended March 31, 2001, which exceeded
the growth also recognized in loan prepayments during this period.   Partially
offsetting  the increase in interest income on real estate loans were declines
of $329,000 in interest on mortgage-backed securities and $410,000 in interest
on investment  securities,  reflecting  declines  in average balances of $26.1
million  in  mortgage  backed  securities  and  $29.2  million  in  investment
securities.  Investment security average balances declined  due  to  runoff in
these  securities from calls and/or maturities.  The average balance of  these
securities  during  the  most  recent  quarter  was below its level during the
comparable quarter of the previous year due to a  decline in purchase activity
and balance in these securities during the period April  2000 through December
2000.   See "Capital Leverage Strategy."  However, we recently  increased  our
balance of mortgage-backed securities.

   Overall,  the  yield  on  interest-earning assets increased 20 basis points
from 7.21% during the three months  ended  March  31, 2000 to 7.41% during the
three months ended March 31, 2001.  The increase was attributable primarily to
increases  in the average yield of 13 basis points on  real  estate  loans,  9
basis points on both mortgage-backed securities and investment securities, and
39 basis points  on  other  interest  earning assets, resulting primarily from
general market interest rate increases  during  the  period April 2000 through
December 2000.

   INTEREST  EXPENSE.   Interest  expense  increased $3.7  million,  to  $28.9
million  during the three months ended March  31,  2001,  from  $25.2  million
during the  three months ended March 31, 2000.  This increase resulted in part
from increased  interest  expense  of  $2.3  million  on borrowed funds, which
resulted  from both an increase in the average cost of borrowed  funds  of  53
basis points  during  the  three  months  ended March 31, 2001 compared to the
three months ended March 31, 2000, and an increase  in  the average balance of
$70.1 million during this same period.  The increase in the average balance of
borrowed  funds  resulted  in  part  from  the  addition of $25.0  million  in
subordinated debt on April 12, 2000, at a stated  annual coupon of 9.25%.  The
subordinated notes contributed $599,000 to interest expense during the quarter
ended March 31, 2001.  The increase in average cost  of  borrowed  funds  also
reflects  both  the overall increase in interest rates during the period April
2000 through December  2000,  as  well  as  a non-recurring prepayment penalty
charge of $239,000 that increased interest expense  on  borrowings  during the
quarter  ended  March  31,  2001.   During  the  quarter ended March 31, 2001,
reductions in general interest rates provided some  reduction in our borrowing
costs, which partially offset the aforementioned items.

   Interest  expense  on money market accounts increased  $828,000,  resulting
from an increase of $79.5  million  in  the  average balance of these deposits
during  this  period.  The growth in the average  balance  of  these  accounts
resulted from ongoing  promotions related to these accounts.  Interest expense
on certificates of deposits also increased $726,000 due to both an increase of
26 basis points in average  cost  of  these  deposits,  reflecting the overall
increase in interest rates during the period April 2000 through December 2000,

                                     -18-

as well as an increase in average balance of $29.3 million during this period,
resulting from both deposit promotions as well as an apparent  consumer  trend
to move monies out of mutual funds and into depository institutions.  Interest
expense on savings accounts declined $149,000 due a decline in average balance
in  these accounts of $24.4 million, which much of these funds being moved  to
money market accounts.

   PROVISION  FOR  LOAN  LOSSES.   The  provision  for loan losses was $60,000
during both the three months ended March 31, 2001 and 2000.  Our overall asset
quality  remained  solid.  See "Asset Quality."  The loan  loss  provision  of
$60,000 during the period  reflects  both  our response to continued growth in
real estate loans and our recognition of slight  increases  in  delinquent and
impaired  loans.  The allowance for loan losses increased $15,000  during  the
three months  ended  March  31,  2001,  as  the loan loss provision of $60,000
exceeded net charge-offs of $15,000 during the period.

   NON-INTEREST  INCOME.   Non-interest  income  increased  $759,000  to  $2.2
million during the three months ended March 31, 2001, from $1.4 million during
the three months ended March 31, 2000.  The  increase  resulted primarily from
our investment in Bank Owned Life Insurance (hereafter referred to as "BOLI").
The  BOLI  investment was instituted in May 2000 and contributed  $527,000  to
other non-interest  income  during  the  quarter  ended  March  31,  2001.  In
addition,  fee  income  increased  $210,000  due  primarily  to an increase of
$126,000 in deposit customer fees.

   NON-INTEREST EXPENSE. Non-interest expense was $8.8 million during both the
quarter ended March 31, 2001 and the quarter ended March 31, 2000.

   Salary  and  employee  benefits  declined  $225,000  during  this   period.
Employee benefit plan restructurings, which became effective on July 1,  2000,
resulted  in  cost savings of $484,000 in salary and employee benefits expense
during this period.   Partially  offsetting  these  savings  were increases in
salaries  and  401(k)  plan  expenses,  as  401(k)  plan  contributions   were
reinstated effective July 1, 2000.

   Occupancy  and  equipment  expense  increased  $90,000, due primarily to an
increase in utility costs on branch properties.

   Other  expenses  increased $83,000 due primarily to  increased  advertising
expenses of $139,000.

   INCOME TAX EXPENSE.  Income  tax  expense increased $208,000, or 6%, during
the quarter ended March 31, 2001 compared to the quarter ended March 31, 2000.
Our effective tax rate declined from 38.2% to 36.5% during this period, due to
the favorable tax status on income associated with our recent BOLI investment.

COMPARISON OF THE OPERATING RESULTS FOR  THE  NINE MONTHS ENDED MARCH 31, 2001
     AND 2000

   GENERAL. Net income was $18.1 million during  the  nine  months ended March
31, 2001, an increase of $1.4 million over net income of $16.7  million during
the nine months ended March 31, 2000.  During this period, an increase of $1.7
million  in  non-interest  income  and  a  decline of $752,000 in non-interest
expense, was partially offset by a decline of  $680,000 in net interest income
and an increase of $500,000 in the provision for loan losses.

   NET INTEREST INCOME.  The discussion of net interest  income  for  the nine
months  ended  March  31,  2001  and  2000, presented below, should be read in
conjunction with the following table, which  sets  forth  certain  information
relating  to  our  consolidated  statements  of operations for the nine months
ended March 31, 2001 and 2000, and reflects the  average  yield  on assets and
average cost of liabilities for the periods indicated. Such yields  and  costs
are derived by dividing income or expense by the average balance of assets  or
liabilities, respectively, for the periods shown. Average balances are derived
from  average  daily  balances.  The  yields  and costs include fees which are
considered adjustments to yields.

                                     -19-

ANALYSIS OF NET INTEREST INCOME (UNAUDITED)

                                                                For the Nine Months Ended March 31,
                                           --------------------------------------------------------------------------------------
                                                                2001                                           2000
                                           --------------------------------------------------------------------------------------
                                                                                                     
                                                                             AVERAGE                                      AVERAGE
                                               AVERAGE                        YIELD/           AVERAGE                     YIELD/
                                               BALANCE        INTEREST         COST            BALANCE        INTEREST      COST
                                           ------------      ---------      ---------        ----------      ---------    -------
Assets:                                                                 (DOLLARS IN THOUSANDS)
  Interest-earning assets:
    Real Estate Loans                    $1,777,994       $102,935           7.72%       $1,518,935        $86,585       7.60%
    Other loans                                   7,086            482           9.07             7,525            468       8.29
    Mortgage-backed securities              430,040         21,806           6.76           484,213         23,278       6.41
    Investment securities                   131,336          6,293           6.39           157,108          7,375       6.26
    Other                                        67,601          3,395           6.70           106,330          4,725       5.92
                                           ------------      ---------      ---------        ----------      ---------    -------
      TOTAL INTEREST-EARNING ASSETS           2,414,057       $134,911           7.45%        2,274,111       $122,431       7.18%
                                           ------------      =========                       ----------      =========
     NON-INTEREST EARNING ASSETS                146,910                                         108,680
                                           ------------                                      ----------
TOTAL ASSETS                                 $2,560,967                                      $2,382,791
                                           ============                                      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY:
  INTEREST-BEARING LIABILITIES:
    Now and Super Now                           $25,891           $230           1.18%          $26,931           $236       1.17%
    Money Market accounts                       174,028          5,625           4.31            84,246          2,629       4.15
    Savings accounts                            363,183          5,533           2.03           393,966          6,048       2.04
    Certificates of deposit                     635,882         25,627           5.37           649,202         24,635       5.05
    Borrowed funds                            1,016,151         48,542           6.36           910,993         38,849       5.68
                                           ------------      ---------      ---------        ----------      ---------    -------
      TOTAL INTEREST-BEARING
         LIABILITIES                          2,215,135        $85,557           5.15%        2,065,338        $72,397       4.67%
                                           ------------      =========                       ----------      =========
  Checking accounts                              59,188                                          55,210
  Other non-interest-bearing
      liabilities                                73,031                                          51,014
                                           ------------                                      ----------
      TOTAL LIABILITIES                       2,347,354                                       2,171,562
  STOCKHOLDERS' EQUITY                          213,613                                         211,229
                                           ------------                                      ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                    $2,560,967                                      $2,382,791
                                           ============                                      ==========
NET INTEREST INCOME/ INTEREST RATE
   SPREAD                                                  $49,354           2.30%                         $50,034       2.51%
                                                             =========                                       =========
NET INTEREST-EARNING ASSETS/NET
   INTEREST MARGIN                         $198,922                          2.73%         $208,773                      2.93%
                                           ============                                      ==========
RATIO OF INTEREST-EARNING ASSETS
   TO INTEREST-BEARING LIABILITIES                                             108.98%                                     110.11%

 In computing the average balance of loans, non-accrual loans have been
     included.

 Includes securities classified "held to maturity" and "available for sale."

 Net interest rate spread represents the difference between the average rate
     on interest-earning assets and the average cost of interest-bearing
     liabilities.

 Net interest margin represents net interest income as a percentage of
     average interest-earning assets.

                                     -20-

RATE/VOLUME ANALYSIS

                                                                 NINE MONTHS ENDED
                                                                   MARCH 31, 2001
                                                                    COMPARED TO
                                                                 NINE MONTHS ENDED
                                                                   MARCH 31, 2000
                                                                INCREASE/ (DECREASE)
                                                                      DUE TO
                                                                       
                                                   VOLUME              RATE             TOTAL
                                               --------------      ------------     -------------
  Interest-earning assets:                                 (DOLLARS IN THOUSANDS)
    Real Estate Loans                                 $14,875            $1,475           $16,350
    Other loans                                           (29)               43                14
    Mortgage-backed securities                         (2,674)            1,202            (1,472)
    Investment securities                              (1,223)              141            (1,082)
    Other                                              (1,837)              507            (1,330)
                                               --------------      ------------     -------------
      Total                                            $9,112            $3,368           $12,480
                                               ==============      ============     =============
  Interest-bearing liabilities:
    NOW and Super Now accounts                            $(9)               $3               $(6)
    Money market accounts                               2,847               149             2,996
    Savings accounts                                     (478)              (37)             (515)
    Certificates of deposit                              (537)            1,529               992
    Borrowed funds                                      4,761             4,932             9,693
                                               --------------      ------------     -------------
      Total                                             6,584             6,576            13,160
                                               --------------      ------------     -------------
Net change in net interest income                      $2,528           $(3,208)            $(680)
                                               ==============      ============     =============

   Net  interest income for the nine months ended  March  31,  2001  decreased
$680,000  to  $49.3  million  from  $50.0 million during the nine months ended
March 31, 2000. This decrease was attributable to an increase of $13.2 million
in interest expense, which exceeded the  increase of $12.5 million in interest
income.  The net interest rate spread declined  21 basis points from 2.51% for
the nine months ended March 31, 2000 to 2.30% for  the nine months ended March
31, 2001, and the net interest margin declined 20 basis  points  from 2.93% to
2.73% during the same period.

   The decline in interest rate spread and net interest margin both  reflect a
48  basis  point increase in the average cost of interest bearing liabilities,
resulting primarily  from an increase in the average cost of borrowed funds of
68 basis points, certificates of deposit accounts of 32 basis points and money
market accounts of 16 basis points.  These interest rate increases all reflect
increases in general interest  rates  during  the  period  April  2000 through
December  2000.   The  narrowing  of the interest rate spread and net interest
margin also reflects the $105.2 million  increase  in  average borrowed funds,
which possess the highest average cost of interest bearing  liabilities.   Our
issuance,  on  April  12,  2000, of $25.0 million in subordinated notes with a
stated annual coupon of 9.25%  also  contributed  to  the  growth  in interest
expense  on  borrowed  funds.   During  the  quarter  ended  March  31,  2001,
reductions  in general interest rates provided some reduction in our borrowing
costs, which partially offset the aforementioned items.

   During the  three  months ended March 31, 2000, the Federal Reserve Bank of
New York increased its  overnight  borrowing  rate  by  25 basis points on two
different occasions, moving from a beginning rate of 5.50%  to  an ending rate
of  6.0%.  This rate was subsequently increased an additional 50 basis  points
during the period April 2000 through December 2000 to 6.5%, which is where it
stood at December 31, 2000.  During the three months ended March 31, 2001, the
Federal  Reserve  Bank of New York reduced its federal funds borrowing rate by
50 basis points on  three  different  occasions,  moving  from  the  beginning

                                     -21-

overnight  borrowing  rate of 6.5% to 5.0% as of March 31, 2001.  Because  the
majority of our interest  earning  assets  and interest bearing liabilities do
not reprice daily, we experience delays in recognizing the effects of interest
rate movements.  As a result, despite the significant  reductions  in interest
rates  by  the  Federal  Reserve  Bank  of  New  York,  which have brought the
overnight borrowing rate at March 31, 2001 below its level  at March 31, 2000,
our  overall  yield  on  interest earning assets and cost on interest  bearing
liabilities were higher during  the  nine months ended March 31, 2001 than the
nine months ended March 31, 2000.

   INTEREST INCOME.  Interest income for the nine months ended March 31, 2001,
was $134.9 million, an increase of $12.5  million  from  $122.4 million during
the  nine  months  ended March 31, 2000. The increase in interest  income  was
attributable to increased  interest  income  on  real  estate  loans  of $16.4
million.    The   increase  in  interest  income  on  real  estate  loans  was
attributable primarily to an increase of $259.1 million in the average balance
of real estate loans,  resulting  from  $341.8  million  of  real estate loans
originated  during  the  twelve-month period ended March 31, 2001.   Partially
offsetting the increase in  interest income on real estate loans was a decline
of $1.3 million in income on  other  interest  earning  assets  (comprised  of
federal funds sold, commercial paper, and FHLBNY capital stock).  This decline
resulted  from  a  decline  in  the  average  balance of these assets of $38.7
million, as we maintained a higher than normal  level  of  investment in these
short-term  assets  during the quarter ended December 31, 1999  for  liquidity
purposes.   See  "Liquidity   and  Capital  Resources."   Interest  income  on
mortgage-backed securities declined  $1.5  million,  reflecting  a  decline of
$54.2 million in average balance, and interest income on investment securities
declined  $1.1  million,  reflecting  a  decline  in  average balance of $25.8
million.  These declines in average balance resulted from our ongoing shift in
composition of interest earning assets towards real estate loans.  The average
balance of these securities during the nine months ended  March  31,  2001 was
below  its  level  during the comparable period of the previous year due to  a
decline in purchase activity and balance in these securities during the period
April 2000 through December  2000.  See "Capital Leverage Strategy."  However,
we recently increased our balance of mortgage-backed securities.

   Overall, the yield on interest-earning  assets  increased  27  basis points
from  7.18%  during  the nine months ended March 31, 2000 to 7.45% during  the
nine months ended March  31, 2001.  The increase was attributable primarily to
increases in the average yield  of  12  basis  points on real estate loans, 35
basis  points  on  mortgage-backed securities and 78  basis  points  on  other
interest earning assets, resulting primarily from general market interest rate
increases during the  period  April  2000  through December 2000.  The average
interest rate on real estate loan originations  during  the  nine months ended
March 31, 2001 was 8.09%, compared to 7.41% during the nine months ended March
31, 2000, reflecting the increase in general market interest rates  during the
period April 2000 through December 2000.

   INTEREST  EXPENSE.   Interest  expense  increased  $13.2  million, to $85.6
million during the nine months ended March 31, 2001, from $72.4 million during
the  nine  months ended March 31, 2000. This increase resulted primarily  from
increased interest  expense  of $9.7 million on borrowed funds, which resulted
from both an increase in the average balance of $105.2 million during the nine
months ended March 31, 2001 compared  to the nine months ended March 31, 2000,
and an increase in the average cost of borrowed funds of 68 basis points.  The
increase in the average balance of borrowed  funds resulted from the growth in
FHLBNY advances from $250.0 million at June 30,  1999  to  $542.5  million  at
March  31, 2001.  While much of this growth occurred during the period July 1,
1999 through  June 30, 2000, the full effects of this growth was recognized in
the average balance  computation  for  the  nine  months ended March 31, 2001,
while  only  a  portion  of the growth was recognized in  the  computation  of
average balance for the nine  months  ended  March  31,  2000.   In  addition,
average borrowings grew as a result of the $25.0 million in subordinated  debt
added on April 12, 2000, at a stated annual coupon of 9.25%.  The subordinated
notes  contributed  $1.8  million  to  interest expense during the nine months
ended March 31, 2001.  The increase in average cost of borrowed funds reflects
both a prepayment penalty charge of $239,000  that  increased interest expense
on  borrowings  during  the  quarter  ended March 31, 2001,  and  the  overall
increase in interest rates during the period April 2000 through December 2000.
Further, interest expense on money market  accounts  increased  $3.0  million,
resulting from both an increase of $89.8 million in the average balance and an
increase of 16 basis points in average cost of these deposits during the  nine

                                     -22-

months  ended  March  31,  2001 compared to the same period of the prior year.
The increase in average balance  and  average  cost  of  money market accounts
reflects  the growth of these accounts from ongoing interest  rate  promotions
during the  period  July  1, 1999 through March 31, 2001.  Interest expense on
certificates of deposits also  increased  $992,000,  which  resulted  from  an
increase  of 32 basis points in the average cost of these deposits, reflecting
the overall  increase  in  interest rates during the period April 2000 through
December 2000.  Interest expense  on  savings accounts declined $515,000 due a
decline in average balance in these accounts  of  $30.8 million, which much of
these funds being moved to money market accounts.

   PROVISION  FOR  LOAN LOSSES.  The provision for loan  losses  was  $680,000
during the nine months  ended  March 31, 2001, compared to $180,000 during the
nine months ended March 31, 2000.  During the quarter ended December 31, 2000,
an additional provision of $500,000 was recorded related to a recent troubled-
debt  restructuring  loan.  Otherwise,  our  overall  asset  quality  remained
relatively stable.  See "Asset Quality."  The remaining loan loss provision of
$180,000 during the period  reflects  both our response to continued growth in
real estate loans and our recognition of  slight  increases  in delinquent and
impaired loans.  The allowance for loan losses increased $612,000  during  the
nine  months  ended  March  31,  2001,  as the loan loss provision of $680,000
exceeded net charge-offs of $68,000 during the period.

   NON-INTEREST INCOME.  Non-interest income  increased  $1.7  million to $6.8
million during the nine months ended March 31, 2001, from $5.0 million  during
the nine months ended March 31, 2000.  The increase resulted primarily from an
increase  of  $845,000  on  the  gain  on the disposal of securities and other
assets.  During the nine months ended March  31,  2001, the Company recorded a
gain on the sale of equity investments of $756,000.   During  the  nine months
ended  March 31, 2000, we recorded net losses of $1.2 million associated  with
the sales  of investments and mortgage-backed securities, which were offset by
a gain of $1.2  million  on the sale of deposits at the Gates Avenue, Brooklyn
branch.  Additionally, our  investment  in  BOLI,  which was instituted in May
2000, contributed $1.6 million to other non-interest  income  during  the nine
months ended March 31, 2001.  Loan prepayment fees, a component of other  non-
interest  income,  declined  $891,000 to $446,000 during the nine months ended
March 31, 2001 compared to $1.3 million during the nine months ended March 31,
2000,  but were partially offset  by  increased  bank  retail  fee  income  of
$221,000 during this period.

   NON-INTEREST  EXPENSE.  Non-interest expense decreased $752,000, from $26.7
million during the nine months  ended  March 31, 2000, to $26.0 million during
the nine months ended March 31, 2001.

   Salary and employee benefits declined  $1.3  million  during  this  period.
Employee benefit plan restructurings, which became effective on July 1,  2000,
provided  declines  of  $2.0 million in salaries and employee benefits expense
during this period.  Partially  offsetting  these  declines  were increases in
salaries  and  401(k)  plan  expenses,  as  401(k)  plan  contributions   were
reinstated effective July 1, 2000.

   Occupancy  and  equipment  expense  increased  $242,000,  due  primarily to
increased rental, utility and branch property costs on our branch offices that
aggregated approximately $116,000 during the nine moths ended March  31,  2001
compared to the nine months ended March 31, 2000.  In addition, we experienced
increased  depreciation  expense of $99,000 during the nine months ended March
31, 2001, due to the accelerated  depreciation  of computer equipment acquired
from Financial Bancorp, Inc. in January 1999.  This  accelerated depreciation,
which resulted from our revised estimate of the estimated  useful  life of the
equipment,

   Federal deposit insurance premiums also declined $108,000 during  the  nine
months  ended  March  31,  2001  compared  to March 31, 2000, as a result of a
reduction in our insurance rate that was instituted in January 2000.

   Other expenses increased $336,000 due primarily  to  an increase in banking
operational  losses  of  $163,000, the majority of which occurred  during  the
quarter  ended  December 31,  2000,  and  increased  advertising  expenses  of
$228,000.

                                     -23-

   INCOME TAX EXPENSE.  Income  tax expense decreased $84,000, during the nine
months ended March 31, 2001 compared  to the nine months ended March 31, 2000,
despite an increase in pre-tax income of $1.3 million.  Our effective tax rate
declined  from  40.6%  to 38.6% during this  period,  due  to  additional  tax
benefits associated with  activities  of  subsidiary  companies as well as the
favorable tax status on income associated with our recent BOLI investment.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

   Quantitative and qualitative disclosure about  market  risk is presented at
June 30, 2000 in Exhibit 13.1 to our Annual Report on Form  10-K,  filed  with
the  Securities  and Exchange Commission on September 28, 2000.  The following
is an update of the discussion provided therein:

   GENERAL. Our largest component of market risk continues to be interest rate
risk.  Virtually all  of this risk continues to reside at the Bank level.  The
Bank still is not subject  to  foreign  currency  exchange  or commodity price
risk.   At  March  31,  2001, we owned no trading assets, nor did  we  utilize
hedging transactions such as interest rate swaps and caps.

   ASSETS,  DEPOSIT LIABILITIES  AND  WHOLESALE  FUNDS.   There  has  been  no
material change in the composition of assets, deposit liabilities or wholesale
funds from June 30, 2000 to March 31, 2001.

   GAP ANALYSIS.   There  has been no material change in the computed one-year
interest rate gap from June 30, 2000 to March 31, 2001.

   INTEREST RATE RISK COMPLIANCE.   We  continue  to  monitor  the  impact  of
interest  rate  volatility upon net interest income and net portfolio value in
the same manner as  at  June  30,  2000.   There were  no changes in our board
approved  limits  of  acceptable  variance  in net  interest  income  and  net
portfolio value at March 31, 2001 compared to  June  30,  2000.   On April 19,
2001,  the Board of Directors approved the following changes in net  portfolio
value ("NPV") limits:

         CHANGE IN
       INTEREST RATE         PREVIOUS          CURRENT
     (IN BASIS POINTS)       NPV LIMIT        NPV LIMIT
    -------------------      ---------        ---------
           -300                7.00%              8.00%
           -200                6.50               8.00
           -100                6.00               8.00
        Flat (Base)            5.50               8.00
           +100                5.00               7.00
           +200                4.50               6.00
           +300                4.00               5.00

   The projected  changes  in net interest income and net portfolio value have
continuously  fallen  within the  approved  board  limits  at  all  levels  of
potential interest rate volatility.

   As a federal savings  bank,  the Bank is required to monitor changes in the
net  present  value of the expected  future  cash  flows  of  its  assets  and
liabilities, which  is referred to as net portfolio value or NPV. In addition,
we monitor the Bank's  NPV  ratio,  which  is its NPV divided by the estimated
market value of total assets. The NPV ratio  can  be  viewed as a corollary to
the  Bank's  capital  ratios.  To  monitor the Bank's overall  sensitivity  to
changes in interest rates, we simulate  the effect of instantaneous changes in
interest rates of up to 200 basis points on the Bank's assets and liabilities.
As of December 31, 2000, an increase in interest  rates  of  200  basis points
would have reduced the Bank's NPV by approximately 22.5%, resulting  in an NPV
ratio  of 8.04%.  There can be no assurance that future changes in the  Bank's
mix of assets  and  liabilities  will not result in more extensive declines in
the Bank's NPV and NPV ratio. Our focus on multi-family lending may subject us
to greater risk of an adverse impact  on our operations from a downturn in the
economy.  While we are currently reviewing  the  Bank's  NPV calculation as of

                                     -24-

March 31, 2001, we anticipate that the Bank's NPV ratio, under  an increase in
interest rates of 200 basis points, will remain above 6.00%

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

   We are involved in various legal actions arising in the ordinary  course of
its business that, in the aggregate, involve amounts which are believed  to be
immaterial to our financial condition and results of operations.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5.     OTHER INFORMATION

     None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

     (k) EXHIBITS
           Exhibit 11. Statement Re:  Computation of Per Share Earnings

     (B)   REPORTS ON FORM 8-K

           None.

                                     -25-

                              SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,  the
registrant  has  duly  caused  this  report  to be signed on its behalf by the
undersigned thereunto duly authorized.

                                 Dime Community Bancshares, Inc.

                                       /s/ VINCENT F. PALAGIANO
Dated:    May 14, 2001            By: ____________________________________
                                      Vincent F. Palagiano
                                      Chairman of the Board and Chief
                                         Executive Officer

                                       /s/ KENNETH J. MAHON
Dated:    May 14, 2001            By: ____________________________________
                                      Kenneth J. Mahon
                                      Executive Vice President and Chief
                                         Financial Officer