SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                              FORM 10-K

 X  ANNUAL   REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF   THE
    SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
    For the Fiscal Year Ended June 30, 1996

    TRANSITION  REPORT  PURSUANT TO SECTION  13  OR  15(d)  OF  THE
    SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
    For the transaction period from        to

                    Commission file Number 0-27782

                     Dime Community Bancorp, Inc.
        (Exact Name of registrant as specified in its charter)

            Delaware                           11-3297463
 (State or other jurisdiction of            (I.R.S. employer
        incorporation or                 identification number)
          organization)
                                                    
 209 Havemeyer Street, Brooklyn,                 11211
               NY                              (Zip Code)
 (Address of principal executive
            offices)

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

     Securities Registered Pursuant to Section 12(b) of the Act:
                                 None

     Securities Registered Pursuant to Section 12(g) of the Act:
                Common Stock, par value $.01 per share
                           (Title of Class)

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

   Indicate  by  check  mark if disclosure of  delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not be contained, to the best of Company's knowledge, in
definitive  proxy  or  information  statements  incorporated   by
reference in Part III of this Form 10-K or any amendments to this
Form 10-K.   [ X]

   As  of  September 23, 1996, there were issued and  outstanding
14,547,500  shares of the Company's Common Stock.  The  aggregate
market  value of the voting stock held by non-affiliates  of  the
Company as of September 23, 1996 was $ 177,877,005.  This  figure
is based upon the closing price on the NASDAQ National Market for
a  share  of  the  Company's Common Stock, $0.01  par  value,  on
September  23, 1996, which was $13.625 as reported  in  the  Wall
Street Journal on September 24, 1996.

                        TABLE OF CONTENTS
                                                       Page
                             PART 1
Item 1.  Business

General..............................................................     3
      Acquisition of Conestoga Bancorp,Inc...........................     4
      Market Area and Competition....................................     6
      Lending Activities.............................................     7
      Asset Quality..................................................    15
      Allowance for Loan Losses......................................    17
      Investment Activities..........................................    20
      Sources of Funds...............................................    24
      Subsidiary Activities..........................................    27
      Personnel......................................................    27
      Federal , State and Local Taxation
         Federal Taxation............................................    27
         State and Local Taxation....................................    28
      Regulation
         General.....................................................    29
            Regulation of Federal Savings Associations...............    30
            Regulation of Holding Company............................    38
            Federal Securities Laws..................................    39
Item 2. Properties...................................................    40
Item 3. Legal Proceedings............................................    41
Item 4. Submission of Matters to a Vote of Security Holders..........    41

                             PART II
Item 5. Market for the Company's Common Stock and Related
        Stockholder Matters..........................................    41
Item 6. Selected Financial Data......................................    43
Item 7. Management Discussion and Analysis of Financial Condition
        and Results of Operations
      Management's Strategy..........................................    45
      Analysis of Net Interest Income................................    49
      Rate/Volume Analysis...........................................    50
      Comparison of Financial Condition..............................    50
      Comparison of Operating Results................................    52
      Liquidity and Capital Resources................................    55
      Impact of Inflation and Changing Prices........................    56
      Impact of Accounting Standards.................................    56
Item 8. Financial Statements and Supplementary Data..................    59
Item 9. Changes in and Disagreements with Accountants on
        Accounting and Financial Disclosure..........................    89

                            PART III
Item 10. Directors and Executive Officers of the Company.............    89
Item 11. Executive Compensation......................................    89
Item 12. Security Ownership of Certain Beneficial Owners
         and Management..............................................    89
Item 13. Certain Relationships and Related Transactions..............    89

                             PART IV
Item 14. Exhibits, Financial Statement Schedules,
         and Reports on Form 8-k ....................................    90
Signatures...........................................................    92

   Statements  contained  in  this Annual  Report  on  Form  10-K
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 risks and uncertainties, and actual results
could differ materially from those currently anticipated due to a
number of factors, which include, but are not limited to, factors
discussed  under  the captions "Item 1 -Business  and  Item  7  -
Management's  Discussion and Analysis" below,  and  elsewhere  in
this  Form  10-K.  The Company has no obligation to update  these
forward looking statements.
                                
                             PART I

Item 1.   Business

General

   Dime  Community Bancorp, Inc. (the "Company")  is  a  Delaware
corporation organized in December, 1995 at the direction  of  the
Board of Directors of the Dime Savings Bank of Williamsburgh (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  (the
"Conversion").   In connection with the Conversion,  the  Company
issued 14,547,500 shares (par value $0.01) of common stock  at  a
price  of $10.00 per share to the Bank's eligible depositors  who
subscribed  for  shares and to an Employee Stock  Ownership  Plan
("ESOP")  established by the Company.  The Company  realized  net
proceeds of $141.4 million from the sale of its common stock  and
utilized  approximately $76.4 million of the proceeds to purchase
100%  of the Bank's common stock and $11.6 million to fund a loan
to  the ESOP for its purchase of 1,163,800 shares, or 8%, of  the
Company's common stock.  The remaining proceeds of $53.4  million
were retained by the Company.

   The  primary business of the Company is the operation  of  its
wholly-owned  subsidiary,  the Bank. In  addition  to  directing,
planning  and coordinating the business activities of  the  Bank,
the Company retained proceeds of $53.4 million in connection with
the  Conversion, which are invested in federal funds, short-term,
investment   grade  marketable  securities  and   mortgage-backed
securities.  The Company also holds a note evidencing  the   loan
that  it  made  to  the ESOP to purchase 8% of its  common  stock
issued in the Conversion.  See - "-Regulation - Regulation of the
Holding Company."

   The  Company  is  a unitary savings and loan holding  company,
which, under existing law, is generally not restricted as to  the
types  of  business activities in which it may  engage,  provided
that  the Bank continues to be a qualified thrift lender.   Under
regulations of the Office of Thrift Supervision ("OTS") the  Bank
is  a  qualified  thrift lender if its ratio of qualified  thrift
investments to portfolio assets ("QTL Ratio") is 65% or more,  on
a  monthly average basis in nine of every twelve months.  At June
30,  1996,  the  Bank's  QTL Ratio was  76%,  and  the  Bank  has
maintained  more  that 65% of its portfolio assets  in  qualified
thrift  investments  in  at least nine of  the  preceding  twelve
months.

   In  the  future, the Company may organize or acquire,  through
merger   or   otherwise,  other  subsidiaries,  including   other
financial  institutions, or branches thereof, or other  financial
services  related  companies,  although  there  are  no   current
arrangements,  understandings or agreements  regarding  any  such
acquisition or expansion.

   The  Company neither owns nor leases any property but  instead
uses  the  premises and equipment of the Bank.   At  the  present
time,  the Company does not employ any persons other than certain
officers of the Bank who do not receive any extra compensation as
officers of the Company.  The Company utilizes the support  staff
of  the  Bank from time to time, as needed.  Additional employees
may  be  hired  as  deemed appropriate by the management  of  the
Company.

   Unless otherwise disclosed, the information presented in  this
Form  10-K  reflect  the  financial  condition  and  results   of
operations  of the Company and the Bank on a consolidated  basis.
At  June  30, 1996, the Company had total consolidated assets  of
$1.37  billion, which included $131.1 million of excess  proceeds
resulting  from  the  oversubscription to the  Company's  initial
public  offering, which  was refunded on July 1,  1996.   Certain
information  which  discloses percentages of  total  assets  will
include  parenthetical  disclosure for "Adjusted  Assets,"  which
represents  total  assets  adjusted  for  the  refund  of  excess
proceeds on July 1, 1996.

   The  Bank's principal business has been, and continues to  be,
gathering  deposits from customers within its  market  area,  and
investing those deposits, primarily in multi-family and  one-  to
four-family    residential   mortgage   loans,    mortgage-backed
securities, and obligations of the U.S. Government and Government
Sponsored  Entities  ("GSEs"). The Bank's  revenues  are  derived
principally  from interest on its loan and securities portfolios.
The   Bank's  primary  sources  of  funds  are:  deposits;   loan
amortization,    prepayments   and   maturities;    amortization,
prepayments  and  maturities  of mortgage-backed  and  investment
securities;  and,  to  a lesser extent, the  sale  of  fixed-rate
mortgage  loans  to the secondary market.  The  Bank  is  also  a
member  of the Federal Home Loan Bank of New York ("FHLBNY")  and
is eligible to utilize the FHLBNY as a source of borrowed funds.

Acquisition of Conestoga Bancorp, Inc.

   On  June  26, 1996 (the "Effective Time"),  the Bank completed
the acquisition of Conestoga Bancorp, Inc. ("Conestoga") pursuant
to  the Agreement and Plan of Merger dated as of November 2, 1995
(the "Merger Agreement").  The acquisition (the "Acquisition") of
Conestoga  by  the  Bank  resulted in the merger  of  Conestoga's
wholly-owned subsidiary, Pioneer Savings Bank, F.S.B. ("Pioneer")
with  and into the Bank, with the Bank as the resulting financial
institution.   The  Board  of  Directors  of  the  Bank,  as  the
surviving  entity of the merger, consists solely of  all  of  the
Directors of the Bank immediately prior to the Acquisition.

   Each  share of Conestoga's common stock, par value  $0.01  per
share,  issued  and outstanding as of the Effective  Time  (other
than  shares  held as treasury stock of Conestoga and unallocated
shares  held in Conestoga's Recognition and Retention  Plans  and
Trust) was canceled and converted automatically into the right to
receive  $21.31  per  share in cash pursuant  to  the  terms  and
conditions  of  the  Merger  Agreement.   As  a  result  of   the
Acquisition,  shareholders of Conestoga were  paid  approximately
$101.3   million  in  cash  (the  "Merger  Consideration").    In
addition,  the Bank paid to each holder of an outstanding  option
which  had  been  granted  by Conestoga  to  purchase  shares  of
Conestoga's   common  stock  an  amount  in  cash   computed   by
multiplying  (i) any positive difference obtained by  subtracting
from  (x)  the per share amount of the Merger Consideration  from
(y)  the  per share exercise price applicable to such option,  by
(ii)  the  number of shares of Conestoga common stock subject  to
such option.  These payments totaled approximately $4.1 million.

   The  Acquisition of Conestoga occurred immediately  after  the
Conversion.  A  portion  of  the  proceeds  received   from   the
Conversion,  along  with cash generated in  the  Bank's  ordinary
course  of business, were utilized by the Bank to pay the  Merger
Consideration.

     Set forth below is the Pro Forma Statement of Operations for
the year ended June 30, 1996.  The historical portion has been
derived from the audited  statement of operations of the Company
for the year ended June 30, 1996 and the audited statement of
operations of Conestoga for the year ended March 31, 1996. Pro
forma adjustments have been prepared assuming that the
Acquisition was consummated as of July 1, 1995.

  The Acquisition has been accounted for in the financial
statements using the purchase method of accounting. Under
purchase accounting, the acquired assets and liabilities of
Conestoga are recognized at their fair value as of the date of
the Acquisition.

  The Pro Forma Combined Statement of Operations for the year
ended June 30, 1996 does not purport to be indicative of the
financial position or operating results which would have been
achieved had the Acquisition been consummated as of July 1, 1995
and should not be construed as representative of future operating
results.  The pro forma adjustments are based upon available
information and assumptions the Company believes are reasonable
under the circumstances.

      Unaudited Pro Forma Combined Statement of Operations
                For the Year Ended June 30, 1996

                                       Dime
                                     Community    Conestoga    Purchase    Pro Forma       Note
                                   Bancorp, Inc. Bancorp, Inc. Adjustments  Combined     Reference
                                   ------------- ------------- ----------- ----------- -----------
(In thousands)
                                                                         
Interest income:
Loans.............................      $39,654         $9,069   $  58      $48,781     (1)
Investment securities.............        5,738          8,761      49       14,548     (1)
Mortgage backed securities........        5,927         12,383     (22)      18,288     (1)
Federal funds sold................        1,300          2,189       -        3,489
                                   ------------- ------------- ----------- -----------
Total interest income.............       52,619         32,402      85       85,106
Interest expense:
Deposits and escrow...............       22,508         17,084     168       39,760     (1)
Borrowed funds....................        1,008          1,209       -        2,217
                                   ------------- ------------- ----------- -----------
Total interest expense............       23,516         18,293     168       41,977
Net interest income...............       29,103         14,109     (83)      43,129
Provision for loan losses                 2,979            104      -         3,083
                                   ------------- ------------- ----------- -----------
Net interest income after
provision for loan losses.........       26,124         14,005     (83)      40,046
                                   ------------- ------------- ----------- -----------
Non-interest income:
Service charges and other fees....          911            568      -         1,479
Gain (loss) on sales of securities
and other assets..................          (30)         1,771      -         1,741
Net gain (loss) on sales of loans.           12             -       -            12
Other.............................          482            251      -           733
                                   ------------- ------------- ----------- -----------
Total non-interest income.........        1,375          2,590      -         3,965
                                   ------------- ------------- ----------- -----------
Non-interest expense:
Salaries and employee benefits....        7,359          3,792   (1,497)      9,654     (2)
ESOP and RRP benefits.............          114          1,045   (1,045)        114     (3)
Occupancy and equipment...........        1,775          1,454     (107)      3,122     (1)
Federal deposit insurance
premiums..........................          109            938      -         1,047
Data Processing...................          557            460      -         1,017
Amortization of goodwill..........           25             -      2,325      2,350     (4)
Merger related expenses............          -             842      (842)       -       (6)
Provision for losses on Other
real estate owned.................          586             -       -           586
Other.............................        3,496          1,735      (231)     5,000     (5)
                                   ------------- ------------- ----------- -----------
Total non-interest expense........       14,021         10,266    (1,397)    22,890
                                   ------------- ------------- ----------- -----------
Income before income tax expense
and cumulative effect of
changes in accounting
principles........................       13,478          6,329     1,314     21,121
Income tax expense................        6,181          3,119     1,674     10,974     (7)
                                   ------------- ------------- ----------- -----------
Income before cumulative effect of
changes in accounting
principles........................       $7,297         $3,210     $(360)   $10,147
                                   ============= ======================== ===========

(Notes on following page)

  Notes to Unaudited Pro Forma Combined Statement of Operations
                      Amounts in Thousands

           (1) Purchase adjustments column represents one year of
   amortization  of  the  following  total  purchase   accounting
   adjustments   to  Conestoga's  loan,  investment   securities,
   mortgage-backed   securities,  deposits,  and   premises   and
   equipment to new cost basis.

                                   Total Purchase
                                      Accounting          Annual
        Item                          Adjustment       Amortization
   ------------------------------   -------------     -----------------
   Loans.........................  $   463            $   58
   Investment securities.........      249                49
   Mortgage-backed securities....     (112)              (22)
   Deposits......................      839               168
   Premises and equipment........   (4,288)             (107)

(2)   To record reductions in employee salaries and benefits expense
   resulting from reductions in Conestoga staffing levels.

(3)   To  reflect the decrease in ESOP and RRP expense  resulting
   from the termination of Conestoga plans.

(4)    Purchase  adjustments  column  represents  one   year   of
   amortization  of  Goodwill totaling $28,438  acquired  in  the
   Acquisition, amortized over a period of 12 years.

(5)   To record the reduction in certain Other operating expenses
   of Conestoga, as itemized below:

            Directors' fees..............     $204
            Automobile Expense.......           27
                                              -----
                                              $231
                                              =====

(6)   To  reflect  the  elimination of attorney,  consulting  and
   accounting  expenses incurred by Conestoga in connection  with
   the Acquisition.

(7)  To reflect the income tax effect of the adjustments described
   in Notes (1) through (6).

Market Area and Competition

   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. The Bank maintains its
headquarters  in  the Williamsburgh section  of  the  borough  of
Brooklyn. Fourteen additional offices are located in the boroughs
of  Brooklyn,  Queens, and the Bronx, and in Nassau  County.  The
Bank   gathers  deposits  primarily  from  the  communities   and
neighborhoods  in  close proximity to its  branches.  The  Bank's
primary  lending area is larger, and includes much  of  New  York
City  and  Nassau County. Most of the Bank's mortgage  loans  are
secured by properties located in its primary lending area.

   The New York City metropolitan area has historically benefited
from  having  a  large  number of corporate  headquarters  and  a
diversity of financial services industries. However, due  to  (1)
the lingering effects of the decline of the stock market in 1987,
(2) the resulting decline in the regional economy and (3) layoffs
and corporate relocations in the financial services industry, the
New  York  City metropolitan area experienced reduced  levels  of
employment  and  an overall decline in the underlying  values  of
local properties from 1987 to 1993.

   Since then, the local economy has begun to show signs  of
improvement  in  recent periods. Perhaps the  most  important  of
these   signs  has  been  the  gradual  decrease  in   the   area
unemployment rate from a 1992 peak. Improvement can also be  seen
in  the local real estate market, as reflected in the increase in
existing  home  sales  during  the  past  four  years   and   the
stabilization of local real estate values. The rise  and  decline
of  the  Bank's non-performing asset portfolio closely  parallels
the  trend of the local economy during this period. See "-  Asset
Quality."

   Despite  these encouraging trends, the outlook for  the  local
economy  remains  uncertain. Total New York City employment,  for
example,  remains significantly below the high reached  in  1988.
Other  troubling  signs  include  a  stubbornly  high  commercial
property (non-residential) vacancy rate and continued weakness in
local manufacturing and construction activity.

  The Bank faces significant competition both in making loans and
in attracting deposits. The Bank's market area has a high density
of  financial institutions, many of which have greater  financial
resources than the Bank, and all of which are competitors of  the
Bank  to varying degrees. The Bank's competition for loans  comes
principally  from  commercial banks, savings banks,  savings  and
loan  associations,  mortgage  banking  companies  and  insurance
companies. The Bank has recently faced increased competition  for
the  origination of multi-family loans, which comprised 50.6%  of
the   Bank's   loan  portfolio  at  June  30,  1996.   Management
anticipates  that competition for both multi-family and  one-  to
four-family loans will continue to increase in the future.  Thus,
no  assurances can be made that the Bank will be able to maintain
its   current  level  of  such  loans.  The  Bank's  most  direct
competition  for deposits has historically come from savings  and
loan  associations, savings banks, commercial  banks  and  direct
purchases  of  government securities. The Bank  faces  additional
competition for deposits from short-term money market  funds  and
other  corporate and government securities funds, and from  other
financial  institutions  such as brokerage  firms  and  insurance
companies.  Competition may also increase  as  a  result  of  the
lifting of restrictions on the interstate operations of financial
institutions.

Lending Activities

    Loan  Portfolio  Composition.    The  Bank's  loan  portfolio
consists  primarily  of multi-family loans secured  by  apartment
buildings   (including  loans  underlying   apartment   buildings
organized   under  cooperative  form  of  ownership,  "underlying
cooperatives"),   conventional  first  mortgage   loans   secured
primarily   by   one-   to   four-family  residences,   including
condominiums  and  cooperative apartment share  loans,  and  non-
residential  (commercial) property loans. At June 30,  1996,  the
Bank's  loan  portfolio totaled $585.9 million. Within  the  loan
portfolio,  $296.6  million  or 50.6%  were  multi-family  loans,
$229.3 million or 39.1% were loans to finance the purchase of one-
to  four-family properties and cooperative apartment share loans,
$37.7  million  or  6.4% were loans to finance  the  purchase  of
commercial   properties,   primarily  small   shopping   centers,
warehouses  and  nursing homes, and $16.7 million  or  2.9%  were
loans  to  finance multi-family and residential  properties  with
either  full or partial credit guarantees provided by either  the
Federal   Housing  Administration  (''FHA'')  or  the   Veterans'
Administration  (''VA''). Of the total  mortgage  loan  portfolio
outstanding at that date, 20.1% were fixed-rate loans  and  79.1%
were  adjustable-rate loans (''ARMs''), of which 72.9% are multi-
family  and non-residential property loans which carry a maturity
of  10  years,  and an amortization period of no longer  than  25
years. These loans have a fixed interest rate that adjusts  after
the fifth year indexed to the 5-year FHLBNY advance rate, but may
not  adjust below the initial interest rate of the loan.  At June
30, 1996, the Bank's loan portfolio also included $3.0 million in
passbook  loans, $1.3 million in student loans, and $1.2  million
in other consumer loans.

   The types of loans that the Bank may originate are subject  to
federal and state laws and regulations. Interest rates charged by
the Bank on loans are affected principally by the demand for such
loans,   the supply of money available for lending purposes,  and
the rates offered by its competitors. These factors are, in turn,
affected  by general and economic conditions, and the fiscal  and
monetary policy of the federal government.

The  following table sets forth the composition of the Bank's
mortgage and other loan portfolios in dollar amounts and percentages
at the dates indicated.

                                                                     At June 30,
                                           ----------------------------------------------------------------------------------------
                                                   1996         1995               1994              1993              1992
                                           ----------------- ----------------- ----------------- ----------------- -----------------
                                                     Percent           Percent           Percent           Percent           Percent
                                            Amount  of Total  Amount  of Total  Amount  of Total  Amount  of Total  Amount  of Total
                                           -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
                                                                              (Dollars in thousands)
                                                                                               
Mortgage loans:
One-  to four-family...................... $170,182   29.05% $ 58,291   13.52% $ 59,461   13.74% $ 75,248   16.26% $ 86,175   17.91%
Multi-family  and underlying cooperative..  296,630   50.63   252,436   58.56   242,088   55.92   243,803   52.67   238,018   49.48
Non-residential...........................   37,708    6.44    26,972    6.26    26,896    6.21    25,873    5.59    26,988    5.61
FHA/VA  insured...........................   16,686    2.85    22,061    5.12    27,264    6.30    33,421    7.22    37,334    7.76
Cooperative  apartment....................   59,083   10.08    67,524   15.67    73,250   16.92    80,469   17.39    88,438   18.38
                                           -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total  mortgage loans.....................  580,289   99.05   427,284   99.13   428,959   99.09   458,814   99.13   476,953   99.14
                                           -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Other loans:
Student  loans............................    1,307    0.22     1,431    0.33     1,506    0.35     1,696    0.37     1,879    0.39
Passbook savings (secured by savings
    and  time deposits)...................    3,044    0.52     1,510    0.35     1,516    0.35     1,375    0.30     1,194    0.25
Consumer  installment loans...............      323    0.06       336    0.08       362    0.08       302    0.06       284    0.06
Home  improvement loans...................      891    0.15       475    0.11       550    0.13       665    0.14       747    0.16
                                           -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total  other loans........................    5,565    0.95     3,752    0.87     3,934    0.91     4,038    0.87     4,104    0.86
                                           -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gross  loans..............................  585,854  100.00%  431,036  100.00%  432,893  100.00%  462,852  100.00%  481,057  100.00%
                                           -------- ======== -------- ======== -------- ======== -------- ======== -------- ========
Less:
Unearned discounts and net deferred
      loan fees...........................    2,168             1,182             1,300             1,434             1,447
Allowance for loan losses.................    7,812             5,174             3,633             2,996             2,094
                                           --------          --------          --------          --------          --------
Loans, net................................ $575,874          $424,680          $427,960          $458,422          $477,516
                                           ========          ========          ========          ========          ========
Loans serviced for others:
One- to four-family and
     cooperative apartment................  $63,360          $ 63,192          $ 65,063           $59,403           $30,578
Multi-family and underlying cooperative...   27,690            30,264            34,396            44,079            49,644
                                           --------          --------          --------          --------          --------
Total loans serviced for others...........  $91,050          $ 93,456          $ 99,459          $103,482           $80,222
                                           ========          ========          ========          ========          ========

  Includes loans held for sale.
  Includes acquisition of loans from Conestoga, substantially all of which were
      one-to-four family loans.

Loan    Originations,    Purchases,   Sales   and    Servicing.      The    Bank
originates    both    ARMs   and   fixed-rate   loans,   which    activity    is
dependent   upon   customer   demand  and  market   rates   of   interest,   and
generally    does    not    purchase    whole    mortgage    loans    or    loan
participations.   Generally,   the   Bank   sells   all   originated   one-   to
four-family   fixed-rate   mortgage   loans   in   the   secondary   market   to
the    Federal   National   Mortgage   Association   (''FNMA''),   the   Federal
Home   Loan   Mortgage  Corporation  (''FHLMC''),  the   State   of   New   York
Mortgage    Agency    (''SONYMA'')   and   other   private   secondary    market
purchasers.     ARMs,    including    adjustable-rate    multi-family     loans,
and    fixed-rate    multi-family    and    non-residential    mortgage    loans
with    maturities   up   to   15   years,   are   retained   for   the   Bank's
portfolio.   For   the   fiscal  year  ended  June  30,  1996   origination   of
ARMs   totaled   $95.4   million    or   83.0%   of   all   loan   originations.
Originations    of   fixed-rate   mortgage   loans   totaled    $5.1    million,
while   sales   of   fixed-rate   loans   totaled   $5.7   million.   The   Bank
generally   sells   all   fixed-rate  loans   without   recourse   and   retains
the   servicing   rights.  As  of  June  30,  1996,  the  Bank   was   servicing
$91.1   million   of   loans  for  others.  The  Bank   generally   receives   a
loan   servicing   fee   equal   to   0.25%   of   the   outstanding   principal
balance for servicing loans sold.

     On    April    9,    1996,   the   Bank   entered    into    a    Community
Reinvestment    Banking    Agreement   (the   ''CRB    Agreement'')    with    a
local,    Bronx-based   community   group.   In   the   CRB    Agreement,    the
Bank   has   agreed  to  use  its  best  efforts,  consistent  with   safe   and
sound   banking   practices,   to  increase  its  dollar   volume   of   lending
in    certain   low   and   moderate   income   neighborhoods   to   at    least
$46.8   million   and   a   maximum  of  $86.0  million  over   the   three-year
period   ending   December   31,   1998.  Pursuant   to   the   CRB   Agreement,
the   Bank   also   has  agreed  to  use  its  best  efforts   to   open   three
automated   teller   machines   (''ATMs'')  in   the   neighborhoods   of   East
Brooklyn,   Upper   Manhattan  and  the  South   Bronx   in   New   York   City.
Consistent    with   the   CRB   Agreement,   the   Bank   has   expanded    its
Community    Reinvestment    Act    service    territory    to    include    the
entirety   of   Brooklyn,   Manhattan  and  the   Bronx.    The   Bank   is   in
compliance   with   all   currently   applicable   provisions   of    the    CRB
Agreement.

The   following   table   sets   forth   the   Bank's   loan   originations,
loan sales and principal repayments for the periods indicated.

                                                For the Years Ended June 30,
                                                ------------------- ---------
                                                  1996      1995      1994
                                                --------- --------- ---------
                                                        (In thousands)
Loans (gross):
At beginning of period......................... $431,036   $432,893  $462,852
                                                --------- --------- ---------
Mortgage loans originated:
One- to four-family............................    6,087      5,509    17,111
Multi-family and underlying cooperative........   94,379     36,326    41,595
Non-residential................................   11,764      2,563     3,584
Cooperative apartment..........................      568        888       679
                                                --------- --------- ---------
Total mortgage loans originated................  112,798     45,286    62,969
Other loans originated:
Other loans....................................    2,122      2,115     1,691
                                                --------- --------- ---------
Total loans originated.........................  114,920     47,401    64,660
                                                --------- --------- ---------
Loans acquired from Conestoga (2) .............  113,140        -         -

Principal repayments...........................   67,308     45,988    72,831
Loans sold(1)..................................    5,740      2,791    19,866
Loans transferred from real estate pending
foreclosure....................................     (875)    (2,316)   (1,949)
Mortgage loans transferred to OREO.............    1,069      2,795     3,871
                                                --------- --------- ---------
Unpaid principal balances at end of period..... $585,854   $431,036  $432,893
                                                ========= ========= =========

(1) Includes fixed-rate mortgage loans and student loans.
(2) Substantially all of these mortgage loans are one-to-four
    family mortgage loans.

  Loan Maturity and Repricing.   The following table shows the
earlier of maturity or repricing period of the Bank's loan
portfolio at June 30, 1996. Loans that have adjustable rates are
shown as being due in the period during which the interest rates
are next subject to change. The table does not include
prepayments or scheduled principal amortization. Prepayments and
scheduled principal amortization on the Bank's loan portfolio
totaled $67.3 million for the year ended June 30, 1996.

                                                            At June 30, 1996
                                         ----------------------------------------------------
                                                            Mortgage Loans
                                         ---------------------------------------------------
                                                    Multi-
                                         One- to  family and
                                          Four-   Underlying Non-                Cooperative  Other   Total
                                          Family Cooperative residential  FHA/VA  Apartment   Loans   Loans
                                         ------- ----------- ----------- ------- ----------- ------ --------
                                                                        (In thousands)
                                                                               
Amount due:
One year or less........................ $63,027     $43,939  $ 5,395     $ -      $ 54,809   $ 974 $168,144
                                         ------- ----------- ----------- ------- ----------- ------ --------
After one year:
One to three years......................  12,433      78,569    9,033       -         4,008   2,825  106,868
More than three years to five years.....   7,446     143,404   14,012      9,229        231   1,271  175,593
More than five years to ten years.......  18,720      30,104    7,481        192         19     495   57,011
More than ten years to twenty years.....  37,567         614    1,253      5,554         16      -    45,004
Over twenty years.......................  30,989           -      534      1,711          -      -    33,234
                                         ------- ----------- ----------- ------- ----------- ------ --------
Total due or repricing after one year... 107,155     252,691   32,313     16,686      4,274   4,591  417,710
                                         ------- ----------- ----------- ------- ----------- ------ --------
Total amounts due or repricing, gross...$170,182    $296,630  $37,708    $16,686    $59,083  $5,565 $585,854
                                         ======= =========== =========== ======= =========== ====== ========

    The   following  table  sets  forth  the  dollar  amounts in each loan
category   at   June  30,  1996  that  are  due  after  June 30, 1997, and
whether such loans have fixed- or adjustable-interest rates.

                                             Due after June 30,1997
                                           ---------------------------
                                            Fixed  Adjustable  Total
                                           ------- ---------- --------
                                                  (In thousands)
Mortgage loans:
One- to four-family....................... $87,747    $19,408 $107,155
Multi-family and underlying cooperative...   8,104    244,587  252,691
Non-residential...........................   6,729     25,584   32,313
FHA/VA....................................  16,686         -    16,686
Cooperative apartment.....................     209      4,065    4,274
Other loans...............................   4,591         -     4,591
                                           ------- ---------- --------
Total loans...............................$124,066   $293,644 $417,710
                                           ======= ========== ========

  Multi-family and Non-residential Lending.   The Bank originates
adjustable-rate and fixed-rate multi-family (five or more units)
and non-residential loans which are secured primarily by
apartment buildings, underlying cooperatives, mixed-use
(residential combined with commercial) and other non-residential
properties, generally located in the Bank's primary lending area.
The main competitors for loans in this market tend to be other
small- to medium-sized local savings institutions. Multi-family
and non-residential loans in the Bank's portfolio generally range
in amount from $100,000 to $3.6 million, and have an average loan
size of approximately $572,000. Residential multi-family loans in
this range generally have between 5 and 100 apartments per
building. The Bank had a total of $226.2 million of multi-family
loans in its portfolio on buildings with under 100 units as of
June 30, 1996. Mostly as a result of rent control and rent
stabilization, the associated rent rolls for buildings of this
type indicate a rent range that would be considered affordable
for low- to moderate-income households. In addition, at June 30,
1996, the Bank had a total of $59.1 million in loans secured by
mortgages on underlying cooperative apartment buildings.

  The Bank originated multi-family loans totaling $94.4 million
during the fiscal year ended June 30, 1996, versus $36.3 million
June 30, 1995.  At June 30, 1996,  the Bank had $81.2 million of
commitments outstanding to originate mortgage loans, which
included $11.0 million of commitments to refinance existing
mortgage loans. This compares to $26.2 million of commitments
outstanding at June 30, 1995. All the mortgage commitments
outstanding at June 30, 1996 were issued to borrowers within the
Bank's service area, $80.3 million of which are secured by multi-
family and underlying cooperative apartment buildings.

  The Bank's current lending policy requires loans in excess of
$500,000 to be approved by the Board of Directors. The Bank's
lending policy provides for a maximum loan amount of $5.0
million.  The Bank also considers the financial resources and
income level of the borrower, the borrower's experience in owning
or managing similar properties, the market value of the property
and the Bank's lending experience with the borrower. The typical
adjustable-rate multi-family loan carries a maturity of 10 years,
and an amortization period of no longer than 25 years. These
loans have a fixed interest rate that adjusts after the fifth
year indexed to the 5-year FHLBNY advance rate, but may not
adjust below the initial interest rate of the loan. Prepayment
penalties are assessed throughout the life of the loans.  The
Bank also offers fixed-rate, self-amortizing, multi-family and
non-residential loans with maturities of up to 15 years.

   At  June  30,  1996, the Bank had multi-family loans  totaling
$296.6  million in its portfolio, comprising 50.6% of  the  gross
loan   portfolio.  The  underwriting  standards  for  new   loans
generally require (1) a maximum loan-to-value ratio of 75%  based
on  an  appraisal  performed  by an independent,  state-certified
appraiser,  and  (2)  sufficient cash flow  from  the  underlying
property  to adequately service the debt, represented by  a  debt
service ratio not below 1.15.  Of the Bank's multi-family  loans,
$235.2  million,  or 79.3%, were secured by apartment  buildings,
and   $59.1   million,  or  20.7%,  were  secured  by  underlying
cooperatives  at June 30, 1996. Multi-family loans are  generally
viewed  as exposing the Bank to a greater risk of loss than  one-
to  four-family  residential loans and typically  involve  higher
loan  principal amounts. At June 30, 1996, the Bank had 80 multi-
family and non-residential loans with principal balances of  $1.0
million  or  more,  totaling $138.7 million. These  loans,  while
underwritten to the same standards as all other multi-family  and
non-residential loans, tend to expose the Bank to a higher degree
of  risk due to the potential impact of losses from any one  loan
relative to the size of the Bank's capital position.  As of  June
30, 1996, one of the 80 loans was in process of foreclosure, with
an  outstanding balance of $2.1 million. See ''- Asset Quality.''
Three  other  loans  totaling $6.4 million  were  on  the  Bank's
''watch  list,'' none of which were in arrears at that  date.  In
addition, the Bank has identified 107 large real estate loans  or
commitments,  totaling $90.4 million, derived in connection  with
34  principal  parties,  each  of  which  has  certain  financial
interests in more than one real estate loan held by the Bank. The
principal  parties identified may, for example,  be  officers  of
corporations, or sponsors of cooperative corporations, which  own
the  real  estate  on  which  the  Bank  holds  a  mortgage.   No
combination  of  these  loans  are  in  violation  of   the   OTS
limitations  on  loans  to one borrower.  See  ''-  Regulation  -
Regulation  of  Federal  Savings  Associations  -  Loans  to  One
Borrower.''

  Repayment of multi-family loans is dependent, in large part, on
sufficient  cash  flow  from  the  property  to  cover  operating
expenses   and  debt  service.  Economic  events  and  government
regulations,  such  as rent control and rent stabilization  laws,
which  are outside the control of the borrower or the Bank, could
impair the value of the security for the loan or the future  cash
flow  of  such properties. As a result, rental income  might  not
rise sufficiently over time to meet increases in the loan rate at
repricing,  or  increases in overhead expenses (i.e.,  utilities,
taxes). During the last five fiscal years, the Bank's charge-offs
related  to its multi-family loan portfolio totaled $5.3 million.
As  of June 30, 1996, the Bank had $4.7 million of non-performing
multi-family loans. See "- Asset Quality and - Allowance for Loan
Losses"  for  discussions  of the Bank's underwriting  procedures
utilized in originating multi-family loans.

  The Bank's loan portfolio also includes $37.7 million in non-
residential real estate mortgage loans which represented 6.4% of
gross loans at June 30, 1996.  This portfolio is comprised of
commercial and industrial properties, and shopping centers. The
Bank utilizes, where appropriate, rent or lease income, business
receipts, the borrowers' credit history and business experience,
and comparable appraisal values when underwriting non-residential
applications. As of June 30, 1996, there were no non-performing
non-residential loans in the Bank's portfolio.

  The Bank's three largest loans at June 30, 1996, consisted of a
$3.6 million loan secured by a first mortgage on a twelve story
apartment building located in midtown Manhattan originated in
February, 1996; a $3.5 million first mortgage loan, originated in
November, 1995, secured by a three-story catering hall located in
the Howard Beach section of Queens; and a $3.5 million first
mortgage loan, originated in October, 1995, secured by mortgages
on three contiguous mixed-use properties in lower Manhattan
combining both residential and commercial space.  As of June 30,
1996, all of these loans were performing in accordance with their
terms. Additionally, as of June 30, 1996, the Bank had an
outstanding commitment to originate a loan for portfolio in the
amount of $3.5 million, to a 23-store shopping center  located in
Hewlett, New York. The loan, which had a debt service ratio in
excess of 4.0 and a loan-to-value ratio of 31.8%, closed in
August, 1996.  See ''- Regulation - Regulation of Federal Savings
Associations - Loans to One Borrower.''

  The Bank also currently services a total of $27.7 million in
multi-family loans for various private investors. These loans
were sold in the late 1980s, without recourse.

  One- to Four-Family Mortgage and Cooperative Apartment Lending.
The Bank offers residential first mortgage loans secured
primarily by owner-occupied, one- to four-family residences,
including condominiums, and cooperative apartment share loans.
Lending is primarily confined to an area covered by a 50-mile
radius from the Bank's Main Office in Brooklyn. The Bank offers
conforming and non-conforming fixed-rate mortgage loans and
adjustable-rate mortgage loans with maturities of up to 30 years
and a maximum loan amount of $500,000. The Bank's residential
mortgage loan originations are generally obtained from existing
or past loan customers, depositors of the Bank, members of the
local community and referrals from attorneys, realtors and
independent mortgage brokers who refer members of the communities
located in the Bank's primary lending area. The Bank is a
participating seller/servicer with several  government-sponsored
mortgage agencies: FNMA,  FHLMC, and SONYMA, and generally
underwrites its one- to four-family residential mortgage loans to
conform with standards required by these agencies. At June 30,
1996, $229.3 million, or 39.1%, of the Bank's loans consisted of
one- to four-family and cooperative apartment mortgage loans.
ARMs represented 61.6% of total one- to four-family and
cooperative apartment loans, while fixed-rate mortgages comprised
38.4% of the total.  Of the total fixed-rate one-to four-family
and cooperative apartment loans 90.5% were acquired from
Conestoga. See "- Acquisition of Conestoga."

  From 1985 to 1988, the Bank was an active lender in the
cooperative apartment share loan market. Although the collateral
for cooperative apartment loans is comprised of shares in a
cooperative corporation (a corporation whose primary asset is the
underlying real estate), cooperative apartment loans generally
are treated as one- to four-family loans. From 1985 to 1988, the
Bank originated for portfolio over $117 million of cooperative
apartment loans, or 26.8% of total loans as of December 31, 1988.
These were exclusively one- and three-year adjustable-rate loans
and were well-suited to the Bank's asset/liability strategy. By
the end of 1988, in response to the steep decline in the market
value of cooperative apartments, the Bank enacted more stringent
underwriting guidelines for cooperative apartment loans. Of
particular importance was the requirement that the number of
units sold to owner-occupants of the subject building be greater
than 65% of total units available in the building in order for a
loan application to be considered. Since 1988, originations of
cooperative apartment loans have significantly declined. Thus, as
a result of prepayments and amortization, the Bank's portfolio of
such loans has declined to $59.1 million, or 10.1% of total loans
as of June 30, 1996. The recent market for cooperative apartment
loan financing has improved with the support of certain
government agencies, particularly SONYMA and FNMA, who are
insuring and purchasing, respectively, cooperative apartment
share loans in qualifying buildings. The Bank adheres to
underwriting guidelines established by SONYMA and FNMA for all
fixed-rate cooperative apartment loans which are originated for
sale.  Adjustable-rate cooperative apartment loans continue to be
originated both for portfolio and for sale.

  The Bank currently offers one- to four-family ARMs secured by
residential properties with rates that adjust every one or three
years. One- to four-family ARMs are offered with terms of up to
30 years. The interest rate at repricing on one- to four-family
ARMs currently offered fluctuates based upon a spread above the
average yield on United States Treasury securities, adjusted to a
constant maturity which corresponds to the adjustment period of
the loan (the ''U.S. Treasury constant maturity index'') as
published weekly by the Federal Reserve Board. Additionally, one-
and three-year one- to four-family ARMs are generally subject to
limitations on interest rate increases of 2% and 3%,
respectively, per adjustment period, and an aggregate adjustment
of 6% over the life of the loan. For the year ended June 30,
1996, the Bank originated $1.0 million of one- to four-family
ARMs.

  The volume and types of ARMs originated by the Bank have been
affected by such market factors as the level of interest rates,
competition, consumer preferences and availability of funds.
During fiscal 1996 , demand for one- to four-family ARMs was
relatively weak due to the prevailing low interest rate
environment and consumer preference for fixed-rate loans.
Accordingly, although the Bank will continue to offer one- to
four-family ARMs, there can be no assurance that in the future
the Bank will be able to originate a sufficient volume of one- to
four-family ARMs to increase or maintain the proportion that
these loans bear to total loans.

  The retention of one- to four-family ARMs, as opposed to fixed-
rate residential mortgage loans, in the Bank's loan portfolio
helps reduce the Bank's exposure to increases in interest rates.
However, one- to four-family ARMs generally pose credit risks
different from the risks inherent in fixed-rate loans, primarily
because as interest rates rise, the underlying payments of the
borrower rise, thereby increasing the potential for default. At
the same time, the marketability of the underlying property may
be adversely affected. In order to minimize risks, applicants for
one- to four-family ARMs are qualified at the highest rate which
would be in effect after the first interest rate adjustment, if
rates were to rise. The Bank did not in the past, nor does it
currently, originate one- to four-family ARMs which provide for
negative amortization.

  The Bank currently offers fixed-rate mortgage loans with terms
of 10 to 30 years secured by one- to four-family residences and
cooperative apartments. Interest rates charged on fixed-rates
loans are competitively priced based on market conditions. The
Bank generally originates fixed-rate loans for sale in amounts up
to the maximum allowed by FNMA, FHLMC and SONYMA, with private
mortgage insurance required for loans with loan-to-value ratios
in excess of 80%. For the year ended June 30, 1996, the Bank
originated $5.7 million of fixed-rate, one- to four-family
residential mortgage and cooperative apartment loans.

  The Bank generally sells its newly originated conforming fixed-
rate mortgage loans in the secondary market to federal and state
agencies such as FNMA, FHLMC and SONYMA, and its non-conforming
fixed-rate mortgage loans to various private sector secondary
market purchasers. With few exceptions, such as SONYMA, the Bank
retains the servicing rights on all such loans sold. For the year
ended June 30, 1996, the Bank sold mortgage loans totaling $5.1
million. As of June 30, 1996, the Bank's portfolio of one-to four-
family fixed-rate mortgage loans serviced for others totaled
$63.4 million. The Bank intends to continue to sell all of its
newly-originated fixed-rate mortgage loans to conform to its
interest-rate risk policy. No assurances can be made, however,
that the Bank will be able to do so.

  Originated mortgage loans in the Bank's one-to-four family
portfolio generally include due-on-sale clauses which provide the
Bank with the contractual right to deem the loan immediately due
and payable in the event that the borrower transfers ownership of
the property without the Bank's consent. It is the Bank's policy
to enforce due-on-sale provisions within the applicable
regulations and guidelines imposed by New York law and secondary
market purchasers.

  Home equity loans currently are originated to a maximum of
$250,000. When combined with the balance of the first mortgage
lien, the home equity loan may not exceed 75% of the appraised
value of the property at the time of the loan commitment. The
Bank's home equity loans outstanding at June 30, 1996, totaled
$760,000 against total available credit lines of $1.2 million.

  Other Lending.   The Bank also originates other loans,
primarily student and passbook loans. Total other loans
outstanding at June 30, 1996, amounted to $5.6 million, or 0.95%,
of the Bank's loan portfolio. Passbook loans, totaling $3.0
million, and student loans, totaling $1.3 million, comprise the
majority of the Bank's other loan portfolio.

  Loan Approval Authority and Underwriting.   The Board of
Directors establishes lending authorities for individual officers
as to its various types of loan products. For multi-family and
one- to four-family mortgage loans, including cooperative
apartment and condominium loans, the Loan Operating Committee,
which is comprised of the Chief Executive Officer, Executive Vice
President and Senior Vice President, and the heads of both the
residential loan and multi-family loan origination departments,
has the authority to approve loans in amounts up to $500,000. Any
loan in excess of $500,000, however, must be approved by the
Board of Directors. In addition, regulatory restrictions imposed
on the Bank's lending activities limit the amount of credit that
can be extended to any one borrower to 15% of total capital. See
''- Regulation - Regulation of Federal Savings Associations -
Loans to One Borrower.''

  For all one- to four-family loans originated by the Bank, upon
receipt of a completed loan application from a prospective
borrower, a credit report is ordered, income, assets and certain
other information are verified by an independent credit agency,
and if necessary, additional financial information is required to
be submitted by the borrower. An appraisal of the real estate
intended to secure the proposed loan is required, which currently
is performed by an independent appraiser designated and approved
by the Board of Directors. In certain cases, the Bank may also
require certain environmental hazard reports on multi-family
properties.  It is the Bank's policy to require appropriate
insurance protection, including title and hazard insurance, on
all real estate mortgage loans prior to closing. Borrowers
generally are required to advance funds for certain items such as
real estate taxes, flood insurance and private mortgage
insurance, when applicable.

Asset Quality

  Delinquent Loans and Foreclosed Assets.   Management does not
expect to incur significant losses on its current portfolio of
delinquent mortgage loans. Loans in the process of foreclosure
and other non-accrual loans, 27 loans in all, totaled $6.6
million at June 30, 1996 versus $5.1 million at June 30, 1995.
The largest loan in this group is a $2.1 million foreclosure on
an underlying cooperative apartment building located in Brooklyn,
New York. The Bank has received a preliminary offer to purchase
the mortgage for $1.5 million. No assurance can be given that the
mortgage will be sold, or as to the ultimate terms of any such
sale. The Bank believes that its allowance for loan losses as of
June 30, 1996 is adequate after taking into consideration the
proposed sale of the loan and expected charge to the allowance
for loan losses. The Bank had twelve loans totaling $1.7 million
delinquent 60-89 days at June 30, 1996, as compared to seven such
delinquent loans totaling $479,000 at June 30, 1995.

  The Bank's real estate loan servicing policies and procedures
require that the Bank initiate contact with a delinquent borrower
as soon after the tenth day of delinquency as possible.
Generally, the policy calls for a late notice to be sent 10 days
after the due date of the late payment. If payment has not been
received within 30 days of the due date, a letter is sent to the
borrower. Thereafter, periodic letters and phone calls are placed
to the borrower until payment is received. In addition, Bank
policy calls for the cessation of interest accruals on loans
delinquent 60 days or more. When contact is made with the
borrower at any time prior to foreclosure, the Bank will attempt
to obtain the full payment due, or work out a repayment schedule
with the borrower to avoid foreclosure. Generally, foreclosure
proceedings are initiated by the Bank when a loan is 90 days past
due. If a foreclosure action is instituted and the loan is not
brought current, paid in full, or refinanced before the
foreclosure sale, the real property securing the loan is
generally sold at foreclosure or by the Bank as soon thereafter
as practicable.

  Management reviews delinquent loans on a continuous basis and
reports monthly to the Board of Directors regarding the status of
all delinquent and non-accrual loans in the Bank's portfolio. The
Bank retains outside counsel experienced in foreclosure and
bankruptcy procedures to institute foreclosure and other actions
on the Bank's delinquent loans. It is the policy of the Bank to
initiate foreclosure proceedings after a loan becomes 90 days
past due.  As soon as practicable after initiating foreclosure
proceedings on a loan, the Bank prepares an estimate of the fair
value of the underlying collateral. In the event the carrying
balance of the loan, including all accrued interest, exceeds the
estimate of fair value, the loan is considered to be impaired and
a reserve is established pursuant to Statement of Financial
Accounting Standards ("SFAS") No. 114. At June 30, 1996, $7.4
million of loans were deemed impaired under SFAS 114.  It is the
Bank's general policy to dispose of properties acquired through
foreclosure or deeds in lieu thereof as quickly and as prudently
as possible in consideration of market conditions, the physical
condition of the property, and any other mitigating conditions.

  Under Generally Accepted Accounting Principles ("GAAP"), the
Bank is 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 the Bank, for economic or legal
reasons related to the borrower's financial difficulties, grants
a concession to the borrower that the Bank would not otherwise
consider. Debt restructurings or loan modifications for a
borrower do not necessarily always constitute troubled-debt
restructurings, however, and troubled-debt restructurings do not
necessarily result in non-accrual loans. The Bank had four loans
classified as troubled-debt restructurings at June 30, 1996,
totaling $4.7 million, and all are currently performing according
to their restructured terms. The largest restructured debt, a
$2.7 million loan secured by a mortgage on an underlying
cooperative apartment building located in Forest Hills, New York,
was originated in 1987. The loan was first restructured in 1988,
and again in 1994.

  Non-performing Assets and Troubled-Debt Restructurings.   The
following table sets forth information regarding the Bank's non-
performing assets and troubled-debt restructurings at the dates
indicated.

                                                                   At Year Ended June 30,
                                                    --------------------------------------------
                                                      1996     1995     1994     1993     1992
                                                    -------  -------- -------- -------- --------
                                                                   (Dollars in thousands)
                                                                         
Non-accrual mortgage loans:
   One- to four-family......................        $ 1,149    $572   $ 1,276  $ 3,449  $ 4,184
   Multi-family and underlying cooperative..          4,734   3,978     4,363    7,265   11,528
   Non-residential..........................             -       -         -        -        -
   Cooperative apartment....................            668     523       609      918    1,001
   Non-accrual other loans..................             -       -         -        -        -
                                             --------------- -------- -------- -------- --------
Total non-performing loans..................          6,551   5,073     6,248   11,632   16,713
                                             --------------- -------- -------- -------- --------
Total OREO..................................          1,946   4,466     8,200    7,981    7,367
Total non-performing assets.................         $8,497  $9,539  $ 14,448  $19,613  $24,080
                                             =============== ======== ======== ======== ========
Troubled-debt restructurings................         $4,671  $7,651   $ 7,421   $5,219      $-
Total non-performing assets and troubled-
   debt restructurings......................        $13,168  $17,190  $21,869  $24,832  $24,080
Total non-performing loans to total loans...           1.12%   1.18%     1.45%    2.52%    3.48%
Total non-performing assets to total assets        0.62    1.44      2.23     3.04     3.74
Total non-performing assets and troubled-
   debt restructurings to total assets.            0.96    2.59      3.38     3.84     3.74

 Total non-performing assets to total Adjusted Assets were
     0.68% at June 30, 1996.
 Total non-performing assets and troubled-debt restructurings
     to total Adjusted Assets were 1.06% at June 30, 1996.

   The  Bank recorded $47,000 and $344,000 of interest income  on
non-performing    loans    and   troubled-debt    restructurings,
respectively, for the year ended June 30, 1996, and $104,000  and
$587,000, respectively, for the fiscal year ended June 30,  1995.
If    the   Bank's   non-performing   loans   and   troubled-debt
restructurings  had  been  performing in  accordance  with  their
terms, the Bank would have recorded additional interest income of
$410,000 and $127,000, respectively, for the year ended June  30,
1996,  and  $325,000 and $210,000, respectively, for  the  fiscal
year ended June 30, 1995.

  Other Real Estate Owned ("OREO"). Property acquired by the Bank
as  a result of a foreclosure on a mortgage loan is classified as
OREO  and is recorded at the lower of the recorded investment  in
the related loan or the fair value of the property at the date of
acquisition,  with  any  resulting  write  down  charged  to  the
allowance  for  loan losses. The Bank obtains an appraisal  on  a
real  estate owned property as soon as practicable after it takes
possession of the real property. The Bank will generally reassess
the value of OREO at least annually thereafter.

  Classified Assets. The Bank's Loan Loss Reserve Committee meets
every other month to review all problem loans in the portfolio to
determine   whether   any  loans  require   reclassification   in
accordance with applicable regulatory guidelines. Recommendations
are  reported by the Loan Loss Reserve Committee to the Board  of
Directors  on a quarterly basis. The Loan Loss Reserve Committee,
subject  to  Board approval, establishes policy relating  to  the
internal   classification  of  loans  and   believes   that   its
classification policies are consistent with regulatory  policies.
All non-performing loans and OREO are considered to be classified
assets.  In addition, the Bank maintains a "watch list" comprised
of  loans  totaling  $8.1 million at June 30, 1996  which,  while
performing, are characterized by weaknesses which require special
attention  from  management and are considered  to  be  potential
problem loans. All loans on the watch list are considered  to  be
classified  assets  or  are  otherwise  categorized  as  "Special
Mention" as discussed below. As a result of its bi-monthly review
of the loan portfolio, the Loan Loss Reserve Committee may decide
to reclassify one or more of the loans on the watch list.

   Federal  regulations and Bank policy require  that  loans  and
other assets considered to be of lesser quality be classified  as
''Substandard,''  ''Doubtful'' or ''Loss'' assets.  An  asset  is
considered ''Substandard'' if it is inadequately protected by the
current  net worth and paying capacity of the obligor or  of  the
collateral pledged, if any. ''Substandard'' assets have  a  well-
defined  weakness  or  weaknesses and are  characterized  by  the
distinct possibility that the Bank will sustain ''some loss''  if
deficiencies are not corrected. Assets classified as ''Doubtful''
have   all   of  the  weaknesses  inherent  in  those  classified
''Substandard'' with the added characteristic that the weaknesses
present make ''collection or liquidation in full,'' on the  basis
of  current  existing  facts, conditions,  and  values,  ''highly
questionable and improbable.'' Assets classified as ''Loss''  are
those considered ''uncollectible'' and of such little value  that
their  continuance  as  assets without  the  establishment  of  a
specific  loss  reserve is not warranted.  Assets  which  do  not
expose  the Bank to sufficient risk to warrant classification  in
one  of  the  aforementioned  categories  but  possess  potential
weaknesses  that  deserve management's attention  are  designated
''Special Mention'' by management. At June 30, 1996 the Bank  had
$9.4 million of loans designated Special Mention.

   When an insured institution classifies one or more assets,  or
portion  thereof, as Substandard or Doubtful, it is  required  to
establish  a  general valuation allowance for loan losses  in  an
amount deemed prudent by management. Generally, federally-insured
institutions  must maintain an allowance for  loan  losses  at  a
level  that  is  ''adequate  to absorb  estimated  credit  losses
associated  with  the  loan portfolio.''  The  general  valuation
allowance,  which  is  a  regulatory  term,  represents  a   loss
allowance  which has been established to recognize  the  inherent
risk  associated with lending activities, but which,  unlike  the
specific allowance, has not been allocated to particular  problem
assets.  When  an  insured institution  classifies  one  or  more
assets,  or  proportions thereof, as ''Loss,'' it is required  to
establish  a specific allowance for losses equal to 100%  of  the
amount of the asset so classified or to charge-off such amount.

   At  June  30,  1996,  the  Bank had  $7.3  million  of  assets
classified  Substandard,  consisting  of  42  loans,  no   assets
classified as Doubtful, and $5,000 of assets classified as  Loss,
consisting of 1 loan.

   The  following  table sets forth at June 30, 1996  the  Bank's
aggregate carrying value of the assets classified as Substandard,
Doubtful or Loss or designated as Special Mention.

                                         Special Mention Substandard   Doubtful       Loss
                                        ---------------- -------------- ------------- -------------
                                           Number Amount Number Amount Number Amount Number Amount
                                           ------ ------ ------ ------ ------ ------ ------ ------
                                                           (Dollars in thousands)
                                                                    
Mortgage Loans:
One- to four-family.......................      4   $704     3   $ 690     -    $ -      -    $ -
Multi-family and underlying cooperative...     11  8,347     7   4,090     -      -      1      5
Non-residential...........................      -     -      -      -      -      -      -      -
Cooperative apartment.....................      6    339     9     604     -      -      -      -
                                           ------ ------ ------ ------ ------ ------ ------ ------
Total Mortgage Loans......................     21  9,390    19   5,384     -      -      1      5
                                           ------ ------ ------ ------ ------ ------ ------ ------
Real Estate Owned:
One- to four-family.......................     -      -      5   1,388     -      -      -      -
Multi-family and underlying cooperative...     -      -      -      -      -      -      -      -
Non-residential...........................     -      -      -      -      -      -      -      -
Cooperative apartment.....................     -      -     18     558     -      -      -      -
                                           ------ ------ ------ ------ ------ ------ ------ ------
Total Real Estate Owned...................     -      -     23   1,946     -      -      -      -
                                           ------ ------ ------ ------ ------ ------ ------ ------
Total.....................................     21 $9,390    42  $7,330     -     $-      1   $  5
                                           ====== ====== ====== ====== ====== ====== ====== ======

 The Bank had $215,777 of receivables from Nationar, a
  failed check-clearing and trust company, which are included in
  Other Assets.  These receivables are fully reserved at June
  30, 1996.  See "Notes to Consolidated Financial Statements."

Allowance for Loan Losses

  The Bank has established a Loan Loss Reserve Committee and has
charged it with, among other things, specific responsibility for
monitoring the adequacy of the loan loss reserve. The Loan Loss
Reserve Committee's findings, along with recommendations for
additional loan loss reserve provisions, if any, are reported
directly to senior management of the Bank, and to the Board of
Directors. The Allowance for Loan Losses is supplemented through
a periodic provision for loan losses based on the Loan Loss
Reserve Committee's evaluation of several variables, including
the level of non-performing loans, the ratio of reserves to total
performing loans, the level and composition of new loan activity,
and an estimate of future losses determinable at the date the
portfolio is evaluated. Such evaluation, which includes a review
of all loans on which full collectibility may not be reasonably
assured, considers among other matters, the fair value of the
underlying collateral, economic conditions, historical loan loss
experience and other factors that warrant recognition in
providing for an adequate loan loss allowance. In addition,
various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for
loan losses, its valuation of OREO, and both the level of loans
in foreclosure and pending foreclosure. Based on their judgments
about information available to them at the time of their
examination, the regulators may require the Bank to recognize
additions to the allowance.

  Loan loss reserves are established based upon a review of the
two components of the Bank's loan portfolio, performing loans and
non-performing loans. Performing loans are reviewed based upon
the premise that, over time, the loan portfolio will generate
losses and that some portion of the loan portfolio which is
currently performing will default. The evaluation process is thus
based upon the Bank's historical loss experience.

  Non-performing loans are reviewed individually to determine if
the liquidation value of the underlying collateral is sufficient
to pay off the existing debt. Should the bank determine that a
non-performing loan is likely to result in  a principal loss, the
loan is then placed into one of four classifications. The
particular classification assigned to any one loan, or proportion
thereof, (loss, doubtful, substandard or special mention) is
based upon the actual level of loss attributable to that loan, as
determined by the Loan Loss Reserve Committee. The Bank will then
increase its general valuation allowance in an amount established
by the Loan Loss Reserve Committee to appropriately reflect the
anticipated loss from each loss classification category.

  Specific reserves are established against loans classified as
''loss.'' Rather than an estimation of potential loss, the
establishment of a specific reserve represents the identification
of an actual loss which will result in a charge-off. This loss
amount will be set aside on the Bank's balance sheet as a
specific reserve and will serve to reduce the carrying value of
the associated loan. The Bank's determination as to the
classification of its assets and the amount of its valuation
allowances is subject to review by various regulatory agencies
which can order the establishment of additional general or
specific loss allowances.

  The Bank has increased its allowance for loan losses to a level
which management believes is adequate to absorb possible losses
that may be incurred within the Bank's loan portfolio. The Bank
provided $3.0 million  to its allowance for loan losses for the
fiscal year ended June 30, 1996 and acquired reserves of $668,000
from Conestoga.  At June 30, 1996, the total allowance was $7.8
million, which amounted to 119.3% of non-performing loans and
1.34% of total loans. The increase in the allowance reflects
management's assessment of the risks inherent in its loan
portfolio, including those risks associated with the Bank's
emphasis on multi-family mortgage loans, which are considered to
be at greater risk of loss than one- to four-family loans.  The
Bank will continue to monitor and modify the level of its
allowance for loan losses in order to maintain such allowance at
a level which management considers adequate to provide for loan
losses. For the fiscal year ended June 30, 1996, the Bank had
charge-offs, net of recoveries, of $1.0 million against the
allowance. Since 1985, total principal losses attributable to the
Bank's loan portfolio have averaged 0.42% of the average
outstanding loan balance.

  The following table sets forth activity in the Bank's allowance
for loan losses at or for the dates indicated.

                                                                   At or For the Year Ended June 30,
                                                           ------------------- -----------------------------

                                                              1996      1995      1994      1993      1992
                                                           --------- --------- --------- --------- ---------
                                                                (Dollars in thousands)

Total loans outstanding at end of period(1)............... $583,686  $429,854  $431,593  $461,418  $479,610
                                                           ========= ========= ========= ========= =========
Average total loans outstanding(1)........................ $449,063  $430,845  $455,705  $474,362  $468,594
                                                           ========= ========= ========= ========= =========
Balance at beginning of period............................   $5,174    $3,633    $2,996    $2,094    $1,340
Provision for loan losses.................................    2,979     2,950     4,105     3,395     1,409
Charge-offs:
One- to four-family.......................................     (21)      (146)     (224)     (272)      (40)
Multi-family and underlying cooperative...................    (553)    (1,081)   (2,203)   (1,355)     (114)
Non-residential...........................................    (274)       (92)       -        (19)       -
F.H.A./V.A................................................      -          (9)       -        (13)       -
Cooperative apartment.....................................    (170)      (328)   (1,109)     (876)     (557)
Other.....................................................      (5)        -         -         -        (1)
                                                           --------- --------- --------- --------- --------- -
Total charge-offs.........................................   (1,023)   (1,656)   (3,536)   (2,535)     (712)
                                                           --------- --------- --------- --------- --------- -
Recoveries................................................       14       247        68        42        57
                                                           --------- --------- --------- --------- ---------
Reserve acquired in purchase of Conestoga..................     668        -         -         -         -
                                                           --------- --------- --------- --------- ---------
Balance at end of period..................................    $7,812    $5,174    $3,633    $2,996    $2,094
                                                           ========= ========= ========= ========= =========
Allowance for loan losses to total loans at end of period.    1.34%     1.20%     0.84%     0.65%    0.44%
Allowance for loan losses to total non-performing loans at
end of period(2)..........................................   119.25    101.99     58.15     25.76    12.53

Allowance for losses on OREO:
Balance at beginning of period............................     $-       $-        $-        $-        $-
Provision charged to operations...........................    586        -         -         -         -
Charge-offs, net of recoveries............................   (472)       -         -         -         -
                                                           --------- --------- --------- --------- ---------
Balance at end of period..................................   $114       $-        $-        $-        $-
                                                           ========= ========= ========= ========= =========

  Total loans represents loans, net, plus the allowance for loan
      losses.  Total loans at June 30, 1996 includes $113.1 million
      of loans acquired from Conestoga.
  The Bank adopted SFAS No. 114 on July 1, 1995. See
      ''Management's Discussion and Analysis of Financial Condition
      and Results of Operations-Impact of Accounting Standards.''

  The following table sets forth the Bank's allowance for loan
losses allocated by loan category and the percent of loans in
each category to total loans at the dates indicated.

                                                         At June 30,
                            --------------------------------------------------------------
                                      1996               1995                 1994
                            -------------------- -------------------- --------------------
                                      Percent of           Percent of           Percent of
                                       Loans in             Loans in             Loans in
                                         Each                 Each                 Each
                                       Category             Category             Category
                            Allowance  to Total  Allowance  to Total  Allowance  to Total
                              Amount   Loans    Amount   Loans    Amount   Loans
                            --------- ---------- --------- ---------- --------- ----------
                                                (Dollars in thousands)
                                                              
Mortgage loans:
One- to four-family........    $1,171     29.90%      $556    14.25%      $398     14.66%
Multi-family and underlying
cooperative................     4,763     52.11      3,372    61.72      2,267     59.68
Non-residential............       605      6.63        103     6.60         72      6.63
Cooperative apartment......     1,085     10.38      1,031    16.51        784     18.06
Other......................       188      0.98        112     0.92        112      0.97
                            --------- ---------- --------- ---------- --------- ----------
Total......................    $7,812    100.00%    $5,174   100.00%    $3,633    100.00%
                            ========= ========== ========= ========== ========= ==========

  Total loans represent gross loans less FHA and VA loans,
      which are government guaranteed loans.

Investment Activities

  Investment Strategies of the Company - After using $76.4
million of the proceeds raised in the initial public offering to
purchase the 100% of the Bank's Common Stock, the Company
retained approximately $65. 0 million in cash, of which $11.6
million was loaned to the Company's ESOP.

  The remaining $53.4 million is to be utilized for general
business activities which may include, but are not limited to:
(1) repurchases of Common Stock, (2) acquisition of other
companies, (3) subject to applicable limitations, the payment of
dividends, and/or (4) investments in the equity securities of
other financial institutions and other investments not permitted
for federally-insured institutions.  There can be no assurance
that the Company will engage in any of these activities in the
future.  See "Item 5 - Market for the Company's Common Stock and
Related Stockholder Matters."

  Otherwise, the investment policy of the Company calls for
investments in relatively short-term, liquid securities similar
to such securities defined in the securities investment policy of
the Bank.

  Investment Policy of the Bank.   The securities investment
policy of the Bank, which is established by the Board of
Directors, is designed to help the Bank achieve its overall
asset/liability management objectives. Generally, the policy
calls for management to emphasize principal preservation,
liquidity, diversification, short maturities and/or repricing
terms, and a favorable return on investment when selecting new
investments for the Bank's portfolio. The Bank's current
securities investment policy permits investments in various types
of liquid assets including obligations of the U.S. Treasury and
federal agencies, investment grade corporate obligations, various
types of mortgage-backed securities, commercial paper,
certificates of deposit, and federal funds sold to select
financial institutions periodically approved by the Board of
Directors.

  Investment strategies are implemented by the Asset and
Liability Management Committee ("ALCO") comprised of the Chief
Executive Officer, the Executive Vice President and other senior
management officers.  The strategies take into account the Bank's
overall balance sheet, including loans and deposits, and are
intended to protect and enhance the Company's earnings and market
value.  The strategies are reviewed monthly by the ALCO and
reported regularly to the Board of Directors.

  The Bank converted to a federally chartered mutual savings bank
on November 1, 1995. Prior to that date, the Bank operated as a
New York State chartered mutual savings Bank. While operating
under its New York State charter, the Bank was permitted to make
certain investments in equity securities and stock mutual funds.
At June 30, 1996, these equity investments totaled $3.2 million,
comprised primarily of a $2.1 million investment in a common
stock mutual fund designed specifically for New York State
Savings Banks, and a $1.1 million investment divided among two
additional common stock mutual funds and one fixed income mutual
fund. Pursuant to current law, the Bank is required to divest or
transfer such securities. The Bank expects that it will either
dispose of such securities to a third-party or sell or transfer
such securities to the Company.

  The Bank currently does not participate in hedging programs,
interest rate swaps, or other activities involving the use of off-
balance sheet derivative financial instruments. These activities
are prohibited by the Bank's securities investment policy.
Similarly, the Bank has not and does not invest in mortgage-
backed securities which are deemed to be ''high risk,'' or
purchase bonds which are not rated investment grade.

  Mortgage-Backed Securities.   In its securities investment
activities over the past few years the Bank has increased its
purchases of  mortgage-backed securities, which provide the
portfolio with investments consisting of desirable repricing,
cash flow and credit quality characteristics. Mortgage-backed
securities generally yield less than the loans that underlie the
securities because of the cost of payment guarantees and credit
enhancements that reduce credit risk to the investor. However,
mortgage-backed securities are more liquid than individual
mortgage loans and may be used to collateralize borrowings of the
Bank. Virtually all (99.9%) of the Company's $209.9 million
mortgage-backed securities portfolio, which represented 15.3% of
the Company's total assets (or 16.9% of Adjusted Assets) at
June 30, 1996, was comprised of securities backed by either the
Governmental National Mortgage Association (''GNMA''), FHLMC, or
FNMA.  In addition to the superior credit quality provided by the
agency backing, the mortgage-backed securities portfolio also
provides the Company with important interest rate risk management
features. One year adjustable-rate mortgage-backed securities,
which total $111.3 million, are the single largest component of
the Bank's mortgage-backed securities portfolio. These securities
are structured so that the interest rate received by the Company
adjusts annually in tandem with changes in other short-term
market interest rates, a feature which reduces the Bank's
exposure to interest rate risk. The Company also has a $50.9
million  investment in fixed-rate balloon mortgage-backed
securities which provide a return of principal and interest on a
monthly basis, and have original maturities of between five to
seven years, at which point the entire remaining principal
balance is repaid (the ''balloon'' payment).  The remainder of
the Company's mortgage-backed securities portfolio is split
between a $39.1 million investment in seasoned pass-through
certificates backed by GNMA, FNMA or FHLMC, with an average
remaining maturity of 7 years, and an $8.6 million investment in
Collateralized Mortgage Obligations ("CMOs") comprised entirely of
fixed rate, short-term classes with relatively little cash flow
volatility or floating rate classes which reprice periodically.

  While mortgage-backed securities backed by federally sponsored
agencies carry a reduced credit risk as compared to whole loans,
such securities remain subject to the risk that fluctuating
interest rates, along with other factors such as the geographic
distribution of the underlying mortgage loans, may alter the
prepayment rate of such mortgage loans and so affect both the
prepayment speed, and value, of such securities.

  The Bank adopted SFAS 115 effective July 1, 1994.  SFAS 115
requires that investments in equity securities that have readily
determinable fair values and all investments in debt securities
be classified in one of the following three categories and
accounted for accordingly:  trading securities, securities
available for sale, or securities held to maturity.  The
Company  had no securities classified as trading securities
during the year ended June 30, 1996, and does not intend to trade
securities.  Unrealized gains and losses on available for sale
securities are excluded from earnings and are reported as a
separate component of stockholders' equity, net of deferred
taxes.  At June 30, 1996, the Company had $498.7 million of
securities classified as available for sale which represented
36.3% of total assets (or 39.93% of Adjusted Assets) at June 30,
1996. Given the size of the available for sale portfolio, future
fluctuations in market values of these securities could result in
fluctuations in the Company's stockholders' equity.  As a
mitigating factor, approximately $360.4 million, or 72%, of the
total available for sale portfolio at June 30, 1996 either
matures or reprices within one year.
  The maturities on the Bank's fixed-term mortgage-backed
securities (balloons, seasoned GNMAs and FHLMCs) are relatively
short as compared to the final maturities on its ARMs and CMO
portfolios. Except for fixed rate mortgage backed securities
acquired from Conestoga, which were generally classified as
available for sale, the Company typically classifies purchased
fixed rate mortgage-backed securities as held-to-maturity, and
carries the securities at amortized cost.  The Company is
confident of its ability to hold these securities to final
maturity.  The Company typically classifies purchased ARMs and
CMOs as available for sale, in recognition of the greater
prepayment uncertainty associated with these securities, and
carries these securities at fair market value.

The following table sets forth activity in the Company's mortgage-
backed securities portfolio for the periods indicated.

                                                    For the Year Ended June 30,
                                                ----------------------------------
                                                    1996        1995       1994
                                                ----------- ----------- ----------
                                                          (In thousands)
                                                               
Amortized cost at beginning of period..........  $  90,543     $94,356    $82,077
Purchases/Sales (net)..........................     20,743      10,067     29,753
Principal repayments...........................    (25,871)    (13,595)   (16,906)
Premium and discount amortization, net.........       (283)       (285)      (568)
Securities acquired in purchase of Conestoga   124,409          -          -
                                                 -----------  ---------- ---------
Amortized cost at end of period................  $ 209,541      $90,543    $94,356
                                                 ===========  ========== =========

 Amount comprised of $9.9 million of FHLMC securities, $38.4
     million of FNMA securities, $70.1 of GNMA securities, and $6.0
     million of CMOs.

The following table sets forth the amortized cost and fair value
of the Company's securities at the dates indicated.

                                                    At June 30,
                               ----------------------------------------------------------
                                        1996          1995                1994
                               -------------------- ------------------ ------------------
                                Amortized    Fair   Amortized   Fair   Amortized   Fair
                                  Cost      Value      Cost     Value     Cost     Value
                               ---------- --------- --------- -------- --------- --------
                                                    (In thousands)
                                                                   
Mortgage-backed securities:
GNMA..........................    $88,133   $88,563   $24,402  $24,960   $29,764  $29,224
FNMA..........................     56,720    56,654     7,417    7,599     5,941    5,965
FHLMC.........................     56,122    56,151    54,888   55,382    53,950   53,010
CMOs..........................      8,566     8,589     3,836    3,964     4,701    4,738
                               ---------- --------- --------- -------- --------- --------
Total mortgage-backed
securities....................    209,541   209,957    90,543   91,905    94,356   92,937
                               ---------- --------- --------- -------- --------- --------
Investment securities:
U.S. Treasury and Agency......    297,994   297,906    25,834   25,694    18,989   18,684
Other.....................     83,700    83,610    67,991   67,909    61,352   60,379
                               ---------- --------- --------- -------- --------- --------
Total investment securities...    381,694   381,516    93,825   93,603    80,341   79,063
Equity securities.............      2,977     3,205     3,304    3,070     1,356    1,359
Net unrealized gain.......        575        -        770      -         -        -
                               ---------- --------- --------- -------- --------- --------
Total securities, net.........   $594,787  $594,678  $188,442 $188,578  $176,053 $173,359
                               ========== ========= ========= ======== ========= ========

 Includes $9.9 million of FHLMC securities, $38.4
     million of FNMA securities, $70.1 million in GNMA securities,
     $6.0 million in CMOs,  $119.1 million in agency obligations,
     and $51.7 million in corporate obligations acquired from
     Conestoga.
 The net unrealized gain at June 30, 1996 and 1995
     relates to available for sale securities in accordance with
     SFAS No. 115. The net unrealized gain is presented in order to
     reconcile the ''Amortized Cost'' of the Company's securities
     portfolio to the recorded value  reflected in the Consolidated
     Statements of Condition.

  Corporate Debt Obligations.   The Company invests in the short-
term investment grade debt obligations of various corporations.
Corporate debt obligations generally carry both a higher rate of
return and a higher degree of credit risk than U.S. Treasury
securities with comparable maturities. In addition, corporate
securities are generally less liquid than comparable U.S.
Treasury securities. In recognition of the additional risks
associated with investing in these securities, the Company's
investment policy limits new investments in corporate obligations
to those companies which are rated single ''A'' or better by one
of the nationally recognized rating agencies, and limits
investments in any one corporate entity to the lesser of 1% of
total assets or 15% of the Company's equity. At June 30, 1996,
the Company's portfolio of corporate debt obligations totaled
$79.2 million, or 5.8% of total assets.

The following table sets forth the amortized cost and fair value
of the Company's securities, by accounting classification and by
type of security, at the dates indicated.

                                                      At June 30,
                               ----------------------------------------------------------
                                        1996           1995                1994
                               -------------------- ------------------ ------------------
                                Amortized    Fair   Amortized   Fair   Amortized    Fair
                                  Cost      Value      Cost     Value     Cost      Value
                               ---------- --------- --------- -------- --------- ---------
                                                    (In thousands)
                                                               
Held-to-Maturity:
Mortgage-backed securities:
Pass-through securities........   $52,580   $52,596   $53,815  $54,172   $89,655  $88,199
CMOs...........................        -         -         -        -      4,701    4,738
                               ---------- --------- --------- -------- --------- --------
Total mortgage-backed
securities....................     52,580    52,596    53,815   54,172    94,356   92,937
Investment securities          43,552    43,428    51,475   51,254    80,341   79,063
Equity securities.............         -         -         -        -      1,356    1,359
                               ---------- --------- --------- -------- --------- --------
Total Held-to-Maturity........   $ 96,132  $ 96,024  $105,290 $105,426  $176,053 $173,359
                               ========== ========= ========= ======== ========= ========
Available-for-Sale:
Mortgage-backed securities:
Pass-through securities........  $148,396  $148,772   $32,892  $33,769        -        -
CMOs...........................     8,566     8,589     3,836    3,964        -        -
                               ---------- --------- --------- -------- --------- --------
Total mortgage-backed
securities....................    156,962   157,361    36,728   37,733        -        -
Investment securities.    338,141   338,089    42,350   42,349        -        -
Equity securities.............      2,977     3,205     3,304    3,070        -        -
Net unrealized gain.......        575        -        770       -         -        -
                               ---------- --------- --------- -------- --------- --------
Total available-for-sale......   $498,655  $498,655   $83,152   83,152        -        -
                               ========== ========= ========= ======== ========= ========
Total securities, net.........   $594,787  $594,679  $188,442 $188,578  $176,053 $173,359
                               ========== ========= ========= ======== ========= ========

 Includes $118.4 million of mortgage-backed  pass-through
     securities,  $6.0  million  in  CMOs,  and  $170.8  million  in
     investment  securities  acquired from Conestoga.   Except,  for
     $10.7  million  of investment securities which were  classified
     as  held-to-maturity, all securities acquired  were  classified
     as available for sale.
 Includes corporate debt obligations.
 The net unrealized gain at June 30, 1996 and 1995 relates to
     available for sale securities in accordance with SFAS No.  115.
     The  net unrealized gain is presented in order to reconcile the
     ''Amortized  Cost''  of the Company's securities  portfolio  to
     the  recorded  value  reflected in the Consolidated  Statements
     of Condition.
 Amount includes $125.0 million of investment  securities
     (short-term agency obligations) which  matured on  July 1, 1996
     in  order  to  coincide  with  the refund of excess subscription
     proceeds received in the Company's initial  public offering.

   The  following table sets forth certain information  regarding
the  amortized cost, fair value and weighted average yield of the
Company's  debt securities at June 30, 1996, by remaining  period
to   contractual   maturity.  With  respect  to   mortgage-backed
securities, the entire amount is reflected in the maturity period
that  includes the final security payment date and,  accordingly,
no  effect  has  been  given to periodic repayments  or  possible
prepayments. Other than obligations of federal agencies and GSEs,
the  Company has no investments in securities issued by  any  one
entity in excess of 10% of stockholders' equity at June 30, 1996.

                                                          At June 30, 1996
                                         ------------------------------------------------------
                                              Held-to-Maturity           Available-for-Sale
                                         --------------------------- --------------------------
                                                            Weighted                   Weighted
                                         Amortized   Fair   Average  Amortized   Fair  Average
                                            Cost     Value   Yield      Cost    Value    Yield
                                         --------- -------- -------- --------- -------- --------
                                                         (Dollars in thousands)
                                                                      
Mortgage-backed securities:
Due within 1 year.......................   $    -   $    -       - %    $2,075   $2,075    6.00%
Due after 1 year but within 5 years.....    32,300   31,962    6.20     12,930   12,930    6.04
Due after 5 years but within 10 years...     2,817    2,740    6.10      5,945    5,968    6.83
Due after 10 years......................    17,463   17,894    7.01    136,012  136,388    6.72
                                         --------- --------          --------- --------
Total...................................    52,580   52,596    6.46    156,962  157,361    6.65
                                         --------- --------          --------- --------
U.S. Treasury and Agency:
Due within 1 year ..................     6,000    5,982    4.87    230,934  230,934    5.35
Due after 1 year but within 5 years.....     5,340    5,314    5.62     46,307   46,247    6.12
Due after 5 years but within 10 years...     8,093    8,111    6.86         -        -       -
Due after 10 years......................     1,320    1,320    7.41         -        -       -
                                         --------- --------          --------- --------
Total...................................    20,753   20,727    6.00    277,241  277,181    5.48
                                         --------- --------          --------- --------
Corporate & Other:
Due within 1 year.......................    13,039   13,043    5.55     42,417   42,420    5.37
Due after 1 year but within 5 years.....     9,760    9,658    6.10     14,109   14,132    6.62
Due after 5 years but within 10 years...        -        -       -       3,376    3,348    7.99
Due after 10 years......................        -        -       -       3,975    4,213    8.15
                                         --------- --------          --------- --------
Total...................................    22,799   22,701    5.79     63,877   64,113    5.96
                                         --------- --------          --------- --------
Total:
Due within 1 year.......................    19,039   19,025    5.33    275,426  275,429    5.36
Due after 1 year but within 5 years.....    47,400   46,934    6.11     73,346   73,309    6.20
Due after 5 years but within 10 years...    10,910   10,851    6.67      9,321    9,316    7.24
Due after 10 years......................    18,783   19,214    7.03    139,987  140,601    6.76
                                         --------- --------          --------- --------
Total...................................  $ 96,132 $ 96,024    6.20%  $498,080 $498,655    5.91%
                                         ========= ========          ========= ========

 Amount includes $125.0 million of investment securities
     (short-term  agency GSE notes) which  matured on July 1,1996
     in  order  to  coincide  with  the  refund of excess
     subscription proceeds received in the Company's initial  public
     offering.

Sources of Funds

   General.    Deposits, repayments of loans and  mortgage-backed
securities,  investment security maturities and redemptions,  and
short-  to medium-term borrowings from the FHLBNY are the  Bank's
primary  sources  of  funding  for  its  lending  and  investment
activities.  The  Bank is also active in the  secondary  mortgage
market,  selling  substantially all of its new long-term,  fixed-
rate  residential  mortgage product to  either  FNMA,  FHLMC,  or
SONYMA.

   Deposits.    The  Bank  offers a variety of  deposit  accounts
having  a  range of interest rates and terms. The Bank  presently
offers   savings   accounts,  money  market  accounts,   checking
accounts,  NOW  and  Super  NOW  accounts,  and  certificates  of
deposit.  The  flow  of deposits is influenced  significantly  by
general  economic  conditions,  changes  in  prevailing  interest
rates,  and  competition  from other financial  institutions  and
investment products. The Bank has not used brokers to attract and
retain deposits, relying instead on customer service, convenience
and long-standing relationships with customers. Consequently, the
communities  in  which  the bank maintains  branch  offices  have
historically  provided the Bank with nearly all of its  deposits.
At  June  30,  1996, the Bank had deposit liabilities  of  $950.1
million,  up $395.3 million from June 30, 1995. The increase  was
due  primarily to $394.3 of deposits acquired in the purchase  of
Conestoga.   Within  total  deposits,  $40.1  million,  or  4.2%,
consisted of certificates of deposit with balances of $100,000 or
greater. Individual Retirement Accounts (''IRA's'') totaled $98.0
million, or 10.3% of total deposits.

The following table presents the deposit activity of the Bank for
the periods indicated.

                                                           For the Year Ended June 30,
                                                         ------------------------------
                                                           1996       1995       1994
                                                         --------- ---------- ---------
                                                                (In thousands)

Deposits...............................................  $696,881  $699,479   $646,338
Withdrawals............................................   718,534   709,317    680,325
                                                         --------- --------- ----------
(Withdrawals) in excess of deposits....................  (21,653)   (9,838)   (33,987)
Deposits acquired in purchase of Conestoga ........   394,250       -          -
Interest credited......................................    22,676    17,918     16,638
                                                         --------- --------- ----------
Total increase (decrease) in deposits..................  $395,273    $8,080   $(17,349)
                                                         ========= ========= ==========

 Amount comprised of $216.3 million in certificate of
     deposits, $129.2 in savings accounts, $16.9 million in checking
     accounts, $30.8 million in money market accounts, and $954,000 in
     NOW and Super NOW accounts.

   At June 30, 1996 the Bank had $40.1 million in certificate  of
deposit accounts over $100,000 maturing as follows:

                                                Weighted
                                      Amount  Average Rate
                                     -------- -------------
                                     (Dollars in thousands)
Maturity Period
Within three months.................  $11,005         5.24%
After three but within six months...    7,584         5.43
After six but within 12 months......   11,721         5.56
After 12 months.....................    9,755         6.23
                                     --------
Total...............................  $40,065         5.61%
                                     ========

   The  following table sets forth the distribution of the Bank's
deposit accounts and the related weighted average interest  rates
at the dates indicated.

                                                               At June 30,
                               --------------------------------------------------------------------------------------
                                        1996                            1995                         1994
                              ----------------------------- ---------------------------- -----------------------------
                                         Percent of  Weighted          Percent of Weighted           Percent of   Weighted
                                           Total     Average             Total    Average              Total      Average
                                 Amount   Deposits    Rate       Amount  Deposits    Rate    Amount    Deposits      Rate
                               ---------- --------- --------- ---------- -------- -------- --------- -----------  ---------
                                                                   (Dollars in thousands)
                                                                                       
Checking accounts.............   $27,684     2.91%      -%      $10,219      1.85%     - %    $9,865      1.80%         -%
NOW accounts..................    15,029     1.58%    1.50       13,877      2.50    1.50     13,596      2.49        1.50
Super NOW.....................       552     0.06     1.50          674      0.12    1.50        416      0.08        1.50
Money market accounts.........    45,948     4.84     3.04       16,698      3.01    2.65     22,145      4.05        2.66
Savings accounts..............   365,146    38.43     2.50      238,217     42.93    2.50    294,387     53.84        2.50
Certificates of deposit ......   495,755    52.18     5.50      275,156     49.59    5.72    206,352     37.74        3.78
                               ---------- --------            ----------  --------          ---------  --------
Totals........................  $950,114   100.00%             $554,841    100.00%          $546,761    100.00%
                               ========== ========            ==========  ========          =========  ========

   The  following  table presents, by interest rate  ranges,  the
amount of certificate accounts outstanding at the dates indicated
and   the   period  to  maturity  of  the  certificate   accounts
outstanding at June 30, 1996.

                      Period to Maturity at June 30, 1996            
                    --------------------------------------- ------------------------------
                                                                    Total at June 30,
                      Less than      One to       Four to   ------------------------------
Interest Rate Range   One Year    Three Years   Five Years      1996       1995     1994
- -------------------  ----------- ------------- ------------ ------------ -------- --------
                                                 (In thousands)
                                                                
4.00% and below....       $3,257           $42           $1       $3,300  $20,646 $146,755
4.01% to 5.00%.....      192,562        12,261            3      204,826   45,135   18,331
5.01% to 6.00%.....       65,720        71,613        6,998      144,331   86,389   29,049
6.01% to 7.00%.....       86,597        11,558       18,390      116,545  112,929    7,774
7.01% and above....       11,220         4,865       10,668       26,753   10,057    4,443
                     ----------- ------------- ------------ ------------ -------- --------
Total..............     $359,356      $100,339      $36,060     $495,755 $275,156 $206,352
                     =========== ============= ============ ============ ======== ========

  Borrowings.   The Bank has been a member and shareholder of the
FHLBNY  since  February 14, 1980. One of the privileges  accorded
FHLBNY  shareholders is the ability to borrow money under various
lending (''advance'') programs at competitive interest rates. The
Bank's total borrowing capacity at the FHLBNY at June 30, 1996 is
in  excess  of  $152  million. Included  as  part  of  the  total
borrowing capacity at the FHLBNY, the Bank has been approved  for
an  ''Overnight Line of Credit'' of $32.1 million,  and  a  $32.1
million  ''One-Month Overnight Line of Credit,'' both  priced  at
0.125% over the prevailing federal funds rate. At June 30,  1996,
the  Bank  had  a  total of $15.7 million in fixed-rate  advances
outstanding with the FHLBNY with remaining maturities of  between
two and three years, at an average rate of 5.40%.

Securities sold with agreement to repurchase totaled $12.0
million at June 30, 1996. Of this total, $10.0 million were
acquired in the acquisition of Conestoga.  The U.S. Government,
agency and mortgage-backed securities sold with agreement to
repurchase all mature beyond ten years as of June 30, 1996..
Borrowings under such reverse repurchase agreements involve the
delivery of securities to broker-dealers who arrange the
transactions. The securities remain registered in the name of the
Bank, and are returned upon the maturities of the agreements.
Funds to repay the Bank's securities sold with agreement to
repurchase at maturity will be provided primarily by cash
received from the maturing securities.

  Presented below is information concerning securities sold with
agreement to repurchase for the years ended June 30, 1996, 1995
and 1994:

                                                             At of for the Years Ended June 30,
                                                         ----------------------------------------
                                                             1996          1995          1994
                                                         ------------- ------------- ------------
                                                                  (Dollars in thousands)
                                                                                        
Average amounts outstanding.............................     $2,148        $2,212         $2,196
Total interest cost.....................................        153           160            164
Average interest rate paid..............................       7.13%         7.25%          7.48%
Maximum amount outstanding at any month end.............    $11,998        $2,164         $2,277
Ending balance..........................................     11,998         2,110          2,161
Weighted average interest rate on balance outstanding...       6.00%         7.50%          7.56%

Subsidiary Activities

The  Company's  only  subsidiary  is  the  Bank.   The  Bank  was
originally  founded in 1864 as a New York State-chartered  mutual
savings  bank.   On  November 1, 1995, the Bank  converted  to  a
federal  mutual  savings  bank.   On  June  26,  1996,  the  Bank
converted  from  the mutual to the stock form of  ownership,  and
100% of its outstanding shares were acquired by the Company.  The
operation of the Bank is the primary business of the Company.

   The  Bank  has  three  wholly-owned  subsidiary  corporations.
Havemeyer Brokerage Corporation (''HBC'') is currently engaged in
the  sale  of  insurance and annuity products  primarily  to  the
Bank's  customers and members of the local community. As of  June
30,  1996.  HBC had $597,690 in consolidated assets, and for  the
year  ended  June  30,  1996,  had  pre-tax  income  of  $47,889.
Havemeyer  Equities Corporation (''HEC'') and  Boulevard  Funding
Corporation  (''BFC'') are currently inactive.  As  of  June  30,
1996, HEC had $7,688 and BFC had $1,868 of consolidated assets.

Personnel

   As  of  June 30, 1996, the Company had 208 full-time employees
and 73 part-time employees.  The employees are not represented by
a  collective  bargaining  unit, and the  Company  considers  its
relationship with its employees to be good.

Federal, State and Local Taxation

Federal Taxation

      General.   The  following is a discussion of  material  tax
matters and does not purport to be a comprehensive description of
the tax rules applicable to the Bank or the Company. The Bank was
last  audited  for its taxable year ended December 31,  1988  For
federal  income tax purposes, the Company and the Bank will  file
separate income tax returns and report their income on a June  30
fiscal year basis using the accrual method of accounting and will
be subject to federal income taxation in the same manner as other
corporations  with  some exceptions, including  particularly  the
Bank's tax reserve for bad debts, discussed below.

      Tax  Bad  Debt Reserves.  The Small Business Job Protection
Act  of  1996 (the "1996 Act"), which was enacted on  August  20,
1996,  made  significant changes to provisions  of  the  Internal
Revenue   Code  of  1986  (the  "Code")  relating  to  a  savings
institution's  use  of bad debt reserves for federal  income  tax
purposes  and  requires such an institution to  recapture  (i.e.,
take  into income) certain portions of its accumulated  bad  debt
reserves.  The  effect of the 1996 Act on the Bank  is  discussed
below.  Prior  to  the enactment of the 1996 Act,  the  Bank  was
permitted  to establish tax reserves for bad debts  and  to  make
annual  additions  thereto,  which  additions,  within  specified
formula  limits, were deducted in arriving at the Bank's  taxable
income.  The Bank's deduction with respect to "qualifying loans,"
which  are generally loans secured by certain interests  in  real
property, was permitted to be computed using an amount based on a
six-year  moving  average of the Bank's  charge-offs  for  actual
losses (the "Experience Method"), or an amount equal to 8% of the
Bank's taxable income (the "PTI Method"), computed without regard
to  this  deduction and with additional modifications and reduced
by  the  amount  of any permitted addition to the  non-qualifying
reserve.  Use  of the PTI Method had the effect of  reducing  the
marginal  rate  of  federal tax on the Bank's  income  to  32.2%,
exclusive of any minimum or environmental tax, as compared to the
generally applicable maximum corporate federal income tax rate of
35%.  The  Bank's deduction with respect to non-qualifying  loans
was  required  to be computed under the Experience  Method.  Each
year  the  Bank reviewed the most favorable way to calculate  the
deduction  attributable  to  an addition  to  the  tax  bad  debt
reserves.

      The  1996  Act.   Under the 1996 Act, for its  current  and
future taxable years, the Bank is not permitted to make additions
to  its tax bad debt reserves. The Bank will be allowed to deduct
bad  debts  as  incurred. In addition, the Bank  is  required  to
recapture  (i.e., take into income) over a six  year  period  the
excess  of  the balance of its tax bad debt reserves  as  of  the
first taxable year beginning after December 31, 1995 (other  than
its supplemental reserve for losses on loans) over the balance of
such  reserves  as  of December 31, 1987.  As a  result  of  such
recapture,   the  Bank  will  pay  additional  federal   tax   of
approximately $1.1 million.  Since the Bank has already  provided
a  deferred  income  tax liability of this amount  for  financial
reporting  purposes,  the enactment of  the  1996  Act  will  not
adversely  impact the Bank's financial condition  or  results  of
operations.  Moreover, such recapture will be suspended for  each
of  the  two successive taxable years, beginning with the  Bank's
current  taxable year, in which the Bank originates a minimum  of
certain residential loans based upon the average of the principal
amounts  of  such loans made by the Bank during its  six  taxable
years preceding its current taxable year.

      Distributions.  Under the 1996 Act, if the Bank makes "non-
dividend  distributions" to the Company, such distributions  will
be  considered to have been made from the Bank's unrecaptured tax
bad  debt reserve balance as of December 31, 1987, to the  extent
thereof, and then from the Bank's supplemental reserve for losses
on  loans,  to  the extent thereof, and an amount  based  on  the
amount  distributed  (but not in excess of  the  amount  of  such
reserves)  will  be  included in the Bank's income.  Non-dividend
distributions  include  distributions in  excess  of  the  Bank's
current  and accumulated earnings and profits, as calculated  for
federal  income  tax  purposes, distributions  in  redemption  of
stock,  and  distributions  in partial or  complete  liquidation.
Dividends paid out of the Bank's current or accumulated  earnings
and profits will not be so included in the Bank's income.

      The amount of additional taxable income created from a non-
dividend distribution is an amount that, when reduced by the  tax
attributable  to  the  income, is equal  to  the  amount  of  the
distribution. Thus, if, after the Conversion, the  Bank  makes  a
non-dividend distribution to the Company, approximately  one  and
one-half times the amount of such distribution (but not in excess
of the amount of such reserves) would be includable in income for
federal  income  tax purposes, assuming a 35%  federal  corporate
income  tax  rate.  See  "Regulation" and "Dividend  Policy"  for
limits on the payment of dividends by the Bank. The Bank does not
intend  to pay dividends that would result in a recapture of  any
portion of its tax bad debt reserves.

      Corporate Alternative Minimum Tax. The Code imposes  a  tax
("AMT") on alternative minimum taxable income ("AMTI") at a  rate
of 20%. AMTI is also adjusted by determining the tax treatment of
certain  items  in a manner that negates the deferral  of  income
resulting  from the regular tax treatment of those  items.  Thus,
the  Bank's  AMTI is increased by an amount equal to 75%  of  the
amount by which the Bank's adjusted current earnings exceeds  its
AMTI  (determined without regard to this adjustment and prior  to
reduction  for  net operating losses). In addition,  for  taxable
years  beginning  after December 31, 1986 and before  January  1,
1996,  an environmental tax of 0.12% of the excess of AMTI  (with
certain   modifications)   over  $2   million   is   imposed   on
corporations, including the Bank, whether or not an AMT is paid..

State and Local Taxation

       State of New York. The Bank and the Company are subject to
New York State franchise tax on one of several alternative bases,
whichever  results  in the highest tax, and  will  file  combined
returns  for  purposes of this tax. The basic tax is measured  by
"entire  net  income,"  which  is  federal  taxable  income  with
adjustments. For New York State tax purposes, so long as the Bank
continues  to  meet certain definitional tests  relating  to  its
assets  and  the  nature of its business, it  will  be  permitted
deductions, within specified formula limits, for additions to its
bad  debt  reserves  for  purposes of computing  its  entire  net
income.  The Bank's deduction with respect to "qualifying loans,"
which  are generally loans secured by certain interests  in  real
property,  may  be computed using an amount based on  the  Bank's
actual  loss  experience (the "Experience Method") or  an  amount
equal  to 32% of the Bank's entire net income (the "PTI Method"),
computed  without  regard to this deduction and  reduced  by  the
amount  of any permitted addition to the Bank's reserve for  non-
qualifying loans. Because of a recent amendment to the  New  York
State  tax law, the Bank is not required to recapture any portion
of  its  New  York  bad debt reserves because  of  the  automatic
recapture of its federal bad debt reserves pursuant to  the  1996
Act  (see Federal Taxation, Tax Bad Debt Reserves). However,  the
New  York  bad debt reserves are subject to recapture  for  "non-
dividend  distributions" in a manner similar to the recapture  of
the federal bad debt reserves for such distributions (see Federal
Taxation, Distributions). Also, the New York bad debt reserve  is
subject  to recapture in the event that the Bank fails to satisfy
the  definitional  tests. The Bank's deduction  with  respect  to
non-qualifying loans must be computed under the Experience Method
which  is based on the Bank's actual charge-offs.  Each year  the
Bank  will  review  the  most  favorable  way  to  calculate  the
deduction  attributable  to  an addition  to  the  tax  bad  debt
reserves.

      The  New York State tax rate for the 1996 calendar year  is
10.755%  (including commuter transportation and other surcharges)
of  net  income. In general, the Company will not be required  to
pay  New  York State tax on dividends and interest received  from
the Bank.

      City of New York. The Bank and the Company are also subject
to  a similarly calculated New York City banking corporation  tax
of  9% on income allocated to New York City. Unless the New  York
City  tax law is amended to conform with the New York State  law,
the Bank will  be required to include in its New York City income
for its current taxable year the excess of its post-1987 New York
City  reserves for losses on qualifying real property loans  over
its  reserve  for  losses  on such loans maintained  for  federal
income tax purposes (the "Excess Reserves"). If the Bank's Excess
Reserve  of $29.6 million as of the first taxable year  beginning
after December 31, 1995 were so included, the Bank would pay   an
additional  city  tax  liability of approximately  $1.2  million.
Since  the  Bank  has  already provided  a  deferred  income  tax
liability  of this amount for financial reporting purposes,  this
will  not  adversely  impact the Bank's  financial  condition  or
results of operations.

     State of Delaware. As a Delaware holding company not earning
income  in  Delaware,  the  Company  is  exempted  from  Delaware
corporate  income tax, but is required to file an  annual  report
and pay an annual franchise tax to the State of Delaware.

Regulation

General

   The Bank is subject to extensive regulation, examination,  and
supervision by the OTS, as its chartering agency, and  the  FDIC,
as  its  deposit insurer. The Bank's deposit accounts are insured
up  to applicable limits by the Bank Insurance Fund ("BIF")   and
Savings Association Insurance Fund ("SAIF") administered  by  the
FDIC,  and  it  is  a member of the FHLBNY. The  Bank  must  file
reports  with the OTS and the FDIC concerning its activities  and
financial  condition,  and  it must obtain  regulatory  approvals
prior  to  entering into certain transactions,  such  as  mergers
with, or acquisitions of, other depository institutions. The  OTS
and  the FDIC conduct periodic examinations to assess the  Bank's
compliance  with various regulatory requirements. This regulation
and   supervision  establishes  a  comprehensive   framework   of
activities  in  which a savings association  can  engage  and  is
intended  primarily for the protection of the insurance fund  and
depositors.   The Company, as a unitary savings and loan  holding
company,  is required to file certain reports with, and otherwise
comply  with,  the rules and regulations of the OTS  and  of  the
Securities  and  Exchange  Commission  (the  ''SEC'')  under  the
federal securities laws.

   The OTS and the FDIC have significant discretion in connection
with their supervisory and enforcement activities and examination
policies,  including policies with respect to the  classification
of  assets  and the establishment of adequate loan loss  reserves
for regulatory purposes. Any change in such policies, whether  by
the  OTS, the FDIC or the Congress, could have a material adverse
impact on the Company, the Bank, and the operations of both.

   The  following discussion is intended to be a summary  of  the
material   statutes   and  regulations  applicable   to   savings
associations,  and  it  does not purport to  be  a  comprehensive
description of all such statutes and regulations.

Regulation of Federal Savings Associations

   Business  Activities.    The  Bank  derives  its  lending  and
investment  powers  from the Home Owner's Loan  Act,  as  amended
(''HOLA''),  and  the  regulations of the OTS  thereunder.  Under
these laws and regulations, the Bank may invest in mortgage loans
secured by residential and commercial real estate, commercial and
consumer  loans,  certain types of debt securities,  and  certain
other  assets.  The Bank may also establish service  corporations
that  may engage in activities not otherwise permissible for  the
Bank,  including  certain  real  estate  equity  investments  and
securities  and insurance brokerage. These investment powers  are
subject  to  various  limitations, including  (a)  a  prohibition
against  the acquisition of any corporate debt security  that  is
not  rated  in one of the four highest rating categories;  (b)  a
limit of 400% of an association's capital on the aggregate amount
of  loans secured by non-residential real estate property; (c)  a
limit of 10% of an association's assets on commercial loans;  (d)
a limit of 35% of an association's assets on the aggregate amount
of  consumer  loans and acquisitions of certain debt  securities;
(e)  a  limit of 5% of assets on non-conforming loans  (loans  in
excess  of the specific limitations of HOLA); and (f) a limit  of
the  greater  of  5%  of  assets or an association's  capital  on
certain construction loans made for the purpose of financing what
is or is expected to become residential property.

   Loans to One Borrower.   Under HOLA, savings associations  are
generally subject to the same limits on loans to one borrower  as
are  imposed on national banks. Generally, under these limits,  a
savings  association may not make a loan or extend  credit  to  a
single  or  related group of borrowers in excess of  15%  of  the
association's unimpaired capital and surplus. Additional  amounts
may  be  lent,  not  in excess of 10% of unimpaired  capital  and
surplus, if such loans or extensions of credit are fully  secured
by  readily-marketable collateral. Such collateral is defined  to
include  certain  debt  and equity securities  and  bullion,  but
generally  does not include real estate. At June  30,  1996,  the
Bank's limit on loans to one borrower was $12.4 million. At  June
30,  1996,  the Bank's largest aggregate amount of loans  to  one
borrower was $8.2 million and the second largest borrower had  an
aggregate balance of $4.9 million.

   QTL  Test.  HOLA requires a savings association to meet a  QTL
test.  Under  the QTL test, a savings association is required  to
maintain  at  least  65% of its ''portfolio assets''  in  certain
''qualified thrift investments'' in at least nine months  of  the
most  recent twelve-month period. ''Portfolio assets'' means,  in
general,  an  association's total assets  less  the  sum  of  (a)
specified  liquid assets up to 20% of total assets,  (b)  certain
intangibles,  including goodwill and credit  card  and  purchased
mortgage servicing rights, and (c) the value of property used  to
conduct   the   association's   business.   ''Qualified    thrift
investments''   includes  various  types  of   loans   made   for
residential  and  housing purposes, investments related  to  such
purposes,   including   certain   mortgage-backed   and   related
securities,  and  consumer loans up to 10% of  the  association's
portfolio assets. At June 30, 1996, the Bank maintained 76.0%  of
its  portfolio assets in qualified thrift investments.  The  Bank
had  also  met the QTL test in each of the prior 12  months  and,
therefore, was a qualified thrift lender.

   A  savings  association that fails the QTL  test  must  either
operate  under certain restrictions on its activities or  convert
to  a bank charter. The initial restrictions include prohibitions
against  (a) engaging in any new activity not permissible  for  a
national  bank,  (b)  paying  dividends  not  permissible   under
national  bank regulations, (c) obtaining new advances  from  any
FHLB,  and  (d) establishing any new branch office in a  location
not  permissible  for a national bank in the  association's  home
state.  In  addition,  within one year  of  the  date  a  savings
association  ceases to meet the QTL test, any company controlling
the  association would have to register under, and become subject
to  the requirements of, the Bank Holding Company Act of 1956, as
amended. If the savings association does not requalify under  the
QTL  test  within the three-year period after it failed  the  QTL
test,  it  would  be required to terminate any  activity  and  to
dispose of any investment not permissible for a national bank and
would  have  to  repay  as promptly as possible  any  outstanding
advances from an FHLB. A savings association that has failed  the
QTL  test  may requalify under the QTL test and be free  of  such
limitations, but it may do so only once.

   Capital  Requirements.   The OTS regulations  require  savings
associations to meet three minimum capital standards: a  tangible
capital  ratio  requirement of 1.5% of total assets  as  adjusted
under the OTS regulations, a leverage ratio requirement of 3%  of
core  capital  to  such adjusted total assets, and  a  risk-based
capital ratio requirement of 8% of core and supplementary capital
to  total  risk-based assets. In determining the amount of  risk-
weighted   assets   for  purposes  of  the   risk-based   capital
requirement,  a  savings association must compute its  risk-based
assets  by  multiplying its assets and certain off-balance  sheet
items  by  risk-weights,  which  range  from  0%  for  cash   and
obligations  issued  by  the  United  States  Government  or  its
agencies, to 100% for consumer and commercial loans, as  assigned
by the OTS capital regulation based on the risks OTS believes are
inherent in the type of asset.

  Tangible capital is defined, generally, as common stockholders'
equity   (including  retained  earnings),  certain  noncumulative
perpetual   preferred  stock  and  related   earnings,   minority
interests  in equity accounts of fully consolidated subsidiaries,
less  intangibles other than certain purchased mortgage servicing
rights  and  investments in and loans to subsidiaries engaged  in
activities  not permissible for a national bank. Core capital  is
defined  similarly  to tangible capital, but  core  capital  also
includes  certain  qualifying supervisory  goodwill  and  certain
purchased   credit  card  relationships.  Supplementary   capital
currently   includes   cumulative  preferred   stock,   long-term
perpetual  preferred  stock,  mandatory  convertible  securities,
subordinated  debt  and  intermediate preferred  stock,  and  the
allowance  for possible loan losses. The allowance for  loan  and
lease losses includable in supplementary capital is limited to  a
maximum  of  1.25%  of risk-weighted assets, and  the  amount  of
supplementary  capital  that may be  included  as  total  capital
cannot exceed the amount of core capital.

   The OTS regulations require a savings association with ''above
normal''  interest rate risk is required to deduct a  portion  of
such  capital from its total capital to account for  the  ''above
normal''  interest  rate  risk. A savings association's  interest
rate  risk is measured by the decline in the net portfolio  value
of its assets (i.e., the difference between incoming and outgoing
discounted  cash  flows from assets, liabilities and  off-balance
sheet  contracts) resulting from a hypothetical  2%  increase  or
decrease  in  market rates of interest, divided by the  estimated
economic  value  of the association's assets,  as  calculated  in
accordance  with guidelines set forth by the OTS.  At  the  times
when  the 3-month Treasury bond equivalent yield falls below  4%,
an association may compute its interest rate risk on the basis of
a decrease equal to one-half of that Treasury rate rather than on
the  basis  of 2%. A savings association whose measured  interest
rate risk exposure exceeds 2% would be considered to have ''above
normal''  risk.  The interest rate risk component  is  an  amount
equal  to  one-half  of the difference between the  association's
measured  interest rate risk and 2%, multiplied by the  estimated
economic value of the association's assets. That dollar amount is
deducted  from  an  association's total  capital  in  calculating
compliance with its risk-based capital requirement. Any  required
deduction  for interest rate risk becomes effective on  the  last
day  of  the  third quarter following the reporting date  of  the
association's financial data on which the interest rate risk  was
computed.   Pending other regulatory developments,  the  OTS  has
deferred  enforcing the general requirement to deduct capital  on
account of "above normal" interest rate risk.

      The  table below presents the Bank's regulatory capital  as
compared  to the OTS regulatory capital requirements at June  30,
1996:

                                                                    Minimum
                                                Actual        Capital Requirement
                                         ------------------- ---------------------
                                          Amount     Ratio     Amount     Ratio
                                         --------- --------- ----------- ---------
As of June 30, 1996:
                                                             
  Tangible.............................. $ 119,125     9.49%  >= $18,828   >= 1.5%
  Core Capital.......................... $ 119,259     9.50%  >= $37,659   >= 3.0%
  Risk-based capital.................... $ 126,715    21.24%  >= $47,718   >= 8.0%

  The Bank received approximately $131.1 million of excess proceeds
resulting from the oversubscription of the Company's initial public
offering.  The Bank's tangible, core, and risk-based capital ratios
were 10.60%, 10.61%, and 23.86% respectively, excluding the effects
of the excess proceeds on the balance sheet, at June 30, 1996.

The following is a reconciliation of generally accepted accounting
principles (GAAP) capital to regulatory capital for the Bank:

                                           June 30, 1996
                                     -----------------------------
                                     Tangible   Core    Risk-Based
                                     Capital  Capital    Capital
                                     -------- --------- ----------

GAAP capital........................$148,008  $148,008   $148,008
                                    --------- ---------  ---------
Non-allowable assets:
Core deposit intangible.............    (134)       -          -
Unrealized gain on AFS securities...    (311)     (311)      (311)
Goodwill............................ (28,438)  (28,438)   (28,438)
General valuation allowance.........      -         -       7,456
                                    --------- --------- ----------
Regulatory capital.................. 119,125   119,259    126,715
Minimum capital requirement.........  18,828    37,659     47,718
                                    --------- --------- ----------
Regulatory capital-excess...........$100,297  $ 81,600    $78,997
                                    ========= ========= ==========

    Limitation   on  Capital  Distributions.    OTS   regulations
currently  impose  limitations  upon  capital  distributions   by
savings  associations,  such  as  cash  dividends,  payments   to
repurchase   or  otherwise  acquire  its  shares,   payments   to
shareholders  of  another institution in a cash-out  merger,  and
other  distributions charged against capital.  At  least  30-days
written  notice  must be given to the OTS of a  proposed  capital
distribution  by a savings association, and capital distributions
in  excess  of specified earnings or by certain institutions  are
subject  to approval by the OTS. An association that has  capital
in  excess of all fully phased-in regulatory capital requirements
before and after a proposed capital distribution and that is  not
otherwise  restricted  in  making capital  distributions,  could,
after  prior  notice but without the approval of  the  OTS,  make
capital distributions during a calendar year equal to the greater
of  (a) 100% of its net earnings to date during the calendar year
plus  the  amount  that  would reduce by one-half  its  ''surplus
capital  ratio''  (the excess capital over  its  fully  phased-in
capital  requirements) at the beginning of the calendar year,  or
(b)  75% of its net earnings for the previous four quarters.  Any
additional   capital  distributions  would  require   prior   OTS
approval.  In  addition, the OTS can prohibit a proposed  capital
distribution, otherwise permissible under the regulation, if  the
OTS  has determined that the association is in need of more  than
normal   supervision  or  if  it  determines  that   a   proposed
distribution  by  an association would constitute  an  unsafe  or
unsound  practice.  Furthermore, under the OTS prompt  corrective
action regulations, the Bank would be prohibited from making  any
capital distribution if, after the distribution, the Bank  failed
to meet its minimum capital requirements, as described above. See
'' - Prompt Corrective Regulatory Action.''

   The  OTS  has  proposed regulations that  would  simplify  the
existing  procedures governing capital distributions  by  savings
associations. Under the proposed regulations, the approval of the
OTS  would be required only for an association that is deemed  to
be  in troubled condition or that is undercapitalized or would be
undercapitalized  after  the  capital  distribution.  A   savings
association would be able to make a capital distribution  without
notice  to or approval of the OTS if it is not held by a  savings
association  holding company, is not deemed  to  be  in  troubled
condition,  has  received  either of the  two  highest  composite
supervisory   ratings,  and  would  continue  to  be   adequately
capitalized  after such distribution. Notice  would  have  to  be
given  to  the OTS by any association that is held by  a  savings
association  holding  company or that had  received  a  composite
supervisory  rating  below the highest two composite  supervisory
ratings.  An  association's capital rating  would  be  determined
under  the  prompt corrective action regulations. See  ''  Prompt
Corrective Regulatory Action.''

  The Company however, is subject to the terms of a certification
requested by and delivered to the OTS in connection with the
Bank's application to the OTS for approval of the Conversion,
which certification prohibits the Company from taking any actions
to further any payments to its shareholders through a return of
excess capital until June 26, 1997. The certification expressly
does not apply to taxable dividend payments made by the Company
or to dividend payments made by the Bank to the Company.

   Liquidity.   The Bank is required to maintain an average daily
balance  of liquid assets (cash, certain time deposits,  bankers'
acceptances, specified United States Government, state or federal
agency  obligations, shares of certain mutual funds  and  certain
corporate  debt  securities  and commercial  paper)  equal  to  a
monthly  average of not less than a specified percentage  of  its
net  withdrawable  deposit accounts plus  short-term  borrowings.
This  liquidity requirement may be changed from time to  time  by
the  OTS  to  any amount within the range of 4% to 10%  depending
upon   economic  conditions  and  the  savings  flows  of  member
institutions, and is currently 5%. OTS regulations  also  require
each savings association to maintain an average daily balance  of
short-term liquid assets at a specified percentage (currently 1%)
of  the  total  of  its  net withdrawable  deposit  accounts  and
borrowings payable in one year or less. Monetary penalties may be
imposed  for  failure to meet these liquidity  requirements.  The
Bank's average liquidity ratio for the month ended June 30,  1996
was  43.0%, which exceeded the applicable requirements. The  Bank
has  never been subject to monetary penalties for failure to meet
its liquidity requirements.

    Assessments.    Savings  associations  are  required  by  OTS
regulation  to pay assessments to the OTS to fund the  operations
of  the OTS. The general assessment, paid on a semi-annual basis,
is   computed  upon  the  savings  association's  total   assets,
including   consolidated  subsidiaries,  as   reported   in   the
association's  latest quarterly Thrift Financial  Report.  During
January  1996, the Bank paid its first assessment  as  a  federal
savings  bank  of $72,493 for the period January 1, 1996  through
June 30, 1996. Prior to that date, the Bank had not paid any  OTS
assessments  as it converted to a federal charter on November  1,
1995.

   Branching.   Subject to certain limitations, HOLA and the  OTS
regulations  permit federally chartered savings  associations  to
establish  branches  in  any  state of  the  United  States.  The
authority  to establish such a branch is available (a) in  states
that expressly authorize branches of savings associations located
in  another state and (b) to an association that qualifies  as  a
''domestic  building and loan association''  under  the  Internal
Revenue  Code  of 1986, which imposes qualification  requirements
similar  to  those for a ''qualified thrift lender'' under  HOLA.
See   ''   QTL  Test.''  The  authority  for  a  federal  savings
association  to  establish  an interstate  branch  network  would
facilitate  a  geographic diversification  of  the  association's
activities.  This  authority under HOLA and the  OTS  regulations
preempts  any  state  law  purporting to  regulate  branching  by
federal savings associations.

   Community Reinvestment.   Under the CRA, as implemented by OTS
regulations,   a   savings  association  has  a  continuing   and
affirmative  obligation  consistent  with  its  safe  and   sound
operation  to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The CRA does not
establish specific lending requirements or programs for financial
institutions  nor  does it limit an institution's  discretion  to
develop  the types of products and services that it believes  are
best suited to its particular community, consistent with the CRA.
The CRA requires the OTS, in connection with its examination of a
savings  association,  to  assess  the  association's  record  of
meeting the credit needs of its community and to take such record
into  account in its evaluation of certain applications  by  such
association.  The  CRA  also requires all  institutions  to  make
public  disclosure  of their CRA ratings.  The  Bank  received  a
''Satisfactory'' CRA rating in its most recent examination.

   In  April 1995, the OTS and the other federal banking agencies
adopted  amendments revising their CRA regulations.  Among  other
things,  the  amended CRA regulations substitute  for  the  prior
process-based  assessment factors a new  evaluation  system  that
would  rate  an  institution based on its actual  performance  in
meeting community needs. In particular, the proposed system would
focus  on  three  tests:  (a) a lending  test,  to  evaluate  the
institution's record of making loans in its service areas; (b) an
investment  test,  to  evaluate  the  institution's   record   of
investing in community development projects, affordable  housing,
and  programs  benefiting low or moderate income individuals  and
businesses; and (c) a service test, to evaluate the institution's
delivery  of  services  through its  branches,  ATMs,  and  other
offices.  The  amended  CRA  regulations  also  clarify  how   an
institution's  CRA  performance  would  be  considered   in   the
application process.

   Transactions with Related Parties.   The Bank's  authority  to
engage in transactions with its ''affiliates'' is limited by  the
OTS  regulations  and  by Sections 23A and  23B  of  the  Federal
Reserve  Act (''FRA''). In general, an affiliate of the  Bank  is
any  company that controls the Bank or any other company that  is
controlled  by  a company that controls the Bank,  excluding  the
Bank's  subsidiaries other than those that are insured depository
institutions. The OTS regulations prohibit a savings  association
(a)  from  lending to any of its affiliates that  is  engaged  in
activities  that  are not permissible for bank holding  companies
under  Section 4(c) of the Bank Holding Company Act (''BHC Act'')
and  (b)  from  purchasing the securities of any affiliate  other
than  a  subsidiary. Section 23A limits the aggregate  amount  of
transactions with any individual affiliate to 10% of the  capital
and  surplus  of  the  savings association and  also  limits  the
aggregate  amount of transactions with all affiliates to  20%  of
the  savings  association's capital and  surplus.  Extensions  of
credit to affiliates are required to be secured by collateral  in
an  amount  and  of  a  type described in Section  23A,  and  the
purchase  of  low  quality  assets from affiliates  is  generally
prohibited.  Section 23B provides that certain transactions  with
affiliates, including loans and asset purchases, must be on terms
and  under  circumstances, including credit standards,  that  are
substantially  the  same  or  at  least  as  favorable   to   the
association  as  those  prevailing at  the  time  for  comparable
transactions  with  nonaffiliated companies. In  the  absence  of
comparable  transactions, such transactions may only occur  under
terms and circumstances, including credit standards, that in good
faith  would  be  offered  to  or would  apply  to  nonaffiliated
companies.

   The  Bank's  authority  to  extend credit  to  its  directors,
executive officers, and 10% shareholders, as well as to  entities
controlled  by  such  persons,  is  currently  governed  by   the
requirements  of  Sections  22(g)  and  22(h)  of  the  FRA   and
Regulation  O of the Federal Reserve Board (''FRB'')  thereunder.
Among  other things, these provisions require that extensions  of
credit  to  insiders (a) be made on terms that are  substantially
the  same as, and follow credit underwriting procedures that  are
not   less   stringent  than,  those  prevailing  for  comparable
transactions  with unaffiliated persons and that do  not  involve
more   than  the  normal  risk  of  repayment  or  present  other
unfavorable  features and (b) not exceed certain  limitations  on
the  amount of credit extended to such persons, individually  and
in  the aggregate, which limits are based, in part, on the amount
of  the  association's capital. In addition, extensions of credit
in excess of certain limits must be approved by the association's
board of directors.

   Enforcement.   Under the Federal Deposit Insurance Act  (''FDI
Act''),  the  OTS  has  primary enforcement  responsibility  over
savings  associations and has the authority to bring  enforcement
action  against all ''institution-affiliated parties,'' including
any   controlling  stockholder  or  any  shareholder,   attorney,
appraiser and accountant who knowingly or recklessly participates
in  any  violation of applicable law or regulation or  breach  of
fiduciary  duty or certain other wrongful actions that causes  or
is  likely  to  cause  a  more  than  a  minimal  loss  or  other
significant  adverse  effect on an insured  savings  association.
Civil penalties cover a wide range of violations and actions  and
range  from $5,000 for each day during which violations  of  law,
regulations,   orders,   and  certain  written   agreements   and
conditions continue, up to $1 million per day for such violations
if  the  person obtained a substantial pecuniary gain as a result
of such violation or knowingly or recklessly caused a substantial
loss to the institution. Criminal penalties for certain financial
institution  crimes  include  fines  of  up  to  $1  million  and
imprisonment  for  up to 30 years. In addition,  regulators  have
substantial  discretion  to take enforcement  action  against  an
institution   that   fails   to  comply   with   its   regulatory
requirements,   particularly  with   respect   to   its   capital
requirements.  Possible  enforcement  actions  range   from   the
imposition   of   a  capital  plan  and  capital   directive   to
receivership,  conservatorship, or  the  termination  of  deposit
insurance.  Under  the  FDI Act, the FDIC has  the  authority  to
recommend to the Director of OTS that enforcement action be taken
with  respect to a particular savings association. If  action  is
not  taken by the Director of the OTS, the FDIC has authority  to
take such action under certain circumstances.

   Standards for Safety and Soundness.   The FDI Act, as  amended
by  FDICIA  and  the Riegle Community Development and  Regulatory
Improvement Act of 1994 (''Community Development Act''), requires
the   OTS,  together  with  the  other  federal  bank  regulatory
agencies,  to prescribe standards, by regulations or  guidelines,
relating  to internal controls, information systems and  internal
audit  systems, loan documentation, credit underwriting, interest
rate  risk exposure, asset growth, asset quality, earnings, stock
valuation,  and  compensation, fees and benefits and  such  other
operational  and  managerial  standards  as  the  agencies   deem
appropriate.  The  OTS and the federal bank  regulatory  agencies
have  adopted,  effective August 9, 1995,  a  set  of  guidelines
prescribing safety and soundness standards pursuant to FDICIA, as
amended.  The guidelines establish general standards relating  to
internal   controls  and  information  systems,  internal   audit
systems,  loan documentation, credit underwriting, interest  rate
exposure,  asset growth, and compensation, fees and benefits.  In
general,  the guidelines require, among other things, appropriate
systems  and  practices  to identify and  manage  the  risks  and
exposures  specified  in the guidelines. The guidelines  prohibit
excessive  compensation  as an unsafe and  unsound  practice  and
describe  compensation as excessive when  the  amounts  paid  are
unreasonable or disproportionate to the services performed by  an
executive  officer, employee, director or principal  shareholder.
The  OTS  and the other agencies determined that the adoption  of
stock  valuation standards was not appropriate. In addition,  the
OTS  adopted  regulations pursuant that  authorize,  but  do  not
require,  the  OTS to order an institution that  has  been  given
notice  by  the OTS that it is not satisfying any of such  safety
and  soundness standards to submit a compliance plan.  If,  after
being  so  notified, an institution fails to submit an acceptable
compliance plan or fails in any material respect to implement  an
accepted  compliance plan, the OTS must issue an order  directing
action to correct the deficiency and may issue an order directing
other   actions   of  the  types  to  which  an  undercapitalized
association  is  subject under the ''prompt  corrective  action''
provisions of FDICIA. If an institution fails to comply with such
an  order,  the  OTS may seek to enforce such order  in  judicial
proceedings  and  to  impose  civil  money  penalties.  Effective
October 1, 1996, the OTS and the federal bank regulatory agencies
adopted  guidelines for identifying and monitoring asset  quality
and earnings standards.

   Real Estate Lending Standards.   The OTS and the other federal
banking  agencies adopted regulations to prescribe standards  for
extensions of credit that (a) are secured by real estate  or  (b)
are  made  for  the  purpose  of financing  the  construction  of
improvements  on  real estate. The OTS regulations  require  each
savings  association to establish and maintain  written  internal
real  estate lending standards that are consistent with safe  and
sound  banking  practices and appropriate  to  the  size  of  the
association  and the nature and scope of its real estate  lending
activities.   The   standards  also  must  be   consistent   with
accompanying  OTS guidelines, which include loan-to-value  ratios
for  the  different types of real estate loans. Associations  are
also  permitted  to make a limited amount of loans  that  do  not
conform to the proposed loan-to-value limitations so long as such
exceptions   are   reviewed  and  justified  appropriately.   The
guidelines  also  list a number of lending  situations  in  which
exceptions to the loan-to-value standards are justified.

   Prompt  Corrective Regulatory Action.   Under the  OTS  prompt
corrective  action  regulations, the  OTS  is  required  to  take
certain,  and  is  authorized to take other, supervisory  actions
against  undercapitalized savings associations. For this purpose,
a  savings  association would be placed in one of five categories
based   on  the  association's  capital.  Generally,  a   savings
association  is treated as ''well capitalized'' if its  ratio  of
total  capital  to  risk-weighted assets is at least  10.0%,  its
ratio  of core capital to risk-weighted assets is at least  6.0%,
its  ratio of core capital to total assets is at least 5.0%,  and
it is not subject to any order or directive by the OTS to meet  a
specific capital level. A savings association will be treated  as
''adequately capitalized'' if its ratio of total capital to risk-
weighted  assets is at least 8.0%, its ratio of core  capital  to
risk-weighted  assets is at least 4.0%, and  its  ratio  of  core
capital to total assets is at least 4.0% (3.0% if the association
receives  the  highest rating on the CAMEL financial institutions
rating system). A savings association that has a total risk-based
capital of less than 8.0% or a leverage ratio or a Tier 1 capital
ratio  that  is  less  than  4.0% (3.0%  leverage  ratio  if  the
association  receives the highest rating on the  CAMEL  financial
institutions    rating    system)    is    considered    to    be
''undercapitalized.'' A savings association that has a total risk-
based  capital  of less than 6.0% or a Tier 1 risk-based  capital
ratio  or a leverage ratio of less than 3.0% is considered to  be
''significantly  undercapitalized.'' A savings  association  that
has  a tangible capital to assets ratio equal to or less than  2%
is  deemed to be ''critically undercapitalized.'' The elements of
an  association's  capital for purposes of the prompt  corrective
action  regulations are defined generally as they are  under  the
regulations  for minimum capital requirements.  As  of  the  most
recent   notification  from  the  Office  of  Thrift  Supervision
categorized  the  Bank as well capitalized under  the  regulatory
framework  for prompt corrective action.  There are no conditions
or  events since that notification that management believes  have
changed    the   institution's   category.    See   ''-   Capital
Requirements.''

   The  severity of the action authorized or required to be taken
under  the prompt corrective action regulations increases  as  an
association's    capital   deteriorates    within    the    three
undercapitalized categories. All associations are prohibited from
paying   dividends  or  other  capital  distributions  or  paying
management  fees  to  any controlling person if,  following  such
distribution,  the  association  would  be  undercapitalized.  An
undercapitalized  association  is  required  to  file  a  capital
restoration  plan  within  45 days of the  date  the  association
receives   notice   that  it  is  within   any   of   the   three
undercapitalized  categories. The  OTS  is  required  to  monitor
closely the condition of an undercapitalized association  and  to
restrict the asset growth, acquisitions, branching, and new lines
of    business    of    such   an   association.    Significantly
undercapitalized  associations are  subject  to  restrictions  on
compensation  of senior executive officers; such  an  association
may   not,  without  OTS  consent,  pay  any  bonus  or   provide
compensation to any senior executive officer at a rate  exceeding
the  officer's  average rate of compensation (excluding  bonuses,
stock  options and profit-sharing) during the 12 months preceding
the  month  when  the  association  became  undercapitalized.   A
significantly undercapitalized association may also  be  subject,
among  other things, to forced changes in the composition of  its
board  of directors or senior management, additional restrictions
on  transactions with affiliates, restrictions on  acceptance  of
deposits from correspondent associations, further restrictions on
asset  growth,  restrictions on rates paid  on  deposits,  forced
termination  or  reduction of activities deemed  risky,  and  any
further operational restrictions deemed necessary by the OTS.

   If  one or more grounds exist for appointing a conservator  or
receiver  for an association, the OTS may require the association
to issue additional debt or stock, sell assets, be acquired by  a
depository  association holding company or combine  with  another
depository  association. The OTS and the FDIC have a broad  range
of grounds under which they may appoint a receiver or conservator
for  an insured depository association. Under FDICIA, the OTS  is
required  to appoint a receiver (or with the concurrence  of  the
FDIC,   a   conservator)   for   a  critically   undercapitalized
association   within  90  days  after  the  association   becomes
critically undercapitalized or, with the concurrence of the FDIC,
to  take such other action that would better achieve the purposes
of  the  prompt  corrective action provisions.  Such  alternative
action can be renewed for successive 90-day periods. However,  if
the  association  continues to be critically undercapitalized  on
average  during the quarter that begins 270 days after  it  first
became critically undercapitalized, a receiver must be appointed,
unless the OTS makes certain findings with which the FDIC concurs
and  the Director of the OTS and the Chairman of the FDIC certify
that  the association is viable. In addition, an association that
is   critically  undercapitalized  is  subject  to  more   severe
restrictions on its activities, and is prohibited, without  prior
approval  of  the  FDIC from, among other things,  entering  into
certain  material  transactions or  paying  interest  on  new  or
renewed  liabilities at a rate that would significantly  increase
the association's weighted average cost of funds.

   When appropriate, the OTS can require corrective action  by  a
savings association holding company under the ''prompt corrective
action'' provisions of FDICIA.

   Insurance of Deposit Accounts.   Pursuant to FDICIA, the  FDIC
established  a  new risk-based assessment system for  determining
the   deposit  insurance  assessments  to  be  paid  by   insured
depository  institutions. Under the new assessment system,  which
began  in  1993, the FDIC assigns an institution to one of  three
capital   categories   based  on  the   institution's   financial
information as of the reporting period ending seven months before
the  assessment period. The three capital categories  consist  of
(a)   well  capitalized,  (b)  adequately  capitalized,  or   (c)
undercapitalized. The FDIC also assigns an institution to one  of
three  supervisory subcategories within each capital  group.  The
supervisory subgroup to which an institution is assigned is based
on   a  supervisory  evaluation  provided  to  the  FDIC  by  the
institution's primary federal regulator and information that  the
FDIC  determines  to  be relevant to the institution's  financial
condition  and the risk posed to the deposit insurance funds.  An
institution's assessment rate depends on the capital category and
supervisory  category  to  which  it  is  assigned.   Under   the
regulation, there are nine assessment risk classifications (i.e.,
combinations  of  capital  groups and supervisory  subgroups)  to
which different assessment rates are applied.

   The  FDI Act requires that the BIF and the SAIF funds each  be
recapitalized until reserves are at least 1.25% of  the  deposits
insured  by  that  fund. After a fund reached the  1.25%  reserve
ratio,  the assessment rates for that fund could be reduced.  The
FDIC  reported  that the BIF reached the required  reserve  ratio
during May 1995. As a result of the recapitalization of the  BIF,
the  FDIC  reduced BIF-assessment rates. Beginning in  1993,  the
assessment  rates for the BIF and the SAIF had ranged from  0.23%
of  deposits  for  an institution in the highest category  (i.e.,
well-capitalized and financially sound, with no more than  a  few
minor weaknesses) to 0.31% of deposits for an institution in  the
lowest   category   (i.e.,   undercapitalized   and   substantial
supervisory  concern). Effective June 1, 1995, the  FDIC  reduced
the BIF assessment rates to a range of 0.04% to 0.27% of deposits
for  such institutions. The Bank's assessment rates for 1995 were
0.23% of deposits through May 31, 1995 and were 0.04% of deposits
beginning on June 1, 1995.

   On November 14, 1995, the FDIC again decided to reduce the BIF
assessments.  Having  determined  that  the  BIF  had  sufficient
reserves in excess of the required 1.25% ratio, the FDIC  decided
that  ''well  capitalized'' institutions without any  significant
supervisory  concerns  should begin  paying  assessments  at  the
statutory  minimum of $2,000 annually, beginning with  the  first
quarter   of  1996,  and  the  BIF-assessment  rates  for   other
institutions range from 0.03% to 0.27% of deposits.

   The  FDIC has reported that, under current law and appropriate
financial   projections,  the  SAIF  is  not   expected   to   be
recapitalized  until 2001. Accordingly, the FDIC  has  determined
that SAIF-insured institutions should continue to pay assessments
at  the current SAIF assessment rates, which range from 0.23%  of
deposits to 0.31% of deposits. The assessment rates on the  Oakar
Deposits were not subject to the decrease in assessment rates and
continue to be assessed at a rate of 0.23%.

   The resulting disparity in deposit insurance assessments rates
between the SAIF members and the BIF members is likely to provide
institutions  paying  only  the  BIF  assessments  with   certain
competitive advantages in the pricing of loans and deposits,  and
in  lowered  operating costs, pending any legislative  action  to
remedy the disparity. Congress considered proposed legislation to
address these issues.

   The  proposed Balanced Budget Act of 1995 (the "Budget  Act"),
which  was  approved by the Congress but vetoed by the President,
included  provisions  that focused on a recapitalization  of  the
SAIF.   Under  the provisions of the Budget Act, all  SAIF-member
institutions would have paid a special assessment to recapitalize
the  SAIF, and the assessment base for the payments on  the  FICO
bonds (as herein defined) would have been expanded to include the
deposits of both BIF- and SAIF-insured institutions.  The  amount
of  the special assessment required to recapitalize the SAIF  was
then  estimated to be approximately 80 basis points of the  SAIF-
assessable  deposits.   The special assessment  would  have  been
imposed  as of the first business day of January 1996 or on  such
other  date  prescribed by the FDIC not later than 60 days  after
enactment of the Budget Act, based on the amount of SAIF deposits
on March 31, 1995.  If an 80-basis-point assessment were assessed
against  the  Bank's deposits as of March 31,  1995,  the  Bank's
special  assessment would be approximately $2.8 million, or  $1.5
million on an after-tax basis.

      The Budget Act also provided for the merger of the BIF  and
SAIF  on January 1, 1998, with such merger being conditioned upon
the  prior  elimination  of  the thrift  charter.   Congressional
leaders  had  also agreed that Congress should consider  and  act
upon  separate  legislation to eliminate the  thrift  charter  as
early  as  possible in 1996.  If adopted, such legislation  would
require  that the Bank, as a federal savings bank, convert  to  a
bank  charter.   See  "-  Financial  Institution  Regulation  and
Possible Legislation."

     The veto of the Budget Act by the President was not based on
the above described provisions of the Budget Act, and the federal
banking  regulators continue to seek a legislative  solution  for
the   recapitalization   of   the  SAIF.    In   February   1996,
representatives of the FDIC, the OTS and the Treasury  Department
stated  to  Congress that, unless Congress adopts legislation  to
strengthen the SAIF, the SAIF's current problems could result  in
an erosion of the SAIF deposit base, could cause a default on the
FICO  bonds that are paid from SAIF assessments, and could  leave
the SAIF unable to meet its obligations to insured depositors.

     If enacted by Congress, legislation to recapitalize the SAIF
as  proposed in the Budget Act would have the effect of  reducing
the capital of SAIF member institutions by the after-tax cost  of
the  special  SAIF  assessment, plus any related  additional  tax
liabilities.   The  legislation would also  have  the  effect  of
reducing any differential that may otherwise be required  in  the
assessment rates for the BIF and SAIF.

      Management cannot predict whether the above legislation  or
any other legislative proposal will be enacted as described above
or,  if  enacted,  the amount of any special SAIF  assessment  or
whether ongoing SAIF premiums will be reduced to a level equal to
that  of BIF premiums.  It also cannot be predicted whether  some
other  legislative action will be taken to address  the  BIF/SAIF
disparity and what consequences such action could have  for  SAIF
members.   A  significant  increase in SAIF  insurance  premiums,
either  absolutely or relative to BIF premiums, or a  significant
one-time  fee  to  recapitalize the SAIF could  have  an  adverse
effect on the operating expenses and results of operations of the
Bank.

   Under the FDI Act, insurance of deposits may be terminated  by
the  FDIC  upon  a finding that the institution  has  engaged  in
unsafe or unsound practices, is in an unsafe or unsound condition
to  continue  operations  or  has violated  any  applicable  law,
regulation, rule, order or condition imposed by the FDIC  or  the
OTS.  The  management of the Bank does not know of any  practice,
condition or violation that might lead to termination of  deposit
insurance.

   Federal Home Loan Bank System.   The Bank is a member  of  the
FHLBNY,  which  is one of the regional FHLBs composing  the  FHLB
System.  Each  FHLB provides a central credit facility  primarily
for its member institutions. The Bank, as a member of the FHLBNY,
is  required to acquire and hold shares of capital stock  in  the
FHLB  in  an amount at least equal to the greater of  1%  of  the
aggregate  principal  amount of its unpaid  residential  mortgage
loans  and similar obligations at the beginning of each  year  or
1/20  of its advances (borrowings) from the FHLBNY. The Bank  was
in  compliance with this requirement with an investment  in  FHLB
stock at June 30, 1996, of $7.6 million. Any advances from a FHLB
must  be secured by specified types of collateral, and all  long-
term  advances may be obtained only for the purpose of  providing
funds for residential housing finance.

   The FHLBs are required to provide funds for the resolution  of
insolvent thrifts and to contribute funds for affordable  housing
programs. These requirements could reduce the amount of  earnings
that  the  FHLBs can pay as dividends to their members and  could
also  result  in the FHLBs imposing a higher rate of interest  on
advances  to  their  members. The FHLBNY paid  dividends  on  the
capital stock of $332,964, $367,131, and $422,943 and during  the
years  ended  June  30,  1996, 1995 and  1994,  respectively.  If
dividends  were  reduced,  or interest on  future  FHLB  advances
increased,  the Bank's net interest income would likely  also  be
reduced.  Further, there can be no assurance that the  impact  of
FDICIA  and  the  Financial  Institutions  Reform,  Recovery  and
Enforcement Act of 1989 (''FIRREA'') on the FHLBs will  not  also
cause a decrease in the value of the FHLB stock held by the Bank.

   Federal Reserve System.   The Bank is subject to provisions of
the  FRA  and the FRB's regulations pursuant to which  depository
institutions  may  be  required to maintain  non-interest-earning
reserves  against  their  deposit  accounts  and  certain   other
liabilities.  Currently,  reserves  must  be  maintained  against
transaction   accounts  (primarily  NOW  and   regular   checking
accounts). The FRB regulations generally require that reserves be
maintained  in  the amount of 3% of the aggregate of  transaction
accounts up to $52.0 million. The amount of aggregate transaction
accounts  in excess of $52.0 million are currently subject  to  a
reserve  ratio of 10%, which ratio the FRB may adjust between  8%
and  12%.  The FRB regulations currently exempt $4.3  million  of
otherwise  reservable  balances from  the  reserve  requirements,
which  exemption is adjusted by the FRB at the end of each  year.
The   Bank   is   in   compliance  with  the  foregoing   reserve
requirements. Because required reserves must be maintained in the
form  of either vault cash, a non-interest-bearing account  at  a
Federal Reserve Bank, or a pass-through account as defined by the
FRB,  the  effect of this reserve requirement is  to  reduce  the
Bank's  interest-earning assets. The balances maintained to  meet
the  reserve  requirements imposed by the  FRB  may  be  used  to
satisfy  liquidity requirements imposed by the OTS.  FHLB  System
members  are  also authorized to borrow from the Federal  Reserve
''discount   window,''   but   FRB   regulations   require   such
institutions to exhaust all FHLB sources before borrowing from  a
Federal Reserve Bank.

Regulation of Holding Company

   The  Company is a non-diversified unitary savings  association
holding company within the meaning of HOLA, as amended. As  such,
the  Company is required to register with the OTS and is  subject
to  OTS  regulations,  examinations,  supervision  and  reporting
requirements. In addition, the OTS has enforcement authority over
the Company and its non-savings association subsidiaries, if any.
Among other things, this authority permits the OTS to restrict or
prohibit activities that are determined to be a serious  risk  to
the  financial  safety, soundness, or stability of  a  subsidiary
savings association.

   HOLA prohibits a savings association holding company, directly
or   indirectly,  or  through  one  or  more  subsidiaries,  from
acquiring another savings association or holding company thereof,
without   prior  written  approval  of  the  OTS;  acquiring   or
retaining,  with  certain exceptions, more  than  5%  of  a  non-
subsidiary savings association, a non-subsidiary holding company,
or  a  non-subsidiary  company engaged in activities  other  than
those permitted by HOLA; or acquiring or retaining control  of  a
depository  institution  that is not  insured  by  the  FDIC.  In
evaluating  an  application by a holding  company  to  acquire  a
savings  association,  the OTS must consider  the  financial  and
managerial  resources and future prospects  of  the  company  and
savings  association involved, the effect of the  acquisition  on
the risk to the insurance funds, the convenience and needs of the
community, and competitive factors.

   As  a  unitary savings and loan holding company,  the  Company
generally  is restricted under existing laws as to the  types  of
business  activities in which it may engage,  provided  that  the
Bank  continues  to satisfy the QTL test. See ''-  Regulation  of
Federal Savings Associations QTL Test'' for a discussion  of  the
QTL  requirements.  Upon any non-supervisory acquisition  by  the
Company of another savings association or savings bank that meets
the QTL test and is deemed to be a savings association by the OTS
and  that will be held as a separate subsidiary, the Company will
become a multiple savings association holding company and will be
subject  to  limitations on the types of business  activities  in
which  it  can engage. HOLA limits the activities of  a  multiple
savings   association   holding  company  and   its   non-insured
association subsidiaries primarily to activities permissible  for
bank  holding  companies under Section 4(c)(8) of  the  BHC  Act,
subject to the prior approval of the OTS, and to other activities
authorized by OTS regulation.

  The OTS is prohibited from approving any acquisition that would
result   in  a  multiple  savings  association  holding   company
controlling savings associations in more than one state,  subject
to  two  exceptions: an acquisition of a savings  association  in
another  state (a) in a supervisory transaction, and (b) pursuant
to authority under the laws of the state of the association to be
acquired   that   specifically  permit  such  acquisitions.   The
conditions  imposed upon interstate acquisitions by those  states
that  have  enacted  authorizing legislation  vary.  Some  states
impose  conditions  of  reciprocity, which  have  the  effect  of
requiring  that the laws of both the state in which the acquiring
holding company is located (as determined by the location of  its
subsidiary  savings  association) and  the  state  in  which  the
association  to  be  acquired  is  located,  have  each   enacted
legislation  allowing its savings associations to be acquired  by
out-of-state holding companies on the condition that the laws  of
the  other  state authorize such transactions on  terms  no  more
restrictive  than those imposed on the acquiror by the  state  of
the target association. Some of these states also impose regional
limitations, which restrict such acquisitions to states within  a
defined  geographic  region. Other states allow  full  nationwide
banking without any condition of reciprocity. Some states do  not
authorize interstate acquisitions of savings associations.

  Transactions between the Company and the Bank, including any of
its  subsidiaries,  and  any  of its affiliates  are  subject  to
various  conditions and limitations. See '' Regulation of Federal
Savings  Associations  Transactions with Related  Parties.''  The
Bank  must  give 30-days written notice to the OTS prior  to  any
declaration  of  the payment of any dividends  or  other  capital
distributions  to  the  Company. See ''-  Regulation  of  Federal
Savings Associations - Limitation on Capital Distributions.''

Federal Securities Laws

   .  The Company's Common stock is registered with the SEC under
Section  12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").  The Company is subject to the information,
proxy   solicitation,  insider  trading  restrictions  and  other
requirements under the Exchange Act.

Item 2 - Properties
   The  Bank  conducts its business through fifteen  full-service
offices,  including eight offices acquired from  Conestoga..  The
Bank's  Main Office and headquarters is located at 209  Havemeyer
Street,  Brooklyn, New York. The Bank believes that  its  current
facilities  are  adequate  to meet the  present  and  immediately
foreseeable needs of the Bank and the Company.

                                                              Date
                                                  Leased or  Leased or Lease Expiration Net Book Value at
                                                    Owned    Acquired       Date         June 30, 1996
                                                  --------- --------- ---------------- -----------------
                                                                           
Main Office .....................................     Owned   1906         -                 $398,031
   209 Havemeyer Street
   Brooklyn, New York 11211
Avenue M Branch .................................     Owned   1993         -                  491,546
   1600 Avenue M at E. 16th Street
   Brooklyn, New York 11230
Bayside Branch ..................................    Leased   1974     May, 2004               66,310
   61-38 Springfield Boulevard
   Bayside, New York 11364
Merrick Branch ..................................     Owned   1960         -                  252,426
   1775 Merrick Avenue
   Merrick, New York 11566
Hillcrest Branch ................................    Leased   1971     May, 2001               67,737
   176-47 Union Turnpike
   Flushing, New York 11366
Bellmore Branch .................................     Owned   1973         -                  522,697
   2412 Jerusalem Avenue
   Bellmore, New York 11710
Bronx Branch ................................    Leased   1965   October, 1996             48,905
   1931 Turnbull Avenue
   Bronx, New York 10473
Roslyn Branch....................................     Owned   1990         -                3,084,876
   1075 Northern Boulevard
   Roslyn, New York 11576
Gates Avenue Branch..............................     Owned   1905         -                  282,020
   1012 Gates Avenue
   Brooklyn, New York 11221
Marine Park Branch............................    Owned   1993         -                  821,135
   2172 Coyle Street
   Brooklyn, New York 11229
Kings Highway Branch.............................     Owned   1976         -                  845,493
   1902-1904 Kings Highway
   Brooklyn, New York 11229
Port Washington Branch...........................    Owned    1971         -                  496,215
   1000 Port Washington Boulevard
   Port Washington, New York 11050
Bensonhurst Branch...............................    Owned    1978         -                1,367,523
   1545 86th Street
   Brooklyn, New York 11228
Whitestone Branch................................    Owned    1979         -                  827,194
   24-44 Francis Lewis Boulevard
   Whitestone, New York 11357
Westbury Branch .............................         1994         -                  599,281
   622 Old Country Road
   Westbury, New York 11590
Administrative Office ...........................     Owned   1989         -                4,226,772
   275 South 5th Street (Corner of Havemeyer Street)
   Brooklyn, New York 11211

 The Bank has an option to extend this lease for  an
     additional ten year term at fair market rent, as determined  by
     the  agreement of the parties or, if the parties cannot  agree,
     by arbitration.
 Prior to October 2, 1993, this branch office was located at
     2161 Coyle Street, Brooklyn, New York.
 This branch office opened April 29, 1995.
 Building owned, land leased.   Lease expires in October, 2003.

Item 3 - Legal Proceedings

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

On December 4, 1995, a purported class action complaint was filed
in the Delaware Chancery Court, New Castle County, on behalf of
the stockholders of Conestoga by Jeffrey Simon (''Plaintiff'')
against Conestoga, each of the members of the Conestoga Board,
and the Bank. The Plaintiff alleges that each of the members of
Conestoga's Board breached his fiduciary duties to Conestoga
stockholders by, among other things, agreeing to accept the
Acquisition consideration, which Plaintiff alleges is inadequate.
The Bank is alleged to have aided and abetted this breach.
Plaintiff seeks various remedies, including compensatory damages
in an unspecified amount.

On  February 9, 1996, Conestoga and the director defendants filed
an  answer  in  which  they denied the allegations  of  liability
raised  in  the  complaint and raised affirmative  defenses.   In
addition,  they moved to dismiss the complaint.  On February  12,
1996, the Bank filed its own motion to dismiss the complaint.  On
or about
March  12, 1996, Plaintiff served a motion for leave to  file  an
amended  complaint.  In his proposed amended complaint, Plaintiff
asserts, among other things, that the proxy statement distributed
to   Conestoga's   stockholders  did   not   provide   sufficient
disclosure,   that  the  Acquisition  is  unfair  to  Conestoga's
stockholders  and  disproportionately benefits Conestoga's  Board
and the Bank.

The  Court has not yet ruled on the Plaintiff's motion  to  amend
the complaint.  The Bank intends to vigorously defend against the
claims made against it.

Item 4 - Submission of Matters to a Vote of Security Holders.

None

                             PART II

Item 5- Market for the Company's Common Stock and Related
Stockholder Matters

  Dime Community Bancorp, Inc. common stock is traded on the
Nasdaq National Market and quoted under the symbol "DIME."

  The following table shows the high and low sales price during
the period indicated.  The Company's Common stock began trading
on June 26, 1996, the date of the initial public offering.

1996                  High          Low
- -----------------    -------         --------
June 26 - June 28    $11.75         $11.6875

  At June 28, 1996, the last trading date in the fiscal year, the
Company's stock closed at $11.6875.  At September 23, 1996 the
Company had approximately 1,613 shareholders of record
respectively, not including the number of persons or entities
holding stock in nominee or street name through various brokers
and banks.  There were 14,547,500 shares of common stock
outstanding at June 30, 1996.

   The  Board  of  Directors of the Company did not  declare  any
dividends  on Common Stock during the year ended June  30,  1996.
The  Board  of  Directors may consider a policy  of  paying  cash
dividends  on the Common Stock in the future subject to statutory
and  regulatory requirements. However, no decision has been  made
as  to  the  amount or timing of such dividends. Declarations  of
dividends by the Board of Directors, if any, will depend  upon  a
number  of factors, including, investment opportunities available
to  the  Company  or  the Bank, capital requirements,  regulatory
limitations,  the  Company's and the Bank's financial  condition,
results  of  operations, tax considerations and general  economic
conditions.  No  assurances  can  be  given,  however,  that  any
dividends  will  be paid or, if commenced, will  continue  to  be
paid.

   As  the  principal asset of the Company, the Bank will provide
the  principal  source of funds for payment of dividends  by  the
Company. The Bank will not be permitted to pay dividends  on  its
capital stock if its stockholders' equity would be reduced  below
the  amount required for the liquidation account. See ''Item 1  -
Business  -  Regulation.''  For  information  concerning  federal
regulations which apply to the Bank in determining the amount  of
proceeds  which  may be retained by the Company and  regarding  a
savings  institution's  ability  to  make  capital  distributions
including payment of dividends to its holding company, see ''Item
1  -  Business  -  Regulation  - Regulation  of  Federal  Savings
Associations - Limitation on Capital Distributions'' and ''Item 1
- -  Business  -  Federal and State Taxation - Federal  Taxation  -
Distributions.''

  Unlike the Bank, the Company is not subject to OTS regulatory
restrictions on the payment of dividends to its shareholders,
although the source of such dividends will be dependent on the
net proceeds retained by the Company and earnings thereon and may
be dependent, in part,  upon dividends from the Bank. The Company
is subject, however, to  the requirements of Delaware law,  which
generally limit dividends to an amount equal to the excess of the
net assets of the Company (the amount by which total assets exceed
total liabilities) over its  statutory capital, or if there is no
such excess, to its net profits for the current and/or immediately
preceding fiscal year. At  June  30,  1996, the Company has
approximately $53.4 million available for the payment of dividends.

  The Company however, is subject to the terms of a certification
requested by and delivered to the OTS in connection with the
Bank's application to the OTS for approval of the Conversion,
which certification prohibits the Company from taking any actions
to further any payments to its shareholders through a return of
excess capital until June 26, 1997. The certification expressly
does not apply to taxable dividend payments made by the Company
or to dividend payments made by the Bank to the Company.

Item 6. - Selected Financial Data

  The selected consolidated financial and other data of the Company
set below is derived in part from and should be read in conjunction
with, the Consolidated Financial Statements of the Company and
Notes thereto presented under Item 8 of this document.  No cash
dividends were declared or paid during the year ended June 30,
1996.  As a result, dividends per share information is not
presented. Since the sale of the Company's stock occurred
substantially at year-end (June 26, 1996) earnings per share
information for the Company for the year ended June 30, 1996 is not
meaningful.

                                                            At June 30,
                                    --------------------------------------------------
                                          1996        1995    1994     1993     1992
                                   --------------- -------- -------- -------- --------
                                                       (In thousands)
                                                               
Selected Financial Condition Data:
Total assets (1)..................      $1,371,821 $662,739 $646,458 $645,899 $643,120
Loans, net(2).....................         575,874  424,680  427,960  458,422  477,516
Mortgage-backed securities(3).....         209,941   91,548   94,356   82,077   58,404
Investment securities (1)(3)......         392,450  101,695   86,686   56,724   72,055
Federal funds sold (1)............         115,130   17,809    7,029   21,037    9,348
Deposits..........................         950,114  554,841  546,761  564,110  564,520
Stockholders' Equity (4)..........         213,071   77,067   67,919   58,920   49,648

(Notes on following page)

                                                    For the Year Ended June 30,
                                                 ----------------------------------------
                                                  1996(5)   1995   1994     1993    1992
                                                 ------- -------- -------- ------- -------
                                                              (In thousands)
                                                                    
Selected Operating Data:
Interest income..................................$52,619 $49,223  $49,821  $51,393 $55,230
Interest expense on deposits and borrowings...... 23,516  18,946   17,594   21,251  32,391
                                                  ------- ------- -------- ------- -------
Net interest income.............................. 29,103  30,277   32,227   30,142  22,839
Provision for loan losses........................  2,979   2,950    4,105    3,395   1,409
                                                  ------- ------- -------- ------- -------
Net interest income after provision for loan
losses........................................... 26,124  27,327   28,122   26,747  21,430
Non-interest income..............................  1,375   1,773    2,267    3,195   2,107
Non-interest expense............................. 14,021  14,053   12,714   12,214  11,768
                                                  ------- ------- -------- ------- -------
Income before income tax expense and
cumulative effect of changes in accounting
principles....................................... 13,478  15,047   17,675   17,728  11,769
Income tax expense...............................  6,181   6,621    8,211    8,530   5,227
                                                  ------- ------- -------- ------- -------
Income before cumulative effect of changes in
accounting principles............................  7,297   8,426    9,464    9,198   6,542
Cumulative effect on prior years of changing to a
different method of accounting for:
Income taxes(6)..................................     -       -     (383)      -       -
Post-retirement benefits other than
pensions(7)...................................... (1,032)     -        -       -        -
                                                  ------- ------- -------- ------- -------
Net income....................................... $6,265  $8,426   $9,081   $9,198  $6,542
                                                  ======= ======= ======== ======= =======

(Notes on following page)

                                                          At or For the Year Ended June 30,
                                                      -----------------------------------------
                                                       1996    1995    1994     1993     1992
                                                      ------- ------- ------- -------- --------
                                                                (Dollars in thousands)
                                                                        
Selected Financial Ratios and Other Data(8):                    
Performance Ratios:
   Return on average assets(9).......................   1.07%   1.33%   1.46%    1.47%    1.03%
   Return on average equity(9).......................   9.07   11.50   14.66    16.83    14.16
   Average equity to average assets..................  11.84   11.53    9.98     8.72     7.30
   Equity to total assets at end of period...........  15.53   11.63   10.51     9.12     7.72
   Average interest rate spread(10)..................   3.85    4.51    4.80     4.61     3.44
   Net interest margin(11)...........................   4.41    4.91    5.12     4.95     3.72
   Average interest-earning assets to average
     interest-bearing liabilities.................... 115.68  113.15  111.50   109.66   105.26
   Non-interest expense to average assets............   2.06    2.21    1.97     1.95     1.86
   Efficiency Ratio(12)..............................  45.98   44.11   37.63    38.18    48.29
Regulatory Capital Ratios(13):
   Tangible capital..................................  9.49%   11.53%  10.47%    9.07%    7.72%
   Core capital......................................  9.50    11.56   10.51     9.12     7.72
   Total risk-based capital.......................... 21.24    22.18   19.83    14.13    11.59
Asset Quality Ratios and Other Data:
   Total non-performing loans(14)....................$6,551   $5,073  $6,248  $11,632  $16,713
   Other real estate owned, net......................$1,946   $4,466  $8,200   $7,981   $7,367
Ratios(15)(16):
   Non-performing loans to total loans...............  1.12%    1.18%   1.45%    2.52%    3.48%
   Non-performing loans and real estate owned
     to total assets.................................  0.62     1.44    2.23     3.04     3.74
Allowance for loan losses to:
Non-performing loans................................. 19.25   101.99   58.15    25.76    12.53
Total loans..........................................  1.34     1.20    0.84     0.65     0.44
Full service branches................................    15        7       7        7        7

(Notes follow)

(1)  June 30, 1996, Investment securities include $125.0 million
     and Federal funds sold include $6.1 million of excess proceeds
     resulting from the oversubscription to the Company's initial
     public offering, which was refunded on July 1, 1996.
(2)  Loans, net, represents gross loans less net deferred
     loan fees and allowance for loan losses.
(3)  The Company has classified its securities as ''held-to-
     maturity'' or ''available-for-sale'' since July 1, 1994, when
     it adopted SFAS No. 115. 
(4)  Stockholders' Equity increased from June
     30, 1995 to June 30, 1996 primarily due to the initial public
     offering.
(5)  Since the merger with Conestoga was completed at June 26, 1996,
     its contribution to the Company's  earnings and the effect
     upon average balance computation for fiscal year ended
     June 30, 1996 were not material.
(6)  Pursuant to SFAS No. 109, on July 1, 1993, the Bank
     changed prospectively to the deferred method of
     accounting for income taxes. The effect of the adoption
     of this standard is reflected in the financial statements
     as the cumulative effect of adopting a change in
     accounting principles.
(7)  The Bank adopted SFAS No. 106  effective July 1, 1995.
     The Bank elected to record the full accumulated post
     retirement benefit obligation upon adoption. This resulted in
     a cumulative effect adjustment of $1,032,000 (after reduction
     for income taxes of $879,000) to apply retroactively to
     previous years the new method of accounting, which is shown in
     the consolidated statement of income for the year ended
     June 30, 1996.
(8)  With the exception of end of period ratios, all ratios
     are based on average daily balances during the indicated
     periods. Asset Quality Ratios and Regulatory Capital Ratios
     are end of period ratios.
(9)  Income before cumulative effect of changes in accounting
     principles is used to calculate return on average assets and
     return on average equity ratios.
(10) The interest rate spread represents the difference
     between the weighted-average yield on interest-earning assets
     and the weighted-average cost of interest-bearing liabilities.
(11) The net interest margin represents net interest income as
     a percentage of average interest-earning assets.
(12) The efficiency ratio represents non-interest expense as a
     percentage of the sum of net interest income and non-interest
     income excluding any gains or losses on sales of assets.
(13) All ratios calculated for the Bank only.  For
     definitions and further information relating to the Bank's
     regulatory capital requirements. See "Item 1- Business-
     Regulation-Regulation of Federal Savings Associations."
(14) Non-performing loans consists of non-accrual loans; the
     Bank did not have any loans that were 90 days or more past due
     and still accruing at any of the dates presented. Non-
     performing loans do not include troubled-debt restructurings
     (''TDRs''). See "Item 1 -Business - Asset Quality - Non-
     performing Assets and Troubled-Debt Restructurings.''
(15) Total loans represents loans, net, plus the allowance
     for loan losses.
(16) The Bank adopted SFAS No. 114 on July 1, 1995.

Item 7. -Management's Discussion and Analysis of Financial
Condition and Results of Operations

The  Company began operations substantially at year end (June 26,
1996). Substantially all of the Company's earnings for the fiscal
year  ended June 30, 1996 represented earnings of the Bank  prior
to its acquisition of Conestoga Bancorp, Inc.  The Bank's results
of  operations  are dependent primarily on net  interest  income,
which is the difference between the interest income earned on its
interest-earning  assets, such as loans and securities,  and  the
interest  expense  on its interest-bearing liabilities,  such  as
deposits.  The  Bank also generates non-interest income  such  as
service  charges and other fees. The Bank's non-interest expenses
primarily   consist  of  employee  compensation   and   benefits,
occupancy expenses, federal deposit insurance premiums, net costs
of  other  real  estate  owned, data processing  fees  and  other
operating  expenses.  The Bank's results of operations  are  also
significantly  affected  by  general  economic  and   competitive
conditions  (particularly  changes  in  market  interest  rates),
government policies, changes in accounting standards and  actions
of regulatory agencies.

Management Strategy

   The  Bank's  primary management strategy is  to  increase  its
household and deposit market shares in the communities it serves,
either  through  acquisitions or purchases  of  deposits,  or  by
direct  marketing,  and  to  increase  its  origination  of,  and
investment  in, mortgage loans, with an emphasis on  multi-family
loans. Multi-family lending is a significant business of the Bank
and  reflects  the fact that much of the housing  in  the  Bank's
primary   lending  area  is  multi-family  housing.  The   Bank's
secondary,  or  supplemental, strategy, is to  provide  a  stable
source of liquidity and earnings through the purchase of short-to
medium-term,  investment grade securities; seek to  maintain  the
Bank's  asset  quality for loans and other investments;  and  use
appropriate  portfolio and asset/liability management  techniques
in an effort to reduce the effects of interest rate volatility on
the Bank's profitability and capital.

   Franchise  Expansion.    The  Bank  completed  its  merger  of
Conestoga  into  the  Bank  on June  26,  1996,  providing  eight
additional  full  service branches with deposits totaling  $394.3
million  at  June 26, 1996.  The Bank will continue  to  evaluate
acquisition  and  other  growth  opportunities  as  they   become
available.  See  "Item  1 - Business - Acquisition  of  Conestoga
Bancorp, Inc."  Additionally, management plans to supplement this
strategy  with  direct  marketing efforts  designed  to  increase
household balances and the number of the Bank's services used per
household among its existing customers.

   Loan  Originations  with an emphasis on Multi-family  Lending.
Management believes that multi-family loans provide advantages as
portfolio investments. First, they provide a higher yield  than
single  family  loans  or  investment  securities  of  comparable
maturities or terms to repricing. Second, the Bank's market  area
generally has provided a stable flow of new and refinanced multi-
family  loan originations. In addition to its emphasis on  multi-
family  lending, the Bank will continue to market  and  originate
residential  first  mortgage loans secured  primarily  by  owner-
occupied,  one- to four-family residences, including condominiums
and  cooperative apartments. See "Item 1 - Business  -  Lending."
Third,  origination and processing costs for  the  Bank's  multi-
family loans are lower per thousand than comparable single family
costs.  In addition, to address the higher credit risk associated
with  multi-family  lending, management  has  developed  what  it
believes   are   reliable   underwriting   standards   for   loan
applications in order to maintain a consistent credit quality for
new loans.

   Stable  Source of Liquidity and Earnings.   The Bank purchases
short- to medium-term investment grade securities combining  what
management  believes  to  be appropriate  yield,  liquidity,  and
credit  quality,  in its efforts to achieve  (1)  a  managed  and
predictable source of liquidity to meet loan demand, (2) a stable
source  of interest income and (3) diversification in the  Bank's
portfolio of earning assets. This portfolio is comprised of fixed-
and  adjustable-rate obligations of various corporate and federal
agency  issuers  $594.8 million at June 30, 1996.  In  accordance
with  the Bank's policies, new investments in this category  must
be  rated at least ''investment grade'' upon purchase and have  a
final  maturity  or  repricing term no greater  than  ten  years,
although  no  security purchased since 1990 has  had  a  term  to
maturity  or  repricing greater than five years. See  "Item  1  -
Business - Investment Activities."

   Asset  Quality.   The Bank has sought to maintain  high  asset
quality  by  utilizing comprehensive loan underwriting  standards
and  collection efforts and by generally limiting its origination
of  mortgage loans to its market area. In addition, the Bank  has
established  a  loan  workout group whose  responsibility  is  to
manage  the  Bank's Other Real Estate Owned (''OREO'') properties
and  foreclosures.  Total non-performing  assets  have  decreased
steadily since 1992, due in part to the efforts of this group and
also to the general improvement in the area economy. See "Item  1
- -  Business  - Asset Quality." The Bank's ratio of non-performing
loans  to  total  loans at year end ranged from  1.12%  to  3.48%
during  the  five-year period ended June 30, 1996. Non-performing
assets to total assets averaged 2.21% during the last five years,
and  was  0.62% at June 30, 1996. The Bank's allowance  for  loan
losses to non-performing loans averaged 63.5% over the five years
ended June 30, 1996, and was 119.25% at June 30, 1996.

   Interest Rate Volatility.  The Bank's profitability, like that
of  most  financial institutions, is dependent to a large  extent
upon its net interest income, which is the difference between its
interest  income on interest-earning assets, such  as  loans  and
securities,   and   its  interest  expense  on   interest-bearing
liabilities,  such  as  deposits and  borrowings.     The  Bank's
balance  sheet is primarily comprised of assets which  mature  or
reprice within five years, with a significant portion maturing or
repricing  within one year. In addition, the Bank's deposit  base
is  comprised primarily of savings accounts, and certificates  of
deposit  with  maturities of three years  or  less,  representing
38.4%  and  48.4%, respectively, of total deposits  at  June  30,
1996.  As a result, at June 30, 1996, the Bank's interest-bearing
liabilities maturing or repricing within one year totaled  $599.6
million,  while  interest earning assets  maturing  or  repricing
within  one year totaled $758.1 million, resulting in a  positive
one-year interest sensitivity gap of $159.1 million, or 11.6%  of
total  assets.  The Bank's estimate of repricing liabilities  for
selected deposit types which do not carry contractual maturities,
such  as  savings accounts, is based upon the decay  rate  tables
published by the OTS.

   Under interest rate scenarios other than that which existed on
June  30,  1996,  the  gap  ratio  for  the  Bank's  assets   and
liabilities  could  differ  substantially  based  upon  different
assumptions  about  how  core  deposit  decay  rates   and   loan
prepayments  would change. For example, the Bank's interest  rate
risk management model assumes that in a rising rate scenario,  by
paying  competitive rates on non-core deposits, a large share  of
core  deposits  will transfer to certificates of deposit  and  be
retained,  although at higher cost to the Bank.  Also,  loan  and
mortgage-backed security prepayment rates would  be  expected  to
slow,  as  borrowers postpone property sales or loan refinancings
until rates again decline. As a result, while a positive one-year
gap  ratio  indicates that the Bank's net interest  income  would
grow  in  a period of rising rates (that is, more assets  reprice
upwards  as  rates  rise than do liabilities), historically,  the
opposite  has been true. In every rising rate scenario since  the
early 1980s, the Bank's net income has declined. Conversely, when
rates declined the Bank's net interest income has risen.

   Increases  in  the level of interest rates also may  adversely
affect  the fair value of the Bank's and the Company's securities
and other earning assets. Generally, the fair value of fixed-rate
instruments fluctuates inversely with changes in interest  rates.
As  a  result,  increases  in  interest  rates  could  result  in
decreases  in  the  fair value of the Bank's  and  the  Company's
interest  earning  assets,  which  could  adversely  affect   the
Company's  results  of operations if sold, or,  in  the  case  of
interest  earning assets classified as available  for  sale,  the
Company's  stockholders' equity if retained. Under SFAS No.  115,
which  was  adopted by the Bank on July 1, 1994, changes  in  the
unrealized   gains  and  losses,  net  of  taxes,  on  securities
classified  as  available  for sale  will  be  reflected  in  the
Company's  stockholders'  equity.  As  of  June  30,  1996,   the
Company's   securities  portfolio  included  $498.7  million   in
securities  classified as available for sale. Accordingly,  as  a
result  of  adoption  of SFAS No. 115 and the  magnitude  of  the
Company's  holdings of securities available for sale, changes  in
interest rates could produce significant changes in the value  of
such securities and could produce significant fluctuations in the
stockholders' equity of the Company.

   The Company relies primarily on an income-simulation model  to
measure  its risk exposure to changes in interest rates.  Income-
simulation analysis attempts to capture not only the potential of
assets  and  liabilities  to  mature  or  reprice  but  also  the
potential magnitude of these changes based upon various  sets  of
assumptions used in the model. The interest rate risk  management
strategy  of  the Company is designed to stabilize  net  interest
income  and preserve capital over a broad range of interest  rate
movements and has three primary components:

   Assets.    To  aid in the implementation of this strategy,  in
addition to the origination of multi-family loans, management has
sought  to include various types of adjustable-rate single family
(including cooperative apartment) whole loans and adjustable-rate
investment  securities  in  its portfolio.  These  categories  of
adjustable-rate assets generally have repricing terms of 3  years
or   less.   Adjustable-rate  whole  loans  (single  family   and
cooperative  apartments) totaled $141.3 million as  of  June  30,
1996,  and adjustable-rate investment securities (mortgage-backed
securities  issued by GSEs) totaled $131.3 million  at  the  same
date.

   Deposit Liabilities.   The Bank, a traditional community-based
savings bank, is largely dependent upon its base of competitively
priced  core deposits to provide stability on the liability  side
of  the balance sheet. The Bank has retained many loyal customers
over   the  years  through  a  combination  of  service  quality,
convenience, and a stable and experienced staff. Core deposits at
June  30,  1996 were $454.4 million, or 47.8% of total  deposits.
The  balance of certificates of deposit as of June 30,  1996  was
$495.8  million, or 52.2% of total deposits. Depending on  market
conditions, management prices its certificates of deposit  in  an
effort  to  encourage the extension of the average maturities  of
deposit liabilities beyond one year. Over the twelve-month period
ending  June  30, 1996, the Bank had an 80.4% retention  rate  on
maturing certificates of deposit.

   Wholesale Funds.   The Bank does not accept brokered  deposits
as  a  source  of funds and has no plans to do so in the  future.
However,  the  Bank is a member of the FHLBNY which  provides  it
with a borrowing line equal to $152.0 million. From time to time,
the Bank will borrow ("Advances") from the FHLBNY for  various
purposes.  At June 30, 1996,  the  Bank  had  $15.7 million in
medium-term advances outstanding.

   The following table sets forth the amounts of interest-earning
assets  and interest-bearing liabilities outstanding at June  30,
1996,  which  are  anticipated by the Bank,  based  upon  certain
assumptions,  to  reprice or mature in each of  the  future  time
periods  shown. Except as stated below, the amount of assets  and
liabilities  shown  which reprice or mature during  a  particular
period  were determined based on the earlier of term to repricing
or  the term to repayment of the asset or liability. The table is
intended  to provide an approximation of the projected  repricing
of  assets  and  liabilities at June 30, 1996  on  the  basis  of
contractual  maturities, anticipated prepayments,  and  scheduled
rate  adjustments  within  a three-month  period  and  subsequent
selected  time  intervals. For purposes of  presentation  in  the
following  table,  the Bank utilized the national  deposit  decay
rate  assumptions  published by the OTS as of December  31,  1992
(the latest available), which for savings accounts, NOW and Super
NOW  accounts and money market accounts in the one year  or  less
category,  were 17%, 37% and 79%, respectively. The loan  amounts
in the table reflect principal balances expected to be redeployed
and/or  repriced  as  a  result of contractual  amortization  and
anticipated early payoffs of adjustable-and fixed-rate loans, and
as  a  result  of contractual rate adjustments on adjustable-rate
loans.  The  amounts  attributable to mortgage-backed  securities
reflect  principal  balances expected  to  be  redeployed  and/or
repriced as a result of anticipated principal repayments, and  as
a  result  of  contractual  rate adjustments  on  adjustable-rate
mortgage-backed securities.

                                                                        At June 30, 1996
                                       -----------------------------------------------------------------------------------------
                                                  More than  More than More than  More than
                                       3 Months   3 Months   6 Months    1 Year    3 Years   More than  Non-interest
                                        or Less  to 6 Months to 1Year to 3 Years to 5 Years  5 Years     Bearing      Total
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
                                                                        (Dollars in thousands)
                                                                                                     
Interest-earning assets:
Mortgages and other loans (total).....  $48,559     $48,289   $96,579   $100,904   $206,163    $83,192         $-      $583,686
Investment securities.................  237,474      19,717    50,224     52,227      8,312     16,892          -       384,846
Mortgage-backed securities........   44,465      35,879    54,736     40,964     19,386     14,511          -       209,941
Federal funds sold....................  115,130          -        -          -          -          -            -       115,130
FHLB capital stock....................    7,604          -        -          -          -          -            -         7,604
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
Total interest-earning assets.........  453,252     103,885   201,539    194,095    233,861    114,595          -     1,301,207
Less:
Loan loss reserves....................       -           -        -          -          -          -        (7,812)     (7,812)
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
Net interest-earning assets...........  453,252     103,885   201,539    194,095    233,861    114,595      (7,812)   1,293,395
Non-interest-earning assets...........       -           -        -          -          -          -        78,426       78,426
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
Total assets.......................... $453,252    $103,885  $201,539   $194,095   $233,861   $114,595      $70,614  $1,371,821
                                       ========= =========== ========= ========== ========== ========== ============ ===========
Interest-bearing liabilities:
Savings accounts......................  $15,519     $15,519   $31,037    $94,285    $61,467   $147,319          $-     $365,146
NOW and Super NOW accounts............    1,441       1,441     2,882      5,277      1,412      3,128           -       15,581
Money market accounts.................    9,075       9,075    18,149      5,055      2,407      2,187           -       45,948
Certificates of deposit...............  124,903      96,316   138,137    100,339     36,060         -            -      495,755
Borrowed funds........................    5,000          -        -       20,710         -       1,998           -       27,708
Interest-bearing escrow...............  131,052          -        -          -           -       2,898           -      133,950
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
Total interest-bearing liabilities....  286,990     122,351   190,205    225,666    101,346    157,530           -    1,084,088
Checking accounts.....................       -           -        -          -           -          -        27,684      27,684
Other non-interest-bearing
liabilities...........................       -           -        -          -           -          -        46,978      46,978
Equity................................       -           -        -          -           -          -       213,071     213,071
                                       --------- ----------- --------- ---------- ---------- ---------- ------------ -----------
Total liabilities and
Stockholders' Equity.................. $286,990    $122,351  $190,205   $225,666   $101,346   $157,530     $287,733  $1,371,821
                                       ========= =========== ========= ========== ========== ========== ============ ===========
Interest sensitivity gap per period... $166,242    $(18,466)  $11,334   $(31,571)  $132,515   $(42,935)          -
                                       ========= =========== ========= ========== ========== ==========
Cumulative interest sensitivity gap... $166,242    $147,766  $159,110   $127,539   $260,054   $217,119           -
                                       ========= =========== ========= ========== ========== ==========
Cumulative interest sensitivity gap as
a percent of total assets.............    12.12%      10.77%   11.60%      9.30%     18.96%     15.83%           -
Cumulative total interest-earning
assets as a percent of cumulative
total interest-bearing liabilities....   157.93%     136.10%  126.54%    115.46%    128.07%    120.03%           -

 Interest-earning assets are included in the period in which
     the  balances are expected to be redeployed and/or repriced  as
     result    of    anticipated   pre-payments,   scheduled    rate
     adjustments, and contractual maturities.
 Based upon historical repayment experience.

   Certain  shortcomings are inherent in the method  of  analysis
presented  in the foregoing table. For example, although  certain
assets and liabilities may have similar maturities or periods  to
repricing,  they  may  not react correspondingly  to  changes  in
market interest rates. Also, the interest rates on certain  types
of  assets  and liabilities may fluctuate with changes in  market
interest rates, while interest rates on other types of assets may
lag behind changes in market rates. Additionally, certain assets,
such  as  adjustable-rate loans, have features, like  annual  and
lifetime rate caps, which restrict changes in interest rates both
on a short-term basis and over the life of the asset. Further, in
the  event  of a change in interest rates, prepayment  and  early
withdrawal levels would likely deviate from those assumed in  the
table.  Finally,  the  ability  of  certain  borrowers  to   make
scheduled payments on their adjustable-rate loans may decrease in
the event of an interest rate increase.

Analysis of Net Interest Income

  Net interest income represents the difference between income on
interest-earning   assets   and   expense   on   interest-bearing
liabilities.  Net  interest  income  depends  upon  the  relative
amounts   of   interest-earning   assets   and   interest-bearing
liabilities and the interest rates earned or paid on them.

   The following table sets forth certain information relating to
the Company's consolidated statements of operations for the years
ended  June  30,  1996, 1995 and 1994, 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.

                                                                        For the Years Ended June 30,
                                          --------------------------------------------------------------------------------------
                                                      1996                         1995                         1994
                                          ---------------------------- ---------------------------- ----------------------------
                                                              Average                      Average                      Average
                                           Average             Yield/   Average             Yield/   Average             Yield/
                                           Balance   Interest   Cost    Balance   Interest   Cost    Balance   Interest   Cost
                                          ---------- -------- --------- -------- --------- --------- --------- -------- --------
                                                                        (Dollars in thousands)
                                                                                             
Assets:
Interest-earning assets:
Real estate loans....................  $435,948  $39,314    9.02%   $427,042   $38,375    8.99%  $451,699   $40,596    8.99%
Other loans..............................     3,497      340    9.72       3,803       307    8.07      4,006       337    8.41
Mortgage-backed securities...........    89,001    5,927    6.66      89,232     5,464    6.12     86,040     4,858    5.65
Investment securities............   107,206    5,738    5.35      84,188     4,402    5.23     69,975     3,454    4.94
Federal funds sold.......................    23,904    1,300    5.44      12,179       675    5.54     18,000       576    3.20
                                           --------- -------           ---------- --------          ---------- --------
Total interest-earning assets............   659,556  $52,619    7.98     616,444   $49,223    7.99%   629,720   $49,821    7.91%
                                           ========= =======           ========== ========          ========== ========
Allowance for loan losses................    (4,797)                      (4,404)                      (3,278)
Non-interest-earning assets..............    25,221                       23,662                       20,476
                                           ---------                   ----------                   ----------
Total assets.............................  $679,980                     $635,702                     $646,918
                                           =========                   ==========                   ==========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
NOW, Super NOW and Money
market accounts..........................   $30,759     $634    2.06%    $33,583      $716    2.13%   $37,334      $840    2.25%
Savings accounts.........................   232,631    5,789    2.49     264,247     6,575    2.49    294,348     7,511    2.55
Certificates of deposit..................   285,524   16,013    5.61     225,785    10,571    4.68    213,092     8,219    3.86
Mortgagors' escrow.......................     3,371       72    2.14       3,253        71    2.18      3,183        67    2.10
Borrowed funds...........................    17,854    1,008    5.65      17,922     1,013    5.65     16,819       957    5.69
                                           --------- --------          ---------- --------           ---------- --------
Total interest bearing liabilities.......   570,139   23,516    4.12     544,790   $18,946    3.48%   564,776   $17,594    3.11%
                                           --------- ========          ---------- ========           ---------- ========
Checking accounts........................    11,646                       10,950                       10,926
Other non-interest bearing liabilities...    17,718                        6,678                        6,647
                                           ---------                   ----------                    ----------
Total liabilities........................   599,503                      562,418                      582,349
Stockholders' equity.....................    80,477                       73,284                       64,569
                                          ----------                   ----------                    ----------
Total liabilities and equity............. $ 679,880                    $ 635,702                     $646,918
                                          ==========                   ==========                    ==========
Net interest income/interest rate
spread...............................            $29,103    3.85%              $30,277    4.51%             $32,227    4.80%
                                                     ========                     ========                      ========
Net interest-earning assets/net interest
margin...............................  $ 89,417             4.41%    $71,654              4.91%   $64,944              5.12%
                                           =========                   ==========                    ==========
Ratio of interest-earning assets to
interest-bearing liabilities.............                     115.68%                       113.15%                      111.50%

 In computing the average balance of loans, non-accrual loans
     have been included.
 Includes securities classified ''available for sale.''
 Includes interest bearing deposits in other banks and  FHLB
     stock.
 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.

Rate/Volume Analysis

  Net interest income can also be analyzed in terms of the impact
of   changing  interest  rates  on  interest-earning  assets  and
interest-bearing liabilities and changing the volume or amount of
these assets and liabilities. The following table represents  the
extent  to  which changes in interest rates and  changes  in  the
volume    of   interest-earning   assets   and   interest-bearing
liabilities have affected the Bank's interest income and interest
expense during the periods indicated. Information is provided  in
each category with respect to (i) changes attributable to changes
in  volume  (change  in volume multiplied by  prior  rate),  (ii)
changes attributable to rate (changes in rate multiplied by prior
volume),  and (iii) the net change. Changes attributable  to  the
combined   impact  of  volume  and  rate  have   been   allocated
proportionately to the changes due to the volume and the  changes
due to rate.

                                 Year Ended                  Year Ended                   Year Ended
                                June 30, 1996               June 30, 1995                June 30, 1994
                                 Compared to                 Compared to                  Compared to
                                 Year Ended                  Year Ended                   Year Ended
                               June 30, 1995               June 30, 1994                 June 30, 1993
                             Increase/(Decrease)        Increase/(Decrease)          Increase/(Decrease)
                                   Due to                      Due to                       Due to
                            --------------------------- --------------------------- -------------------------
                             Volume    Rate       Net     Volume    Rate      Net     Volume     Rate       Net
                             ------- --------- --------- --------- ------- --------- --------- --------- ---------
                                                           (In thousands)
                                                                                          
Interest-earning assets:
Real estate loans...........   $802      $137      $939   $(2,216)    $(5)  $(2,221)  $(1,691)    $(375)  $(2,066)
Other loans.................    (28)       61        33       (17)    (13)      (30)        6       (38)      (32)
Mortgage-backed securities..    (24)      487       463       188     418       606     1,735    (1,076)      659
Investment securities.......  1,431       (95)    1,336       722     226       948       328      (682)     (354)
Federal funds sold..........  1,036      (411)      625      (254)    353        99       195        26       221
                             ------- --------- --------- --------- ------- --------- --------- --------- ---------
Total....................... $3,217      $179    $3,396   $(1,577)   $979     $(598)     $573   $(2,145)  $(1,572)
                             ======= ========= ========= ========= ======= ========= ========= ========= =========
Interest-bearing liabilities:
NOW, Super NOW and
  money market accounts.....   $(76)     $ (6)     $(82)     $(82)   $(42)    $(124)      $(9)    $(190)    $(199)
Savings accounts............   (976)      190      (786)     (759)   (177)     (936)      725    (1,667)     (942)
Certificate of deposit and
  other.....................  3,846     1,596     5,442       542   1,810     2,352      (572)   (1,283)   (1,855)
Mortgagors' escrow..........      8        (7)        1         2       2         4         9         1        10
Borrowed funds..............     (6)        1        (5)       63      (7)       56      (160)     (511)     (671)
                             ------- --------- --------- --------- ------- --------- --------- --------- ---------
Total.......................  2,796     1,774     4,570      (234)  1,586     1,352        (7)   (3,650)   (3,657)
                             ------- --------- --------- --------- ------- --------- --------- --------- ---------
Net change in net
  interest income...........  $ 421  $(1,595)  $ (1,174)  $(1,343)  $(607)  $(1,950)     $580    $1,505    $2,085
                             ======= ========= ========= ========= ======= ========= ========= ========= =========

Comparison of Financial Condition at June 30,1996 and June 30,1995

      The  Company's assets grew $709.1 million during the fiscal
year ended June 30, 1996, increasing to $1.37 billion at June 30,
1996  from $662.7 million at June 30, 1995.  The growth  resulted
primarily from increases of $406.3 million and $151.2 million  in
investment and mortgage-backed securities and loans respectively.
Both  investment and loan growth were enhanced by the acquisition
of Conestoga, which provided $295.2 million and $113.1 million of
investments    and   mortgage-backed   securities    and    loans
respectively.

      In addition, the Company's investment in federal funds sold
increased  by  $97.3 million, due primarily to  net  proceeds  of
$141.4  raised in the Company's initial public offering, as  well
as   excess  proceeds  of  $131.1  million  resulting  from   the
oversubscription to the Company's initial public offering,  which
were refunded to subscribers on July 1, 1996.

      The  Company  continued its strategy of emphasizing  multi-
family  lending  with  multi-family loan  originations  of  $94.4
during  the fiscal year ended June 30, 1996.  As a result, multi-
family loans grew to $296.6 million or 21.6% of assets (23.9%  of
Adjusted assets) at June 30, 1996 from $252.4 million at June 30,
1995.   In  addition,  the Company increased its  non-residential
loans  by  $10.7 million.  Growth in both of these segments  were
attributable to more competitive loan pricing during the  period.
Offsetting  this growth were declines of $2.4 million  and  $14.2
million in one-to-four family residential loans (excluding  loans
acquired from Conestoga) and cooperative apartment loans, as  the
Company  originated only $6.6 million of one-to-four  family  and
cooperative  apartment loans, the majority of  which  were  fixed
rate loans sold in the secondary market.

      The  acquisition  of Conestoga provided $124.4  million  of
mortgage-backed  securities, of which $70.0 million  were  GNMAs,
and  $170.8 of investment securities, of which $119.1 million and
$51.7  million was comprised of agency obligations and  corporate
obligations,  respectively.  The growth in  securities  portfolio
also reflected the proceeds from the initial public offering  and
the excess subscription proceeds.

      The growth in assets was funded primarily through increased
stockholders'   equity   of  $136.0  million   and   the   excess
subscription  proceeds of $131.1 million included in  escrow  and
other  deposits  at June 30, 1996.  The growth  in  stockholders'
equity  was  due  primarily to $141.4  million  in  net  proceeds
received  from  the  Company's initial public offering  and  $6.3
million  in net income for the year.  Offsetting these  increases
to equity was purchases of the Company's Common Stock by the ESOP
totaling  $11.6 million.  Total stockholders' equity  was  $213.1
million  or 15.53% of total assets (17.17% of Adjusted Assets) at
June 30, 1996.

      The  Company acquired deposits totaling $394.3 million from
Conestoga.   Removing this effect, deposits increased  only  $1.0
million  during the year ended June 30, 1996, as net outflows  of
$21.6   million   offset  interest  credits  of  $22.7   million.
Liabilities at June 30, 1996 reflect a purchase by the Company of
$34.0  million of investment securities available for sale  dated
June  28,  1996  for which the proceeds were not disbursed  until
after July 1, 1996.

      The  Company  utilized the proceeds raised in  the  initial
public  offering  to  fund  the Merger  Consideration  of  $101.3
million for the Bank's acquisition of Conestoga.  The Acquisition
resulted  in goodwill of $28.4 million, which is currently  being
amortized over a twelve year period.

Comparison of Financial Condition at June 30, 1995 and  June  30,
1994

  Total assets increased to $662.7 million at June 30, 1995, from
$646.5  million  at June 30, 1994, an increase of $16.2  million.
The annual growth that occurred in fiscal year 1995 was funded by
a  combination of net income, which was $8.4 million, and deposit
growth, which totaled $8.1 million for the year.

    Asset  growth  was  concentrated  in  the  Bank's  securities
portfolio,  as weak demand for new residential mortgages  at  the
rates  offered,  and strong prepayment activity in  the  existing
mortgage  loan  portfolio,  combined to  lower  the  Bank's  loan
holdings. Total loans fell $1.7 million to $429.9 million at June
30,  1995.  A portion of the liquidity created by the combination
of  the increase in deposits (which was due to interest credited)
and  the reduction in the size of the loan portfolio is reflected
in  the  $10.8  million  increase  in  the  size  of  the  Bank's
investment in federal funds sold, which was $17.8 million at June
30,  1995.  The  remaining liquidity was used  for  new  security
purchases.  Growth  in  the securities  portfolio  totaled  $12.2
million,  primarily attributable to new purchases of  short-term,
fixed-rate securities backed by GSEs, consistent with the  Bank's
supplemental  strategy  of  seeking investments  that  provide  a
stable   source  of  liquidity  and  earnings.  See  ''Management
Strategy  Stable Source of Liquidity and Earnings.'' At June  30,
1995,  the  Bank's investment in mortgage-backed  and  investment
securities had increased to $193.2 million, as compared to $181.0
million at June 30, 1994.

  Total equity of the Bank was $77.1 million at June 30, 1995, or
11.63% of total assets. This compares with total equity of  $67.9
million and an equity to total assets ratio of 10.51% at June 30,
1994.   Included  in  the  equity  calculation  is  a   component
recognizing  the  net  unrealized gain  or  loss  on  the  Bank's
available for sale securities portfolio, as required by SFAS  No.
115,  which  the  Bank adopted effective July 1,  1994.  The  net
addition  to  equity  resulting  from  this  requirement  totaled
$416,000,  net of deferred taxes, at June 30, 1995.  Whether  the
application of SFAS No. 115 will result in an addition  to  or  a
deduction  from  equity in the future is subject to  change  with
changes in market conditions and interest rates. See '' Impact of
Accounting Standards.''

Comparison  of Operating Results for the Fiscal Years Ended  June
30, 1996 and 1995

   General.   Net income for the fiscal year ended June 30,  1996
was  $6.3 million as compared to $8.4 million for the fiscal year
ended June 30, 1995. Income before cumulative effect of change in
accounting principles for the year ended June 30, 1996  was  $7.3
million,  a decrease of $1.1 million from $8.4 million for  prior
year.  Decreases  of  $1.2 million and $398,000 in  net  interest
income  and non-interest income, respectively, were offset  by  a
$440,000 decrease in income tax expense.

   Interest  Income.   Interest income amounted to $52.6  million
for  the  year ended June 30, 1996, representing an  increase  of
$3.4 million from the prior year. The increase was the result  of
the  effect  of  a  $43.1 million increase in  average  interest-
earning  assets, as the average yield on interest-earning  assets
decreased  by  1  basis  point. The  largest  components  of  the
increase  in interest income were interest income on real  estate
loans, investment securities and federal funds sold, of $939,000,
$1.3  million and $625,000, respectively. All of these  increases
were  driven  primarily  by the increases  in  average  interest-
earning  assets of $8.9 million, $23.0 million and $11.7 million,
in  real  estate loans, investment securities and  federal  funds
sold,  respectively.  Average yields on real  estate  loans,  and
investment  securities increased by 3 basis points and  12  basis
points  respectively, while the average yield  on  federal  funds
sold  declined by 10 basis points.  The small increase in  yields
on  these assets resulted from general increase in interest rates
during  the year ended June 30, 1996  offset by a shift of  funds
to  shorter-term, lower yielding investments and competitive loan
pricing, which reduced rates slightly on loan originations.   The
increase  in  average interest-earning assets is consistent  with
the  Bank's  supplemental  strategy of seeking  loan  growth  and
investments  that provide a stable source of earnings.   See  "-
Management  Strategy."  Since  much  of  the  real  estate   loan
originations occurred during the fourth quarter, its effect  upon
average  balance and interest income for the year ended June  30,
1996 was minor.

  Interest Expense.    Interest expense was $23.5 million for the
fiscal  year  1996, an increase of $4.6 million from fiscal  year
1995.  Interest-bearing liabilities averaged $570.1  million  for
the  year ended June 30, 1996, representing an increase of  $25.3
million, or 4.65%, over the prior year. The average rate paid  on
interest-bearing  liabilities increased  64  basis  points,  from
3.48% to 4.12%. The increase in the average rate paid on interest-
bearing  liabilities  resulted  from  the  higher  interest  rate
environment  and from a steady shift of deposits out  of  savings
accounts   and  into  higher  costing  certificates  of  deposit.
Management's  strategy of paying competitive  interest  rates  on
certificates  of deposit with maturities in excess of  one  year,
which  management  believes should help to stabilize  the  Bank's
cost  of funds over the longer term, contributed to a higher cost
of  funds in the current period. Average savings account balances
decreased by $31.6 million from $264.2 million for the year ended
June 30, 1995 to $232.6 million for the year ended June 30, 1996,
at  the  same  time the average certificates of  deposit  balance
increased by $59.7 million from $225.8 million for the year ended
June 30, 1995 to $285.5 million for the year ended June 30, 1996.
The average rate paid on certificates of deposit increased by  93
basis points over the same period.

Provision for loan losses.  The provision for loan losses
increased slightly to $2.97 million for the year ended June 30,
1996 from $2.95 million for the year ended June 30, 1995.  The
allowance for loan losses increased from $5.2 million at June 30,
1995 to $7.8 million at June 30, 1996, reflecting net charge-offs
of $1.0 million during the fiscal year ended June 30, 1996
compared to $1.4 million for the fiscal year ended June 30, 1995,
the provision for loan losses, and the addition for Conestoga
allowance for loan losses of $668,000.  In management's judgment,
it was prudent to continue to increase the loan loss allowance
based upon an evaluation of the adequacy of the reserve in the
context of the Bank's historical loan loss experience and to
reflect the growing volume of multi-family loan originations
during 1996. Although charge-offs declined during fiscal 1996 to
fiscal 1995, the Bank experienced an increase in non-performing
loans of $1.5 million, from $5.1 million at June 30, 1995 to $6.6
million at June 30, 1996. See "Item 1 -Business - Asset Quality."

Non-interest income.  Non-interest income declined $398,000 to
$1.4 million for the year ended June 30, 1996 from $1.8 million
for the year ended June 30, 1995. This decrease reflects a $53,000
reduction in net gain on the sale of OREO, a decrease of $258,000
on net gains on sales of stock, and a decline of $136,000 in
income provided from service charges.  The decrease in net gain on
sale of stocks was attributable primarily to a loss of $195,000 on
the sale of preferred stocks in December, 1995.  The decrease in
income provided by service charges resulted primarily from a
change in the manner in which the Bank accounts for income from
the rental of safe deposit boxes.  In addition, declines of
$34,000 and  $39,000 occurred in dividends on FHLBNY stock and
annuity fees, respectively.  Offsetting these declines, was an
increase of $106,000 in net gains on sale of bonds.

Non-interest expense.  Non-interest expense declined $32,000 from
$14.1 million for the year ended June 30, 1995 to $14.0 million
for the year ended June 30, 1996, attributable primarily to a
decrease of $1.1 million in insurance premiums paid to the Federal
Deposit Insurance Corporation ("FDIC").  This decrease resulted
from a reduction in the rate paid by the Bank to the FDIC for
deposit insurance premiums, combined with a refund from the FDIC
for premiums previously paid in the amount of $319,000. The Bank
acquired $394.3 million of deposits insured by SAIF, from
Conestoga, on which the annual insurance premium is expected to be
$0.23 per $100 of deposit balance. As a result, future FDIC
insurance premium expense is expected to increase from the amount
recorded during the fiscal year ended June 30, 1996. See "Item 1 -
Business - Regulation - Regulation of Federal Savings Associations."
The decrease in deposit insurance expense was partially offset by
a $594,000 increase in compensation and benefits expense, which
was attributable to an increase in employee bonuses and normal
salary increases, and a $586,000 provision for losses attributable
to the Bank's holding of OREO. Beginning with the fiscal year
ended June 30, 1996, periodic provisions to the OREO valuation
reserve are recorded as non-interest expense.

Income tax expense.   Income tax expense totaled $6.2 million for
the year ended June 30, 1996 compared to $6.6 million for the year
ended June 30, 1995, a decline of $440,000.  The decline was
attributable primarily to a decrease of $1.6 million in pre-tax
income, offset by an increase in the effective tax rate from 44.0%
for the year ended June 30, 1995 to 45.9% for the year ended June
30, 1996.  The reduced effective tax rate during the year ended
June 30, 1995 resulted substantially from the utilization of
capital gains  tax loss carryforwards totaling $183,000 during the
fiscal year.

Cumulative Effect of Changes in Accounting Principles.   On  July
1, 1995, the Bank adopted SFAS No. 106, which requires accrual of
post-retirement  benefits, such as health care  benefits,  during
the years an employee provides services. The cumulative effect of
the adoption of SFAS No. 106 on prior years was $1,032,000, after
a  reduction  for income taxes of $879,000. As permitted  by  the
Standard, the Bank elected to record this liability at  the  time
of adoption. See '' - Impact of Accounting Standards.''

Comparison  of Operating Results for the Fiscal Years Ended  June
30, 1995 and 1994

  General.   Net income for fiscal year 1995 was $8.4 million, as
compared to $9.1 million during fiscal year 1994. Interest  rates
rose  sharply  beginning in February, 1994,  and  then  gradually
declined  after January, 1995. The result was a higher  yield  on
earning  assets and a higher cost of interest-bearing liabilities
in  1995  than  in  fiscal year 1994. The effect  on  the  Bank's
liabilities   was  greater,  however,  as  more  interest-bearing
liabilities  than  interest earning assets  repriced  during  the
year.  The  result was a decline in both net interest income  and
net  income for the Bank in fiscal year 1995. Net income fell  to
$8.4  million,  a  decrease of $655,000 from the previous  fiscal
year,  due to (1) the decline in net interest income, which  fell
by  $2.0 million, (2) a $494,000 decrease in non-interest income,
and  (3)  a $1.3 million increase in non-interest expense.  These
were partially offset by a $1.2 million decrease in the provision
for loan losses and adoption of Statement of Financial Accounting
Standards  No.  109,  ''Accounting for Income Taxes,''  effective
July  1,  1993, whereby the Bank changed prospectively  from  the
deferred method to the liability method of accounting for  income
taxes,  which resulted in a charge of $383,000 during the  fiscal
year ended June 30, 1994.

   Interest Income.   Total interest income was $49.2 million  in
fiscal  year 1995, a decrease of $598,000 from fiscal year  1994.
Despite an increase in the average yield on earning assets during
the  year,  interest income fell, primarily because  of  a  $13.3
million  decrease  in  the  amount  of  average  interest-earning
assets.  The Bank's average investment in real estate  loans  was
$427.0  million in fiscal year 1995 versus $451.7 million  during
the  prior  year,  as  principal  repayments  exceeded  new  loan
originations for the Bank's portfolio. The result was a  drop  of
$2.2  million  in  interest  income from  the  real  estate  loan
portfolio  during  1995.  Interest  income  from  mortgage-backed
securities increased by $606,000 to $5.5 million, due to the $3.2
million  growth  in  the  Bank's  average  investment  in   these
securities and to a 47 basis point increase in the average  yield
on  the mortgage-backed securities portfolio. Similarly, interest
income  provided  by  the Bank's portfolio  of  other  securities
increased by $948,000 from fiscal year 1994 to fiscal year  1995.
A  $14.2 million increase in the average balance invested in this
portfolio  combined with an increase in yield to  5.23%  in  1995
from  4.94%  in  fiscal  year 1994 accounted  for  the  increase.
Federal funds sold, despite averaging $5.8 million less in fiscal
year  1995,  provided $99,000 more in interest income during  the
year  due  to a 234 basis point increase in the average yield  on
federal funds.

    Interest   Expense.    Average  interest-bearing  liabilities
decreased  by  $20.0 million in fiscal year 1995, reflecting  net
deposit  outflows  during the year. Total interest  expense  rose
during  the  period, however, as rising funding costs offset  the
drop  in  average  interest-bearing liabilities.  Throughout  the
first  half  of  the  1995  fiscal year,  the  Bank's  depositors
responded  to  higher interest rates by extending  their  deposit
maturities. Savings account deposits, which had previously  grown
during a period of low rates existing in 1993 and 1992, began  to
shift into higher yielding certificates of deposit. During fiscal
year  1995, average savings account balances decreased  by  $30.1
million  from  year  earlier average balances. Meanwhile  average
balances  of  certificates of deposit grew  from  $213.1  million
during  the 1994 fiscal year, to $225.8 million during  the  1995
fiscal year, an increase of $12.7 million. The net result was  an
increase  in  deposit expense of $1.3 million.  Interest  expense
attributable  to borrowed funds increased by $56,000  on  a  $1.1
million increase in average borrowings.

   Net Interest Income.   Net interest income for the 1995 fiscal
year was $30.3 million, a decline of $1.95 million, or 6.1%, from
1994's results. A lower average interest rate spread and a  $11.2
million  reduction in the average assets of the Bank combined  to
reduce  net  interest income. The interest rate  spread  and  net
interest  margin were 4.51% and 4.91%, respectively, in 1995,  as
compared  with  4.80%  and 5.12% in 1994. Generally,  the  Bank's
assets  repriced less quickly than the Bank's liabilities  during
the  year,  a  result  due in large part to the  high  volume  of
deposit  flows  out  of  savings accounts and  into  higher  cost
certificates of deposit.

   Provision for Loan Losses.   The provision for loan losses was
$2.95  million in 1995 as compared to $4.11 million in  the  1994
fiscal  year.  The  change in the level of loan  loss  provisions
reflected  the general improvement in the overall credit  quality
of  the Bank's balance sheet during fiscal year 1995. By June 30,
1995,  both  non-performing loans and non-performing  assets  had
declined  significantly  from year  earlier  levels.  During  the
period,  total non-performing loans declined by $1.2 million,  or
18.8%.  Non-performing assets showed similar improvement, falling
from  $14.4  million  at June 30, 1994, to $9.5  million  a  year
later. In addition, net charge-offs for the fiscal year 1995 were
$1.4  million, representing a decline of $2.1 million from fiscal
year  1994.  At  June  30, 1995, the allowance  for  loan  losses
totaled 101.99% of non-performing loans and 1.20% of total loans,
up  from  58.15% and 0.84%, respectively, at June 30, 1994.  See
"Item  1  -  Business - Asset Quality Non-performing  Assets  and
Troubled-Debt Restructurings.''

   Non-Interest Income.   Non-interest income for the 1995 fiscal
year  decreased  to  $1.8 million from $2.3 million  in  1994,  a
reduction  of  $494,000. Bonds called in the  low  interest  rate
environment  of  the 1994 fiscal year provided $342,000  in  non-
interest  income, as compared to the $52,000 generated in  fiscal
year  1995  by  the  sale of securities, a decline  of  $290,000.
Additionally, net gains on the sale of fixed-rate  loans  to  the
secondary mortgage market fell by $184,000 in fiscal year 1995 as
compared with fiscal year 1994, due to the change in direction of
interest rates during each respective period.

   Non-Interest  Expense.   Total non-interest expense  increased
$1.3 million, or 10.5%, in the 1995 fiscal year to $14.1 million,
as  compared  to $12.7 million in fiscal year 1994.  The  primary
factor  behind this increase was a $565,000 charge  taken  during
1995  for  possible  losses  from the Bank's  investment  in  the
capital  stock and debentures of Nationar, which was one  of  the
Bank's  primary  correspondent  banks.  Additionally,  the   Bank
established a $75,000 reserve against the possibility  of  losses
relating  to  its federal funds held by Nationar at  February  6,
1995. (See Item 8 - Financial Statements and Supplemental Data  -
Note 16 - Commitments and Contingencies)

   Other  factors  contributing to the  increase  in  total  non-
interest expense in the 1995 fiscal year were a $418,000 increase
in  compensation and benefits and a $112,000 increase in expenses
associated  with  managing  the Bank's  portfolio  of  OREO.  The
increase  in  OREO expenses in fiscal year 1995 was  due  to  the
payment of maintenance arrears on four cooperative apartments  on
which   the   Bank  foreclosed  during  1995.  The  increase   in
compensation and benefits expenses reflects, in part, the  Bank's
establishment   of  a  Supplemental  Executive  Retirement   Plan
(''SERP'')  in February of 1994 in the middle of the Bank's  1994
fiscal  year. Thus, fiscal 1995 was the first full year for  SERP
expense  accruals. Expenses attributable to the SERP were $64,000
higher  in fiscal year 1995 than in fiscal year 1994 as a result.
In  addition, there was a $312,000 increase in employee  salaries
and  benefits  expense in fiscal year 1995 due to  normal  salary
increases.

   Income  Tax  Expense.   Income tax expense  declined  by  $1.6
million  in fiscal year 1995 as compared to fiscal year 1994  due
to  a decrease in pre-tax income. The Bank's effective income tax
rates  for  the fiscal year 1995 and fiscal year 1994 were  44.0%
and  46.5%, respectively. The effective rate was higher in fiscal
year  1994  due to several factors, the most important  of  which
were  the  application  of accrued tax loss  carryforwards  to  a
capital  gain  on one of the Bank's mutual fund investments,  and
the  impact  of  a  graduated federal tax  rate  schedule,  which
increased the Bank's marginal tax rate in fiscal year 1994 due to
higher pre-tax earnings.

Liquidity and Capital Resources

   The  Company's primary sources of funds are deposits, proceeds
from  principal  and interest payments on loans,  mortgage-backed
securities  and  investments, 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  general interest rates, economic  conditions  and
competition.

   The  Company completed the sale of 14,547,500 shares of common
stock  at  $10.00  per  share on June  26,  1996,  realizing  net
proceeds  of  $141.4  million  and utilized  approximately  $88.0
million  of  the proceeds to purchase 100% of the  Bank's  common
stock. The Bank used these proceeds, along with cash generated in
the  Bank's  ordinary course of business,  to  fund  the   Merger
Consideration  of  $101.3 million paid to Conestoga  shareholders
for the Acquisition.

   The  Bank is required to maintain an average daily balance  of
liquid assets and short-term liquid assets as a percentage of net
withdrawable  deposit  accounts  plus  short-term  borrowings  as
defined  by  OTS regulations. The minimum required liquidity  and
short-term  liquidity  ratios  are  currently  5.0%   and   1.0%,
respectively.  At June 30, 1996, the Bank's liquidity  ratio  and
short-term   liquid   asset  ratios   were   43.0%   and   37.0%,
respectively.  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.

    The  primary  investing  activities  of  the  Bank  are   the
origination of multi-family and single-family mortgage loans, and
the  purchase of mortgage-backed and other securities. During the
fiscal years ended June 30, 1996, 1995 and 1994, the Bank's  loan
originations  totaled  $114.9 million, $47.4  million  and  $64.7
million,  respectively.  Purchases of mortgage-backed  and  other
securities  totaled  $574.5 million,  $55.4  million  and  $101.3
million for the fiscal years ended June 30, 1996, 1995, and 1994,
respectively. These activities were funded primarily by principal
repayments  on  loans,  mortgage-backed  securities   and   other
securities. Loan sales provided additional liquidity to the Bank,
totaling  $5.1  million, $2.8 million and $19.9 million  for  the
fiscal years ended June 30, 1996, 1995, and 1994 respectively.

  The Bank experienced a net increase in total deposits of $395.3
million  and $8.1 million respectively in the fiscal years  ended
June  30,  1996  and 1995, respectively, while the   fiscal  year
ended  June  30, 1994  produced a decrease  in total deposits  of
$17.3 million.  As discussed previously, the increase in deposits
during the year ended June 30, 1996 was attributable primarily to
the  acquisition  of $394.3 million in deposits  from  Conestoga.
Deposit  flows are affected by the level of interest  rates,  the
interest  rates  and products offered by local  competitors,  and
other factors.

   The  Bank closely monitors its liquidity position on  a  daily
basis.  Excess  short-term  liquidity is  invested  in  overnight
federal funds sales and various money market investments. In  the
event  that  the Bank should require funds beyond its ability  to
generate  them  internally,  additional  sources  of  funds   are
available  through the use of the Bank's $152.0 million borrowing
limit at the FHLBNY. At June 30, 1996, the Bank had $15.7 million
in   medium  term  borrowings  outstanding  at  the  FHLBNY   and
additional overall borrowing capacity from the FHLBNY  of  $136.3
million.

   Loan  commitments  totaled $81.2 million  at  June  30,  1996,
comprised  of  $80.2  million  in  multi-family  commitments  and
residential   mortgage   loan  commitments   totaling   $971,000.
Management  of  the  Company  anticipates  that  it   will   have
sufficient  funds available to meet its current loan commitments.
Certificates of deposit which are scheduled to mature in one year
or  less  from June 30, 1996 totaled $359.4 million. From October
1,  1994  to  June  30,  1996, the Company experienced  an  80.4%
retention  rate of funds from maturing certificates  of  deposit.
Based  upon  this  experience and the Company's  current  pricing
strategy, management believes that a significant portion of  such
deposits will remain with the Company.

   At  June  30,  1996,  the  Bank was  in  compliance  with  all
applicable  regulatory  capital  requirements.  Tangible  capital
totaled  $119.1  million,  or 9.49%  of  total  tangible  assets,
compared  to  a  1.50% regulatory requirement; core  capital,  at
9.50%,  exceeded the required 3.0% regulatory minimum, and  total
risk-based  capital, at 21.24% of risk weighted assets,  exceeded
the 8.0% regulatory requirement.

Impact of Inflation and Changing Prices

   The  Financial  Statements and Notes thereto presented  herein
have  been  prepared in accordance with GAAP, which  require  the
measurement of financial position and operating results in  terms
of  historical  dollars without considering the  changes  in  the
relative  purchasing power of money over time due  to  inflation.
The impact of inflation is reflected in the increased cost of the
Bank's operations. Unlike industrial companies, nearly all of the
assets and liabilities of the Bank are monetary in nature.  As  a
result,  interest  rates  have a greater  impact  on  the  Bank's
performance  than do the effects of general levels of  inflation.
Interest  rates do not necessarily move in the same direction  or
to the same extent as the price of goods and services.

Impact of Accounting Standards

   In  December,  1990  the  FASB  issued  SFAS  No.  106,  which
significantly  changed the prevailing practice of accounting  for
post-retirement benefits (such as health care benefits) on a cash
basis to requiring an accrual, during the years that the employee
renders  the necessary service, of the expected cost of providing
those  benefits  to an employee and the employee's  beneficiaries
and  covered dependents. The Bank adopted SFAS No. 106  effective
July  1,  1995, electing to record the entire accumulated benefit
obligations  immediately.  The  net  cumulative  effect  of   the
adjustment of $1.0 million (after reduction for income  taxes  of
$879,000) to apply retroactively to prior years was included as a
charge to net income for the year  ended June 30, 1996.

   In May 1993, the FASB issued Statement of Financial Accounting
Standards No. 114, ''Accounting by Creditors for Impairment of  a
Loan'' (''SFAS No. 114''). Under the provisions of SFAS No.  114,
a  loan is considered impaired when, based on current information
and  events,  it is probable that the lender will  be  unable  to
collect  all  principal  and  interest  due  according   to   the
contractual  terms of the loan agreement. SFAS No.  114  requires
lenders  to measure impairment of a loan based on (i) the present
value  of  expected future cash flows discounted  at  the  loan's
effective interest rate, (ii) the loan's observable market  price
or  (iii)  the  fair  value  of the collateral  if  the  loan  is
collateral-dependent. SFAS No. 114 also applies  to  restructured
loans  and eliminates the requirement to classify loans that  are
in-substance foreclosures as foreclosed assets except  for  loans
where  the  creditor has physical possession  of  the  underlying
collateral, but not legal title. As amended by SFAS No. 118, SFAS
No. 114 allows a creditor to use existing methods for recognizing
interest income on impaired loans. The Bank adopted SFAS No.  114
effective July 1, 1995. Adoption of this standard did not have  a
material  effect upon the Bank's financial condition  or  results
from operations.

   In  March 1995, the FASB issued SFAS No. 121, ''Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets  to
be  Disposed  Of''  which  requires that  long-lived  assets  and
certain identifiable intangibles to be held and used by an entity
be  reviewed for impairment and reported at the lower of carrying
amount  or  fair  value, less cost to sell,  whenever  events  or
changes in circumstances indicate that the carrying amount of  an
asset  may  not  be  recoverable. SFAS No. 121 is  effective  for
fiscal  years  beginning  after  December  15,  1995.  Management
anticipates  that the adoption of SFAS No. 121 will  not  have  a
material  impact  on  the  financial  condition  or  results   of
operations of the Bank.

   In May 1995, the FASB issued Statement of Financial Accounting
Standards  No. 122, ''Accounting for Mortgage Servicing  Rights''
(''SFAS  122'').  SFAS  No.  122 amends  Statement  of  Financial
Accounting  Standards No. 65, ''Accounting for  Certain  Mortgage
Banking  Activities,'' requiring separate capitalization  of  the
costs  of  rights to service mortgage loans for others regardless
of  whether these rights are acquired through a purchase or  loan
origination activity. SFAS No. 122 is effective for fiscal  years
beginning  after December 15, 1995, and applies only to servicing
rights   on   loans  sold  subsequent  to  adoption.   Management
anticipates  that the adoption of SFAS No. 122 will  not  have  a
material  impact  upon  the financial  condition  or  results  of
operations of the Bank.

   In  October  1995,  the  FASB issued  Statement  of  Financial
Accounting   Standards  No.  123,  ''Accounting  for  Stock-Based
Compensation'' (''SFAS No. 123''). SFAS No. 123 encourages a fair
value based method of accounting for an employee stock option  or
similar  equity instrument and encourages all entities  to  adopt
this method for all employee stock compensation plans. Under  the
fair  value  based method, compensation cost is measured  at  the
grant date based on the value of the award and is recognized over
the service period, which is usually the vesting period. SFAS No.
123  is  effective for fiscal years beginning after December  15,
1995.

   On  November  15,  1995,  the FASB  issued  a  special  report
entitled:  ''A  Guide  to  Implementation  of  Statement  115  on
Accounting for Certain Investments in Debt and Equity Securities,
Questions  and Answers'' (''The Guide''). The Guide  permitted  a
one-time reassessment and related reclassifications from the held
to  maturity category (no later than December 31, 1995) that will
not call into question the intent of the enterprise to hold other
debt securities at maturity in the future. In December, 1995, the
Bank  performed  a reassessment of its investment  and  mortgage-
backed securities portfolios which resulted in a reclassification
of approximately $3.3 million of investment securities from held-
to-maturity into available for sale. The impact upon  the  Bank's
financial  condition  resulting  from  this  transfer   was   not
material.  There  was  no  impact  on  the  Bank's  results  from
operations resulting from this transfer.

  In June 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 125 ''Accounting
for Transfers of Financial Assets and Extinguishments of
Liabilities.''  The statement provides consistent standards for
distinguishing transfers of financial assets that are sales from
transfers that are borrowings.  This statement also requires that
liabilities and derivatives incurred or obtained as part of a
transfer be measured initially at fair value.  This statement also
provides guidance on measurement of servicing rights on assets
transferred and derecognition of liabilities transferred.  The
statement is effective for all transfers, servicing, or
extinguishments occurring after December 31, 1996.  Adoption of
this standard is not expected to have a material effect upon the
Company's financial condition or results of operations.

   In  November 1993, the American Institute of Certified  Public
Accountants  (''AICPA'') issued Statement of Position  No.  93-6,
''Employers'  Accounting  for Employee  Stock  Ownership  Plans''
(''SOP  93-6'')  which  is effective for fiscal  years  beginning
after  December 15, 1993. SOP 93-6 will apply to the Bank's  ESOP
and requires the recognition of compensation expense by employers
based on the fair value of ESOP shares. Under SOP 93-6, the  Bank
will  recognize compensation expense equal to the fair  value  of
the  ESOP  shares  that  become  committed  to  be  released   to
participant  accounts. To the extent that the fair value  of  the
Bank's  ESOP  shares  at  the time they become  committed  to  be
released  differs  from the original cost  of  such  shares,  the
difference  will be charged or credited to shareholders'  equity.
The cost of the stock acquired by the ESOP which has not yet been
committed  to  be  released  to  participant  accounts  will   be
reflected as a reduction of shareholders' equity.

  In December 1994, the AICPA issued Statement of Position No. 94-
6,  ''Disclosure of Certain Significant Risks and Uncertainties''
(''SOP  94-6'') which is effective for fiscal years ending  after
December  15, 1995. SOP 94-6 requires disclosure in the financial
statements  about  certain  risks and  uncertainties  that  could
significantly  affect  the  amounts  reported  in  the  financial
statements  in  the near term and relate to: (i)  the  nature  of
operations;   (ii)  the  necessary  use  of  estimates   in   the
preparation  of  financial  statements,  and;  (iii)  significant
concentrations in certain aspects of operations. The adoption  of
SOP  94-6  did  not   have a material impact upon  the  financial
condition or results of operations of the Bank.

Item 8. - Financial Statements and Supplementary Data

Financial Statements begin on following page.

                                 

                   INDEPENDENT AUDITORS' REPORT

To the Stockholders and the Board of Directors of
 the Dime Community Bancorp, Inc. and Subsidiary

We have audited the accompanying consolidated statements of
condition of the Dime Community Bancorp, Inc. and Subsidiary (the
''Company'') as of June 30, 1996 and 1995, and the related
consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period
ended June 30, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of the Dime Community Bancorp, Inc. and Subsidiary as of
June 30, 1996 and 1995, and the results of their operations and
their cash flows for each of the three years in the period ended
June 30, 1996 in conformity with generally accepted accounting
principles.

As discussed in Notes 1 and 15, effective July 1, 1995, the Company
changed its method of accounting for postretirement benefits other
than pensions to comply with Statement of Financial Accounting
Standards No. 106.  As discussed in Notes 1 and 14, effective July
1, 1993 the Company changed its method of accounting for income
taxes to comply with Statement of Financial Accounting Standards
No. 109.

/s/ Deloitte & Touche llp
________________________________
New York, New York
August 30, 1996

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CONDITION
                      JUNE 30, 1996 AND 1995
                          (In Thousands)

                                                                                    1996      1995
                                                                               ----------- ----------
                                                                                     
                    ASSETS:
Cash and due from banks...................................................        $17,055     $6,807
Investment securities held to maturity (estimated market value of
 $43,428 and $51,254 at June 30, 1996 and June 30, 1995
  respectively) (Notes 2, 4 and 12).......................................         43,552     51,475
Investment securities available for sale (Notes 2,4, and 12):
 Bonds and notes (amortized cost of $338,141 and $42,350 at
  June 30, 1996 and June 30, 1995, respectively)..........................        338,089     42,349
 Marketable equity securities (historical cost of $2,977 and
  $3,304 at June 30, 1996 and June 30, 1995, respectively)................          3,205      3,070
Mortgage-backed securities held to maturity (estimated market value
 of $52,596 and $54,172 at June 30, 1996 and June 30, 1995
 respectively) (Notes 5 and 12)...........................................         52,580     53,815
Mortgage-backed securities available for sale (amortized cost of
 $156,962 and $36,728 at June 30, 1996 and June 30, 1995,
 respectively) (Notes 5 and 12)...........................................        157,361     37,733
Federal funds sold (Note 2)...............................................        115,130     17,809
Loans (Note 6):
  Real estate.............................................................        577,663    425,965
  Other loans.............................................................          5,564      3,751
  Less allowance for loan losses..........................................         (7,812)    (5,174)
                                                                               ----------- ----------
Total loans, net..........................................................        575,415    424,542
                                                                               ----------- ----------
Loans held for sale.......................................................            459        138
Premises and fixed assets (Note 9)........................................         14,399      5,921
Federal Home Loan Bank of New York capital stock (Note 10)................          7,604      4,801
Other real estate owned, net(Note 7)......................................          1,946      4,466
Goodwill (Note 3).........................................................         28,438         -
Other assets (Notes 14 and 15)............................................         16,588      9,813
                                                                               ------------ ---------
TOTAL ASSETS..............................................................     $1,371,821   $662,739
                                                                               ============ =========
                    LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:                                                                               
Due to depositors (Note 11)...............................................       $950,114   $554,841
Escrow and other deposits (Note 2)........................................        141,732     12,109
Securities sold under agreements to repurchase (Note 12)..................         11,998      2,110
Federal Home Loan Bank of New York advances (Note 13).....................         15,710     15,710
Payable for securities purchased..........................................         33,994         -
Accrued postretirement benefit obligation (Note 15).......................          2,381         -
Other liabilities (Notes 1 and 15)........................................          2,821        902
                                                                               ------------ ---------
TOTAL LIABILITIES.........................................................      1,158,750    585,672
                                                                               ------------ ---------
COMMITMENTS AND CONTINGENCIES (Note 16)

STOCKHOLDERS' EQUITY:
Preferred Stock ($0.01 par, 9,000,000 shares authorized, none outstanding
  at June 30, 1996 and 1995)..............................................             -          -
Common Stock ($0.01 par, 45,000,000 shares authorized, 14,547,500 shares
  outstanding at June 30, 1996, none outstanding at June 30,1995)........             145         -
Additional paid-incapital................................................         141,240         -
Employee Stock Ownership Plan (Note 15)...................................        (11,541)        -
Retained earnings (Notes 2 and 14)........................................         82,916     76,651
Unrealized gain on securities available for sale, net of deferred taxes...            311        416
                                                                               ------------ ---------
TOTAL STOCKHOLDERS' EQUITY................................................        213,071     77,067
                                                                               ------------ ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................     $1,371,821   $662,739
                                                                               ============ =========

See notes to consolidated financial statements.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF OPERATIONS
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
                          (In Thousands)

                                                                                  For the Years
                                                                                  Ended June 30,
                                                                           --------------------------
                                                                             1996    1995     1994
                                                                           -------- -------- --------
                                                                                                   
Interest income:
Loans secured by real estate.............................................. $39,314   $38,375  $40,596
Other loans...............................................................     340       307      337
Investment securities.....................................................   5,738     4,402    3,454
Mortgage-backed securities................................................   5,927     5,464    4,858
Federal funds sold........................................................   1,300       675      576
                                                                           -------- -------- --------
Total interest income.....................................................  52,619    49,223   49,821
                                                                           -------- -------- --------
Interest expense:
Deposits and escrow.......................................................  22,508    17,933   16,637
Borrowed funds............................................................   1,008     1,013      957
                                                                           -------- -------- --------
Total interest expense....................................................  23,516    18,946   17,594
Net interest income.......................................................  29,103    30,277   32,227
Provision for loan losses (Note 6)........................................   2,979     2,950    4,105
                                                                           -------- -------- --------
Net interest income after provision for loan losses.......................  26,124    27,327   28,122
                                                                           -------- -------- --------
Non-interest income:
Service charges and other fees............................................     911     1,047      995
Net gain (loss) on sales and redemptions of securities and other assets...     (30)      159      495
Net gain on sales of loans................................................      12        33      217
Other.....................................................................     482       534      560
                                                                           -------- -------- --------
Total non-interest income.................................................   1,375     1,773    2,267
                                                                           -------- -------- --------
Non-interest expense:
Salaries and employee benefits............................................   7,359     6,879    6,461
ESOP benefit expense......................................................     114        -        -
Occupancy and equipment...................................................   1,775     1,610    1,613
Federal deposit insurance premiums........................................     109     1,245    1,268
Data processing costs.....................................................     557       481      477
Provision for losses on Other real estate owned (Note 7)..................     586        -        -
Other.....................................................................   3,521     3,838    2,895
                                                                           -------- -------- --------
Total non-interest expense................................................  14,021    14,053   12,714
                                                                           -------- -------- --------
Income before income taxes and cumulative effect of changes in
accounting
principles.....................................................             13,478    15,047   17,675
Income tax expense (Note 14)..............................................   6,181     6,621    8,211
                                                                           -------- -------- --------
Income before cumulative effect of changes in accounting
principles................................................................   7,297     8,426    9,464
Cumulative effect on prior years of changing to a different method of
accounting for:
Income taxes (Notes 1 and 14).............................................      -         -      (383)
Post-retirement benefits other than pensions (Notes 1 and 15).............  (1,032)       -        -
                                                                           -------- -------- --------
Net income................................................................  $6,265    $8,426   $9,081
                                                                           ======== ======== ========

See notes to consolidated financial statements.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

                                                                                 For the Years
                                                                                 Ended June 30,
                                                                           --------------------------
                                                                           1996    1995     1994
                                                                           -------- -------- --------
                                                                                           
Common Stock (Par value $0.01):
Balance at beginning of period............................................ $    -    $    -   $    -
Issuance of common stock in initial public offering (14,547,500 shares)...     145        -        -
                                                                           -------- -------- --------
Balance at end of period..................................................     145        -        -
                                                                           -------- -------- --------
Additional paid-in capital:
Balance at beginning of period............................................      -         -        -
Issuance of common stock in initial public offering....................... 145,330        -        -
Cost of issuance of common stock..........................................  (4,107)
Allocation of ESOP stock..................................................      17        -        -
                                                                           -------- -------- --------
Balance at end of period.................................................. 141,240        -        -
                                                                           -------- -------- --------
Employee Stock Ownership Plan:
Balance at beginning of period............................................      -         -        -
Common stock acquired by ESOP............................................. (11,638)       -        -
Allocation of ESOP stock..................................................      97        -        -
                                                                           -------- -------- --------
Balance at end of period.................................................. (11,541)       -        -
                                                                           -------- -------- --------
Retained earnings:
Balance at beginning of period............................................  76,651    68,225   59,144
Net income for the period.................................................   6,265     8,426    9,081
                                                                           -------- -------- --------
Balance at end of period..................................................  82,916    76,651   68,225
                                                                           -------- -------- --------
Marketable equity securities valuation reserve:
Balance at beginning of period............................................      -       (306)    (225)
Change in marketable equity valuation reserve.............................      -         -       (81)
Effect of adoption of SFAS 115............................................      -        306       -
                                                                           -------- -------- --------
Balance at end of period..................................................      -         -      (306)
                                                                           -------- -------- --------
Unrealized gain(loss) on securities available for sale, net:
Balance at beginning of period............................................     416        -        -
Effect of adoption of SFAS 115, net of deferred taxes.....................       -      (146)      -
Change in unrealized gain (loss) on securities available for sale during
  the year, net of deferred taxes.........................................    (105)      562       -
                                                                           -------- -------- --------
Balance at end of period.................................................. $   311  $    416 $     -
                                                                           -------- -------- --------

See notes to consolidated financial statements.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CASH FLOWS
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
                          (In Thousands)                                             For the Years Ended June 30,
                                                                                       1996     1995     1994
                                                                                     -------- -------- ---------
                                                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.......................................................................    $6,265   $8,426    $9,081
Adjustments to reconcile net income to net cash provided by operating
activities:
  Net gain on investment and mortgage-backed securities called...................       (79)      -       (342)
  Net loss on investment and mortgage-backed securities sold.....................       164       11        -
  Net gain on sale of loans held for sale........................................       (12)     (33)     (217)
  Depreciation and amortization..................................................       127    1,509     1,662
  ESOP plan compensation expense.................................................       114       -         -
  Provision for loan losses......................................................     2,979    2,950     4,105
  Decrease (increase) in loans held for sale.....................................      (310)     580       902
  Decrease (increase) in other assets and other real estate owned................     3,040    3,762    (1,260)
  Increase in accrued postretirement benefit obligation..........................     2,115       -         -
  Increase in payable for securities purchased...................................    33,994       -         -
  Increase in other liabilities..................................................     1,677      291        53
                                                                                   --------- --------  --------
Net cash provided by operating activities......................................      50,074   17,496    13,984
                                                                                   --------- --------  --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in Federal funds sold....................................   (52,253) (10,780)   14,008
Proceeds from maturities of investment securities held to maturity...............    13,065    2,060    29,800
Proceeds from maturities of investment securities available for sale.............   399,135   26,300        -
Proceeds from calls of investment securities held to maturity....................    11,056       -     11,420
Proceeds from calls of investment securities available for sale..................    11,323       -         -
Proceeds from sale of investment securities available for sale...................       501       -         -
Proceeds from sale of mortgage-backed securities held to maturity................     2,555    1,067        -
Purchases of investment securities held to maturity..............................    (9,292)  (1,000)  (71,542)
Purchases of investment securities available for sale..........................    (541,951) (43,251)       -
Purchases of mortgage-backed securities held to maturity.........................   (11,714)  (6,093)  (29,753)
Purchases of mortgage-backed securities available for sale.......................   (11,554)  (5,053)       -
Principal collected on mortgage-backed securities held to maturity...............     9,995    7,905    16,906
Principal collected on mortgage-backed securities available for sale.............    15,877    5,690        -
Net (increase) decrease in loans.................................................   (41,856)    (215)   25,670
Cash disbursed in acquisition of Conestoga Bancorp, net of cash acquired            (93,074)      -         -
Purchases of fixed assets........................................................      (779)    (125)     (226)
Sale (purchase) of Federal Home Loan Bank capital stock..........................      (123)     188        (6)
                                                                                   --------- --------  --------
Net cash used in investing activities............................................  (299,089) (23,307)   (3,723)
                                                                                   --------- --------  --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in due to depositors.....................................     1,019    8,080   (17,350)
Net (decrease) increase in escrow and other deposits.............................   128,625   (1,187)    2,967
Net proceeds from issuance of common stock.......................................   129,730       -         -
Proceeds from FHLB advances......................................................        -        -      6,005
Decrease in repurchase agreements................................................      (111)     (51)     (115)
                                                                                   --------- --------  --------
Net cash (used in) provided by financing activities.............................    259,263    6,842    (8,493)
                                                                                   --------- --------  --------
INCREASE IN CASH AND DUE FROM BANKS..............................................    10,248    1,031     1,768
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD.....................................     6,807    5,776     4,008
                                                                                   --------- --------  --------
CASH AND DUE FROM BANKS, END OF PERIOD...........................................   $17,055   $6,807    $5,776
                                                                                   ========= ========  ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes.......................................................  $  6,993  $ 5,996    $9,689
                                                                                   ========= ========  ========
Cash paid for interest...........................................................  $ 23,744  $18,932   $17,575
                                                                                   ========= ========  ========
Transfer of investment and mortgage-backed securities held-to- maturity to
available for sale...............................................................  $  3,300  $70,000   $    -
                                                                                   ========= ======== =========

 On June 26, 1996, the Bank acquired all of the outstanding common
 stock of Conestoga Bancorp, Inc. for cash.
 In connection with this acquisition, the following assets were
 acquired and liabilities assumed:
  Fair Value of Investments, Loans and Other Assets Acquired, net   $  507,023
  Cash paid for Common Stock                                          (101,272)
                                                                    -----------
     Deposits and Other Liabilities Assumed                         $  405,751
                                                                    ===========
          See notes to consolidated financial statements.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)
                                 
1.    NATURE  OF  OPERATIONS  AND SUMMARY OF  SIGNIFICANT  ACCOUNTING
POLICIES

Nature of Operations - Dime Community Bancorp, Inc. (the "Company")
is a Delaware corporation organized by the Bank for the purpose of
acquiring all of the capital stock of The Dime Savings Bank of
Williamsburgh (the "Bank") issued in the Conversion on June 26, 1996.
Presently, the only significant assets of the Company are the capital
stock of the Bank, the Company's loan to the Bank's ESOP, and
investments of the net conversion proceeds retained by the Company.
The Company is subject to the financial reporting requirements of the
Securities Exchange Act of 1934, as amended.

The Bank was originally founded in 1864 as a New York State-chartered
mutual savings bank.  On November 1, 1995, the Bank converted to a
federal mutual savings bank.  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.
The Bank maintains its headquarters in the Williamsburgh section of
the borough of Brooklyn.  Fourteen additional offices are located in
the boroughs of Brooklyn, Queens, and the Bronx, and in Nassau
County.

The sale of the Company's stock and the merger of Conestoga Bancorp,
Inc. into the Bank occurred substantially at year-end
(June 26, 1996).  Accordingly, the Company's results of operations
for the year ended June 30, 1996 are substantially comprised of the
results of operations of the Bank, and earnings per share information
for the Company for the year ended June 30, 1996 is not meaningful.

Summary of Significant Accounting Policies - The accounting and
reporting policies of the Company conform to generally accepted
accounting principles. The following is a description of the
significant policies:

Principles of Consolidation - The accompanying 1996 consolidated
financial statements include the accounts of the Company, and its
wholly-owned subsidiary, the Bank.  All financial statements
presented include the accounts of the Bank's three wholly-owned
subsidiaries, Havemeyer Equities Corp. (''HEC''), Boulevard Funding
Corp. (''BFC'') and Havemeyer Brokerage Corp. (''HBC''). HBC is
currently engaged in the sale of insurance and annuity products
primarily to the Bank's customers and members of the local community.
BFC and HEC were established in order to invest in real estate joint
ventures and other real estate assets. BFC and HEC had no investments
in real estate at June 30, 1996 and are currently inactive. All
significant intercompany accounts and transactions have been
eliminated in consolidation.

Investment Securities and Mortgage-backed Securities - Purchases and
sales of Investments and Mortgage-backed securities are recorded on
trade date.  Gains and losses on sales of Investment and Mortgage-
backed securities are recorded on the specific identification basis.

On July 1, 1994, the Bank adopted SFAS No. 115, ''Accounting for
Investments in Debt and Equity Securities'' (''SFAS 115''). The
Statement requires that debt and equity securities that have readily
determinable fair values be carried at fair value unless they are
held to maturity. Debt securities are classified as held to maturity
and carried at amortized cost only if the reporting entity has a
positive intent and ability to hold these securities to maturity. If
not classified as held to maturity, such securities are classified as
securities available for sale or as trading securities. Unrealized
holding gains or losses on securities available for sale are excluded
from earnings and reported net of income taxes as a separate
component of stockholders' equity. The effect of adopting this
statement was not material.  At June 30, 1996 and 1995, all equity
securities are classified as available for sale.  At June 30, 1994,
all debt securities were carried at amortized cost and all equity
securities were carried at lower of cost or market.

Loans Held for Sale - Mortgage loans originated and intended for sale
in the secondary market are carried at the lower of aggregate cost or
estimated market value.

Allowance for Loan Losses - It is the policy of the Bank to provide a
valuation allowance for estimated losses on loans based on the Bank's
past loan loss experience, known and inherent risks in the portfolio,
adverse situations which may affect the borrower's ability to repay,
estimated value of underlying collateral and current economic
conditions in the Bank's lending area. The allowance is increased by
provisions for loan losses charged to operations and is reduced by
charge-offs, net of recoveries. Management's periodic evaluation of
the adequacy of the allowance is based on the Bank's

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

past loan loss experience, known and inherent risks in the portfolio,
adverse situations that may affect the borrower's ability to repay,
the estimated value of any underlying collateral, and current
economic conditions. While management
uses available information to estimate losses on loans, future
additions to the allowance may be necessary based on changes in
economic conditions beyond management's control. In addition, various
regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to recognize additions to the
allowance based on judgments different from those of management.
Management believes, based upon all relevant and available
information, that the allowance for loan losses is adequate to absorb
losses inherent in the portfolio.

On July 1, 1995, the Bank adopted Statement of Financial Accounting
Standards No. 114, ''Accounting by Creditors for Impairment of a
Loan'' (''SFAS 114''). The Statement requires all creditors to
account for impaired loans, except those loans that are accounted for
at fair value or at the lower of cost or fair value, at the present
value of expected future cash flows discounted at the loan's
effective interest rate. As an expedient, creditors may account for
impaired loans at the fair value of the collateral or at the
observable market price of the loan if one exists. The adoption of
SFAS No. 114, as amended by SFAS No. 118, did not have a material
effect on the Bank's financial condition or results of operations.

Loan Fees - Loan origination fees and certain direct loan origination
costs are deferred and amortized as a yield adjustment over the
contractual loan terms.

Other Real Estate Owned, net - Properties acquired as a result of
foreclosure on a mortgage loan are classified as Other real estate
owned and are recorded at the lower of the recorded investment in the
related loan or the fair value of the property at the date of
acquisition, with any resulting write down charged to the allowance
for loan losses.  Subsequent write downs are charged to the valuation
allowance for possible losses on Other real estate owned.

Prior to July 1, 1995, the Bank was required to include in Other real
estate owned loans which have been in substance foreclosed. Effective
July 1, 1995, the Bank adopted SFAS 114. The provisions of this
Statement eliminated the Bank's requirement to include in substance
foreclosed loans in other real estate, except where the Bank has
completed foreclosure proceedings. In substance foreclosed real
estate is not material to the financial condition or results of
operations of the Bank.

Premises and Fixed Assets - Land is stated at original cost.
Buildings and furniture and equipment are stated at cost less
accumulated depreciation. Depreciation is computed by the straight-
line method over the estimated useful lives of the properties as
follows:

Buildings                    2.22% to 2.50% per year
Furniture and equipment                 10% per year

Leasehold improvements are amortized over the remaining non-
cancelable terms of the related leases.

Income Taxes - Pursuant to Statement of Financial Accounting
Standards No. 109, ''Accounting for Income Taxes'' (''SFAS 109''), on
July 1, 1993, the Bank changed prospectively from the deferred method
to the liability method of accounting for income taxes. The effect of
the adoption of this standard is reflected in the financial
statements as the cumulative effect of adopting a change in
accounting principle.

Cash Flows - For purposes of the Consolidated Statement of Cash
Flows, the Bank considers cash and due from banks to be cash
equivalents.

Recently Issued Accounting Standards - On July 1, 1995, the Bank
adopted Statement of Financial Accounting Standards No. 106,
''Employers' Accounting for Postretirement Benefits Other Than
Pensions.'' This Statement requires accrual of postretirement
benefits (such as health care benefits) during the years an employee
provides services. The cumulative effect of the adoption of this
standard on prior years was approximately $1,032 (after reduction for
income taxes of $879). As permitted by the Statement, the Bank
elected to record the full liability at the time of adoption.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

In  March 1995, the FASB issued SFAS No. 121, ''Accounting for  the
Impairment  of Long-Lived Assets and for Long-Lived  Assets  to  be
Disposed  Of''  which requires that long-lived assets  and  certain
identifiable  intangibles  to be held and  used  by  an  entity  be
reviewed  for  impairment and reported at  the  lower  of  carrying
amount or fair value, less cost to sell, whenever events or changes
in  circumstances indicate that the carrying amount of an asset may
not  be  recoverable. SFAS No. 121 is effective  for  fiscal  years
beginning after December 15, 1995. Management anticipates that  the
adoption  of  SFAS No. 121 will not have a material impact  on  the
financial condition or results of operations of the Bank.

In May 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 122, ''Accounting for
Mortgage Servicing Rights.'' The Statement which amends Statement of
Financial Accounting Standards
No. 65, ''Accounting for Certain Mortgage Banking Activities,''
requires separate capitalization of the costs of rights to service
mortgage loans for others regardless of whether these rights are
acquired through a purchase or loan origination activity. Adoption of
this Statement is required for fiscal years beginning after December
15, 1995. Given the current level of the Bank's mortgage banking
activities, adoption of this Standard is not expected to have a
material effect upon the Bank's financial condition or results of
operations.

In June 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 125 ''Accounting for
Transfers of Financial Assets and Extinguishments of Liabilities.''
The statement provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that are
borrowings.  This statement also requires that liabilities and
derivatives incurred or obtained as part of a transfer be measured
initially at fair value.  This statement also provides guidance on
measurement of servicing rights on assets transferred and
derecognition of liabilities transferred.  The statement is effective
for all transfers, servicing, or extinguishments occurring after
December 31, 1996.  Adoption of this standard is not expected to have
a material effect upon the Company's financial condition or results
of operations.

Use of Estimates in the Preparation of Financial Statements - The
preparation of financial statements in conformity with generally
accepted accounting principles 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.

Reclassification - Certain June 30, 1995, and 1994 amounts have been
reclassified to conform to the June 30, 1996 presentation.

2.   CONVERSION TO STOCK FORM OF OWNERSHIP:

On November 2, 1995, the Board of Directors of the Bank adopted a
Plan of Conversion to convert from mutual to stock form. As part of
the conversion, the Company was incorporated under Delaware law for
the purpose of acquiring and holding all of the outstanding stock of
the Bank. On June 26, 1996, the Company completed its initial public
offering and issued 14,547,500 shares of common stock (par value $.01
per share) at a price of $10.00 per share, resulting in net proceeds
of approximately $141,368 prior to the acquisition of stock by the
Employee Stock Ownership Plan. The Company retained approximately
$53,397 of the net proceeds and used the remaining net proceeds to
purchase all of the outstanding stock of the Bank.  Costs related to
the conversion were charged against the Company's proceeds from the
sale of the stock.

The Company received approximately $131,078 of excess proceeds
resulting from the oversubscription of the Company's initial public
offering.  In accordance with the terms of the offering, these funds
were refunded on July 1, 1996 inclusive of interest earned at the
Bank's existing passbook rate for the period held.  The excess
proceeds were recorded in Escrow and other deposits, and were
invested in short-term Investment securities and Federal funds sold
at June 30, 1996.

At the time of conversion, the Bank established a liquidation account
in an amount equal to the retained earnings of the Bank as of the
date of the most recent financial statements contained in the final
conversion prospectus. The liquidation

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

account will be reduced annually to the extent that eligible account
holders have reduced their qualifying deposits as of each anniversary
date. Subsequent increases will not restore an eligible account
holder's interest in the liquidation account. In the event of a
complete liquidation, each eligible account holder will be entitled
to receive a distribution from the liquidation account in an amount
proportionate to the current adjusted qualifying balances for
accounts then held.
As discussed in Note 3, the Company acquired Conestoga Bancorp, Inc.
on June 26, 1996.  The liquidation account previously established by
Conestoga's subsidiary, Pioneer Savings Bank, F.S.A. during its
initial public offering in March, 1993, was assumed by the Company in
the acquisition.

The Company may not declare or pay cash dividends on or repurchase
any of its shares of common stock if the effect thereof would cause
stockholders' equity to be reduced below applicable regulatory
capital maintenance requirements, the
amount required for the liquidation account, or if such declaration
and payment would otherwise violate regulatory requirements.

3.   BUSINESS ACQUISITIONS

On June 26, 1996, the Bank completed the acquisition of Conestoga
Bancorp, Inc., the holding company for the Pioneer Savings Bank,
F.S.B.  The Bank received approximately $170,836, $124,411 and
$111,991 of investment securities, mortgage-backed securities and
loans, respectively, at fair value and assumed approximately $394,250
of customer deposit liabilities.  Approximately $10,000 of investment
securities acquired were classified as held-to-maturity at June 30,
1996.  All other securities acquired were classified as available for
sale.  Total cash paid for the acquisition was $101,272.  The
goodwill generated in the transaction of $28,438 is being amortized
on a straight line basis over 12 years for financial reporting
purposes.

This acquisition was recorded using the purchase method of
accounting; accordingly,  the purchase price is allocated to the
respective assets acquired and liabilities assumed based on their
estimated fair values.

A pro forma consolidated statement of condition is not presented
since the assets and liabilities were merged on June 26, 1996.  The
information below presents, on an unaudited pro forma basis, the
consolidated statement of operations for the Company for the years
ended June 30, 1996 and 1995.  All information below is adjusted for
the acquisition of Conestoga, as if the transaction had been
consummated on July 1, 1995 and 1994 respectively for the years ended
June 30, 1996 and 1995.

                                                Pro Forma for
                                              Year Ended June 30,
                                              1996        1995
                                           ----------   ----------
Net interest income.......................   $43,129     $44,658
Provision for possible loan losses........     3,083       2,914
Non-interest income.......................     3,965       3,603
Non-interest expense:
  Goodwill amortization...................     2,350       2,347
  Other non-interest expense..............    20,540      19,833
                                           -----------  ----------
    Total non-interest expense                22,890      22,180
                                           -----------  ----------
Income before income taxes                   $21,121     $23,167
                                           ===========  ==========

On December 4, 1995, a purported class action complaint was filed
in the Delaware Chancery Court, New Castle County, on behalf of the
stockholders of Conestoga by Jeffrey Simon (''Plaintiff'') against
Conestoga, each of the members of the Conestoga Board, and the
Company. The Plaintiff alleges that each of the members of
Conestoga's Board breached his fiduciary duties to Conestoga
stockholders by, among other things, agreeing to accept the
Acquisition consideration, which Plaintiff alleges is inadequate.
The Company is alleged to have aided and abetted this breach.
Plaintiff seeks various remedies, including compensatory damages in
an unspecified amount. The Company intends to pursue vigorously
their defenses in this action.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

4.   INVESTMENT SECURITIES HELD TO MATURITY AND AVAILABLE FOR SALE

The amortized cost, gross unrealized gains and losses and estimated
market value of investment securities held to maturity at June 30,
1996 were as follows:

                                                             Investment Securities Held to Maturity
                                                            ----------------------------------------
                                                                        Gross     Gross    Estimated
                                                            Amortized Unrealized Unrealized   Market
                                                              Cost      Gains     Losses     Value
                                                            -------- ---------- ---------- ---------
                                                                               
Debt securities:
U.S. Treasury securities and obligations of U.S. government
corporations and agencies..................................  $18,705       $ -       $(58)   $18,647
Obligations of state and political subdivisions............    2,048         31         -      2,079
Corporate securities.......................................   20,531         34      (117)    20,448
Public utilities...........................................    2,268         -        (14)     2,254
                                                            -------- ---------- ---------- ---------
                                                             $43,552        $65     $(189)   $43,428
                                                            ======== ========== ========== =========

The amortized cost and estimated market value of investment
securities held to maturity at June 30, 1996, by contractual
maturity, are shown below. Expected maturities may differ from
contractual maturities because issuers may have the right to call or
prepay obligations with or without call or prepayment penalties.

                                          Estimated
                                          Amortized   Market
                                             Cost     Value
                                          --------- ---------
Due in one year or less..................   $19,039   $19,025
Due after one year through five years....    15,100    14,972
Due after five years through ten years...     8,093     8,111
Due after ten years......................     1,320     1,320
                                          --------- ---------
                                            $43,552   $43,428
                                          ========= =========

During the year ended June 30, 1996, proceeds from the calls of
investment securities held to maturity totaled $11,056. A gain of $56
was realized on these calls. There were no sales of investment
securities held to maturity during the year ended June 30, 1996.

The amortized/historical cost, gross unrealized gains and losses and
estimated market value of investment securities available for sale at
June 30, 1996 were as follows:

                                                            Investment Securities Available for Sale
                                                            -----------------------------------------
                                                            Amortized/     Gross     Gross   Estimated
                                                            Historical Unrealized Unrealized  Market
                                                               Cost      Gains     Losses     Value
                                                            ---------- ---------- ---------- ---------
                                                                                                       
Debt securities:
U.S. Treasury securities and obligations of U.S. government
corporations and agencies..................................  $277,240        $20      $(80)  $277,180
Corporate securities.......................................    58,652         27         -     58,679
Public utilities...........................................     2,249          9       (28)     2,230
                                                            ---------  ---------- ---------- ---------
                                                              338,141         56      (108)   338,089
Equity securities:
Mutual funds...............................................     2,977        229        (1)     3,205
                                                            ---------  ---------- ---------- ---------
                                                             $341,118       $285     $(109)  $341,294
                                                            =========  ========== ========== =========

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

During the year ended June 30, 1996, proceeds from the sales and
calls of investment securities available for sale totaled $501 and
$11,323, respectively. A loss of $195 and gain of $24 resulted from
the sales and calls respectively.

The amortized/historical cost and estimated market value of
investment securities available for sale at June 30, 1996, by
contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because issuers may have the right to
call or prepay obligations with or without call or prepayment
penalties.

                                          Amortized/   Estimated
                                          Historical     Market
                                             Cost        Value
                                          ----------   ---------
Due in one year or less..................  $273,351    $273,354
Due after one year through five years....    60,416      60,379
Due after five years through ten years...     3,376       3,348
Due after ten years......................     3,975       4,213
                                          ---------   ---------
                                           $341,118    $341,294
                                          =========   =========

The amortized cost, gross unrealized gains and losses and estimated
market value of investment securities held to maturity at June 30,
1995 were as follows:

                                                             Investment Securities Held to Maturity
                                                            ----------------------------------------
                                                                        Gross      Gross   Estimated
                                                            Amortized Unrealized Unrealized  Market
                                                              Cost       Gains     Losses    Value
                                                            --------- ---------- ---------- ---------
                                                                                         
Debt securities:
U.S. Treasury securities and obligations of U.S. government
corporations and agencies..................................  $15,000          $2     $(170)   $14,832
Obligations of state and political subdivisions............    2,168          44        -       2,212
Corporate securities.......................................   23,712          47      (150)    23,609
Public utilities...........................................   10,595          82       (76)    10,601
                                                             -------- ---------- ---------- ---------
                                                             $51,475        $175     $(396)   $51,254
                                                             ======== ========== ========== =========

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

The amortized/historical cost, gross unrealized gains and losses and
estimated market value of investment securities available for sale at
June 30, 1995 were as follows:

                                                             Investment Securities Available for Sale
                                                            -----------------------------------------
                                                            Amortized/   Gross      Gross    Estimated
                                                            Historical Unrealized Unrealized  Market
                                                               Cost      Gains     Losses     Value
                                                            ---------- ---------- ---------- ---------
                                                                                                     
Debt securities:
U.S. Treasury securities and obligations of U.S. government
corporations and agencies..................................   $15,821         $50      $(10)   $15,861
Corporate securities.......................................    25,516          10       (47)    25,479
Public utilities...........................................     1,013          -         (4)     1,009
                                                             --------- ---------- ---------- ---------
                                                               42,350          60       (61)    42,349
                                                             --------- ---------- ---------- ---------
Equity securities:
Preferred stock............................................       694           -      (265)       429
Mutual funds...............................................     2,610          99       (68)     2,641
                                                             --------- ---------- ---------- ---------
                                                                3,304          99      (333)     3,070
                                                             --------- ---------- ---------- ---------
                                                              $45,654        $159     $(394)   $45,419
                                                             ========= ========== ========== =========

There were no calls or sales of investment securities held to
maturity or available for sale during the year ended June 30, 1995.

5.    MORTGAGE-BACKED SECURITIES HELD TO MATURITY AND  AVAILABLE  FOR
SALE

The amortized cost, gross unrealized gains and losses and the
estimated market value of mortgage-backed securities held to maturity
at June 30, 1996 were as follows:

                                  Mortgage-Backed Securities Held to Maturity
                                  -------------------------------------------
                                               Gross       Gross    Estimated
                                  Amortized  Unrealized Unrealized    Market
                                     Cost      Gains      Losses      Value
                                  --------- ----------- ----------- ---------
GNMA pass-through certificates...   $17,997        $437        $(8)   $18,426
FHLMC pass-through certificates..    27,296          15       (274)    27,037
FNMA pass-through certificates...     7,287           2       (156)     7,133
                                  --------- ----------- ----------- ---------
                                    $52,580        $454      $(438)   $52,596
                                  ========= =========== =========== =========

Proceeds from the sale of mortgage-backed securities held to maturity
were approximately $2,555 for the year ended June 30, 1996 and a
gross gain of approximately $31 was realized on these sales. The
securities sold met the de minimus exemption in SFAS No. 115, as the
unpaid principal at the date of sale was less than 15% of their
acquired par value.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

The amortized cost, gross unrealized gains and losses and the
estimated market value of mortgage-backed securities available for
sale at June 30, 1996 were as follows:

                                  Mortgage-Backed Securities Available for Sale
                                  ---------------------------------------------
                                                 Gross     Gross     Estimated
                                   Amortized  Unrealized Unrealized    Market
                                     Cost       Gains    Losses       Value
                                   --------- ----------- ----------- ----------
Collateralized mortgage obligations   $8,566         $23        $-       $8,589
GNMA pass-through certificates.....   70,136          -          -       70,136
FHLMC pass-through certificates....   28,826         344        (54)     29,116
FNMA pass-through certificates.....   49,434         118        (32)     49,520
                                   --------- ----------- ----------- ----------
                                    $156,962        $485       $(86)   $157,361
                                   ========= =========== =========== ==========

There were no sales of mortgage-backed securities available for sale
during the year ended June 30, 1996.

The amortized cost, gross unrealized gains and losses and the
estimated market value of mortgage-backed securities held to maturity
at June 30, 1995 were as follows:

                                   Mortgage-Backed Securities Held to Maturity
                                   -------------------------------------------
                                                Gross       Gross    Estimated
                                   Amortized  Unrealized Unrealized    Market
                                     Cost        Gains      Losses      Value
                                   --------- ----------- ----------- ---------
GNMA pass-through certificates....   $24,402        $562        $(4)   $24,960
FHLMC pass-through certificates...    28,429          28       (244)    28,213
FNMA pass-through certificates....       984          15         -         999
                                   --------- ----------- ----------- ---------
                                     $53,815        $605      $(248)   $54,172
                                   ========= =========== =========== =========

Proceeds from the sale of mortgage-backed securities held to maturity
were approximately $1,067 for the year ended June 30, 1995 and a
gross loss of approximately $11 was realized on these sales. The
securities sold met the de minimus exemption in SFAS No. 115, as the
unpaid principal at the date of sale was less than 15% of their
acquired par value.

The amortized cost, gross unrealized gains and losses and estimated
market value of mortgage-backed securities available for sale at June
30, 1995 were as follows:

                                 Mortgage-Backed Securities Available for Sale
                                  --------------------------------------------
                                                Gross      Gross     Estimated
                                   Amortized Unrealized  Unrealized   Market
                                     Cost      Gains       Losses      Value
                                   --------- ----------- ----------- ---------
Collateralized mortgage obligations  $3,836         $128        $ -     $3,964
FHLMC pass-through certificates....  26,458          710          -     27,168
FNMA pass-through certificates.....   6,434          167          -      6,601
                                   --------- ----------- ----------- ---------
                                    $36,728       $1,005         $-    $37,733
                                   ========== ========== =========== =========

There were no sales of mortgage-backed securities available for sale
during the year ended June 30, 1995.

            DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
             YEARS ENDED JUNE 30, 1996, 1995 AND 1994
              (In Thousands Except Per Share Amounts)

6.   LOANS

Real estate loans at June 30, 1996 and 1995 consisted of the
following:

                                              1996      1995
                                            --------- ---------
One-to-four family........................ $ 169,723  $ 58,153
Multi-family and underlying cooperative...   296,630   252,436
Nonresidential............................    37,708    26,972
F.H.A. insured mortgage loans.............    14,132    18,890
V.A. guaranteed mortgage loans............     2,554     3,171
Co-op loans...............................    59,083    67,524
                                            --------- ---------
                                             579,830   427,146
Net unearned fees.........................    (2,167)   (1,181)
                                            --------- ---------
                                            $577,663  $425,965
                                            ========= =========

Other loans at June 30, 1996 and 1995 consisted of the following:

                                                            1996   1995
                                                          ------- -------
Student loans...........................................  $1,307   $1,431
Passbook loans (secured by savings and time deposits)...   3,044    1,510
Consumer installment loans..............................     323      336
Home improvement loans..................................     891      475
                                                          ------- -------
                                                           5,565    3,752
Unearned discount.......................................      (1)     (1)
                                                          ------- -------
                                                          $5,564   $3,751
                                                          ======= =======

A concentration of credit risk exists within the Bank's loan
portfolio, as the majority of real estate loans are collateralized by
properties located in New York City and Long Island.

The Bank originates both adjustable and fixed interest rate real
estate loans.  At June 30, 1996, the approximate composition of these
loans was as follows:

          Fixed Rate                           Adjustable Rate
- ------------------------------          -----------------------------
Term to Maturity    Book Value          Term of Adjustment Book Value
- ------------------- ----------          ------------------ ----------
1 month-1 year.....    $ 4,556          1 month-1 year.....  $167,168
1 year-3 years.....        809          1 year-3 years.....   100,479
3 years-5 years....     12,261          3 years-5 years....   161,822
5 years-10 years...     24,617          5 years-10 years...    28,514
Over 10 years......     79,128          Over 10 years......       476
                    ----------                             ----------
                      $121,371                               $458,459
                    ==========                             ==========

The adjustable rate loans have interest rate adjustment limitations
and are generally indexed to the Federal Home Loan Bank of New York
five-year borrowing funds rate, the one-year constant maturity
Treasury index, or the Federal Home Loan Bank national mortgage
contract rate.

Loans on which the accrual of interest has been discontinued
amounted to approximately $6,551  and $5,073 at June 30, 1996 and
1995, respectively. If interest on those loans had been accrued,
interest income would have been increased by approximately $410 and
$325 for the years ended June 30, 1996 and 1995, respectively.

                                
           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

The Bank had outstanding loans considered troubled-debt
restructurings of $4,671, and $7,651 at June 30, 1996 and 1995,
respectively. Income recognized on these loans was approximately
$344 and $587 for the years ended June 30, 1996 and 1995,
respectively, compared to interest income of $471 and $797
calculated under the original terms of the loans, for the years
ended June 30, 1996 and 1995, respectively.

At June 30, 1996, the recorded investment in loans for which
impairment has been recognized under the guidance of SFAS No. 114
was approximately $7,419. The average balance of impaired loans was
approximately $6,696 for the year ended June 30, 1996. The impaired
portion of these loans is represented by specific reserves totaling
$955 allocated within the allowance for loan losses at June 30,
1996. Net principal received and interest income recognized on
impaired loans during the year ended June 30, 1996 was not
material. At June 30, 1996, one loan totaling $2,681, was deemed
impaired for which no reserves have been provided.  This loan,
which is included in troubled-debt restructurings at June 30, 1996,
has performed in accordance with the provisions of the
restructuring agreement signed in October, 1995.
The loan has been retained on accrual status at June 30, 1996.

The following assumptions were utilized in evaluating the loan
portfolio pursuant to the provisions of SFAS No. 114:

Homogenous Loans - One-to-four family residential mortgage loans
and loans on cooperative apartments having a balance of less than
$203 and consumer loans are considered to be small balance
homogenous loan pools and, accordingly, are not covered by SFAS No.
114.

Loans Evaluated for Impairment - All non-homogeneous loans greater
than $1,000 are individually evaluated for potential impairment.
Additionally, residential mortgage loans exceeding $203 and
delinquent in excess of 60 days are evaluated for impairment.  A
loan is considered impaired when it is probable that all
contractual amounts due will not be collected in accordance with
the terms of the loan. A loan is not deemed to be impaired if a
delay in receipt of payment is expected to be less than 30 days or
if, during a longer period of delay, the Bank expects to collect
all amounts due, including interest accrued at the contractual rate
during the period of the delay. Factors considered by management
include the property location, economic conditions, and any unique
circumstances affecting the loan. Except as noted above, at June
30, 1996, all impaired loans were on nonaccrual status. In
addition, at June 30, 1996, approximately $1,817 of one to four
family residential mortgage loans and loans on cooperative
apartments with a balance of less than $203 were on nonaccrual
status. These loans are considered as a homogeneous loan pool not
covered by SFAS No. 114.

Reserves and Charge-Offs - The Bank allocates a portion of its
total allowance for loan losses to loans deemed impaired under SFAS
No. 114. All charge-offs on impaired loans are recorded as a
reduction in both loan principal and the allowance for loan losses.
Management evaluates the adequacy of its allowance for loan losses
on a regular basis. At June 30, 1996, management believes that its
allowance is adequate to provide for losses inherent in the total
loan portfolio, including impaired loans.

Measurement of Impairment - Since all impaired loans are
collateralized by real estate properties, the fair value of the
collateral is utilized to measure impairment.

Income Recognition - Accrual of interest is discontinued on loans
identified as impaired and past due ninety days. Subsequent cash
receipts are applied initially to the outstanding loan principal
balance. Additional receipts beyond the recorded outstanding
balance at the time interest is discontinued are recorded as
recoveries in the Bank's allowance for loan losses.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

Changes in the allowance for loan losses for the years ended June
30, 1996, 1995 and 1994 were as follows:

                                               1996     1995     1994
                                             -------- -------- --------
Balance, beginning of period............... $ 5,174  $ 3,633  $  2,996
Provision charged to operations............   2,979    2,950     4,105
Loans charged off..........................  (1,023)  (1,656)   (3,535)
Recoveries.................................      14      247        67
Reserve acquired in purchase of Conestoga..     668       -         -
                                            -------- -------- --------
Balance, end of period.....................  $7,812  $ 5,174    $3,633
                                            ======== ======== ========

7.   VALUATION ALLOWANCE FOR POSSIBLE LOSSES ON OTHER REAL ESTATE
OWNED

Changes in the valuation allowance for possible losses on Other
real estate owned for the year ended June 30, 1996 is summarized as
follows:

Balance, beginning of period...........  $-
Provision charged to operations........  586
Charge-offs net of recoveries           (472)
                                        -----
Balance, end of period................. $114
                                        =====

Prior to July 1, 1995, no valuation allowance for possible losses
on Other real estate owned was maintained by the Bank.

8.   MORTGAGE SERVICING ACTIVITIES

At June 30, 1996 and 1995, the Bank was servicing loans for others
having principal amounts outstanding of approximately $91,050 and
$93,456 respectively.  Servicing loans for others generally
consists of collecting mortgage payments, maintaining escrow
accounts, disbursing payments to investors and foreclosure
processing. In connection with these loans serviced for others, the
Bank held borrowers' escrow balances of approximately $1,055,
$1,440 and $1,452 at June 30, 1996, 1995 and 1994, respectively.

9.   PREMISES AND FIXED ASSETS

The following is a summary of premises and fixed assets at June 30,
1996 and 1995:

                                                     1996     1995
                                                   --------- --------
Land.............................................   $ 3,964   $   990
Buildings........................................    12,527     6,033
Leasehold improvements...........................     1,190     1,200
Furniture and equipment..........................     6,673     2,881
                                                   --------- --------
                                                     24,354    11,104
Less accumulated depreciation and amortization...    (9,955)   (5,183)
                                                   --------- --------
                                                    $14,399    $5,921
                                                   ========= ========

Depreciation and amortization expense amounted to approximately
$501, $459, and $465 for the years ended June 30, 1996, 1995 and
1994, respectively.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

10.   FEDERAL HOME LOAN BANK OF NEW YORK CAPITAL STOCK

The Bank is a Savings Bank Member of the Federal Home Loan Bank of
New York (FHLBNY). Membership requires the purchase of shares of
FHLBNY capital stock at $100 per share. The Bank owned 76,043 and
48,006 shares at June 30, 1996 and 1995, respectively. The FHLBNY
paid dividends on the capital stock of 6.9% , 7.5%, and 8.5% during
the years ended June 30, 1996, 1995 and 1994, respectively.

11.   DUE TO DEPOSITORS

The deposit accounts of each depositor are insured up to $100 by
either the Bank Insurance Fund or the Savings Association Insurance
Fund of the Federal Deposit Insurance Corporation ("FDIC").

Deposits are summarized as follows:
                                       June 30, 1996        June 30, 1995
                                    ------------------- -------------------
                                    Effective           Effective
                                      Cost    Liability   Cost    Liability
                                    --------- --------- --------- ---------
Savings accounts...................... 2.50%    365,146    2.53%    238,217
Certificates of deposit............... 5.50     495,755    5.89     275,156
Money market accounts................. 2.65      45,948    2.69      16,698
NOW accounts.......................... 1.51      15,029    1.51      13,877
Super NOW accounts.................... 1.51         552    1.51         674
Non-interest bearing checking accounts   -       27,684      -       10,219
                                              ----------          ---------
                                       4.09% $  950,114    4.12%  $ 554,841
                                     ========= ========== ======= =========

The remaining maturity distribution of Certificates of deposits at
June 30, 1996 and 1995 was as follows:
                                       1996     1995
                                     -------- --------
Maturity in three months or less.... $124,903 $ 58,063
Over 3 through 6 months.............   96,316   58,093
Over 6 through 12 months............  138,137   68,459
Over 12 months......................  136,399   90,541
                                     -------- --------
Total time deposits................. $495,755 $275,156
                                     ======== ========

The aggregate amount of Certificates of deposits with a minimum
denomination of $100 was approximately $40,065 and  $21,659 at June
30, 1996 and 1995, respectively.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

12.   SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The Bank has sold certain securities under agreements to repurchase
with a weighted average cost of 6.0%. The transactions were
accounted for as borrowings since the securities can be put back to
the Bank under certain conditions. The amounts outstanding at June
30, 1996 and 1995 were $11,998 and  $2,110, respectively. The
transactions were further collateralized by GNMA/FNMA certificates
with a carrying value of $13,433, and $2,767, and an approximate
market value of $13,660 and $2,843, at June 30, 1996 and 1995,
respectively.

13.   FEDERAL HOME LOAN BANK OF NEW YORK ADVANCES

The Bank had borrowings (''Advances'') from the Federal Home Loan
Bank of New York totaling $15,710 at  June 30, 1996 and 1995,
respectively. The advances mature within five years and bear
interest at an average rate of 5.40%. At June 30, 1996, in
accordance with the Advances, Collateral Pledge and Security
Agreement, the Bank
maintained in excess of $15,710 of qualifying collateral
(principally bonds and mortgage-backed securities), as defined, to
secure such advances.
                                
14.   INCOME TAXES

Federal, State and City income tax provisions for the years ended
June 30, 1996, 1995 and 1994 are comprised of the following:

                 Year Ended                  Year Ended                      Year Ended
               June 30, 1996               June 30, 1995                    June 30, 1994
            ----------------------------  ----------------------------     --------------------------
                       State                         State                            State
            Federal   and City   Total    Federal   and City   Total       Federal   and City  Total
            -------   --------  -------   -------   --------  -------     --------   --------  ------
                                                                    
Current.... $4,218     $ 2,563  $ 6,781   $4,328     $2,416     $6,744      $5,758    $3,183   $8,941
Deferred...  (332)       (268)    (600)    (314)       191       (123)        (537)     (193)    (730)
            -------   --------- --------  -------   --------  --------    ---------  --------  ------
           $3,886     $ 2,295  $ 6,181   $4,014     $2,607     $6,621       $5,221    $2,990   $8,211
            =======   ========= ========  =======   ========  ========     =======    ======= =======

Effective July 1, 1993, the Bank adopted SFAS 109. Pursuant to SFAS
109, deferred income taxes are provided for temporary differences
in the bases of certain assets and liabilities for income tax and
financial reporting purposes. The cumulative effect on prior years
of the adoption of SFAS 109 was an increase in the deferred tax
liability of $383 and a corresponding decrease to income.

A deferred asset of $879 was recorded as a result of the adoption
of SFAS 106.  The deferred asset is netted against the cumulative
effect of the adoption of this standard.  Additionally, deferred
tax assets include $1,908 related to the tax effect of purchase
accounting fair value adjustments resulting from the acquisition of
Conestoga Bancorp, Inc.  Deferred tax liabilities include $2,029
which were originally recorded on Conestoga's books.  Deferred tax
liabilities also include a decrease of $91 resulting from
adjustments pursuant to SFAS 115.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

The components of Federal and net State and City deferred income
taxes as of June 30, 1996 and 1995, respectively, were as follows:

                                                    June 30, 1996            June 30, 1995
                                                ----------------------   ----------------------
                                                Federal State and City   Federal State and City
                                                ------- --------------   ------- --------------
                                                                     
Deferred tax assets
Deferred loan fees............................  $   47        $     30    $  100         $   63
Excess book bad debt over tax bad debt reserve   2,300              -      2,639             -
Reserve for loss on investments...............      61              38       163            104
Accumulated postretirement benefit obligation.     598             374        -              -
Tax effect of purchase accounting fair value
  adjustments.................................   1,173             735        -              -
Other.........................................       9              18        47             27
                                                ------- --------------   ------- --------------
Total deferred tax assets.....................   4,188           1,195     2,949            194
Less: Valuation allowance on deferred tax assets    -               -         -              -
                                                ------- --------------   ------- --------------
Deferred tax assets after valuation allowance.  $4,188        $  1,195    $2,949         $  194
                                                ======= ==============   ======= ==============
Deferred tax liabilities:
Excess tax bad debt over book bad debt reserve $   -         $   2,083     $   -        $  1,706
Excess tax depreciation to book depreciation..    309              196         -              -
Tax effect of unrealized gain on securities
available for sale............................    160              104        216            139
                                                ------- --------------    ------- --------------
Total deferred tax liabilities................ $  469         $  2,383     $  216       $  1,845
                                                ======= ==============    ======= ==============
Net deferred tax asset (liability)............ $3,719         $(1,188)    $2,733       $ (1,651)
                                                ======= ==============    ======= ==============

The provision for income taxes for the years ended June 30, 1996,
1995 and 1994 differs from that computed at the Federal statutory
rate as follows:

                                                      1996    1995    1994
                                                    ------- ------- -------
Tax at Federal statutory rate...................... $4,717   $5,266  $6,186
State and local taxes, net of
Federal income tax benefit.........................  1,492    1,694   1,944
Reserve for loss on sale of loans..................     -      (185)     -
Utilization of capital loss on sale of securities..     -       (86)     -
Other, net.........................................    (28)     (68)     81
                                                    ------- ------- -------
                                                    $6,181   $6,621  $8,211
                                                    ======= ======= =======
Effective rate.....................................   45.9%   44.0%   46.5%
                                                    ======= ======= =======

Savings banks that meet certain definitions, tests, and other
conditions prescribed by the Internal Revenue Code are allowed to
deduct, with limitations, a bad debt deduction.  This deduction can
be computed as a percentage of taxable income before such deduction
or based upon actual loss experience.

Pursuant to SFAS 109, the Bank is not required to provide deferred
taxes on its tax loan loss reserve as of December 31, 1987 ("base
year reserve").  The amount of this reserve on which no deferred
taxes have been provided is approximately $12,153.  This reserve
could be recognized as taxable income and create a current tax
liability using the income tax rates then in effect if one of the
following occur: 1) the Bank's retained earnings represented by the
reserve

                                
           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

is used for purposes other than to absorb losses from bad debts,
including dividends or distributions in liquidation; 2) the Bank
fails to qualify as a Bank as provided by the Internal Revenue
Code, or 3) there is a change in federal tax law.

On August 20, 1996, legislation was signed into law which repealed
the percentage of taxable income method tax bad debt deduction
available for thrift institutions.  This repeal is effective for
the Bank's taxable year beginning January 1, 1996.  In addition,
the legislation requires the Bank to include in taxable income its
bad debt reserves in excess of its base year reserve over a 6-8
year period depending upon the maintenance of certain loan
origination levels.  Since the percentage of taxable income method
tax bad debt deduction and the corresponding increase in the tax
bad debt reserve in excess of the base year have been treated as
temporary differences pursuant to SFAS 109, this change in tax law
will have no effect on the Company's future consolidated statement
of operations.  Since the Bank's bad debt reserve as of exceeds its
base year reserve by $3,100, approximately $176 will be currently
payable as a result of the legislation.

On July 30, 1996, New York State enacted legislation, effective
January 1, 1996, which generally retains the percentage of taxable
income method tax bad debt deduction and does not require the Bank
to recapture into income its excess tax bad debt reserves over its
base year reserve for New York State tax purposes.

15. EMPLOYEE BENEFIT PLANS

Employee Retirement Plan - The Bank is a participant in a
noncontributory defined benefit retirement plan with the Savings
Bank Retirement System. Substantially all full-time employees are
eligible for participation after one year of service. In addition,
a participant must be at least 21 years of age at the date of
enrollment.

The retirement cost (benefit) for the pension plan includes the
following components:

                                   Year Ended June 30,
                                  1996    1995    1994
                                 ------- ------- -------
Service cost....................  $ 206  $ 216   $ 231
Interest cost...................    488    455     428
Actual return on plan assets....   (546)  (227)   (339)
Net amortization and deferral...   ( 82)  (325)   (177)
                                 ------- ------  ------
Net periodic pension cost.......  $  66  $ 119   $ 143
                                 ======= ======  ======

The funded status of the plan as of June 30, 1996 and 1995 was as
follows:

                                                                              1996     1995
                                                                            -------- --------
                                                                                              
Accumulated benefit obligation, including vested benefits of
$8,613,and $5,037 respectively............................................. $ 8,848   $5,304
                                                                            ======== ========
Projected benefit obligation............................................... $ 9,960   $6,180
Plan assets at fair value (investments in trust funds managed by RSI)......  10,594    6,284
                                                                            -------- --------
Excess of plan assets over projected benefit obligation....................     634      104
Unrecognized loss from experience different from that assumed..............     967      747
Unrecognized net transition asset..........................................    (167)    (261)
Unrecognized net past service liability....................................    (271)    (284)
                                                                            -------- --------
Prepaid retirement expense included in Other assets........................  $1,163     $306
                                                                            ======== ========

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

  Major assumptions utilized at June 30, 1996 and 1995 are as
follows:

                                                  1996   1995
                                                 ------ ------
Discount rate.................................... 7.50%  8.25%
Rate of increase in compensation levels.......... 5.50   6.00
Expected long-term rate on plan assets........... 9.00   9.00

Directors' Retirement Plan - Effective July 1, 1996, the Company
adopted a non-qualified Retirement plan for all of its Outside
Directors, which will provide benefits to each eligible Outside
Director commencing upon his termination of Board service or at age
65.  Each Outside Director who serves or has agreed to serve as an
outside director  will automatically become a participant in the
plan.  The plan is not expected to have a material effect upon the
Company's results of operations.

Supplemental Executive Retirement Plan (''SERP'') - The Bank
established a Supplemental Executive Retirement Plan (''SERP'') for
its executive officers. The SERP was established to compensate the
executive officers for any curtailments in benefits due to the
statutory limitations on benefit plans. The SERP exists as a
nonqualified plan which supplements the existing qualified plans.
Defined benefit and defined contribution costs are incurred
annually related to the SERP.

The defined benefit cost for the SERP plan for the years ended June
30, 1996 and 1995 includes the following components:
                                    Years Ended
                                      June 30,
                                 ----------------
                                   1996     1995
                                 -------- -------
Service cost....................  $   56   $   51
Interest cost...................      88       75
Net amortization and deferral...      49       54
                                 -------- -------
Net periodic pension cost.......  $  193     $180
                                 ======== =======

The defined contribution costs incurred by the Bank related to the
SERP plan for the years ended June 30, 1996 and 1995 were $25 and
$20, respectively.

The funded status of the defined benefit portion of the plan as of
June 30, 1996 and 1995 was as follows:

                                                                                   1996     1995
                                                                                 -------- --------
                                                                                                 
Accumulated benefit obligation, fully vested at June 30, 1996
  and 1995, respectively........................................................  $  450   $  165
                                                                                 ======== ========
Projected benefit obligation....................................................  $1,690   $  870
Plan assets at fair value.......................................................      -        -
                                                                                 -------- --------
Deficiency of plan assets over projected benefit obligation.....................  (1,690)    (870)
Unrecognized loss from experience different from that assumed...................     884      230
Unrecognized net past service liability.........................................     317      343
                                                                                 -------- --------
Accrued retirement expense included in Other liabilities........................   $(489)   $(297)
                                                                                 ======== ========

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

Major assumptions utilized at June 30, 1996 and 1995 are as
follows:

                                             1996    1995
                                           ------- -------
Discount rate.............................   7.50%   8.25%
Rate of increase in compensation levels...   5.50    6.00

401(k) Plan - The Bank also has a 401(k) plan which covers
substantially all employees. Prior to May 31, 1996, under such plan
the Bank matched 50% of each participant's contribution up to 6% of
the participant's annual compensation for the first four years of
participation and thereafter 100% of the participant's contribution
up to a maximum of 6%.  Effective May 31, 1996, the plan was
amended whereby the Bank ceased all matching contributions.
Participation in the 401(k) plan is voluntary. A salaried employee
becomes eligible for the plan after completion of one year of
service. The Bank contributed approximately $181, $190, and  $170
for the years ended June 30, 1996, 1995 and 1994, respectively, to
the plan.  At June 30, 1996, the 401(k) plan owns participant
investments totaling $2,092 in the Company's common stock.

Postretirement Benefits other than Pensions - The Bank offers
additional postretirement benefits to its retired employees who
have provided at least five (5) consecutive years of credited
service and were active employees prior to April 1, 1991, as
follows:

  (1) Employees who retired prior to April 1, 1991 receive full
medical coverage in effect until their death at no cost to such
retirees;

  (2)   Eligible employees retiring after April 1, 1991 will be
eligible for continuation of their medical coverage in effect at
the time of such employees' retirement until their death.
Throughout an employee's retirement, the Bank will
continue to pay the premiums for this coverage up to the premium
amount paid for the first year of retirement coverage. Should the
premiums increase, the employee will have to pay the differential
to maintain full medical coverage.

Postretirement medical benefits are only available to those full-
time employees who, upon termination of service, start collecting
retirement benefits immediately from the Bank. The Bank reserves
the right at any time, and to the extent permitted by law, to
change, terminate or discontinue any of the group benefits, and can
exercise the maximum discretion permitted by law, in administering,
interpreting, modifying or taking any other action with respect to
the plan or benefits.

The Bank accrues the cost of such benefits during the years an
employee renders the necessary service. The Bank adopted Statement
of Financial Accounting Standards No. 106, ''Accounting for
Postretirement Benefits Other than Pensions,'' effective July 1,
1995. The Bank elected to record the full accumulated
postretirement benefit obligation upon adoption. This resulted in a
cumulative effect adjustment of $1,032 (after reduction for income
taxes of $879), which is shown in the consolidated statement of
income for the year ended June 30, 1996.

The postretirement cost for the plan for the year ended June 30,
1996 includes the following components:

Service cost....................... $ 62
Interest cost......................  167
                                    ----
Net periodic postretirement cost... $229
                                    ====

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

The funded status of the plan as of June 30, 1996 was as follows:

Accumulated postretirement benefit obligation:
  Retirees.......................................... $ 1,364
  Fully eligible active participants................     173
  Other active participants.........................   1,005
                                                     -------
  Total.............................................   2,542
  Plan assets at fair value........................      -
                                                     -------
  Deficiency of plan assets over accumulated
       benefit obligation (funded status)...........   2,542
  Unrecognized loss.................................    (161)
                                                     --------
  Accrued postretirement benefit obligation.........  $2,381
                                                     ========

The assumed medical cost trend rates used in computing the
accumulated postretirement benefit obligation was 10% in 1995 and
was assumed to decrease gradually to 5.5% in 2005 and to remain at
that level thereafter. Increasing the assumed medical care cost
trend rates by 1% in each year would increase the accumulated
postretirement benefit obligation by approximately $175.

The assumed discount rate and rate of compensation increase used to
measure the accumulated postretirement benefit obligation at June
30, 1996 were 7.5% and 5.5%, respectively.

Employee Stock Ownership Plan - In connection with the conversion,
the Board of Directors of the Company adopted the Dime Community
Bancorp Employee Stock Ownership Plan (the "ESOP").  The ESOP
borrowed $11,638 from the Company and used the funds to purchase
1,163,800 shares of the Company's common stock.  The loan will be
repaid principally from the Bank's discretionary contributions to
the ESOP over a period of time not to exceed 10 years.  The Bank's
obligation to make such contributions is reduced by any investment
earnings realized on such contributions or any dividends paid by
the Company on stock held in the unallocated account.  At June 30,
1996, the loan had an outstanding balance of $11,541 and a fixed
rate of 8.0%.

Shares purchased with the loan proceeds are held in a suspense
account for allocation among participants as the loan is repaid.
Contributions to the ESOP and shares released from the suspense
account are allocated among participants on the basis of
compensation, as described in the plan, in the year of
allocation.  The ESOP vests at a rate of 25% per

year of service beginning after two years with full vesting after
five years, or upon attainment of age 65, death, disability,
retirement or change of control.  ESOP benefit expense totaled
$114 for the year ended June 30, 1996.  Shares of common stock
allocated to participating employees totaled 9,698 at June 30,
1996.

16.   COMMITMENTS AND CONTINGENCIES

Mortgage Loan Commitments and Lines of Credit - At June 30, 1996
and 1995, the Bank had outstanding commitments to make mortgage
loans aggregating approximately $81,252 and $26,163, respectively.

At June 30, 1996, commitments to originate fixed rate and
adjustable rate mortgage loans were $455 and $80,797, respectively.
Interest rates on fixed rate commitments ranged between 7.25% to
9.0%. Substantially all of the Bank's commitments will expire
within two months.

The Bank had available at June 30, 1996 unused lines of credit with
the Federal Home Loan Bank of New York totaling $64,165, expiring
on August 8, 1996.  These credit lines were renewed on August 8,
1996 for one year.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

Lease Commitments - At June 30, 1996, aggregate net minimum annual
rental commitments on leases are as follows:

Calendar Year Ending: Amount
- --------------------- ------
1996................. $  273
1997.................    229
1998.................    237
1999.................    257
2000.................    259
Thereafter...........  1,475
                      ------
                      $2,730
                      ======

Net rental expense for the years ended June 30, 1996, 1995 and 1994
approximated $278, $267, and $206, respectively.

Litigation - The Company and its subsidiary are subject to certain
pending and threatened legal actions which arise out of the normal
course of business.  Management believes that the resolution of any
pending or threatened litigation will not have a material adverse
effect on the financial condition or results of operations.

Outstanding Claims with Nationar - On February 8, 1995 the New York
State Banking Department took possession of Nationar, a check
clearing and trust company. At that time, the Bank had $2,500
invested in Nationar, comprised of approximately $1,900 in cash
demand accounts and Federal funds sold and approximately $567 in
debenture bonds and stock.  During the year ended June 30, 1995,
the Bank established reserves for possible losses related to
investments in Nationar.  The following is a summary of activity in
the reserve account:

                                                              Year ended
                                                               June 30,
                                                          1996        1995
                                                        -------     -------
Beginning balance .....................................   640          -
Provision for losses, net of recoveries received.......   143         640
Charge-off of investments deemed uncollectible.........  (567)         -
                                                        -------     -------
Ending balance ........................................   216         640
                                                        =======     =======

During the year ended June 30, 1996, management of the Bank deemed
the investments in debentures worthless, and accordingly charged-
off all outstanding amounts against the established reserve.  The
Bank received approximately $1,700 in refunds from the New York
State Banking Department which was related primarily to its cash
demand accounts.  At June 30, 1996, the Bank has outstanding claims
totaling $216 which are fully reserved.

17.   FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No.
107, ''Disclosures About Fair Value of Financial Instruments.'' The
estimated fair value amounts have been determined by the Bank using
available market information and appropriate valuation
methodologies. However, considerable judgment is required to
interpret market data to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Bank could realize in a current
market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the
estimated fair value amounts.

Investment Securities and Mortgage-Backed Securities - The fair
value of these securities is based on quoted market prices obtained
from an independent pricing service.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

Federal Funds Sold - The fair value of these assets, principally
overnight deposits, is assumed to be equal to their carrying value
due to their short maturity.

Federal Home Loan Bank of New York (FHLBNY) Stock - The fair value
of FHLBNY stock is assumed to be equal to the carrying value as the
stock is carried at par value and redeemable at par value by the
FHLBNY.

Loans and Loans Held for Sale - The fair value of approximately
4.0% of loans receivable is determined by utilizing secondary
market prices. The fair value of the remainder of the portfolio is
determined by discounting the future cash flows, net of prepayments
of the loans using a rate for which similar loans would be
originated to new borrowers with similar terms.

Deposits - The fair value of savings, money market, NOW, Super NOW
and checking accounts is assumed to be their carrying amount. The
fair value of certificates of deposit is based upon the current
rates for instruments of the same remaining maturity.

Escrow, Other Deposits and Borrowed Funds - The estimated fair
value of escrow, other deposits and borrowed funds is assumed to be
their carrying amount.

Other Liabilities - The estimated fair value of other liabilities,
which primarily include trade accounts payable, is assumed to be
their carrying amount.

Commitments to Extend Credit - The fair value of commitments is
estimated using the fees currently charged to enter into similar
agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties.
For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the
committed rates.

The estimated fair values of the Bank's financial instruments at
June 30, 1996 and 1995 were as follows:

                                                               June 30, 1996
                                                            ------------------
                                                            Carrying   Fair
                                                             Amount    Value
                                                            -------- ---------
Assets:
Investment securities held to maturity..................... $ 43,552 $ 43,428
Investment securities available for sale...................  341,294  341,294
Mortgage-backed securities held to maturity................   52,580   52,596
Mortgage-backed securities available for sale..............  157,361  157,361
Loans and loans held for sale..............................  583,686  579,754
Federal funds sold.........................................  115,130  115,130
FHLB stock.................................................    7,604    7,604
Liabilities:
Savings, money market, NOW, Super NOW and checking accounts  454,359  454,359
Certificates of deposit....................................  495,755  494,975
Escrow, other deposits and borrowed funds..................  169,440  169,440
Other liabilities..........................................   36,816   36,816
Off-balance-sheet liability-commitments to extend credit...      -      (664)

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

                                                               June 30, 1995
                                                            -----------------
                                                            Carrying   Fair
                                                             Amount    Value
                                                            -------- --------
Assets:
Investment securities held to maturity..................... $ 51,475 $ 51,254
Investment securities available for sale...................   45,419   45,419
Mortgage-backed securities held to maturity................   53,815   54,172
Mortgage-backed securities available for sale..............   37,733   37,733
Loans and loans held for sale..............................  429,854  427,895
Federal funds sold.........................................   17,809   17,809
FHLB stock.................................................    4,801    4,801
Liabilities:
Savings, money market, NOW, Super NOW and checking accounts  279,685  279,685
Certificates of deposit....................................  275,156  274,020
Escrow, other deposits and borrowed funds..................   29,929   29,929
Other liabilities..........................................      902      902
Off-balance-sheet liability-commitments to extend credit...       -      (56)

18. REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies.  Failure to meet
minimum capital requirements can initiate certain mandatory--and
possibly additional discretionary-- actions by regulators that, if
undertaken, could have a direct material effect on the Bank's
financial statements.  Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must
meet specific capital guidelines that involve quantitative measures
of the Bank's assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices.  The
Bank's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors.

Effective November 1, 1995, the Bank converted from a state-
chartered mutual savings bank to a Federally chartered mutual
savings bank.  Prior to the conversion, the Bank was required under
FDIC capital regulations to have minimum Tier 1, total capital, and
minimum leverage ratios of 4%, 8% and 3% respectively.  At June 30,
1995, the Bank's Tier 1, total capital and leverage ratios were
20.89%, 22.31%, and 11.63% respectively.  Deposits assumed by the
Bank in the acquisitions of its Avenue M branch in 1993 and
Conestoga Bancorp, Inc. in 1996 are insured by the Savings
Association Insurance Fund of the FDIC, to the extent applicable by
law.  All other deposits, including future deposit accounts of the
Bank, are insured by the Bank Insurance Fund of the FDIC to the
extent applicable by law.

At June 30, 1996, the Bank's primary regulator is the Office of
Thrift Supervision (''OTS''). Under OTS capital regulations, the
Bank is required to maintain minimum tangible capital, core capital
and total risk-based capital to risk-adjusted assets ratios of
1.5%, 3% and 8%, respectively.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

The Company and Bank's actual capital amounts and ratios at June
30, 1996 are presented in the following table.  There was no
deduction from capital for interest-rate risk.

                                                               Minimum
                                           Actual        Capital Requirement
                                    ------------------- --------------------
                                     Amount     Ratio    Amount     Ratio
                                    --------- --------- --------- ----------
As of June 30, 1996:
  Tangible Capital:
    Consolidated Company...........$ 184,188    12.66%     N/A        N/A
    Bank...........................$ 119,125     9.49% >= $18,828   >= 1.5%

  Core Capital:
    Consolidated Company...........$ 184,322    13.72%     N/A        N/A
    Bank...........................$ 119,259     9.50% >= $37,659   >= 3.0%

  Risk-based capital:
    Consolidated Company...........$ 191,778    31.23%     N/A        N/A
    Bank...........................$ 126,715    21.24% >= $47,718   >= 8.0%

As discussed in Note 2, the Bank received approximately $131,078 of
excess proceeds resulting from the oversubscription of the
Company's initial public offering.  The Bank's tangible, core, and
risk-based capital ratios were 10.60%, 10.61%, and 23.86%
respectively, excluding the effects of the excess proceeds on the
balance sheet, at June 30, 1996.

The following is a reconciliation of generally accepted accounting
principles (GAAP) capital to regulatory capital for the Bank:

                                           June 30, 1996
                                     -----------------------------
                                     Tangible   Core    Risk-Based
                                     Capital  Capital    Capital
                                     -------- --------- ----------

GAAP capital........................$148,008  $148,008   $148,008
                                    --------- ---------  ---------
Non-allowable assets:
Core deposit intangible.............    (134)       -          -
Unrealized gain on AFS securities...    (311)     (311)      (311)
Goodwill............................ (28,438)  (28,438)   (28,438)
General valuation allowance.........      -         -       7,456
                                    --------- --------- ----------
Regulatory capital.................. 119,125   119,259    126,715
Minimum capital requirement.........  18,828    37,659     47,718
                                    --------- --------- ----------
Regulatory capital-excess...........$100,297  $ 81,600    $78,997
                                    ========= ========= ==========

Under its prompt corrective action regulations, the OTS is required
to take certain supervisory actions with respect to
undercapitalized institutions. These regulations establish a
framework for the classification of depository institutions into
five capital categories: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. Generally, an institution is considered well
capitalized if it has a leverage ratio of core capital of at least
5.0%, a Tier I risk-based capital ratio of at least 6.0% and a
total risk-based capital ratio of at least

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

10.0%.  As The most recent notification from the Office of Thrift
Supervision categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action.  There are no
conditions or events since that notification that management
believes have changed the institution's category.

19.   QUARTERLY FINANCIAL INFORMATION

The following represents the unaudited results of operations for
each of the quarters during the fiscal years ended
June 30, 1996 and 1995:

                                                         For the Three Months Ended
                                           September 30,  December 31,    March 31,    June 30,
                                               1995           1995          1996        1996
                                           -------------   ----------     ---------    --------
                                                                           
Net interest income.......................     $  6,913     $   7,379      $  7,171    $  7,640
Provision for possible loan losses........          600           351           900       1,128
Net interest income after provision
  for possible loan losses................        6,313     $   7,028         6,271       6,512
Non-interest income.......................          414           186           379         396
Non-interest expense......................        2,922         3,478         3,901       3,720
Income before income taxes and cumulative
  effect of change in accounting principle        3,805         3,736         2,749       3,188
Income tax expense........................        1,741         1,705         1,266       1,469
Income before cumulative effect of change
  in accounting principle.................        2,064         2,031         1,483       1,719
Cumulative effect of change in accounting
  principle...............................       (1,032)          -              -           -
                                           -------------   ----------     ---------    ---------
Net income                                     $  1,032     $   2,031      $  1,483    $  1,719
                                           =============   ==========     =========    =========

                                                          For the Three Months Ended
                                           September 30,  December 31,    March 31,    June 30,
                                               1994           1994          1995        1995
                                           -------------   ----------     ---------    --------
                                                                            
Net interest income.......................     $  7,863     $  7,936      $  7,401     $  7,077
Provision for possible loan losses........          737          738           738          737
Net interest income after provision
  for possible loan losses................        7,126     $  7,198         6,663        6,340
Non-interest income.......................          428          378           465          502
Non-interest expense......................        3,250        3,292         3,591        3,920
Income before income taxes................        4,304        4,284         3,537        2,922
Income tax expense........................        1,783        2,010         1,638        1,190
                                           -------------   ----------     ---------    ---------
Net income                                     $  2,521     $  2,274      $  1,899     $  1,732
                                           =============   ==========     =========    =========

20.   DIME COMMUNITY BANCORP, INC. PARENT COMPANY ONLY FINANCIAL
STATEMENTS:

The Company began operations on June 26, 1996.  Since operations
began substantially at year-end, substantially all of the Company's
results from operations represent the earnings of its wholly-owned
subsidiary.  As a result, a  separate statement of operations for
the Company for the year ended June 30, 1996 is not presented .

The following statement of condition as of June 30, 1996, and the
related statement of cash flows for the year ended June 30, 1996,
reflect the Company's investment in its wholly-owned subsidiary,
the Bank, using the equity method of accounting.

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

                  DIME COMMUNITY BANCORP, INC.
                     STATEMENT OF CONDITION
        (In thousands except share and per share amounts)

                                                                                     June 30,
                                                                                       1996
                                                                                    ----------
                                                                                     
          ASSETS:

Cash and due from banks..........................................................   $      117
Investment securities available for sale.........................................       33,994
Federal funds sold...............................................................       53,623
ESOP loan to subsidiary..........................................................       11,541
Investment in subsidiary.........................................................      148,008
Other assets.....................................................................           23
                                                                                    ----------
TOTAL ASSETS.....................................................................    $ 247,306
                                                                                    ==========

          LIABILITIES:

Payable for securities purchased.................................................       33,994
Other liabilities................................................................          241
                                                                                     ----------
TOTAL LIABILITIES................................................................       34,235
                                                                                     ----------

          STOCKHOLDERS' EQUITY:

Preferred Stock ($.01 par, 9,000,000 shares authorized,
none outstanding at June 30,1996).................................................          -
Common Stock ($.01 par, 45,000,000 shares authorized, 14,547,500 shares
 outstanding at June 30,1996).....................................................         145
Additional paid-in capital........................................................     141,240
Employee Stock Ownership Plan.....................................................     (11,541)
Retained earnings.................................................................      82,916
Unrealized gain on securities available for sale, net of deferred taxes...........         311
                                                                                     ----------
TOTAL STOCKHOLDERS' EQUITY........................................................     213,071
                                                                                     ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................................   $ 247,306
                                                                                     ==========

           DIME COMMUNITY BANCORP, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
            YEARS ENDED JUNE 30, 1996, 1995 AND 1994
             (In Thousands Except Per Share Amounts)

                  DIME COMMUNITY BANCORP, INC.
                     STATEMENT OF CASH FLOWS
        (In thousands except share and per share amounts)

                                                                                    Year Ended
                                                                                  June 30, 1996
                                                                                  --------------
                                                                                     
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................................................      $  6,265
Adjustments to reconcile net income to net cash provided by
operating activities:
Undistributed earnings of subsidiary bank.......................................        (6,238)
Increase in otherassets........................................................            (23)
Increase in payable for securities purchased....................................        33,994
ESOP compensation expense ......................................................           114
Increase in other liabilities...................................................           241
                                                                                  --------------
Net cash provided by operating activities.......................................        34,353
                                                                                  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in federal funds sold..................................................       (53,623)
Equity in undistributed earnings of subsidiary..................................       (76,349)
Purchases of investment securities available for sale...........................       (33,994)
                                                                                  --------------
Net cash provided by (used in) investing activities.............................      (163,966)
                                                                                  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from issuance of common stock......................................       129,730
                                                                                  --------------
Net cash provided by (used in) financing activities.............................       129,730
                                                                                  --------------
Net increase in cash and cash equivalents.......................................           117
CASH AND CASH EQUIVALENTS, beginning of period..................................            -
                                                                                  --------------
CASH AND CASH EQUIVALENTS, end of period........................................     $     117
                                                                                  ==============

                      *   *   *   *   *   *

Item 9. - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

None.
                                
                            PART III

Item 10. - Directors and Executive Officers of the Company

  Information regarding directors and executive officers of the
Company is presented under the headings "Election of Directors -
Nominees for Election as Director," "- Continuing Directors," "-
Meetings and Committees of the Board of Directors," "-Directors'
Compensation," "-Executive Officers," and "-Executive
Compensation" in the Company's definitive Proxy Statement for its
Annual Meeting of Shareholders to be held on December 17, 1996
(the "Proxy Statement") which will be filed with the SEC within
120 days of June 30, 1996, and is incorporated herein by
reference.

Item 11. - Executive Compensation

  Information regarding executive and director compensation  is
presented under the headings "Election of Directors - Directors'
Compensation," "-Executive Compensation," "-Summary Compensation
Table," "Employment Agreements," "- Employee Retention
Agreements," "-Employee Severance Compensation Plan," and "-
Benefits," in the Proxy Statement and is incorporated herein by
reference.

Item 12. - Security Ownership of Certain Beneficial Owners and
Management

Information regarding security ownership of certain beneficial
owners and management is included under the heading "Security
Ownership of Certain Beneficial Owners" and "Security Ownership
of Management" in the Proxy Statement and is incorporated herein
by reference.

Item 13. - Certain Relationships and Related Transactions.

Information regarding certain relationships and related
transactions is included under the heading "Transactions with
Certain Related Persons" in the Proxy Statement and is
incorporated herein by reference.

                             PART IV

Item 14.  Exhibits, Financial Statement Schedules,  and Reports
on Form 8-K

(a) 1.    Financial Statements

   The following consolidated financial statements and
      schedules of the Company, and the independent
      auditors' report thereon are included in this
      Form 10-K at Item 8.
   Independent Auditors' Report
   Consolidated Statements of Financial Condition at June 30,1996 and 1995
   Consolidated Statements of Operations for each of the years
      in the three year period ended June 30, 1996
   Consolidated Statements of Stockholders' Equity  for each of
      the years in the three year period ended June 30, 1996
   Consolidated Statements of Cash Flows for each of the years
      in the three year period ended June 30,1996
   Notes to Consolidated Financial Statements
   Quarterly Results of Operations (Unaudited) for each of the
      years in the two year period ended June 30, 1996

  2. Financial Statement Schedules

  Financial Statement Schedules have been omitted because they
are not applicable or the required information is shown in the
Consolidated Financial Statements or Notes thereto.

(b)  Exhibits  Required  by Item 601 of Securities  and  Exchange
Commission Regulation S-K:

Exhibit
Number
- ------------
3.1  Certificate of Incorporation of Dime Community Bancorp,
     Inc. (Incorporated by reference to Exhibit 31 to the
     Registration Statement on Form S-1, No. 33-80735 filed on
     December 22, 1995, as amended (the   "Registration
     Statement"))
3.2  Bylaws of Dime Community Bancorp, Inc. (Incorporated by
     reference to Exhibit 3.2 to the Registration Statement)
4.1  Certificate of Incorporation of Dime Community Bancorp,
     Inc. (See Exhibit 3.1 hereto)
4.2  Bylaws of Dime Community Bancorp, Inc. (See Exhibit 3.2
     hereto)
4.3  Draft Stock Certificate of Dime Community Bancorp, Inc.
     (Incorporated by reference to Exhibit 4.3 to the
     Registration Statement)
10.1 Agency Agreement, by and among Dime Community Bancorp,
     Inc., The Dime Savings Bank of Williamsburgh and Sandler
     O'Neill & Partners, L.P. (Incorporated by reference to
     Exhibit 1.1 to the Registration Statement)
10.2 Agreement and Plan of Merger dated as of the 2nd day of
     November, 1995 by and between The Dime Savings Bank of
     Williamsburgh and Conestoga Bancorp, Inc. (Incorporated by
     reference to the Schedule 13D of The Dime Savings Bank of
     Williamsburgh, filed with the Commission on November 23,
     1995)
10.3 Stock Option Agreement dated as of the 2nd day of
     November, 1995 by and between The Dime Savings Bank of
     Williamsburgh and Conestoga Bancorp, Inc. (Incorporated by
     reference to the Schedule 13D of The Dime Savings Bank of
     Williamsburgh, filed with the Commission on November 23,
     1995)
10.4 Engagement Letter, dated September 11, 1995 between The
     Dime Savings Bank of Williamsburgh and Ryan Beck & Co., Inc.
     (Incorporated by referenced to Exhibit 10.3 to the
     Registration Statement)
10.5 Amended and Restated Employment Agreement between The Dime
     Savings Bank of Williamsburgh and Vincent F. Palagiano
10.6 Amended and Restated Employment Agreement between The Dime
     Savings Bank of Williamsburgh and Michael P. Devine

Exhibit
Number
- ------------
10.7  Amended and Restated Employment Agreement between The Dime
       Savings Bank of Williamsburgh and Kenneth J. Mahon
10.8  Employment Agreement between Dime Community Bancorp, Inc.
       and Vincent F. Palagiano
10.9  Employment Agreement between Dime Community Bancorp, Inc.
       and Michael P. Devine
10.10 Employment Agreement between Dime Community Bancorp, Inc.
       and Kenneth J. Mahon
10.11 Form of Employee Retention Agreements by and among The
       Dime Savings Bank of Williamsburgh, Dime Community Bancorp,
       Inc. and certain executive officers
10.12 Employee Stock Ownership Plan of Dime Community Bancorp,
       Inc. and certain affiliates (Incorporated by reference to
       Exhibit 10.14 to the Registration Statement)
10.13 First Amendment to Employee Stock Ownership Plan of Dime
       Community Bancorp, Inc. and Certain Affiliates
10.14 ESOP Loan Commitment Letter and ESOP Loan Documents
10.15 The Dime Savings Bank of Williamsburgh 401(k) Savings Plan
       in RSI Retirement Trust (Incorporated by  reference to
       Exhibit 10.14 to the Registration Statement)
10.16 Seventh, Eighth and Ninth Amendments to The Dime Savings
       Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement
       Trust
10.17 The Dime Savings Bank of Williamsburgh Supplemental
       Executive Retirement Plan (Incorporated by reference to
       Exhibit 10.16 to the Registration Statement)
10.18 Severance Pay Plan of The Dime Savings Bank of Williamsburgh
10.19 Retirement Plan for Board Members of Dime Community
       Bancorp, Inc.
21.1  Subsidiaries of the Registrant (Incorporated by reference
       to Exhibit 21.1 to the Registration Statement)
27.1  Financial Data Schedule (EDGAR filing only)

SIGNATURES

      Pursuant  to the requirements of Section 13 or  15  of  the
Securities  Exchange  Act  of 1934, as  amended,  the  Registrant
certifies that it has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on September 24, 1996.

                                   Dime Community Bancorp, Inc.

                                   By:  /s/ Vincent F. Palagiano
                                        Vincent F. Palagiano
                                        Chairman of the Board
                                          President   and   Chief
Executive Officer

      Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, this report has been signed by the following
persons in the capacities and on the dates indicated.

        Name                  Title                 Date

                                                      
 /s/ Vincent F.        Chairman of the       September 24, 1996
Palagiano              Board, 
Vincent F. Palagiano   President and Chief
                       Executive Officer
                       (Principal
                       executive officer)
                                                      
 /s/ Michael P.        Executive Vice        September 24, 1996
Devine                 President, Chief
Michael P. Devine      Operating Officer
                       and Secretary and
                       Director
                                                      
 /s/ Kenneth J.        Senior Vice           September 24, 1996
Mahon                  President and Chief
Kenneth J. Mahon       Financial Officer
                       (Principal
                       financial officer)
                                                      
 /s/ Anthony Bergamo   Director              September 24, 1996
Anthony Bergamo
                                                      
 /s/ George L.         Director              September 24, 1996
Clark, Jr.
George L. Clark, Jr.
                                                      
 /s/ Steven D. Cohn    Director              September 24, 1996
Steven D. Cohn
                                                      
 /s/ Patrick E.        Director              September 24, 1996
Curtin
Patrick E. Curtin
                                                      
 /s/ Joseph H.         Director              September 24, 1996
Farrell
Joseph H. Farrell
                                                      
 /s/ Fred P.           Director              September 24, 1996
Fehrenbach
Fred P. Fehrenbach
                                                      
 /s/ John J. Flynn     Director              September 24, 1996
John J. Flynn
                                                      
 /s/ Malcolm T.        Director              September 24, 1996
Kitson
Malcolm T. Kitson
                                                      
 /s/ Stanley Meisels   Director              September 24, 1996
Stanley Meisels
                                                      
 /s/ Louis V. Varone   Director              September 24, 1996
Louis V. Varone

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                   __________________________

                            EXHIBITS
                               to
                           FORM 10-K

                      SEC File No. 0-27782

                   __________________________

                  DIME COMMUNITY BANCORP, INC.
                       Brooklyn, New York

DESIGNATION                             DESCRIPTION                     PAGE

3.1             Certificate of Incorporation of Dime Community 
                Bancorp, Inc. (Incorporated by reference to Exhibit 
                31 to the Registration Statement on Form S-1, No. 
                33-80735 filed on December 22, 1995, as amended 
                (the "Registration Statement"))

3.2             Bylaws of Dime Community Bancorp, Inc. 
                (Incorporated by reference to Exhibit 3.2 to the 
                Registration Statement)

4.1             Certificate of Incorporation of Dime Community 
                Bancorp, Inc. (See Exhibit 3.1 hereto) 

4.2             Bylaws of Dime Community Bancorp, Inc. (See 
                Exhibit 3.2 hereto) 

4.3             Draft Stock Certificate of Dime Community 
                Bancorp, Inc. (Incorporated by reference to Exhibit 
                4.3 to the Registration Statement)

10.1            Agency Agreement, by and among Dime 
                Community Bancorp, Inc., The Dime Savings Bank 
                of Williamsburgh and Sandler O'Neill & Partners, 
                L.P. (Incorporated by reference to Exhibit 1.1 to the 
                Registration Statement)

10.2            Agreement and Plan of Merger dated as of the 2nd 
                day of November, 1995 by and between The Dime 
                Savings Bank of Williamsburgh and Conestoga 
                Bancorp, Inc. (Incorporated by reference to the 
                Schedule 13D of The Dime Savings Bank of 
                Williamsburgh, filed with the Commission on 
                November 23, 1995)

10.3            Stock Option Agreement dated as of the 2nd day of 
                November, 1995 by and between The Dime Savings 
                Bank of Williamsburgh and Conestoga Bancorp, 
                Inc. (Incorporated by reference to the Schedule 13D 
                of The Dime Savings Bank of Williamsburgh, filed 
                with the Commission on November 23, 1995)

10.4            Engagement Letter, dated September 11, 1995 
                between The Dime Savings Bank of Williamsburgh 
                and Ryan Beck & Co., Inc. (Incorporated by 
                referenced to Exhibit 10.3 to the Registration 
                Statement)

10.5            Amended and Restated Employment Agreement 
                between The Dime Savings Bank of Williamsburgh 
                and Vincent F. Palagiano 

10.6            Amended and Restated Employment Agreement 
                between The Dime Savings Bank of Williamsburgh 
                and Michael P. Devine 

10.7            Amended and Restated Employment Agreement 
                between The Dime Savings Bank of Williamsburgh 
                and Kenneth J. Mahon 

10.8            Employment Agreement between Dime Community 
                Bancorp, Inc. and Vincent F. Palagiano

10.9            Employment Agreement between Dime Community 
                Bancorp, Inc. and Michael P. Devine

10.10           Employment Agreement between Dime Community 
                Bancorp, Inc. and Kenneth J. Mahon 

10.11           Form of Employee Retention Agreements by and 
                among The Dime Savings Bank of Williamsburgh, 
                Dime Community Bancorp, Inc. and certain 
                executive officers 

10.12           Employee Stock Ownership Plan of Dime 
                Community Bancorp, Inc. and certain affiliates 
                (Incorporated by reference to Exhibit 10.14 to the 
                Registration Statement)

10.13           First Amendment to Employee Stock Ownership 
                Plan of Dime Community Bancorp, Inc. and Certain 
                Affiliates

10.14           ESOP Loan Commitment Letter and ESOP Loan 
                Documents 

10.15           The Dime Savings Bank of Williamsburgh 401(k) 
                Savings Plan in RSI Retirement Trust (Incorporated 
                by reference to Exhibit 10.14 to the Registration 
                Statement)

10.16           Seventh, Eighth and Ninth Amendments to The 
                Dime Savings Bank of Williamsburgh 401(k) 
                Savings Plan in RSI Retirement Trust 

10.17           The Dime Savings Bank of Williamsburgh 
                Supplemental Executive Retirement Plan 
                (Incorporated by reference to Exhibit 10.16 to the 
                Registration Statement)

10.18           Severance Pay Plan of The Dime Savings Bank of 
                Williamsburgh 

10.19           Retirement Plan for Board Members of Dime 
                Community Bancorp, Inc.

21.1            Subsidiaries of the Registrant (Incorporated by 
                reference to Exhibit 21.1 to the Registration 
                Statement)

27.1            Financial Data Schedule (EDGAR filing only)

           AMENDED AND RESTATED EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered into as of the 26th day of June, 1996, by and between The
Dime  Savings  Bank  of  Williamsburgh,  a  mutual  savings  bank
organized  and  operating under the federal laws  of  the  United
States  and  having an office at 209 Havemeyer Street,  Brooklyn,
New  York  11211 ("Bank") and Vincent F. Palagiano,  residing  at
[home  address deleted] and amends and restates the  Amended  and
Restated Employment Agreement made as of October 1, 1995  between
the Bank and Mr. Palagiano.

                     W I T N E S S E T H :

          WHEREAS, Mr. Palagiano currently serves the Bank in the
capacity  of Chairman of the Board, President and Chief Executive
Officer; and

           WHEREAS, the Bank and Mr. Palagiano are parties to  an
Employment Agreement made and entered into as of the 1st  day  of
January,  1992  and amended and restated as of  the  1st  day  of
October, 1995 ("Prior Agreement"); and

          WHEREAS, the Bank and Mr. Palagiano desire to amend and
restate  the Prior Agreement in its entirety as set forth herein;
and

           WHEREAS,  for purposes of securing for  the  Bank  Mr.
Palagiano's  continued services, the Board of  Directors  of  the
Bank  ("Board") has approved and authorized the execution of this
Agreement with Mr. Palagiano; and

           WHEREAS, Mr. Palagiano is willing to continue to  make
his  services  available to the Bank on the terms and  conditions
set forth herein.

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Bank and Mr. Palagiano hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)   The Bank hereby represents and warrants  to  Mr.
Palagiano that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Bank; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which the Bank is a  party
or  by which it is bound, or (B) any provision of law, including,
without limitation, any statute, rule or regulation or any  order
of any order of any court or administrative agency, applicable to
the Bank or its business.

           (b)   Mr. Palagiano hereby represents and warrants  to
the Bank that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

            2.    Employment.   The  Bank  hereby  continues  the
employment  of  Mr. Palagiano, and Mr. Palagiano  hereby  accepts
such  continued employment, during the period and upon the  terms
and conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

          (b)  Prior to the first anniversary of the date of this
Agreement   and  each  anniversary  date  thereafter  (each,   an
"Anniversary  Date"), the Board shall review the  terms  of  this
Agreement  and Mr. Palagiano's performance of services  hereunder
and  may, in the absence of objection from Mr. Palagiano, approve
an  extension  of  the Employment Period.   In  such  event,  the
Employment  Period shall be extended to the third anniversary  of
the relevant Anniversary Date.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs  and  the Bank is not  subject  to  rules  and
regulations  of  the  Office  of  Thrift  Supervision,  then  the
Employment  Period  shall be extended through and  including  the
third  anniversary of the earliest date after the effective  date
of  such  Change  of  Control on which either  the  Bank  or  Mr.
Palagiano elects, by written notice pursuant to section  3(d)  of
this  Agreement  to  the non-electing party, to  discontinue  the
Employment Period; provided, however, that this section shall not
apply  in  the  event that, prior to the Change  of  Control  (as
defined  in  section  13 of this Agreement),  Mr.  Palagiano  has
provided  written notice to the Bank of his intent to discontinue
the Employment Period.

           (d)   The  Bank or Mr. Palagiano may, at any  time  by
written  notice  given  to  the other, elect  to  terminate  this
Agreement.   Any  such  notice  given  by  the  Bank   shall   be
accompanied by a certified copy of a resolution, adopted  by  the
affirmative  vote of a majority of the entire membership  of  the
Board at a meeting of the Board duly called and held, authorizing
the giving of such notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:  (i)  Mr. Palagiano's employment with the Bank  may  be
terminated during the Employment Period, in accordance  with  the
terms and conditions of this Agreement; and (ii) nothing in  this
Agreement  shall  mandate  or  prohibit  a  continuation  of  Mr.
Palagiano's employment following the expiration of the Employment
Period  upon  such  terms and conditions  as  the  Bank  and  Mr.
Palagiano may mutually agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

            4.    Duties.   During  the  Employment  Period,  Mr.
Palagiano shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the business and affairs of the Bank and use his best efforts  to
advance the Bank's interests;

           (b)   serve  as  Chairman of the Board, President  and
Chief Executive Officer if duly appointed and/or elected to serve
in such position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board, in accordance  with
organization Certificate, By-laws, Applicable Laws, Statutes  and
Regulations, custom and practice of the Bank as in effect on  the
date first above written.
Mr.  Palagiano  shall  have such authority  as  is  necessary  or
appropriate to carry out his assigned duties. Mr. Palagiano shall
report  to  and  be subject to direction and supervision  by  the
Board.

          (d)  none of the functions, duties and responsibilities
to be performed by Mr. Palagiano pursuant to this Agreement shall
be deemed to include those functions, duties and responsibilities
performed  by  Mr. Palagiano in his capacity as director  of  the
Bank.

          5.   Compensation -- Salary and Bonus. In consideration
for  services rendered by Mr. Palagiano under this Agreement, the
Bank  shall pay to Mr. Palagiano a salary at an annual rate equal
to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $450,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change in Control, the product of Mr. Palagiano's annual rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                              (i)  1.06;

                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers  of  the Bank (other  than  Mr.
                    Palagiano)  who are assistant vice presidents
                    or  more senior officers, divided by (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar  year, of the officers of  the  Bank
                    (other  than Mr. Palagiano) who are assistant
                    vice presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately  equal installments in accordance with  the  Bank's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Palagiano of a salary
in  excess  of  that  prescribed  under  this  section  5  or  of
additional  cash  or non-cash compensation in a form  other  than
salary, to the extent that such payment is duly authorized by  or
under the authority of the Board.

           (d)   no  portion  of  the compensation  paid  to  Mr.
Palagiano  pursuant  to  this Agreement shall  be  deemed  to  be
compensation  received  by  Mr.  Palagiano  in  his  capacity  as
director of the Bank.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr. Palagiano shall be treated as an employee of the Bank and  be
entitled to participate in and receive benefits under the  Bank's
Retirement  Plan, Incentive Savings Plan, group life  and  health
(including  medical  and major medical) and disability  insurance
plans,  and  such  other  employee benefit  plans  and  programs,
including   but  not  limited  to  any  long-term  or  short-term
incentive compensation plans or programs (whether or not employee
benefit plans or programs), as the Bank may maintain from time to
time,  in  accordance  with  the terms  and  conditions  of  such
employee  benefit plans and programs and compensation  plans  and
programs  and with the Bank's customary practices.   Following  a
Change  in Control, all such benefits to Mr. Palagiano  shall  be
continued on terms and conditions substantially identical to, and
in  no  event less favorable than, those in effect prior  to  the
Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"), the Bank will provide, or cause to  be  provided,
to  Mr. Palagiano in connection with such Conversion, stock-based
compensation  and benefits, including, without limitation,  stock
options,   restricted   stock  awards,   and   participation   in
tax-qualified  stock  bonus plans which, in  the  aggregate,  are
either  (A)  accepted  by  Mr.  Palagiano  in  writing  as  being
satisfactory  for  purposes  of this  Agreement  or  (B)  in  the
written,  good faith opinion of a nationally recognized executive
compensation   consulting  firm  selected   by   the   Bank   and
satisfactory  to  Mr.  Palagiano, whose agreement  shall  not  be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions.

           7.    Board Memberships and Personal Activities.   Mr.
Palagiano may serve as a member of the board of directors of such
business,  community  and  charitable  organizations  as  he  may
disclose  to  the Board from time to time, and he may  engage  in
personal  business and investment activities for his own account;
provided,  however, that such service and personal  business  and
investment  activities shall not materially  interfere  with  the
performance  of his duties under this Agreement.   Mr.  Palagiano
may  also  serve as an officer or director of any parent  of  the
Bank on such terms and conditions as the Bank and its parent  may
mutually  agree  upon, and such service shall not  be  deemed  to
materially  interfere  with Mr. Palagiano's  performance  of  his
duties hereunder or otherwise result in a material breach of this
Agreement.

           8.   Working Facilities and Expenses.  Mr. Palagiano's
principal  place  of employment shall be at the Bank's  executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.   The  Bank shall provide Mr. Palagiano, at his  principal
place of employment, with a private office, stenographic services
and  other  support  services  and  facilities  suitable  to  his
position with the Bank and necessary or appropriate in connection
with the performance of his assigned duties under this Agreement.
The  Bank shall provide Mr. Palagiano with an automobile suitable
to  his  position  with  the Bank in accordance  with  its  prior
practices, and such automobile shall be used by Mr. Palagiano  in
carrying out his duties under this Agreement, including commuting
between his residence and his principal place of employment.  The
Bank shall reimburse Mr. Palagiano for his ordinary and necessary
business  expenses, including, without limitation,  all  expenses
associated   with   his  business  use  of   the   aforementioned
automobile,  fees for memberships in such clubs and organizations
as  Mr. Palagiano and the Bank shall mutually agree are necessary
and   appropriate   for   business  purposes   and   travel   and
entertainment   expenses   incurred  in   connection   with   the
performance of his duties under this Agreement, upon presentation
to  the Bank of an itemized account of such expenses in such form
as  the  Bank  may  reasonably require.  Mr. Palagiano  shall  be
entitled to no less than four (4) weeks of paid vacation   during
each year in the Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

           (a)  In the event that Mr. Palagiano's employment with
the  Bank shall terminate during the Employment Period on account
of  the  termination of Mr. Palagiano's employment with the  Bank
other than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

           (ii)  a  voluntary resignation by Mr. Palagiano  other
than a Resignation for Good Reason (within the meaning of section
12(b) of this Agreement);

           (iii)      a termination on account of Mr. Palagiano's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A) Mr. Palagiano has been  absent  from  the
full-time  service of the Bank on account of his  Disability  (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive  months; and (B) Mr. Palagiano shall have  failed  to
return to work in the full-time service of the Bank within thirty
(30) days after written notice requesting such return is given to
Mr.  Palagiano  by the Bank; then the Bank shall provide  to  Mr.
Palagiano  the  benefits  and pay to Mr.  Palagiano  the  amounts
provided under section 9(b) of this Agreement.

           (b)  In the event that Mr. Palagiano's employment with
the Bank shall terminate under circumstances described in section
9(a)  of  this Agreement or if the Bank terminates this Agreement
pursuant  to  section  3(d), the following benefits  and  amounts
shall  be paid or provided to Mr. Palagiano (or, in the event  of
his death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Bank, payable when due but
in no event later than thirty (30) days following his termination
of employment with the Bank;

           (ii)  (A) the benefits, if any, to which Mr. Palagiano
and  his family and dependents are entitled as a former employee,
or  family or dependents of a former employee, under the employee
benefit  plans and programs and compensation plans  and  programs
maintained  for the benefit of the Bank's officers and employees,
in accordance with the terms of such plans and programs in effect
on  the  date  of  his  termination  of  employment,  or  if  his
termination  of employment occurs after a Change in  Control,  on
the  date of his termination of employment or on the date of such
Change  in Control, whichever results in more favorable  benefits
as  determined by Mr. Palagiano, where credit is given for  three
additional  years  of service and age in determining  eligibility
and  benefits for any plan and program where age and service  are
relevant  factors, and (B) payment for all unused  vacation  days
and  floating  holidays in the year in which  his  employment  is
terminated, at his highest annual rate of salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer, if and to the extent necessary to provide Mr. Palagiano
and  his  family  and  dependents  for  the  Remaining  Unexpired
Employment Period, coverage identical to and in any event no less
favorable  than  the  coverage to  which  they  would  have  been
entitled  under  such plans (as in effect  on  the  date  of  his
termination  of employment, or, if his termination of  employment
occurs  after a Change in Control, on the date of his termination
of employment or during the one-year period ending on the date of
such  Change  in  Control, whichever results  in  more  favorable
benefits  as  determined by Mr. Palagiano) if  he  had  continued
working  for  the Bank during the Remaining Unexpired  Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section 5(c) would apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the present value of the salary and the bonus that  Mr.
Palagiano would have earned if he had worked for the Bank  during
the  Remaining Unexpired Employment Period at the highest  annual
rate  of  salary (assuming, if a Change in Control has  occurred,
that the annual increases under section 5(c) would apply) and the
highest bonus as a percentage of the rate of salary provided  for
under  this  Agreement,  where  such  present  value  is  to   be
determined  using a discount rate of six percent (6%) per  annum,
compounded,   in   the  case  of  salary,  with   the   frequency
corresponding to the Bank's regular payroll periods with  respect
to its officers, and, in the case of bonus, annually;

           (v)  within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans   maintained  by,  or  covering  employees  of,  the   Bank
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for  the  Bank during the Remaining Unexpired  Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Bank  during  the  Remaining Unexpired  Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees  of,  the Bank as of the date of his termination  where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable  to the Bank's contribution  to  which  he
would be entitled under any defined contribution plans maintained
by,  or  covering employees of, the Bank (including  any  "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if  he  had worked for  the  Bank  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment Period which is prior  to  Mr.  Palagiano's
termination of employment with the Bank, and been fully vested in
such  plan  or plans, over (B) the present value of the  benefits
attributable to the Bank's contributions to which he is  actually
entitled  under  such plans as of the date of his termination  of
employment  with the Bank, where such present values  are  to  be
determined  using a discount rate of six percent (6%) per  annum,
compounded with the frequency corresponding to the Bank's regular
payroll periods with respect to its officers;

          (vii)     the payments that would have been made to Mr.
Palagiano under any incentive compensation plan maintained by, or
covering  employees of, the Bank (other than  bonus  payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working  for the Bank during the  Remaining  Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to  Mr.  Palagiano under such  incentive  compensation
plan,  multiplied by (B) the compensation that  would  have  been
paid  to  Mr. Palagiano during each calendar year at the  highest
annual rate of compensation (assuming, if a Change in Control has
occurred,  that  the  annual increases under section  5(c)  would
apply) under the Agreement, such payments to be made at the  same
time  and  in  the  same manner as payments  are  made  to  other
officers  of  the  Bank pursuant to the terms of  such  incentive
compensation  plan; provided, however, that payments  under  this
section 9(b)(vii) shall not be made to Mr. Palagiano for any year
on  account  of which no payments are made to any of  the  Bank's
officers under any such incentive compensation plan; and

           (viii)     the  benefits  to which  Mr.  Palagiano  is
entitled under the Bank's Supplemental Executive Retirement  Plan
(or  other excess benefits plan with the meaning of section 3(36)
of  ERISA or other special or supplemental plan) shall be paid to
him  in  a  lump sum, where such lump sum is computed  using  the
mortality tables under the Bank's tax-qualified pension plan  and
a discount rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty  (30)  days  after the  date  of  Mr.  Palagiano's
election,  and  if the amount may be increased  by  a  subsequent
Change  in  Control, any additional payment shall be made  within
thirty (30) days of such Change in Control.

           (c)   Mr.  Palagiano shall not be required to mitigate
the  amount  of  any payment provided for in this  section  9  by
seeking  other employment or otherwise, nor shall the  amount  of
any  payment or benefit provided for in this section 9 be reduced
by  any  compensation earned by Mr. Palagiano as  the  result  of
employment by another employer, by retirement benefits, by offset
against  any  amount claimed to be owed by Mr. Palagiano  to  the
Bank,  or  otherwise except as specifically provided  in  section
9(b)  (iii) of this Agreement.  The Bank and Mr. Palagiano hereby
stipulate that the damages which may be incurred by Mr. Palagiano
as  a  consequence of any such termination of employment are  not
capable  of  accurate  measurement as of  the  date  first  above
written  and that the benefits and payments provided for in  this
Agreement   constitute   a   reasonable   estimate   under    the
circumstances  of all damages sustained as a consequence  of  any
such  termination of employment, other than damages arising under
or  out  of  any  stock option, restricted stock  or  other  non-
qualified  stock acquisition or investment plan  or  program,  it
being  understood  and  agreed  that  this  Agreement  shall  not
determine  the  measurement of damages under  any  such  plan  or
program in respect of any termination of employment.

           10.   Termination Without Severance Benefits.  In  the
event  that  Mr.  Palagiano's  employment  with  the  Bank  shall
terminate during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)  voluntary resignation by Mr. Palagiano other than
a  Resignation  for  Good Reason (within the meaning  of  section
12(b) of this Agreement); or

          (c)  Mr. Palagiano's death;

then  the  Bank  shall  have no further  obligations  under  this
Agreement,  other than the payment to Mr. Palagiano (or,  in  the
event  of  his  death, to his estate) of his  earned  but  unpaid
salary  as of the date of the termination of his employment,  and
the  provision  of such other benefits, if any, to  which  he  is
entitled  as a former employee under the Bank's employee  benefit
plans  and  programs  and  compensation plans  and  programs  and
payment for all unused vacation days and floating holidays in the
year in which his employment is terminated, at his highest annual
salary for such year.

          11.  Death and Disability.

           (a)   Death.  If Mr. Palagiano's employment  is  termi
nated  by  reason of Mr. Palagiano's death during the  Employment
Period,   this   Agreement   shall  terminate   without   further
obligations to Mr. Palagiano's legal representatives  under  this
Agreement,  other  than for payment of amounts and  provision  of
benefits  under  sections 9(b) (i) and (ii);  provided,  however,
that  if Mr. Palagiano dies while in the employment of the  Bank,
his  designated  beneficiary(ies) shall receive a death  benefit,
payable  through  life  insurance  or  otherwise,  which  is  the
equivalent on a net after-tax basis of the death benefit  payable
under  a  term life insurance policy, with a stated death benefit
of three times Mr. Palagiano's then Annual Base Salary.

           (b)   Disability.   If Mr. Palagiano's  employment  is
terminated by reason of Mr. Palagiano's Disability as defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without  further obligations to Mr.  Palagiano,  other
than  for  payment  of amounts and provision  of  benefits  under
section  9(b) (i) and (ii); provided, however, that in the  event
of  Mr.  Palagiano's Disability while in the  employment  of  the
Bank,  the Bank will pay to him a lump sum amount equal to  three
times his then Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined in accordance with the terms of the Bank's long  term
disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Palagiano's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

          (a)  Mr. Palagiano's termination of employment with the
Bank   shall  be  deemed  a  "Termination  for  Cause"  if   such
termination  occurs  for "cause," which,  for  purposes  of  this
Agreement  shall mean personal dishonesty, incompetence,  willful
misconduct,  breach of fiduciary duty involving personal  profit,
intentional  failure to perform stated duties, willful  violation
of  any law, rule or regulation (other than traffic violations or
similar  offenses)  or  final cease  and  desist  order,  or  any
material  breach  of  this Agreement, in each  case  as  measured
against  standards generally prevailing at the relevant  time  in
the  savings and community banking industry;  provided,  however,
that  Mr.  Palagiano shall not be deemed to have been  discharged
for  cause  unless  and until he shall have  received  a  written
notice of termination from the Board, accompanied by a resolution
duly  adopted  by affirmative vote of a majority  of  the  entire
Board  at  a  meeting  called and held for  such  purpose  (after
reasonable  notice to Mr. Palagiano and a reasonable  opportunity
for  Mr. Palagiano to make oral and written presentations to  the
members  of  the  Board, on his own behalf, or  through  a  repre
sentative,  who may be his legal counsel, to refute  the  grounds
for  the  proposed determination) finding that in the good  faith
opinion  of the Board grounds exist for discharging Mr. Palagiano
for cause.

          (b)  Mr. Palagiano's termination of employment with the
Bank  shall  be  deemed a Resignation for  Good  Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)  (A) the assignment to Mr. Palagiano of any duties
inconsistent  with  Mr. Palagiano's status  as  Chairman  of  the
Board, President and Chief Executive Officer of the Bank or (B) a
substantial  adverse alteration in the nature or  status  of  Mr.
Palagiano's  responsibilities from those  in  effect  immediately
prior  to  the alteration; or (C) any Change in Control described
in section 13(b);

           (ii) a reduction by the Bank in Mr. Palagiano's annual
base  salary as in effect on the date first above written  or  as
the  same  may  be  increased  from time  to  time,  unless  such
reduction  was  mandated  at  the initiation  of  any  regulatory
authority having jurisdiction over the Bank;

           (iii)      the  relocation  of  the  Bank's  principal
executive offices to a location outside the New York metropolitan
area  or  the Bank's requiring Mr. Palagiano to be based anywhere
other  than  the  Bank's principal executive offices  except  for
required travel on the Bank's business to an extent substantially
consistent  with Mr. Palagiano's business travel  obligations  at
the date first above written;

           (iv)  the failure by the Bank, without Mr. Palagiano's
consent,  to pay to Mr. Palagiano, within seven (7) days  of  the
date  when due, (A) any portion of his compensation, or  (B)  any
portion  of  an  installment of deferred compensation  under  any
deferred compensation program of the Bank, which failure  is  not
inadvertent and immaterial and which is not promptly cured by the
Bank  after  notice of such failure is given to the Bank  by  the
Executive;

           (v)  the failure by the Bank to continue in effect any
compensation  plan in which Mr. Palagiano participates  which  is
material to his total compensation, including but not limited  to
the  Retirement Plan and the Bank's Incentive Savings Plan or any
substitute plans unless an equitable arrangement (embodied in  an
ongoing  substitute  or  alternative plan)  has  been  made  with
respect to such plan, or the failure by the Bank to continue  his
participation therein (or in such substitute or alternative plan)
on  a  basis not materially less favorable, both in terms of  the
amount  of  benefits provided and the level of his  participation
relative to other participants, unless such failure is the result
of  action mandated at the initiation of any regulatory authority
having jurisdiction over the Bank;

          (vi) the failure by the Bank to continue to provide Mr.
Palagiano with benefits substantially similar to those enjoyed by
Mr.  Palagiano under the Retirement Plan and the Bank's Incentive
Savings  Plan or under any of the Bank's life, health  (including
hospitalization,  medical and major medical),  dental,  accident,
and   long-term  disability  insurance  benefits,  in  which  Mr.
Palagiano  is participating, or the taking of any action  by  the
Bank which would directly or indirectly materially reduce any  of
such  benefits  or deprive Mr. Palagiano of the  number  of  paid
vacation  days to which he is entitled, on the basis of years  of
service with the Bank, rank or otherwise, in accordance with  the
Bank's  normal vacation policy, unless such failure is the result
of  action mandated at the initiation of any regulatory authority
having jurisdiction over the Bank;

            (vii)      the  failure  of  the  Bank  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the Bank which is not effected pursuant the provisions of section
12(a)   regarding  Termination  for  Cause  or  on   account   of
Disability;

           (ix)  a material breach of this Agreement by the Bank,
which  the  Bank fails to cure within thirty (30) days  following
written notice thereof from Mr. Palagiano;

           (x)  in the event of a Change in Control described  in
section  13(b)  of  this  Agreement, a failure  of  the  Bank  to
provide,  or cause to be provided, to Mr. Palagiano in connection
with  such  Change  in  Control,  stock-based  compensation   and
benefits,   including,   without   limitation,   stock   options,
restricted stock awards, and participation in tax-qualified stock
bonus  plans which, in the aggregate, are either (A) accepted  by
Mr.  Palagiano in writing as being satisfactory for  purposes  of
this  Agreement or (B) in the written, good faith  opinion  of  a
nationally  recognized  executive  compensation  consulting  firm
selected  by  the  Bank and satisfactory to Mr. Palagiano,  whose
agreement  shall  not  be  unreasonably  withheld,  are  no  less
favorable than the stock-based compensation and benefits  usually
and  customarily  provided to similarly  situated  executives  of
similar   financial  institutions  in  connection  with   similar
transactions; or

           (xi)  a requirement that Mr. Palagiano report  to  any
person or group other than the Board;

          (xii)     in the event of a Change in Control described
in section 13(a) of this Agreement, termination of employment for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Bank shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of  the  Bank; (B) a corporation  owned,  directly  or
indirectly, by the stockholders of the Bank in substantially  the
same proportions as their ownership of stock of the Bank; or  (C)
Mr.  Palagiano, or any group otherwise constituting a  person  in
which  Mr. Palagiano is a member, becomes the "beneficial  owner"
(as  defined  in Rule 13d-3 promulgated under the Exchange  Act),
directly  or  indirectly,  of  securities  issued  by  the   Bank
representing 25% or more of the combined voting power of  all  of
the Bank's then outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Bank  to effect a transaction described in section 13(a) or 13(c)
of  this Agreement) whose election by the Board or nomination for
election  by  the  Bank's  stockholders  was  approved   by   the
affirmative vote of at least two-thirds of the members  of  Board
then  in office who were either members of the Board on the  date
first   above  written  or  whose  nomination  or  election   was
previously  so  approved  cease for any reason  to  constitute  a
majority  of  the members of the Board, but excluding,  for  this
purpose,  any such individual whose initial assumption of  office
is  in  connection with an actual or threatened election  contest
relating to the election of directors of the Bank (as such  terms
are  used in Rule 14a-11 of Regulation 14A promulgated under  the
Exchange Act); or

          (c)  the shareholders of the Bank approve either:

                (i)   a merger or consolidation of the Bank  with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (A) the members of the
               Board of the Bank immediately prior to such merger
               or consolidation constitute at least a majority of
               the   members  of  the  governing  body   of   the
               institution   resulting  from   such   merger   or
               consolidation; or (B) the shareholders of the Bank
               own  securities of the institution resulting  from
               such  merger or consolidation representing 80%  or
               more  of  the  combined voting power of  all  such
               securities  then outstanding in substantially  the
               same  proportions  as  their ownership  of  voting
               securities  of  the  Bank before  such  merger  or
               consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to   assume  and  perform   the   Bank's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Bank or
an  agreement for the sale or disposition by the Bank of  all  or
substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a), (b) or (c) if the term "Company" were substituted for  the
term  "Bank"  therein.  Such an event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Palagiano's employment during the Employment  Period  or
thereafter, whether by the Bank or by Mr. Palagiano,  shall  have
no  effect  on  the rights and obligations of the parties  hereto
under  the  Bank's  the Retirement Plan and the Bank's  Incentive
Savings  Plan,  group  life,  health (including  hospitalization,
medical  and  major  medical), dental,  accident  and  long  term
disability  insurance plans or such other employee benefit  plans
or  programs, or compensation plans or programs (whether  or  not
employee benefit plans or programs) and, following the conversion
of  the  Bank  to  stock form, any stock option and  appreciation
rights  plan, employee stock ownership plan and restricted  stock
plan,  as  may be maintained by, or cover employees of, the  Bank
from time to time.

          15.  Successors and Assigns.

           (a)   The  Bank  shall require any successor  (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets of the Bank to expressly assume and agree to perform  this
Agreement in the same manner and to the same extent that the Bank
would  be required to perform it if no such succession had  taken
place.  Failure  of  the  Bank  to  obtain  such  assumption  and
agreement prior to the effectiveness of any such succession shall
be   deemed  to  constitute  a  material  breach  of  the  Bank's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Palagiano, his legal representatives and testate
or   intestate  distributees,  and  the  Bank,  their  respective
successors  and  assigns, including any successor  by  merger  or
consolidation or a statutory receiver or any other person or firm
or   corporation  to  which  all  or  substantially  all  of  the
respective  assets  and  business of the  Bank  may  be  sold  or
otherwise transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Palagiano:

          [Home address deleted].

          If to the Bank:

          The Dime Savings Bank of Williamsburgh
          209 Havemeyer Street
          Brooklyn, New York 11211

          Attention:  Corporate Secretary

          With a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright

           17.   Indemnification and Attorneys'  Fees.  The  Bank
shall  pay to or on behalf of Mr. Palagiano all reasonable costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however,  that Mr. Palagiano shall have  substantially
prevailed on the merits pursuant to a judgment, decree  or  order
of  a  court of competent jurisdiction or of an arbitrator in  an
arbitration  proceeding, or in a settlement;  provided,  further,
that this section 17 shall not obligate the Bank to pay costs and
legal  fees  on behalf of Mr. Palagiano under this  Agreement  in
excess   of  $50,000.   For  purposes  of  this  Agreement,   any
settlement agreement which provides for payment of any amounts in
settlement   of  the  Bank's  obligations  hereunder   shall   be
conclusive   evidence   of   Mr.   Palagiano's   entitlement   to
indemnification hereunder, and any such indemnification  payments
shall  be  in  addition  to  amounts  payable  pursuant  to  such
settlement agreement, unless such settlement agreement  expressly
provides otherwise.

           18.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           19.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           20.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

          21.  Governing Law. This Agreement shall be governed by
and  construed and enforced in accordance with the  laws  of  the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            22.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement,  unless otherwise stated.  Any reference to  the  term
"Board"  shall mean the Board of Trustees of the Bank  while  the
Bank  is a mutual savings bank and the Board of Directors of  the
Bank  while  the Bank is a stock savings bank.  Any reference  to
the  term "Bank" shall mean the Bank in its mutual form prior  to
the conversion and in its stock form on and after the conversion.
If  the Bank does not convert to stock form, any reference to the
Bank's being a stock savings bank shall have no effect.

           23.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr. Palagiano.  No modifications of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

           24.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Bank.

           25.   Required  Regulatory Provisions.  The  following
provisions  are  included  for the  purposes  of  complying  with
various   laws,   rules  and  regulations   applicable   to   the
Association:

           (a)  Notwithstanding anything herein contained to  the
contrary,  in no event shall the aggregate amount of compensation
payable to the Executive under section 9(b) hereof (exclusive  of
amounts described in section 9(b)(i) and (viii)) exceed the three
times  the Executive's average annual total compensation for  the
last  five  consecutive  calendar  years  to  end  prior  to  his
termination of employment with the Association (or for his entire
period  of  employment with the Association  if  less  than  five
calendar years).

           (b)  Notwithstanding anything herein contained to  the
contrary,  any  payments  to the Executive  by  the  Association,
whether  pursuant to this Agreement or otherwise, are subject  to
and  conditioned upon their compliance with section 18(k) of  the
Federal  Deposit  Insurance Act ("FDI Act"), 12 U.S.C.  Section
1828(k), and any regulations promulgated thereunder.

           (c)  Notwithstanding anything herein contained to  the
contrary,  if  the  Executive  is suspended  from  office  and/or
temporarily prohibited from participating in the conduct  of  the
affairs  of  the  Association pursuant to a notice  served  under
section  8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. Section
1818(e)(3) or 1818(g)(1), the Association's obligations under this
Agreement shall  be  suspended as of the date of service  of  such
notice, unless stayed by appropriate proceedings.   If the charges
in such notice are dismissed, the Association, in  its  discretion,
may (i) pay  to  the  Executive all or part of  the  compensation
withheld while the Association's obligations hereunder were susp-
ended  and (ii) reinstate, in whole or in part, any of the obli-
gations which were suspended.

           (d)  Notwithstanding anything herein contained to  the
contrary,   if  the  Executive  is  removed  and/or   permanently
prohibited from participating in the conduct of the Association's
affairs  by  an order issued under section 8(e)(4) or 8(g)(1)  of
the  FDI  Act,  12 U.S.C. Section 1818(e)(4) or (g)(1), all
prospective obligations  of  the  Association  under  this
Agreement   shall terminate  as  of  the effective date of the
order,  but  vested rights and obligations of the Association and
the Executive shall not be affected.

           (e)  Notwithstanding anything herein contained to  the
contrary, if the Association is in default (within the meaning of
section  3(x)(1)  of the  FDI Act, 12 U.S.C.  Section 1813(x)(1),
all  prospective  obligations  of  the  Association  under  this
Agreement shall terminate as of the date of default,  but  vested
rights and obligations of the Association and the Executive shall
not  be affected.

           (f)  Notwithstanding anything herein contained to  the
contrary,   all   prospective  obligations  of  the   Association
hereunder  shall  be  terminated, except to  the  extent  that  a
continuation  of  this Agreement is necessary for  the  continued
operation of the Association:  (i) by the Director of the OTS  or
his   designee  or  the  Federal  Deposit  Insurance  Corporation
("FDIC"),  at  the  time the FDIC enters  into  an  agreement  to
provide  assistance to or on behalf of the Association under  the
authority  contained in section 13(c) of the FDI Act,  12  U.S.C.
Section 1823(c); (ii) by the Director of the OTS  or his designee
at  the time  such Director or  designee  approves  a supervisory
merger  to resolve  problems related to the operation of the
Association  or when  the Association is determined by such
Director to be in  an unsafe  or  unsound condition.  The vested
rights and obligations of the parties shall not be affected.

If  and to the extent that any of the foregoing provisions  shall
cease  to  be  required or by applicable law, rule or regulation,
the  same shall become inoperative as though eliminated by formal
amendment of this Agreement.

           IN WITNESS WHEREOF, the Bank has caused this Agreement
to  be executed and Mr. Palagiano has hereto set his hand, all as
of the day and year first above written.

                                   /s/ Vincent F. Palagiano
                                   VINCENT F. PALAGIANO

ATTEST                        THE DIME SAVINGS BANK
                                OF WILLIAMSBURGH

By:/s/ Evelyn McLoughlin      By:  /s/ Anthony Bergamo
     Assistant  Secretary         for the Board of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

           AMENDED AND RESTATED EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered into as of the 26th day of June, 1996, by and between The
Dime  Savings  Bank  of  Williamsburgh,  a  mutual  savings  bank
organized  and  operating under the federal laws  of  the  United
States  and  having an office at 209 Havemeyer Street,  Brooklyn,
New  York 11211 ("Bank") and Michael P. Devine, residing at [home
address deleted] and amends and restates the Amended and Restated
Employment Agreement made as of October 1, 1995 between the  Bank
and Mr. Devine.

                     W I T N E S S E T H :

           WHEREAS, Mr. Devine currently serves the Bank  in  the
capacity  of  Executive  Vice  President,  Secretary  and   Chief
Operating Officer; and

           WHEREAS,  the  Bank and Mr. Devine are parties  to  an
Employment Agreement made and entered into as of the 1st  day  of
January,  1992  and amended and restated as of  the  1st  day  of
October, 1995 ("Prior Agreement"); and

           WHEREAS,  the Bank and Mr. Devine desire to amend  and
restate  the Prior Agreement in its entirety as set forth herein;
and

           WHEREAS,  for purposes of securing for  the  Bank  Mr.
Devine's  continued services, the Board of Directors of the  Bank
("Board")  has  approved and authorized  the  execution  of  this
Agreement with Mr. Devine; and

           WHEREAS, Mr. Devine is willing to continue to make his
services  available to the Bank on the terms and  conditions  set
forth herein.

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Bank and Mr. Devine hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)   The Bank hereby represents and warrants  to  Mr.
Devine that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Bank; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which the Bank is a  party
or  by which it is bound, or (B) any provision of law, including,
without limitation, any statute, rule or regulation or any  order
of any order of any court or administrative agency, applicable to
the Bank or its business.

           (b)  Mr. Devine hereby represents and warrants to  the
Bank that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

            2.    Employment.   The  Bank  hereby  continues  the
employment  of  Mr.  Devine, and Mr. Devine hereby  accepts  such
continued  employment, during the period and upon the  terms  and
conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

          (b)  Prior to the first anniversary of the date of this
Agreement   and  each  anniversary  date  thereafter  (each,   an
"Anniversary  Date"), the Board shall review the  terms  of  this
Agreement and Mr. Devine's performance of services hereunder  and
may,  in  the  absence of objection from Mr. Devine,  approve  an
extension   of  the  Employment  Period.   In  such  event,   the
Employment  Period shall be extended to the third anniversary  of
the relevant Anniversary Date.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs  and  the Bank is not  subject  to  rules  and
regulations  of  the  Office  of  Thrift  Supervision,  then  the
Employment  Period  shall be extended through and  including  the
third  anniversary of the earliest date after the effective  date
of  such Change of Control on which either the Bank or Mr. Devine
elects,  by  written  notice pursuant to  section  3(d)  of  this
Agreement   to   the  non-electing  party,  to  discontinue   the
Employment Period; provided, however, that this section shall not
apply  in  the  event that, prior to the Change  of  Control  (as
defined in section 13 of this Agreement), Mr. Devine has provided
written  notice  to  the Bank of his intent  to  discontinue  the
Employment Period.

          (d)  The Bank or Mr. Devine may, at any time by written
notice  given  to  the other, elect to terminate this  Agreement.
Any  such  notice  given by the Bank shall be  accompanied  by  a
certified  copy of a resolution, adopted by the affirmative  vote
of  a majority of the entire membership of the Board at a meeting
of the Board duly called and held, authorizing the giving of such
notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:   (i)   Mr. Devine's employment with the  Bank  may  be
terminated during the Employment Period, in accordance  with  the
terms and conditions of this Agreement; and (ii) nothing in  this
Agreement  shall  mandate  or  prohibit  a  continuation  of  Mr.
Devine's  employment following the expiration of  the  Employment
Period  upon such terms and conditions as the Bank and Mr. Devine
may mutually agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

           4.   Duties.  During the Employment Period, Mr. Devine
shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the business and affairs of the Bank and use his best efforts  to
advance the Bank's interests;

           (b)  serve as Executive Vice President, Secretary  and
Chief Operating Officer if duly appointed and/or elected to serve
in such position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board, in accordance  with
organization Certificate, By-laws, Applicable Laws, Statutes  and
Regulations, custom and practice of the Bank as in effect on  the
date first above written.
Mr.  Devine  shall  have  such  authority  as  is  necessary   or
appropriate  to carry out his assigned duties. Mr.  Devine  shall
report  to  and  be subject to direction and supervision  by  the
Board.

          (d)  none of the functions, duties and responsibilities
to be performed by Mr. Devine pursuant to this Agreement shall be
deemed  to  include those functions, duties and  responsibilities
performed by Mr. Devine in his capacity as director of the Bank.

          5.   Compensation -- Salary and Bonus. In consideration
for  services  rendered by Mr. Devine under this  Agreement,  the
Bank shall pay to Mr. Devine a salary at an annual rate equal to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $340,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change  in  Control, the product of Mr. Devine's annual  rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                               (i)  1.06;

                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers  of  the Bank (other  than  Mr.
                    Devine) who are assistant vice presidents  or
                    more  senior  officers, divided  by  (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar  year, of the officers of  the  Bank
                    (other  than  Mr. Devine) who  are  assistant
                    vice presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately  equal installments in accordance with  the  Bank's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Devine of a salary in
excess  of  that prescribed under this section 5 or of additional
cash or non-cash compensation in a form other than salary, to the
extent  that  such payment is duly authorized  by  or  under  the
authority of the Board.

           (d)  no portion of the compensation paid to Mr. Devine
pursuant  to  this Agreement shall be deemed to  be  compensation
received by Mr. Devine in his capacity as director of the Bank.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr.  Devine  shall be treated as an employee of the Bank  and  be
entitled to participate in and receive benefits under the  Bank's
Retirement  Plan, Incentive Savings Plan, group life  and  health
(including  medical  and major medical) and disability  insurance
plans,  and  such  other  employee benefit  plans  and  programs,
including   but  not  limited  to  any  long-term  or  short-term
incentive compensation plans or programs (whether or not employee
benefit plans or programs), as the Bank may maintain from time to
time,  in  accordance  with  the terms  and  conditions  of  such
employee  benefit plans and programs and compensation  plans  and
programs  and with the Bank's customary practices.   Following  a
Change  in  Control,  all such benefits to Mr.  Devine  shall  be
continued on terms and conditions substantially identical to, and
in  no  event less favorable than, those in effect prior  to  the
Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"), the Bank will provide, or cause to  be  provided,
to  Mr.  Devine  in connection with such Conversion,  stock-based
compensation  and benefits, including, without limitation,  stock
options,   restricted   stock  awards,   and   participation   in
tax-qualified  stock  bonus plans which, in  the  aggregate,  are
either   (A)  accepted  by  Mr.  Devine  in  writing   as   being
satisfactory  for  purposes  of this  Agreement  or  (B)  in  the
written,  good faith opinion of a nationally recognized executive
compensation   consulting  firm  selected   by   the   Bank   and
satisfactory  to  Mr.  Devine,  whose  agreement  shall  not   be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions.

           7.    Board Memberships and Personal Activities.   Mr.
Devine  may serve as a member of the board of directors  of  such
business,  community  and  charitable  organizations  as  he  may
disclose  to  the Board from time to time, and he may  engage  in
personal  business and investment activities for his own account;
provided,  however, that such service and personal  business  and
investment  activities shall not materially  interfere  with  the
performance of his duties under this Agreement.  Mr.  Devine  may
also serve as an officer or director of any parent of the Bank on
such terms and conditions as the Bank and its parent may mutually
agree  upon,  and such service shall not be deemed to  materially
interfere  with Mr. Devine's performance of his duties  hereunder
or otherwise result in a material breach of this Agreement.

           8.    Working  Facilities and Expenses.  Mr.  Devine's
principal  place  of employment shall be at the Bank's  executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.  The Bank shall provide Mr. Devine, at his principal place
of  employment, with a private office, stenographic services  and
other  support services and facilities suitable to  his  position
with the Bank and necessary or appropriate in connection with the
performance  of  his assigned duties under this  Agreement.   The
Bank shall provide Mr. Devine with an automobile suitable to  his
position  with  the Bank in accordance with its prior  practices,
and  such automobile shall be used by Mr. Devine in carrying  out
his  duties under this Agreement, including commuting between his
residence and his principal place of employment.  The Bank  shall
reimburse  Mr.  Devine  for his ordinary and  necessary  business
expenses,  including, without limitation, all expenses associated
with his business use of the aforementioned automobile, fees  for
memberships in such clubs and organizations as Mr. Devine and the
Bank  shall  mutually  agree are necessary  and  appropriate  for
business  purposes and travel and entertainment expenses incurred
in  connection  with  the performance of his  duties  under  this
Agreement,  upon presentation to the Bank of an itemized  account
of such expenses in such form as the Bank may reasonably require.
Mr.  Devine shall be entitled to no less than four (4)  weeks  of
paid vacation  during each year in the Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

          (a)  In the event that Mr. Devine's employment with the
Bank  shall terminate during the Employment Period on account  of
the  termination of Mr. Devine's employment with the  Bank  other
than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

          (ii) a voluntary resignation by Mr. Devine other than a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement);

           (iii)      a  termination on account of  Mr.  Devine's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A)  Mr. Devine  has  been  absent  from  the
full-time  service of the Bank on account of his  Disability  (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive  months;  and (B) Mr. Devine  shall  have  failed  to
return to work in the full-time service of the Bank within thirty
(30) days after written notice requesting such return is given to
Mr. Devine by the Bank; then the Bank shall provide to Mr. Devine
the  benefits  and pay to Mr. Devine the amounts  provided  under
section 9(b) of this Agreement.

          (b)  In the event that Mr. Devine's employment with the
Bank  shall  terminate under circumstances described  in  section
9(a)  of  this Agreement or if the Bank terminates this Agreement
pursuant  to  section  3(d), the following benefits  and  amounts
shall be paid or provided to Mr. Devine (or, in the event of  his
death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Bank, payable when due but
in no event later than thirty (30) days following his termination
of employment with the Bank;

           (ii) (A) the benefits, if any, to which Mr. Devine and
his  family and dependents are entitled as a former employee,  or
family  or  dependents of a former employee, under  the  employee
benefit  plans and programs and compensation plans  and  programs
maintained  for the benefit of the Bank's officers and employees,
in accordance with the terms of such plans and programs in effect
on  the  date  of  his  termination  of  employment,  or  if  his
termination  of employment occurs after a Change in  Control,  on
the  date of his termination of employment or on the date of such
Change  in Control, whichever results in more favorable  benefits
as  determined  by Mr. Devine, where credit is  given  for  three
additional  years  of service and age in determining  eligibility
and  benefits for any plan and program where age and service  are
relevant  factors, and (B) payment for all unused  vacation  days
and  floating  holidays in the year in which  his  employment  is
terminated, at his highest annual rate of salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer,  if and to the extent necessary to provide  Mr.  Devine
and  his  family  and  dependents  for  the  Remaining  Unexpired
Employment Period, coverage identical to and in any event no less
favorable  than  the  coverage to  which  they  would  have  been
entitled  under  such plans (as in effect  on  the  date  of  his
termination  of employment, or, if his termination of  employment
occurs  after a Change in Control, on the date of his termination
of employment or during the one-year period ending on the date of
such  Change  in  Control, whichever results  in  more  favorable
benefits as determined by Mr. Devine) if he had continued working
for the Bank during the Remaining Unexpired Employment Period  at
the highest annual rate of compensation (assuming, if a Change in
Control  has  occurred, that the annual increases  under  section
5(c) would apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the present value of the salary and the bonus that  Mr.
Devine would have earned if he had worked for the Bank during the
Remaining Unexpired Employment Period at the highest annual  rate
of  salary  (assuming, if a Change in Control has occurred,  that
the  annual  increases under section 5(c) would  apply)  and  the
highest bonus as a percentage of the rate of salary provided  for
under  this  Agreement,  where  such  present  value  is  to   be
determined  using a discount rate of six percent (6%) per  annum,
compounded,   in   the  case  of  salary,  with   the   frequency
corresponding to the Bank's regular payroll periods with  respect
to its officers, and, in the case of bonus, annually;

           (v)  within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans   maintained  by,  or  covering  employees  of,  the   Bank
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for  the  Bank during the Remaining Unexpired  Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Bank  during  the  Remaining Unexpired  Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees  of,  the Bank as of the date of his termination  where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable  to the Bank's contribution  to  which  he
would be entitled under any defined contribution plans maintained
by,  or  covering employees of, the Bank (including  any  "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if  he  had worked for  the  Bank  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment  Period which  is  prior  to  Mr.  Devine's
termination of employment with the Bank, and been fully vested in
such  plan  or plans, over (B) the present value of the  benefits
attributable to the Bank's contributions to which he is  actually
entitled  under  such plans as of the date of his termination  of
employment  with the Bank, where such present values  are  to  be
determined  using a discount rate of six percent (6%) per  annum,
compounded with the frequency corresponding to the Bank's regular
payroll periods with respect to its officers;

          (vii)     the payments that would have been made to Mr.
Devine  under any incentive compensation plan maintained  by,  or
covering  employees of, the Bank (other than  bonus  payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working  for the Bank during the  Remaining  Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to Mr. Devine under such incentive compensation  plan,
multiplied by (B) the compensation that would have been  paid  to
Mr.  Devine during each calendar year at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the  Agreement, such payments to be made at the same time and  in
the  same  manner as payments are made to other officers  of  the
Bank  pursuant to the terms of such incentive compensation  plan;
provided,  however,  that payments under this  section  9(b)(vii)
shall  not be made to Mr. Devine for any year on account of which
no payments are made to any of the Bank's officers under any such
incentive compensation plan; and

           (viii)    the benefits to which Mr. Devine is entitled
under the Bank's Supplemental Executive Retirement Plan (or other
excess  benefits plan with the meaning of section 3(36) of  ERISA
or other special or supplemental plan) shall be paid to him in  a
lump  sum,  where such lump sum is computed using  the  mortality
tables under the Bank's tax-qualified pension plan and a discount
rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty (30) days after the date of Mr. Devine's election,
and  if  the  amount may be increased by a subsequent  Change  in
Control, any additional payment shall be made within thirty  (30)
days of such Change in Control.

           (c)  Mr. Devine shall not be required to mitigate  the
amount  of any payment provided for in this section 9 by  seeking
other  employment  or  otherwise, nor shall  the  amount  of  any
payment  or benefit provided for in this section 9 be reduced  by
any compensation earned by Mr. Devine as the result of employment
by  another  employer, by retirement benefits, by offset  against
any  amount  claimed to be owed by Mr. Devine  to  the  Bank,  or
otherwise  except as specifically provided in section 9(b)  (iii)
of this Agreement.  The Bank and Mr. Devine hereby stipulate that
the  damages which may be incurred by Mr. Devine as a consequence
of any such termination of employment are not capable of accurate
measurement  as  of  the date first above written  and  that  the
benefits and payments provided for in this Agreement constitute a
reasonable  estimate  under  the  circumstances  of  all  damages
sustained as a consequence of any such termination of employment,
other  than  damages arising under or out of  any  stock  option,
restricted  stock  or  other non-qualified stock  acquisition  or
investment  plan or program, it being understood and agreed  that
this  Agreement  shall not determine the measurement  of  damages
under  any such plan or program in respect of any termination  of
employment.

           10.   Termination Without Severance Benefits.  In  the
event  that Mr. Devine's employment with the Bank shall terminate
during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)  voluntary resignation by Mr. Devine other than  a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement); or

          (c)  Mr. Devine's death;

then  the  Bank  shall  have no further  obligations  under  this
Agreement, other than the payment to Mr. Devine (or, in the event
of  his death, to his estate) of his earned but unpaid salary  as
of  the  date  of  the  termination of his  employment,  and  the
provision of such other benefits, if any, to which he is entitled
as  a former employee under the Bank's employee benefit plans and
programs and compensation plans and programs and payment for  all
unused  vacation days and floating holidays in the year in  which
his  employment is terminated, at his highest annual  salary  for
such year.

          11.  Death and Disability.

           (a)   Death.  If Mr. Devine's employment is terminated
by  reason  of  Mr. Devine's death during the Employment  Period,
this Agreement shall terminate without further obligations to Mr.
Devine's  legal representatives under this Agreement, other  than
for  payment of amounts and provision of benefits under  sections
9(b)  (i)  and (ii); provided, however, that if Mr.  Devine  dies
while   in   the   employment  of  the   Bank,   his   designated
beneficiary(ies) shall receive a death benefit,  payable  through
life  insurance or otherwise, which is the equivalent  on  a  net
after-tax  basis of the death benefit payable under a  term  life
insurance policy, with a stated death benefit of three times  Mr.
Devine's then Annual Base Salary.

            (b)   Disability.   If  Mr.  Devine's  employment  is
terminated  by  reason of Mr. Devine's Disability as  defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without further obligations to Mr. Devine, other  than
for  payment  of amounts and provision of benefits under  section
9(b)  (i) and (ii); provided, however, that in the event  of  Mr.
Devine's Disability while in the employment of the Bank, the Bank
will  pay to him a lump sum amount equal to three times his  then
Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined in accordance with the terms of the Bank's long  term
disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Devine's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

           (a)   Mr. Devine's termination of employment with  the
Bank   shall  be  deemed  a  "Termination  for  Cause"  if   such
termination  occurs  for "cause," which,  for  purposes  of  this
Agreement  shall mean personal dishonesty, incompetence,  willful
misconduct,  breach of fiduciary duty involving personal  profit,
intentional  failure to perform stated duties, willful  violation
of  any law, rule or regulation (other than traffic violations or
similar  offenses)  or  final cease  and  desist  order,  or  any
material  breach  of  this Agreement, in each  case  as  measured
against  standards generally prevailing at the relevant  time  in
the  savings and community banking industry;  provided,  however,
that  Mr. Devine shall not be deemed to have been discharged  for
cause unless and until he shall have received a written notice of
termination  from  the Board, accompanied by  a  resolution  duly
adopted by affirmative vote of a majority of the entire Board  at
a  meeting  called  and held for such purpose  (after  reasonable
notice  to Mr. Devine and a reasonable opportunity for Mr. Devine
to  make  oral  and written presentations to the members  of  the
Board, on his own behalf, or through a representative, who may be
his  legal  counsel,  to  refute the  grounds  for  the  proposed
determination)  finding that in the good  faith  opinion  of  the
Board grounds exist for discharging Mr. Devine for cause.

           (b)   Mr. Devine's termination of employment with  the
Bank  shall  be  deemed a Resignation for  Good  Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)   (A)  the assignment to Mr. Devine of any  duties
inconsistent   with  Mr.  Devine's  status  as   Executive   Vice
President, Secretary and Chief Operating Officer of the  Bank  or
(B)  a substantial adverse alteration in the nature or status  of
Mr.  Devine's  responsibilities from those in effect  immediately
prior  to  the alteration; or (C) any Change in Control described
in section 13(b);

           (ii)  a  reduction by the Bank in Mr. Devine's  annual
base  salary as in effect on the date first above written  or  as
the  same  may  be  increased  from time  to  time,  unless  such
reduction  was  mandated  at  the initiation  of  any  regulatory
authority having jurisdiction over the Bank;

           (iii)      the  relocation  of  the  Bank's  principal
executive offices to a location outside the New York metropolitan
area  or  the  Bank's requiring Mr. Devine to be  based  anywhere
other  than  the  Bank's principal executive offices  except  for
required travel on the Bank's business to an extent substantially
consistent with Mr. Devine's business travel obligations  at  the
date first above written;

           (iv)  the  failure by the Bank, without  Mr.  Devine's
consent, to pay to Mr. Devine, within seven (7) days of the  date
when due, (A) any portion of his compensation, or (B) any portion
of  an  installment of deferred compensation under  any  deferred
compensation   program  of  the  Bank,  which  failure   is   not
inadvertent and immaterial and which is not promptly cured by the
Bank  after  notice of such failure is given to the Bank  by  the
Executive;

           (v)  the failure by the Bank to continue in effect any
compensation  plan  in  which Mr. Devine  participates  which  is
material to his total compensation, including but not limited  to
the  Retirement Plan and the Bank's Incentive Savings Plan or any
substitute plans unless an equitable arrangement (embodied in  an
ongoing  substitute  or  alternative plan)  has  been  made  with
respect to such plan, or the failure by the Bank to continue  his
participation therein (or in such substitute or alternative plan)
on  a  basis not materially less favorable, both in terms of  the
amount  of  benefits provided and the level of his  participation
relative to other participants, unless such failure is the result
of  action mandated at the initiation of any regulatory authority
having jurisdiction over the Bank;

          (vi) the failure by the Bank to continue to provide Mr.
Devine  with benefits substantially similar to those  enjoyed  by
Mr.  Devine  under  the Retirement Plan and the Bank's  Incentive
Savings  Plan or under any of the Bank's life, health  (including
hospitalization,  medical and major medical),  dental,  accident,
and  long-term disability insurance benefits, in which Mr. Devine
is  participating, or the taking of any action by the Bank  which
would  directly  or  indirectly materially  reduce  any  of  such
benefits  or  deprive Mr. Devine of the number of  paid  vacation
days  to  which he is entitled, on the basis of years of  service
with  the Bank, rank or otherwise, in accordance with the  Bank's
normal  vacation  policy, unless such failure is  the  result  of
action  mandated  at  the initiation of any regulatory  authority
having jurisdiction over the Bank;

            (vii)      the  failure  of  the  Bank  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the Bank which is not effected pursuant the provisions of section
12(a)   regarding  Termination  for  Cause  or  on   account   of
Disability;

           (ix)  a material breach of this Agreement by the Bank,
which  the  Bank fails to cure within thirty (30) days  following
written notice thereof from Mr. Devine;

           (x)  in the event of a Change in Control described  in
section  13(b)  of  this  Agreement, a failure  of  the  Bank  to
provide,  or  cause to be provided, to Mr. Devine  in  connection
with  such  Change  in  Control,  stock-based  compensation   and
benefits,   including,   without   limitation,   stock   options,
restricted stock awards, and participation in tax-qualified stock
bonus  plans which, in the aggregate, are either (A) accepted  by
Mr.  Devine in writing as being satisfactory for purposes of this
Agreement  or  (B)  in  the  written, good  faith  opinion  of  a
nationally  recognized  executive  compensation  consulting  firm
selected  by  the  Bank  and satisfactory to  Mr.  Devine,  whose
agreement  shall  not  be  unreasonably  withheld,  are  no  less
favorable than the stock-based compensation and benefits  usually
and  customarily  provided to similarly  situated  executives  of
similar   financial  institutions  in  connection  with   similar
transactions; or

           (xi)  a  change  in the position to which  Mr.  Devine
reports;

          (xii)     in the event of a Change in Control described
in section 13(a) of this Agreement, termination of employment for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Bank shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of  the  Bank; (B) a corporation  owned,  directly  or
indirectly, by the stockholders of the Bank in substantially  the
same proportions as their ownership of stock of the Bank; or  (C)
Mr. Devine, or any group otherwise constituting a person in which
Mr.  Devine  is  a  member, becomes the  "beneficial  owner"  (as
defined  in  Rule  13d-3  promulgated under  the  Exchange  Act),
directly  or  indirectly,  of  securities  issued  by  the   Bank
representing 25% or more of the combined voting power of  all  of
the Bank's then outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Bank  to effect a transaction described in section 13(a) or 13(c)
of  this Agreement) whose election by the Board or nomination for
election  by  the  Bank's  stockholders  was  approved   by   the
affirmative vote of at least two-thirds of the members  of  Board
then  in office who were either members of the Board on the  date
first   above  written  or  whose  nomination  or  election   was
previously  so  approved  cease for any reason  to  constitute  a
majority  of  the members of the Board, but excluding,  for  this
purpose,  any such individual whose initial assumption of  office
is  in  connection with an actual or threatened election  contest
relating to the election of directors of the Bank (as such  terms
are  used in Rule 14a-11 of Regulation 14A promulgated under  the
Exchange Act); or

          (c)  the shareholders of the Bank approve either:

                (i)   a merger or consolidation of the Bank  with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (A) the members of the
               Board of the Bank immediately prior to such merger
               or consolidation constitute at least a majority of
               the   members  of  the  governing  body   of   the
               institution   resulting  from   such   merger   or
               consolidation; or (B) the shareholders of the Bank
               own  securities of the institution resulting  from
               such  merger or consolidation representing 80%  or
               more  of  the  combined voting power of  all  such
               securities  then outstanding in substantially  the
               same  proportions  as  their ownership  of  voting
               securities  of  the  Bank before  such  merger  or
               consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to   assume  and  perform   the   Bank's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Bank or
an  agreement for the sale or disposition by the Bank of  all  or
substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a), (b) or (c) if the term "Company" were substituted for  the
term  "Bank"  therein.  Such an event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Devine's  employment during  the  Employment  Period  or
thereafter, whether by the Bank or by Mr. Devine, shall  have  no
effect on the rights and obligations of the parties hereto  under
the  Bank's the Retirement Plan and the Bank's Incentive  Savings
Plan, group life, health (including hospitalization, medical  and
major   medical),  dental,  accident  and  long  term  disability
insurance plans or such other employee benefit plans or programs,
or  compensation  plans  or  programs (whether  or  not  employee
benefit plans or programs) and, following the conversion  of  the
Bank  to  stock  form,  any stock option and appreciation  rights
plan, employee stock ownership plan and restricted stock plan, as
may  be maintained by, or cover employees of, the Bank from  time
to time.

          15.  Successors and Assigns.

           (a)   The  Bank  shall require any successor  (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets of the Bank to expressly assume and agree to perform  this
Agreement in the same manner and to the same extent that the Bank
would  be required to perform it if no such succession had  taken
place.  Failure  of  the  Bank  to  obtain  such  assumption  and
agreement prior to the effectiveness of any such succession shall
be   deemed  to  constitute  a  material  breach  of  the  Bank's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Devine, his legal representatives and testate or
intestate distributees, and the Bank, their respective successors
and  assigns,  including any successor by merger or consolidation
or   a  statutory  receiver  or  any  other  person  or  firm  or
corporation  to which all or substantially all of the  respective
assets  and  business  of  the Bank  may  be  sold  or  otherwise
transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Devine:

          [Home address deleted].

          If to the Bank:

          The Dime Savings Bank of Williamsburgh
          209 Havemeyer Street
          Brooklyn, New York 11211

          Attention:  Corporate Secretary

          With a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright

           17.   Indemnification and Attorneys'  Fees.  The  Bank
shall  pay  to  or on behalf of Mr. Devine all reasonable  costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however,  that  Mr. Devine  shall  have  substantially
prevailed on the merits pursuant to a judgment, decree  or  order
of  a  court of competent jurisdiction or of an arbitrator in  an
arbitration  proceeding, or in a settlement;  provided,  further,
that this section 17 shall not obligate the Bank to pay costs and
legal fees on behalf of Mr. Devine under this Agreement in excess
of  $50,000.   For  purposes  of this Agreement,  any  settlement
agreement which provides for payment of any amounts in settlement
of  the Bank's obligations hereunder shall be conclusive evidence
of Mr. Devine's entitlement to indemnification hereunder, and any
such  indemnification payments shall be in  addition  to  amounts
payable  pursuant  to  such  settlement  agreement,  unless  such
settlement agreement expressly provides otherwise.

           18.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           19.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           20.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

          21.  Governing Law. This Agreement shall be governed by
and  construed and enforced in accordance with the  laws  of  the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            22.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement,  unless otherwise stated.  Any reference to  the  term
"Board"  shall mean the Board of Trustees of the Bank  while  the
Bank  is a mutual savings bank and the Board of Directors of  the
Bank  while  the Bank is a stock savings bank.  Any reference  to
the  term "Bank" shall mean the Bank in its mutual form prior  to
the conversion and in its stock form on and after the conversion.
If  the Bank does not convert to stock form, any reference to the
Bank's being a stock savings bank shall have no effect.

           23.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr.  Devine.  No modifications of this Agreement shall  be  valid
unless made in writing and signed by the parties hereto.

           24.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Bank.

           25.   Required  Regulatory Provisions.  The  following
provisions  are  included  for the  purposes  of  complying  with
various   laws,   rules  and  regulations   applicable   to   the
Association:

           (a)  Notwithstanding anything herein contained to  the
contrary,  in no event shall the aggregate amount of compensation
payable to the Executive under section 9(b) hereof (exclusive  of
amounts described in section 9(b)(i) and (viii)) exceed the three
times  the Executive's average annual total compensation for  the
last  five  consecutive  calendar  years  to  end  prior  to  his
termination of employment with the Association (or for his entire
period  of  employment with the Association  if  less  than  five
calendar years).

           (b)  Notwithstanding anything herein contained to  the
contrary,  any  payments  to the Executive  by  the  Association,
whether  pursuant to this Agreement or otherwise, are subject  to
and  conditioned upon their compliance with section 18(k) of  the
Federal  Deposit  Insurance Act ("FDI Act"), 12 U.S.C.  Section
1828(k), and any regulations promulgated thereunder.

           (c)  Notwithstanding anything herein contained to  the
contrary,  if  the  Executive  is suspended  from  office  and/or
temporarily prohibited from participating in the conduct  of  the
affairs  of  the  Association pursuant to a notice  served  under
section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. Section 1818
(e)(3) or 1818(g)(1),  the  Association's  obligations under this
Agreement shall  be suspended as of the date of service  of  such
notice, unless stayed by appropriate proceedings.  If the charges
in such notice are dismissed, the Association, in its discretion,
may (i) pay  to  the  Executive  all or part of the compensation
withheld while the Association's obligations hereunder were
suspended  and (ii) reinstate, in whole or in part, any of the
obligations which were suspended.

           (d)  Notwithstanding anything herein contained to  the
contrary,   if  the  Executive  is  removed  and/or   permanently
prohibited from participating in the conduct of the Association's
affairs  by  an order issued under section 8(e)(4) or 8(g)(1)  of
the  FDI  Act,  12 U.S.C. Section 1818(e)(4) or (g)(1), all
prospective obligations of the Association under  this  Agreement
shall terminate as of the effective date of the order, but vested
rights and obligations of the Association and the Executive shall
not be affected.

           (e)  Notwithstanding anything herein contained to  the
contrary, if the Association is in default (within the meaning of
section  3(x)(1)  of  the FDI Act, 12  U.S.C. Section 1813(x)(1),
all prospective obligations of the Association under this Agreement
shall terminate as of the date of default, but vested rights  and
obligations  of the Association and the Executive  shall  not  be
affected.

           (f)  Notwithstanding anything herein contained to  the
contrary,   all   prospective  obligations  of  the   Association
hereunder  shall  be  terminated, except to  the  extent  that  a
continuation  of  this Agreement is necessary for  the  continued
operation of the Association:  (i) by the Director of the OTS  or
his   designee  or  the  Federal  Deposit  Insurance  Corporation
("FDIC"),  at  the  time the FDIC enters  into  an  agreement  to
provide  assistance to or on behalf of the Association under  the
authority  contained in section 13(c) of the FDI Act,  12  U.S.C.
Section 1823(c); (ii) by the Director of the OTS or his  designee
at the time such Director or designee approves a supervisory merger
to resolve problems related to the operation of the Association or
when  the Association is determined by such Director to be in  an
unsafe  or  unsound condition.  The vested rights and obligations
of the parties shall not be affected.

If  and to the extent that any of the foregoing provisions  shall
cease  to  be  required or by applicable law, rule or regulation,
the  same shall become inoperative as though eliminated by formal
amendment of this Agreement.

           IN WITNESS WHEREOF, the Bank has caused this Agreement
to  be executed and Mr. Devine has hereto set his hand, all as of
the day and year first above written.

                                   /s/ Michael P. Devine
                                   MICHAEL P. DEVINE

ATTEST                        THE DIME SAVINGS BANK
                                OF WILLIAMSBURGH

By:/s/ Evelyn McLoughlin      By:  /s/ Anthony Bergamo
     Assistant  Secretary              for the Board of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

           AMENDED AND RESTATED EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered into as of the 26th day of June, 1996, by and between The
Dime  Savings  Bank  of  Williamsburgh,  a  mutual  savings  bank
organized  and  operating under the federal laws  of  the  United
States  and  having an office at 209 Havemeyer Street,  Brooklyn,
New  York 11211 ("Bank") and Kenneth J. Mahon, residing at  [home
address deleted] and amends and restates the Amended and Restated
Employment Agreement made as of October 1, 1995 between the  Bank
and Mr. Mahon.

                     W I T N E S S E T H :

           WHEREAS,  Mr. Mahon currently serves the Bank  in  the
capacity  of  Senior Vice President and Chief Financial  Officer;
and

           WHEREAS,  the  Bank and Mr. Mahon are  parties  to  an
Employment Agreement made and entered into as of the 1st  day  of
January,  1992  and amended and restated as of  the  1st  day  of
October, 1995 ("Prior Agreement"); and

           WHEREAS,  the Bank and Mr. Mahon desire to  amend  and
restate  the Prior Agreement in its entirety as set forth herein;
and

           WHEREAS,  for purposes of securing for  the  Bank  Mr.
Mahon's  continued services, the Board of Directors of  the  Bank
("Board")  has  approved and authorized  the  execution  of  this
Agreement with Mr. Mahon; and

           WHEREAS, Mr. Mahon is willing to continue to make  his
services  available to the Bank on the terms and  conditions  set
forth herein.

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Bank and Mr. Mahon hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)   The Bank hereby represents and warrants  to  Mr.
Mahon that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Bank; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which the Bank is a  party
or  by which it is bound, or (B) any provision of law, including,
without limitation, any statute, rule or regulation or any  order
of any order of any court or administrative agency, applicable to
the Bank or its business.

           (b)   Mr. Mahon hereby represents and warrants to  the
Bank that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

            2.    Employment.   The  Bank  hereby  continues  the
employment  of  Mr.  Mahon,  and Mr. Mahon  hereby  accepts  such
continued  employment, during the period and upon the  terms  and
conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

          (b)  Prior to the first anniversary of the date of this
Agreement   and  each  anniversary  date  thereafter  (each,   an
"Anniversary  Date"), the Board shall review the  terms  of  this
Agreement  and Mr. Mahon's performance of services hereunder  and
may,  in  the  absence of objection from Mr.  Mahon,  approve  an
extension   of  the  Employment  Period.   In  such  event,   the
Employment  Period shall be extended to the third anniversary  of
the relevant Anniversary Date.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs  and  the Bank is not  subject  to  rules  and
regulations  of  the  Office  of  Thrift  Supervision,  then  the
Employment  Period  shall be extended through and  including  the
third  anniversary of the earliest date after the effective  date
of  such Change of Control on which either the Bank or Mr.  Mahon
elects,  by  written  notice pursuant to  section  3(d)  of  this
Agreement   to   the  non-electing  party,  to  discontinue   the
Employment Period; provided, however, that this section shall not
apply  in  the  event that, prior to the Change  of  Control  (as
defined  in section 13 of this Agreement), Mr. Mahon has provided
written  notice  to  the Bank of his intent  to  discontinue  the
Employment Period.

           (d)  The Bank or Mr. Mahon may, at any time by written
notice  given  to  the other, elect to terminate this  Agreement.
Any  such  notice  given by the Bank shall be  accompanied  by  a
certified  copy of a resolution, adopted by the affirmative  vote
of  a majority of the entire membership of the Board at a meeting
of the Board duly called and held, authorizing the giving of such
notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:   (i)   Mr. Mahon's employment with  the  Bank  may  be
terminated during the Employment Period, in accordance  with  the
terms and conditions of this Agreement; and (ii) nothing in  this
Agreement shall mandate or prohibit a continuation of Mr. Mahon's
employment following the expiration of the Employment Period upon
such  terms and conditions as the Bank and Mr. Mahon may mutually
agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

           4.    Duties.  During the Employment Period, Mr. Mahon
shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the business and affairs of the Bank and use his best efforts  to
advance the Bank's interests;

          (b)  serve as Senior Vice President and Chief Financial
Officer  if  duly  appointed and/or  elected  to  serve  in  such
position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board, in accordance  with
organization Certificate, By-laws, Applicable Laws, Statutes  and
Regulations, custom and practice of the Bank as in effect on  the
date first above written.
Mr.   Mahon  shall  have  such  authority  as  is  necessary   or
appropriate  to  carry out his assigned duties. Mr.  Mahon  shall
report  to  and  be subject to direction and supervision  by  the
Board.

          5.   Compensation -- Salary and Bonus. In consideration
for services rendered by Mr. Mahon under this Agreement, the Bank
shall pay to Mr. Mahon a salary at an annual rate equal to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $178,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change  in  Control, the product of Mr. Mahon's  annual  rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                              (i)  1.06;

                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers  of  the Bank (other  than  Mr.
                    Mahon)  who are assistant vice presidents  or
                    more  senior  officers, divided  by  (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar  year, of the officers of  the  Bank
                    (other than Mr. Mahon) who are assistant vice
                    presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately  equal installments in accordance with  the  Bank's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Mahon of a salary  in
excess  of  that prescribed under this section 5 or of additional
cash or non-cash compensation in a form other than salary, to the
extent  that  such payment is duly authorized  by  or  under  the
authority of the Board.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr.  Mahon  shall be treated as an employee of the  Bank  and  be
entitled to participate in and receive benefits under the  Bank's
Retirement  Plan, Incentive Savings Plan, group life  and  health
(including  medical  and major medical) and disability  insurance
plans,  and  such  other  employee benefit  plans  and  programs,
including   but  not  limited  to  any  long-term  or  short-term
incentive compensation plans or programs (whether or not employee
benefit plans or programs), as the Bank may maintain from time to
time,  in  accordance  with  the terms  and  conditions  of  such
employee  benefit plans and programs and compensation  plans  and
programs  and with the Bank's customary practices.   Following  a
Change  in  Control,  all such benefits to  Mr.  Mahon  shall  be
continued on terms and conditions substantially identical to, and
in  no  event less favorable than, those in effect prior  to  the
Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"), the Bank will provide, or cause to  be  provided,
to  Mr.  Mahon  in  connection with such Conversion,  stock-based
compensation  and benefits, including, without limitation,  stock
options,   restricted   stock  awards,   and   participation   in
tax-qualified  stock  bonus plans which, in  the  aggregate,  are
either (A) accepted by Mr. Mahon in writing as being satisfactory
for  purposes of this Agreement or (B) in the written, good faith
opinion   of   a  nationally  recognized  executive  compensation
consulting  firm  selected by the Bank and  satisfactory  to  Mr.
Mahon, whose agreement shall not be unreasonably withheld, are no
less  favorable  than the stock-based compensation  and  benefits
usually and customarily provided to similarly situated executives
of  similar  financial  institutions in connection  with  similar
transactions.

           7.    Board Memberships and Personal Activities.   Mr.
Mahon  may  serve as a member of the board of directors  of  such
business,  community  and  charitable  organizations  as  he  may
disclose  to  the Board from time to time, and he may  engage  in
personal  business and investment activities for his own account;
provided,  however, that such service and personal  business  and
investment  activities shall not materially  interfere  with  the
performance  of his duties under this Agreement.  Mr.  Mahon  may
also serve as an officer or director of any parent of the Bank on
such terms and conditions as the Bank and its parent may mutually
agree  upon,  and such service shall not be deemed to  materially
interfere with Mr. Mahon's performance of his duties hereunder or
otherwise result in a material breach of this Agreement.

           8.    Working  Facilities and Expenses.   Mr.  Mahon's
principal  place  of employment shall be at the Bank's  executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.  The Bank shall provide Mr. Mahon, at his principal  place
of  employment, with a private office, stenographic services  and
other  support services and facilities suitable to  his  position
with the Bank and necessary or appropriate in connection with the
performance  of  his assigned duties under this  Agreement.   The
Bank  shall  reimburse Mr. Mahon for his ordinary  and  necessary
business  expenses,  including,  without  limitation,  fees   for
memberships in such clubs and organizations as Mr. Mahon and  the
Bank  shall  mutually  agree are necessary  and  appropriate  for
business  purposes and travel and entertainment expenses incurred
in  connection  with  the performance of his  duties  under  this
Agreement,  upon presentation to the Bank of an itemized  account
of such expenses in such form as the Bank may reasonably require.
Mr.  Mahon  shall be entitled to no less than four (4)  weeks  of
paid vacation  during each year in the Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

           (a)  In the event that Mr. Mahon's employment with the
Bank  shall terminate during the Employment Period on account  of
the  termination of Mr. Mahon's employment with  the  Bank  other
than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

           (ii) a voluntary resignation by Mr. Mahon other than a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement);

           (iii)      a  termination on account  of  Mr.  Mahon's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A)  Mr.  Mahon  has  been  absent  from  the
full-time  service of the Bank on account of his  Disability  (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive months; and (B) Mr. Mahon shall have failed to return
to  work in the full-time service of the Bank within thirty  (30)
days after written notice requesting such return is given to  Mr.
Mahon  by the Bank; then the Bank shall provide to Mr. Mahon  the
benefits and pay to Mr. Mahon the amounts provided under  section
9(b) of this Agreement.

           (b)  In the event that Mr. Mahon's employment with the
Bank  shall  terminate under circumstances described  in  section
9(a)  of  this Agreement or if the Bank terminates this Agreement
pursuant  to  section  3(d), the following benefits  and  amounts
shall  be paid or provided to Mr. Mahon (or, in the event of  his
death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Bank, payable when due but
in no event later than thirty (30) days following his termination
of employment with the Bank;

           (ii) (A) the benefits, if any, to which Mr. Mahon  and
his  family and dependents are entitled as a former employee,  or
family  or  dependents of a former employee, under  the  employee
benefit  plans and programs and compensation plans  and  programs
maintained  for the benefit of the Bank's officers and employees,
in accordance with the terms of such plans and programs in effect
on  the  date  of  his  termination  of  employment,  or  if  his
termination  of employment occurs after a Change in  Control,  on
the  date of his termination of employment or on the date of such
Change  in Control, whichever results in more favorable  benefits
as  determined  by  Mr. Mahon, where credit is  given  for  three
additional  years  of service and age in determining  eligibility
and  benefits for any plan and program where age and service  are
relevant  factors, and (B) payment for all unused  vacation  days
and  floating  holidays in the year in which  his  employment  is
terminated, at his highest annual rate of salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer, if and to the extent necessary to provide Mr. Mahon and
his  family and dependents for the Remaining Unexpired Employment
Period,  coverage identical to and in any event no less favorable
than  the  coverage to which they would have been entitled  under
such  plans  (as  in  effect on the date of  his  termination  of
employment, or, if his termination of employment occurs  after  a
Change  in  Control, on the date of his termination of employment
or  during the one-year period ending on the date of such  Change
in  Control,  whichever  results in more  favorable  benefits  as
determined by Mr. Mahon) if he had continued working for the Bank
during  the Remaining Unexpired Employment Period at the  highest
annual rate of compensation (assuming, if a Change in Control has
occurred,  that  the  annual increases under section  5(c)  would
apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the present value of the salary and the bonus that  Mr.
Mahon would have earned if he had worked for the Bank during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  salary  (assuming, if a Change in Control has occurred,  that
the  annual  increases under section 5(c) would  apply)  and  the
highest bonus as a percentage of the rate of salary provided  for
under  this  Agreement,  where  such  present  value  is  to   be
determined  using a discount rate of six percent (6%) per  annum,
compounded,   in   the  case  of  salary,  with   the   frequency
corresponding to the Bank's regular payroll periods with  respect
to its officers, and, in the case of bonus, annually;

           (v)  within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans   maintained  by,  or  covering  employees  of,  the   Bank
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for  the  Bank during the Remaining Unexpired  Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Bank  during  the  Remaining Unexpired  Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees  of,  the Bank as of the date of his termination  where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment  with the Bank, a lump sum payment  in  an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable  to the Bank's contribution  to  which  he
would be entitled under any defined contribution plans maintained
by,  or  covering employees of, the Bank (including  any  "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if  he  had worked for  the  Bank  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment  Period  which  is  prior  to  Mr.  Mahon's
termination of employment with the Bank, and been fully vested in
such  plan  or plans, over (B) the present value of the  benefits
attributable to the Bank's contributions to which he is  actually
entitled  under  such plans as of the date of his termination  of
employment  with the Bank, where such present values  are  to  be
determined  using a discount rate of six percent (6%) per  annum,
compounded with the frequency corresponding to the Bank's regular
payroll periods with respect to its officers;

          (vii)     the payments that would have been made to Mr.
Mahon  under  any incentive compensation plan maintained  by,  or
covering  employees of, the Bank (other than  bonus  payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working  for the Bank during the  Remaining  Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to  Mr. Mahon under such incentive compensation  plan,
multiplied by (B) the compensation that would have been  paid  to
Mr. Mahon during each calendar year at the highest annual rate of
compensation (assuming, if a Change in Control has occurred, that
the  annual increases under section 5(c) would apply)  under  the
Agreement, such payments to be made at the same time and  in  the
same  manner as payments are made to other officers of  the  Bank
pursuant  to  the  terms  of  such incentive  compensation  plan;
provided,  however,  that payments under this  section  9(b)(vii)
shall  not be made to Mr. Mahon for any year on account of  which
no payments are made to any of the Bank's officers under any such
incentive compensation plan; and

           (viii)     the benefits to which Mr. Mahon is entitled
under the Bank's Supplemental Executive Retirement Plan (or other
excess  benefits plan with the meaning of section 3(36) of  ERISA
or other special or supplemental plan) shall be paid to him in  a
lump  sum,  where such lump sum is computed using  the  mortality
tables under the Bank's tax-qualified pension plan and a discount
rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty (30) days after the date of Mr. Mahon's  election,
and  if  the  amount may be increased by a subsequent  Change  in
Control, any additional payment shall be made within thirty  (30)
days of such Change in Control.

           (c)   Mr. Mahon shall not be required to mitigate  the
amount  of any payment provided for in this section 9 by  seeking
other  employment  or  otherwise, nor shall  the  amount  of  any
payment  or benefit provided for in this section 9 be reduced  by
any  compensation earned by Mr. Mahon as the result of employment
by  another  employer, by retirement benefits, by offset  against
any  amount  claimed  to be owed by Mr. Mahon  to  the  Bank,  or
otherwise  except as specifically provided in section 9(b)  (iii)
of  this Agreement.  The Bank and Mr. Mahon hereby stipulate that
the  damages  which may be incurred by Mr. Mahon as a consequence
of any such termination of employment are not capable of accurate
measurement  as  of  the date first above written  and  that  the
benefits and payments provided for in this Agreement constitute a
reasonable  estimate  under  the  circumstances  of  all  damages
sustained as a consequence of any such termination of employment,
other  than  damages arising under or out of  any  stock  option,
restricted  stock  or  other non-qualified stock  acquisition  or
investment  plan or program, it being understood and agreed  that
this  Agreement  shall not determine the measurement  of  damages
under  any such plan or program in respect of any termination  of
employment.

           10.   Termination Without Severance Benefits.  In  the
event  that Mr. Mahon's employment with the Bank shall  terminate
during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)   voluntary resignation by Mr. Mahon other than  a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement); or

          (c)  Mr. Mahon's death;

then  the  Bank  shall  have no further  obligations  under  this
Agreement, other than the payment to Mr. Mahon (or, in the  event
of  his death, to his estate) of his earned but unpaid salary  as
of  the  date  of  the  termination of his  employment,  and  the
provision of such other benefits, if any, to which he is entitled
as  a former employee under the Bank's employee benefit plans and
programs and compensation plans and programs and payment for  all
unused  vacation days and floating holidays in the year in  which
his  employment is terminated, at his highest annual  salary  for
such year.

          11.  Death and Disability.

          (a)  Death.  If Mr. Mahon's employment is terminated by
reason  of  Mr. Mahon's death during the Employment Period,  this
Agreement  shall  terminate without further  obligations  to  Mr.
Mahon's  legal representatives under this Agreement,  other  than
for  payment of amounts and provision of benefits under  sections
9(b)  (i)  and  (ii); provided, however, that if Mr.  Mahon  dies
while   in   the   employment  of  the   Bank,   his   designated
beneficiary(ies) shall receive a death benefit,  payable  through
life  insurance or otherwise, which is the equivalent  on  a  net
after-tax  basis of the death benefit payable under a  term  life
insurance policy, with a stated death benefit of three times  Mr.
Mahon's then Annual Base Salary.

            (b)   Disability.   If  Mr.  Mahon's  employment   is
terminated  by  reason of Mr. Mahon's Disability  as  defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without further obligations to Mr. Mahon,  other  than
for  payment  of amounts and provision of benefits under  section
9(b)  (i) and (ii); provided, however, that in the event  of  Mr.
Mahon's Disability while in the employment of the Bank, the  Bank
will  pay to him a lump sum amount equal to three times his  then
Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined in accordance with the terms of the Bank's long  term
disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Mahon's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

           (a)   Mr.  Mahon's termination of employment with  the
Bank   shall  be  deemed  a  "Termination  for  Cause"  if   such
termination  occurs  for "cause," which,  for  purposes  of  this
Agreement  shall mean personal dishonesty, incompetence,  willful
misconduct,  breach of fiduciary duty involving personal  profit,
intentional  failure to perform stated duties, willful  violation
of  any law, rule or regulation (other than traffic violations or
similar  offenses)  or  final cease  and  desist  order,  or  any
material  breach  of  this Agreement, in each  case  as  measured
against  standards generally prevailing at the relevant  time  in
the  savings and community banking industry;  provided,  however,
that  Mr.  Mahon shall not be deemed to have been discharged  for
cause unless and until he shall have received a written notice of
termination  from  the Board, accompanied by  a  resolution  duly
adopted by affirmative vote of a majority of the entire Board  at
a  meeting  called  and held for such purpose  (after  reasonable
notice to Mr. Mahon and a reasonable opportunity for Mr. Mahon to
make  oral and written presentations to the members of the Board,
on  his  own behalf, or through a representative, who may be  his
legal   counsel,   to  refute  the  grounds  for   the   proposed
determination)  finding that in the good  faith  opinion  of  the
Board grounds exist for discharging Mr. Mahon for cause.

           (b)   Mr.  Mahon's termination of employment with  the
Bank  shall  be  deemed a Resignation for  Good  Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)   (A)  the assignment to Mr. Mahon of  any  duties
inconsistent with Mr. Mahon's status as Senior Vice President and
Chief  Financial Officer of the Bank or (B) a substantial adverse
alteration   in   the   nature   or   status   of   Mr.   Mahon's
responsibilities from those in effect immediately  prior  to  the
alteration;  or  (C) any Change in Control described  in  section
13(b);

          (ii) a reduction by the Bank in Mr. Mahon's annual base
salary  as  in effect on the date first above written or  as  the
same  may  be increased from time to time, unless such  reduction
was mandated at the initiation of any regulatory authority having
jurisdiction over the Bank;

           (iii)      the  relocation  of  the  Bank's  principal
executive offices to a location outside the New York metropolitan
area or the Bank's requiring Mr. Mahon to be based anywhere other
than  the  Bank's principal executive offices except for required
travel   on  the  Bank's  business  to  an  extent  substantially
consistent  with Mr. Mahon's business travel obligations  at  the
date first above written;

           (iv)  the  failure  by the Bank, without  Mr.  Mahon's
consent,  to pay to Mr. Mahon, within seven (7) days of the  date
when due, (A) any portion of his compensation, or (B) any portion
of  an  installment of deferred compensation under  any  deferred
compensation   program  of  the  Bank,  which  failure   is   not
inadvertent and immaterial and which is not promptly cured by the
Bank  after  notice of such failure is given to the Bank  by  the
Executive;

           (v)  the failure by the Bank to continue in effect any
compensation  plan  in  which  Mr. Mahon  participates  which  is
material to his total compensation, including but not limited  to
the  Retirement Plan and the Bank's Incentive Savings Plan or any
substitute plans unless an equitable arrangement (embodied in  an
ongoing  substitute  or  alternative plan)  has  been  made  with
respect to such plan, or the failure by the Bank to continue  his
participation therein (or in such substitute or alternative plan)
on  a  basis not materially less favorable, both in terms of  the
amount  of  benefits provided and the level of his  participation
relative to other participants, unless such failure is the result
of  action mandated at the initiation of any regulatory authority
having jurisdiction over the Bank;

          (vi) the failure by the Bank to continue to provide Mr.
Mahon with benefits substantially similar to those enjoyed by Mr.
Mahon  under the Retirement Plan and the Bank's Incentive Savings
Plan   or  under  any  of  the  Bank's  life,  health  (including
hospitalization,  medical and major medical),  dental,  accident,
and  long-term disability insurance benefits, in which Mr.  Mahon
is  participating, or the taking of any action by the Bank  which
would  directly  or  indirectly materially  reduce  any  of  such
benefits or deprive Mr. Mahon of the number of paid vacation days
to  which  he is entitled, on the basis of years of service  with
the Bank, rank or otherwise, in accordance with the Bank's normal
vacation  policy,  unless such failure is the  result  of  action
mandated  at  the  initiation of any regulatory authority  having
jurisdiction over the Bank;

            (vii)      the  failure  of  the  Bank  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the Bank which is not effected pursuant the provisions of section
12(a)   regarding  Termination  for  Cause  or  on   account   of
Disability;

           (ix)  a material breach of this Agreement by the Bank,
which  the  Bank fails to cure within thirty (30) days  following
written notice thereof from Mr. Mahon;

           (x)  in the event of a Change in Control described  in
section  13(b)  of  this  Agreement, a failure  of  the  Bank  to
provide, or cause to be provided, to Mr. Mahon in connection with
such  Change  in Control, stock-based compensation and  benefits,
including,  without limitation, stock options,  restricted  stock
awards,  and  participation in tax-qualified  stock  bonus  plans
which, in the aggregate, are either (A) accepted by Mr. Mahon  in
writing  as being satisfactory for purposes of this Agreement  or
(B) in the written, good faith opinion of a nationally recognized
executive compensation consulting firm selected by the  Bank  and
satisfactory  to  Mr.  Mahon,  whose  agreement  shall   not   be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions; or

           (xi)  a  change  in the position to  which  Mr.  Mahon
reports;

          (xii)     in the event of a Change in Control described
in section 13(a) of this Agreement, termination of employment for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Bank shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of  the  Bank; (B) a corporation  owned,  directly  or
indirectly, by the stockholders of the Bank in substantially  the
same proportions as their ownership of stock of the Bank; or  (C)
Mr.  Mahon, or any group otherwise constituting a person in which
Mr. Mahon is a member, becomes the "beneficial owner" (as defined
in  Rule  13d-3 promulgated under the Exchange Act), directly  or
indirectly, of securities issued by the Bank representing 25%  or
more  of  the  combined voting power of all of  the  Bank's  then
outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Bank  to effect a transaction described in section 13(a) or 13(c)
of  this Agreement) whose election by the Board or nomination for
election  by  the  Bank's  stockholders  was  approved   by   the
affirmative vote of at least two-thirds of the members  of  Board
then  in office who were either members of the Board on the  date
first   above  written  or  whose  nomination  or  election   was
previously  so  approved  cease for any reason  to  constitute  a
majority  of  the members of the Board, but excluding,  for  this
purpose,  any such individual whose initial assumption of  office
is  in  connection with an actual or threatened election  contest
relating to the election of directors of the Bank (as such  terms
are  used in Rule 14a-11 of Regulation 14A promulgated under  the
Exchange Act); or

          (c)  the shareholders of the Bank approve either:

                (i)   a merger or consolidation of the Bank  with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (A) the members of the
               Board of the Bank immediately prior to such merger
               or consolidation constitute at least a majority of
               the   members  of  the  governing  body   of   the
               institution   resulting  from   such   merger   or
               consolidation; or (B) the shareholders of the Bank
               own  securities of the institution resulting  from
               such  merger or consolidation representing 80%  or
               more  of  the  combined voting power of  all  such
               securities  then outstanding in substantially  the
               same  proportions  as  their ownership  of  voting
               securities  of  the  Bank before  such  merger  or
               consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to   assume  and  perform   the   Bank's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Bank or
an  agreement for the sale or disposition by the Bank of  all  or
substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a), (b) or (c) if the term "Company" were substituted for  the
term  "Bank"  therein.  Such an event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Mahon's  employment  during  the  Employment  Period  or
thereafter,  whether by the Bank or by Mr. Mahon, shall  have  no
effect on the rights and obligations of the parties hereto  under
the  Bank's the Retirement Plan and the Bank's Incentive  Savings
Plan, group life, health (including hospitalization, medical  and
major   medical),  dental,  accident  and  long  term  disability
insurance plans or such other employee benefit plans or programs,
or  compensation  plans  or  programs (whether  or  not  employee
benefit plans or programs) and, following the conversion  of  the
Bank  to  stock  form,  any stock option and appreciation  rights
plan, employee stock ownership plan and restricted stock plan, as
may  be maintained by, or cover employees of, the Bank from  time
to time.

          15.  Successors and Assigns.

           (a)   The  Bank  shall require any successor  (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets of the Bank to expressly assume and agree to perform  this
Agreement in the same manner and to the same extent that the Bank
would  be required to perform it if no such succession had  taken
place.  Failure  of  the  Bank  to  obtain  such  assumption  and
agreement prior to the effectiveness of any such succession shall
be   deemed  to  constitute  a  material  breach  of  the  Bank's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Mahon, his legal representatives and testate  or
intestate distributees, and the Bank, their respective successors
and  assigns,  including any successor by merger or consolidation
or   a  statutory  receiver  or  any  other  person  or  firm  or
corporation  to which all or substantially all of the  respective
assets  and  business  of  the Bank  may  be  sold  or  otherwise
transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Mahon:

          [Home address deleted].

          If to the Bank:

          The Dime Savings Bank of Williamsburgh
          209 Havemeyer Street
          Brooklyn, New York 11211

          Attention:  Corporate Secretary

          With a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright, Esq.

           17.   Indemnification and Attorneys'  Fees.  The  Bank
shall  pay  to  or  on behalf of Mr. Mahon all reasonable  costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however,  that  Mr.  Mahon  shall  have  substantially
prevailed on the merits pursuant to a judgment, decree  or  order
of  a  court of competent jurisdiction or of an arbitrator in  an
arbitration  proceeding, or in a settlement;  provided,  further,
that this section 17 shall not obligate the Bank to pay costs and
legal  fees on behalf of Mr. Mahon under this Agreement in excess
of  $50,000.   For  purposes  of this Agreement,  any  settlement
agreement which provides for payment of any amounts in settlement
of  the Bank's obligations hereunder shall be conclusive evidence
of  Mr. Mahon's entitlement to indemnification hereunder, and any
such  indemnification payments shall be in  addition  to  amounts
payable  pursuant  to  such  settlement  agreement,  unless  such
settlement agreement expressly provides otherwise.

           18.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           19.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           20.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

          21.  Governing Law. This Agreement shall be governed by
and  construed and enforced in accordance with the  laws  of  the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            22.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement,  unless otherwise stated.  Any reference to  the  term
"Board"  shall mean the Board of Trustees of the Bank  while  the
Bank  is a mutual savings bank and the Board of Directors of  the
Bank  while  the Bank is a stock savings bank.  Any reference  to
the  term "Bank" shall mean the Bank in its mutual form prior  to
the conversion and in its stock form on and after the conversion.
If  the Bank does not convert to stock form, any reference to the
Bank's being a stock savings bank shall have no effect.

           23.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr.  Mahon.   No modifications of this Agreement shall  be  valid
unless made in writing and signed by the parties hereto.

           24.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Bank.

           25.   Required  Regulatory Provisions.  The  following
provisions  are  included  for the  purposes  of  complying  with
various   laws,   rules  and  regulations   applicable   to   the
Association:

           (a)  Notwithstanding anything herein contained to  the
contrary,  in no event shall the aggregate amount of compensation
payable to the Executive under section 9(b) hereof (exclusive  of
amounts described in section 9(b)(i) and (viii)) exceed the three
times  the Executive's average annual total compensation for  the
last  five  consecutive  calendar  years  to  end  prior  to  his
termination of employment with the Association (or for his entire
period  of  employment with the Association  if  less  than  five
calendar years).

           (b)  Notwithstanding anything herein contained to  the
contrary,  any  payments  to the Executive  by  the  Association,
whether  pursuant to this Agreement or otherwise, are subject  to
and  conditioned upon their compliance with section 18(k) of  the
Federal  Deposit  Insurance Act ("FDI Act"), 12 U.S.C.  Section
1828(k), and any regulations promulgated thereunder.

           (c)  Notwithstanding anything herein contained to  the
contrary,  if  the  Executive  is suspended  from  office  and/or
temporarily prohibited from participating in the conduct  of  the
affairs  of  the  Association pursuant to a notice  served  under
section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. Section 1818
(e)(3)or 1818(g)(1), the Association's obligations under this
Agreement shall  be  suspended as of the date of service of  such
notice, unless stayed by appropriate proceedings.  If the charges
in such notice are dismissed, the Association, in its discretion,
may (i)pay  to  the  Executive all or part of the compensation
withheld while the Association's obligations hereunder were sus-
pended  and (ii) reinstate, in whole or in part, any of the
obligations which were suspended.

           (d)  Notwithstanding anything herein contained to  the
contrary,   if  the  Executive  is  removed  and/or   permanently
prohibited from participating in the conduct of the Association's
affairs by an order issued under section 8(e)(4) or 8(g)(1) of the
FDI  Act, 12 U.S.C. Section 1818(e)(4) or (g)(1), all prospective
obligations  of  the  Association  under  this  Agreement   shall
terminate  as  of  the effective date of the  order,  but  vested
rights and obligations of the Association and the Executive shall
not be affected.

           (e)  Notwithstanding anything herein contained to  the
contrary, if the Association is in default (within the meaning of
section  3(x)(1)  of the FDI Act, 12  U.S.C.  Section 1813(x)(1),
all prospective obligations of the Association under this Agreement
shall terminate as of the date of default, but vested rights  and
obligations  of the Association and the Executive  shall  not  be
affected.

           (f)  Notwithstanding anything herein contained to  the
contrary,   all   prospective  obligations  of  the   Association
hereunder  shall  be  terminated, except to  the  extent  that  a
continuation  of  this Agreement is necessary for  the  continued
operation of the Association:  (i) by the Director of the OTS  or
his   designee  or  the  Federal  Deposit  Insurance  Corporation
("FDIC"),  at  the  time the FDIC enters  into  an  agreement  to
provide  assistance to or on behalf of the Association under  the
authority  contained in section 13(c) of the FDI Act,  12  U.S.C.
Section 1823(c); (ii) by  the Director of the OTS or his designee
at  the  time  such  Director or designee  approves a supervisory
merger  to  resolve  problems  related  to  the  operation of the
Association  or  when  the  Association  is  determined  by  such
Director to be in  an unsafe  or  unsound condition.  The  vested
rights and obligations of the parties shall not be affected.

If  and to the extent that any of the foregoing provisions  shall
cease  to  be  required or by applicable law, rule or regulation,
the  same shall become inoperative as though eliminated by formal
amendment of this Agreement.

           IN WITNESS WHEREOF, the Bank has caused this Agreement
to  be executed and Mr. Mahon has hereto set his hand, all as  of
the day and year first above written.

                                   /s/ Kenneth J. Mahon
                                   KENNETH J. MAHON

ATTEST                   THE DIME SAVINGS BANK OF WILLIAMSBURGH

By:/s/ Evelyn McLoughlin           By:  /s/ Anthony Bergamo
     Assistant  Secretary               for the Board of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

                      EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered  into  as of the 26th day of June, 1996, by  and  between
Dime  Community Bancorp, Inc., a savings and loan holding company
organized  and operating under the laws of the State of  Delaware
and  having an office at 209 Havemeyer Street, Brooklyn, New York
11211  ("Company")  and Vincent F. Palagiano, residing  at  [home
address deleted].

                     W I T N E S S E T H :

           WHEREAS, Mr. Palagiano currently serves the Company in
the  capacity  of  Chairman  of the Board,  President  and  Chief
Executive  Officer  of  its  wholly owned  subsidiary,  The  Dime
Savings Bank of Williamsburgh ("Bank"); and

           WHEREAS, the Company desires to assure for itself  the
continued  availability  of  Mr.  Palagiano's  services  and  the
ability  of Mr. Palagiano to perform such services with a minimum
of  personal distraction in the event of a pending or  threatened
Change in Control (as hereinafter defined); and

           WHEREAS, Mr. Palagiano is willing to continue to serve
the Company on the terms and conditions hereinafter set forth;

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Company and Mr. Palagiano hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)  The Company hereby represents and warrants to Mr.
Palagiano that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Company; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A)  any  agreement or instrument to which the Company  is  a
party  or  by  which  it is bound, or (B) any provision  of  law,
including, without limitation, any statute, rule or regulation or
any  order  of  any order of any court or administrative  agency,
applicable to the Company or its business.

           (b)   Mr. Palagiano hereby represents and warrants  to
the Company that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

           2.    Employment.   The Company hereby  continues  the
employment  of  Mr. Palagiano, and Mr. Palagiano  hereby  accepts
such  continued employment, during the period and upon the  terms
and conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

           (b)  Except as provided in section 3(c), beginning  on
the   date  of  this  Agreement,  the  Employment  Period   shall
automatically  be extended for one (1) additional day  each  day,
unless  either the Company or Mr. Palagiano elects not to  extend
the  Agreement  further by giving written  notice  to  the  other
party, in which case the Employment Period shall end on the third
anniversary  of the date on which such written notice  is  given.
Upon  termination of Mr. Palagiano's employment with the  Company
for any reason whatsoever, any daily extensions provided pursuant
to  this  section  3(b),  if  not therefore  discontinued,  shall
automatically cease.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs, then the Employment Period shall be  extended
through and including the third anniversary of the earliest  date
after  the  effective  date of such Change in  Control  on  which
either  the  Company or Mr. Palagiano elects, by  written  notice
pursuant  to  section 3(d) of this Agreement to the  non-electing
party,  to discontinue the Employment Period; provided,  however,
that this section shall not apply in the event that, prior to the
Change  in  Control (as defined in section 13 of this Agreement),
Mr.  Palagiano has provided written notice to the Company of  his
intent to discontinue the Employment Period.

           (d)  The Company or Mr. Palagiano may, at any time  by
written  notice  given  to  the other, elect  to  terminate  this
Agreement.   Any  such  notice given  by  the  Company  shall  be
accompanied by a certified copy of a resolution, adopted  by  the
affirmative  vote of a majority of the entire membership  of  the
Board at a meeting of the Board duly called and held, authorizing
the giving of such notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:   (i)  Mr. Palagiano's employment with the Company  may
be  terminated  during the Employment Period, in accordance  with
the  terms and conditions of this Agreement; and (ii) nothing  in
this  Agreement shall mandate or prohibit a continuation  of  Mr.
Palagiano's employment following the expiration of the Employment
Period  upon  such terms and conditions as the  Company  and  Mr.
Palagiano may mutually agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

            4.    Duties.   During  the  Employment  Period,  Mr.
Palagiano shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the  business and affairs of the Company and use his best efforts
to advance the Company's interests;

           (b)   serve  as  Chairman of the Board, President  and
Chief Executive Officer if duly appointed and/or elected to serve
in such position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board of Directors of  the
Company  ("Board"), in accordance with organization  Certificate,
By-laws,  Applicable Laws, Statutes and Regulations,  custom  and
practice  of  the  Company as in effect on the date  first  above
written.

Mr.  Palagiano  shall  have such authority  as  is  necessary  or
appropriate to carry out his assigned duties. Mr. Palagiano shall
report  to  and  be subject to direction and supervision  by  the
Board.

          (d)  none of the functions, duties and responsibilities
to be performed by Mr. Palagiano pursuant to this Agreement shall
be deemed to include those functions, duties and responsibilities
performed  by  Mr. Palagiano in his capacity as director  of  the
Company.

          5.   Compensation -- Salary and Bonus. In consideration
for  services rendered by Mr. Palagiano under this Agreement, the
Company  shall  pay to Mr. Palagiano a salary at an  annual  rate
equal to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $450,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change in Control, the product of Mr. Palagiano's annual rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                               (i)  1.06;
 
                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers of the Company (other than  Mr.
                    Palagiano)  who are assistant vice presidents
                    or  more senior officers, divided by (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar year, of the officers of the Company
                    (other  than Mr. Palagiano) who are assistant
                    vice presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately equal installments in accordance with the Company's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Palagiano of a salary
in  excess  of  that  prescribed  under  this  section  5  or  of
additional  cash  or non-cash compensation in a form  other  than
salary, to the extent that such payment is duly authorized by  or
under the authority of the Board.

           (d)   No  portion  of  the compensation  paid  to  Mr.
Palagiano  pursuant  to  this Agreement shall  be  deemed  to  be
compensation  received  by  Mr.  Palagiano  in  his  capacity  as
director of the Company.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr.  Palagiano shall be treated as an employee of the Company and
be  entitled  to  participate in and receive benefits  under  the
Company's Retirement Plan, Incentive Savings Plan, group life and
health  (including  medical  and major  medical)  and  disability
insurance  plans,  and  such  other employee  benefit  plans  and
programs,   including  but  not  limited  to  any  long-term   or
short-term  incentive compensation plans or programs (whether  or
not  employee  benefit plans or programs),  as  the  Company  may
maintain  from  time to time, in accordance with  the  terms  and
conditions  of  such  employee benefit  plans  and  programs  and
compensation plans and programs and with the Company's  customary
practices.   Following a Change in Control, all such benefits  to
Mr.   Palagiano  shall  be  continued  on  terms  and  conditions
substantially identical to, and in no event less favorable  than,
those in effect prior to the Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"),  the  Company  will  provide,  or  cause  to   be
provided,  to  Mr. Palagiano in connection with such  Conversion,
stock-based   compensation  and  benefits,   including,   without
limitation,   stock   options,  restricted  stock   awards,   and
participation  in tax-qualified stock bonus plans which,  in  the
aggregate, are either (A) accepted by Mr. Palagiano in writing as
being  satisfactory for purposes of this Agreement or (B) in  the
written,  good faith opinion of a nationally recognized executive
compensation  consulting  firm  selected  by  the   Company   and
satisfactory  to  Mr.  Palagiano, whose agreement  shall  not  be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions.

          7.   Board Memberships and Personal Activities.

           (a)   Mr. Palagiano may serve as a member of the board
of   directors   of  such  business,  community  and   charitable
organizations as he may disclose to the Board from time to  time,
and  he may engage in personal business and investment activities
for  his  own  account; provided, however, that such service  and
personal  business and investment activities shall not materially
interfere   with  the  performance  of  his  duties  under   this
Agreement.

           (b)   Mr.  Palagiano may also serve as an  officer  or
director of the Bank on such terms and conditions as the  Company
and  the Bank may mutually agree upon, and such service shall not
be   deemed   to   materially  interfere  with  Mr.   Palagiano's
performance  of  his duties hereunder or otherwise  result  in  a
material   breach  of  this  Agreement.   If  Mr.  Palagiano   is
discharged   or  suspended,  or  is  subject  to  any  regulatory
prohibition or restriction with respect to participation  in  the
affairs of the Bank, he shall (subject to the Company's powers of
termination  hereunder)  continue to  perform  services  for  the
Company  in accordance with this Agreement but shall not directly
or  indirectly provide services to or participate in the  affairs
of  the  Bank  in a manner inconsistent with the  terms  of  such
discharge or suspension or any applicable regulatory order.

           8.   Working Facilities and Expenses.  Mr. Palagiano's
principal place of employment shall be at the Company's executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.  The Company shall provide Mr. Palagiano, at his principal
place of employment, with a private office, stenographic services
and  other  support  services  and  facilities  suitable  to  his
position  with  the  Company  and  necessary  or  appropriate  in
connection with the performance of his assigned duties under this
Agreement.   The  Company shall provide  Mr.  Palagiano  with  an
automobile   suitable  to  his  position  with  the  Company   in
accordance with its prior practices, and such automobile shall be
used  by  Mr.  Palagiano in carrying out his  duties  under  this
Agreement,  including  commuting between his  residence  and  his
principal  place of employment.  The Company shall reimburse  Mr.
Palagiano  for  his  ordinary  and necessary  business  expenses,
including, without limitation, all expenses associated  with  his
business   use  of  the  aforementioned  automobile,   fees   for
memberships in such clubs and organizations as Mr. Palagiano  and
the  Company  shall mutually agree are necessary and  appropriate
for  business  purposes  and  travel and  entertainment  expenses
incurred  in connection with the performance of his duties  under
this  Agreement, upon presentation to the Company of an  itemized
account  of  such  expenses  in such  form  as  the  Company  may
reasonably require.  Mr. Palagiano shall be entitled to  no  less
than  four  (4) weeks of paid vacation  during each year  in  the
Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

           (a)  In the event that Mr. Palagiano's employment with
the  Company  shall  terminate during the  Employment  Period  on
account of the termination of Mr. Palagiano's employment with the
Company other than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

           (ii)  a  voluntary resignation by Mr. Palagiano  other
than a Resignation for Good Reason (within the meaning of section
12(b) of this Agreement);

           (iii)      a termination on account of Mr. Palagiano's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A) Mr. Palagiano has been  absent  from  the
full-time service of the Company on account of his Disability (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive  months; and (B) Mr. Palagiano shall have  failed  to
return  to  work  in the full-time service of the Company  within
thirty  (30) days after written notice requesting such return  is
given  to  Mr.  Palagiano by the Company; then the Company  shall
provide  to  Mr. Palagiano the benefits and pay to Mr.  Palagiano
the amounts provided under section 9(b) of this Agreement.

           (b)  In the event that Mr. Palagiano's employment with
the  Company  shall  terminate under circumstances  described  in
section 9(a) of this Agreement or if the Company terminates  this
Agreement  pursuant to section 3(d), the following  benefits  and
amounts  shall be paid or provided to Mr. Palagiano (or,  in  the
event of his death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Company, payable when  due
but  in  no  event  later  than thirty (30)  days  following  his
termination of employment with the Company;

           (ii)  (A) the benefits, if any, to which Mr. Palagiano
and  his family and dependents are entitled as a former employee,
or  family or dependents of a former employee, under the employee
benefit  plans and programs and compensation plans  and  programs
maintained  for  the  benefit  of  the  Company's  officers   and
employees,  in  accordance  with the  terms  of  such  plans  and
programs  in effect on the date of his termination of employment,
or  if  his  termination of employment occurs after a  Change  in
Control, on the date of his termination of employment or  on  the
date  of  such  Change  in  Control, whichever  results  in  more
favorable  benefits as determined by Mr. Palagiano, where  credit
is  given  for  three  additional years of  service  and  age  in
determining  eligibility and benefits for any  plan  and  program
where  age and service are relevant factors, and (B) payment  for
all  unused  vacation days and floating holidays in the  year  in
which his employment is terminated, at his highest annual rate of
salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer, if and to the extent necessary to provide Mr. Palagiano
and  his  family  and  dependents  for  the  Remaining  Unexpired
Employment Period, coverage identical to and in any event no less
favorable  than  the  coverage to  which  they  would  have  been
entitled  under  such plans (as in effect  on  the  date  of  his
termination  of employment, or, if his termination of  employment
occurs  after a Change in Control, on the date of his termination
of employment or during the one-year period ending on the date of
such  Change  in  Control, whichever results  in  more  favorable
benefits  as  determined by Mr. Palagiano) if  he  had  continued
working for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section 5(c) would apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the present value of the salary and the bonus that  Mr.
Palagiano  would  have earned if he had worked  for  the  Company
during  the Remaining Unexpired Employment Period at the  highest
annual  rate  of  salary (assuming, if a Change  in  Control  has
occurred,  that  the  annual increases under section  5(c)  would
apply)  and  the  highest bonus as a percentage of  the  rate  of
salary  provided  for under this Agreement,  where  such  present
value  is  to be determined using a discount rate of six  percent
(6%)  per  annum,  compounded, in the case of  salary,  with  the
frequency corresponding to the Company's regular payroll  periods
with  respect  to  its  officers, and,  in  the  case  of  bonus,
annually;

           (v)  within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans  maintained  by,  or  covering employees  of,  the  Company
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Company  during the Remaining Unexpired Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees of, the Company as of the date of his termination where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable to the Company's contribution to which  he
would be entitled under any defined contribution plans maintained
by,  or covering employees of, the Company (including any "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if he had worked for the  Company  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment Period which is prior  to  Mr.  Palagiano's
termination of employment with the Company, and been fully vested
in such plan or plans, over (B) the present value of the benefits
attributable  to  the  Company's contributions  to  which  he  is
actually  entitled  under  such plans  as  of  the  date  of  his
termination  of employment with the Company, where  such  present
values  are to be determined using a discount rate of six percent
(6%)  per  annum, compounded with the frequency corresponding  to
the  Company's  regular  payroll  periods  with  respect  to  its
officers;

          (vii)     the payments that would have been made to Mr.
Palagiano under any incentive compensation plan maintained by, or
covering employees of, the Company (other than bonus payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working for the Company during the Remaining Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to  Mr.  Palagiano under such  incentive  compensation
plan,  multiplied by (B) the compensation that  would  have  been
paid  to  Mr. Palagiano during each calendar year at the  highest
annual rate of compensation (assuming, if a Change in Control has
occurred,  that  the  annual increases under section  5(c)  would
apply) under the Agreement, such payments to be made at the  same
time  and  in  the  same manner as payments  are  made  to  other
officers  of the Company pursuant to the terms of such  incentive
compensation  plan; provided, however, that payments  under  this
section 9(b)(vii) shall not be made to Mr. Palagiano for any year
on  account of which no payments are made to any of the Company's
officers under any such incentive compensation plan; and

           (viii)     the  benefits  to which  Mr.  Palagiano  is
entitled  under  the Company's Supplemental Executive  Retirement
Plan  (or other excess benefits plan with the meaning of  section
3(36)  of  ERISA or other special or supplemental plan) shall  be
paid  to him in a lump sum, where such lump sum is computed using
the  mortality  tables under the Company's tax-qualified  pension
plan and a discount rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty  (30)  days  after the  date  of  Mr.  Palagiano's
election,  and  if the amount may be increased  by  a  subsequent
Change  in  Control, any additional payment shall be made  within
thirty (30) days of such Change in Control.

           (c)   Mr.  Palagiano shall not be required to mitigate
the  amount  of  any payment provided for in this  section  9  by
seeking  other employment or otherwise, nor shall the  amount  of
any  payment or benefit provided for in this section 9 be reduced
by  any  compensation earned by Mr. Palagiano as  the  result  of
employment by another employer, by retirement benefits, by offset
against  any  amount claimed to be owed by Mr. Palagiano  to  the
Company, or otherwise except as specifically provided in  section
9(b) (iii) of this Agreement or except as provided in section  28
to  avoid duplication of payments.  The Company and Mr. Palagiano
hereby  stipulate that the damages which may be incurred  by  Mr.
Palagiano  as a consequence of any such termination of employment
are  not  capable of accurate measurement as of  the  date  first
above written and that the benefits and payments provided for  in
this  Agreement  constitute  a  reasonable  estimate  under   the
circumstances  of all damages sustained as a consequence  of  any
such  termination of employment, other than damages arising under
or  out  of  any  stock option, restricted stock  or  other  non-
qualified  stock acquisition or investment plan  or  program,  it
being  understood  and  agreed  that  this  Agreement  shall  not
determine  the  measurement of damages under  any  such  plan  or
program in respect of any termination of employment.

           10.   Termination Without Severance Benefits.  In  the
event  that  Mr.  Palagiano's employment with the  Company  shall
terminate during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)  voluntary resignation by Mr. Palagiano other than
a  Resignation  for  Good Reason (within the meaning  of  section
12(b) of this Agreement); or

          (c)  Mr. Palagiano's death;

then  the  Company shall have no further obligations  under  this
Agreement,  other than the payment to Mr. Palagiano (or,  in  the
event  of  his  death, to his estate) of his  earned  but  unpaid
salary  as of the date of the termination of his employment,  and
the  provision  of such other benefits, if any, to  which  he  is
entitled  as  a  former  employee under  the  Company's  employee
benefit  plans and programs and compensation plans  and  programs
and payment for all unused vacation days and floating holidays in
the  year  in which his employment is terminated, at his  highest
annual salary for such year.

          11.  Death and Disability.

           (a)   Death.  If Mr. Palagiano's employment  is  termi
nated  by  reason of Mr. Palagiano's death during the  Employment
Period,   this   Agreement   shall  terminate   without   further
obligations to Mr. Palagiano's legal representatives  under  this
Agreement,  other  than for payment of amounts and  provision  of
benefits  under  sections 9(b) (i) and (ii);  provided,  however,
that  if  Mr.  Palagiano  dies while in  the  employment  of  the
Company,  his designated beneficiary(ies) shall receive  a  death
benefit,  payable through life insurance or otherwise,  which  is
the  equivalent  on  a net after-tax basis of the  death  benefit
payable  under a term life insurance policy, with a stated  death
benefit of three times Mr. Palagiano's then Annual Base Salary.

           (b)   Disability.   If Mr. Palagiano's  employment  is
terminated by reason of Mr. Palagiano's Disability as defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without  further obligations to Mr.  Palagiano,  other
than  for  payment  of amounts and provision  of  benefits  under
section  9(b) (i) and (ii); provided, however, that in the  event
of  Mr.  Palagiano's Disability while in the  employment  of  the
Company,  the Company will pay to him a lump sum amount equal  to
three times his then Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined  in  accordance with the terms of the Company's  long
term disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Palagiano's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

          (a)  Mr. Palagiano's termination of employment with the
Company  shall  be  deemed  a "Termination  for  Cause"  if  such
termination occurs upon:

           (i)  Mr. Palagiano's willful and continued failure  to
substantially perform his duties with the Company (other than any
failure  resulting  from incapacity due  to  physical  or  mental
illness or any actual or anticipated failure following notice  by
Mr. Palagiano of an intended Resignation for Good Reason) after a
written demand for substantial performance is delivered to him by
the  Board,  which demand specifically identifies the  manner  in
which  the  Board  believes Mr. Palagiano has  not  substantially
performed his duties, and the failure to cure such breach  within
sixty  (60)  days  following  written  notice  thereof  from  the
Company;  or  (ii)  the  intentional  and  willful  engaging   in
dishonest conduct in connection with his performance of  services
for  the Company resulting in his conviction of a felony,  fraud,
personal dishonesty, incompetence, willful misconduct, breach  of
fiduciary  duty involving personal profit, willful  violation  of
any  law,  rule  or regulation (other than traffic violations  or
similar offenses), or final cease-and-desist order.

No  act,  or  failure to act, on Mr. Palagiano's  part  shall  be
deemed  willful unless done, or omitted to be done, not  in  good
faith  and without reasonable belief that such action or omission
was in the best interest of the Company.  Any act, or failure  to
act,  based  upon  authority given pursuant to a resolution  duly
adopted  by the Board or based upon the written advice of counsel
for  the  Company shall be conclusively presumed to be  done,  or
omitted  to  be done, by Mr. Palagiano in good faith and  in  the
best interests of the Company.  Notwithstanding the foregoing, no
termination  of Mr. Palagiano's employment shall be a Termination
for Cause unless there shall have been delivered to Mr. Palagiano
a  copy of a resolution duly adopted by the affirmative vote of a
majority  of  the Board of Directors (or, following a  Change  in
Control,  an affirmative vote of three-quarters of the  Board  of
Directors)  at  a meeting of the Board called and held  for  such
purpose  (after  reasonable  notice  to  Mr.  Palagiano  and   an
opportunity for Mr. Palagiano, together with his counsel,  to  be
heard before the Board) finding that in good faith opinion of the
Board  circumstances described in section 12(a) (i) or (ii) exist
and specifying the particulars thereof in detail.

          (b)  Mr. Palagiano's termination of employment with the
Company  shall  be deemed a Resignation for Good Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)  (A) the assignment to Mr. Palagiano of any duties
inconsistent  with  Mr. Palagiano's status  as  Chairman  of  the
Board,  President and Chief Executive Officer of the  Company  or
(B)  a substantial adverse alteration in the nature or status  of
Mr. Palagiano's responsibilities from those in effect immediately
prior  to  the alteration; or (C) any Change in Control described
in section 13(b);

           (ii)  a  reduction by the Company in  Mr.  Palagiano's
annual  base salary as in effect on the date first above  written
or  as  the same may be increased from time to time, unless  such
reduction  was  mandated  at  the initiation  of  any  regulatory
authority having jurisdiction over the Company;

           (iii)      the  relocation of the Company's  principal
executive offices to a location outside the New York metropolitan
area  or  the  Company's  requiring Mr.  Palagiano  to  be  based
anywhere  other  than the Company's principal  executive  offices
except for required travel on the Company's business to an extent
substantially  consistent  with Mr. Palagiano's  business  travel
obligations at the date first above written;

            (iv)   the  failure  by  the  Company,  without   Mr.
Palagiano's  consent, to pay to Mr. Palagiano, within  seven  (7)
days  of  the date when due, (A) any portion of his compensation,
or  (B)  any  portion of an installment of deferred  compensation
under any deferred compensation program of the Company;

           (v)   the failure by the Company to continue in effect
any  compensation plan in which Mr. Palagiano participates  which
is  material to his total compensation, including but not limited
to  the Retirement Plan and the Company's Incentive Savings  Plan
or any substitute plans unless an equitable arrangement (embodied
in  an ongoing substitute or alternative plan) has been made with
respect  to such plan, or the failure by the Company to  continue
his  participation therein (or in such substitute or  alternative
plan) on a basis not materially less favorable, both in terms  of
the   amount   of  benefits  provided  and  the  level   of   his
participation relative to other participants, unless such failure
is  the  result  of  action mandated at  the  initiation  of  any
regulatory authority having jurisdiction over the Company;

           (vi) the failure by the Company to continue to provide
Mr.  Palagiano  with  benefits  substantially  similar  to  those
enjoyed  by  Mr.  Palagiano under the  Retirement  Plan  and  the
Company's  Incentive Savings Plan or under any of  the  Company's
life,   health  (including  hospitalization,  medical  and  major
medical),  dental,  accident, and long-term disability  insurance
benefits, in which Mr. Palagiano is participating, or the  taking
of  any  action by the Company which would directly or indirectly
materially  reduce any of such benefits or deprive Mr.  Palagiano
of  the number of paid vacation days to which he is entitled,  on
the  basis  of  years  of  service  with  the  Company,  rank  or
otherwise,  in  accordance  with the  Company's  normal  vacation
policy,  unless such failure is the result of action mandated  at
the  initiation  of any regulatory authority having  jurisdiction
over the Company;

           (vii)      the  failure  of the Company  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the  Company  which  is not effected pursuant the  provisions  of
section  12(a) regarding Termination for Cause or on  account  of
Disability;

           (ix)  a  material  breach of  this  Agreement  by  the
Company, which the Company fails to cure within thirty (30)  days
following written notice thereof from Mr. Palagiano;

           (x)  in the event of a Change in Control described  in
section  13(b)  of this Agreement, a failure of  the  Company  to
provide,  or cause to be provided, to Mr. Palagiano in connection
with  such  Change  in  Control,  stock-based  compensation   and
benefits,   including,   without   limitation,   stock   options,
restricted stock awards, and participation in tax-qualified stock
bonus  plans which, in the aggregate, are either (A) accepted  by
Mr.  Palagiano in writing as being satisfactory for  purposes  of
this  Agreement or (B) in the written, good faith  opinion  of  a
nationally  recognized  executive  compensation  consulting  firm
selected by the Company and satisfactory to Mr. Palagiano,  whose
agreement  shall  not  be  unreasonably  withheld,  are  no  less
favorable than the stock-based compensation and benefits  usually
and  customarily  provided to similarly  situated  executives  of
similar   financial  institutions  in  connection  with   similar
transactions; or

           (xi)  a requirement that Mr. Palagiano report  to  any
person or group other than the Board;

          (xii)     in the event of a Change in Control described
in  section  13 of this Agreement, termination of employment  for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Company shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of the Company; (B) a corporation owned,  directly  or
indirectly,  by the stockholders of the Company in  substantially
the  same proportions as their ownership of stock of the Company;
or  (C)  Mr.  Palagiano,  or any group otherwise  constituting  a
person   in  which  Mr.  Palagiano  is  a  member,  becomes   the
"beneficial  owner" (as defined in Rule 13d-3  promulgated  under
the  Exchange Act), directly or indirectly, of securities  issued
by  the  Company representing 25% or more of the combined  voting
power of all of the Company's then outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Company  to  effect a transaction described in section  13(a)  or
13(c)  of  this  Agreement)  whose  election  by  the  Board   or
nomination  for  election  by  the  Company's  stockholders   was
approved  by the affirmative vote of at least two-thirds  of  the
members  of Board then in office who were either members  of  the
Board  on  the  date first above written or whose  nomination  or
election  was  previously so approved cease  for  any  reason  to
constitute a majority of the members of the Board, but excluding,
for this purpose, any such individual whose initial assumption of
office  is  in  connection with an actual or threatened  election
contest relating to the election of directors of the Company  (as
such  terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or

          (c)  the shareholders of the Company approve either:

               (i)  a merger or consolidation of the Company with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (1) the members of the
               Board  of  the Company immediately prior  to  such
               merger  or  consolidation constitute  at  least  a
               majority of the members of the governing  body  of
               the  institution  resulting from  such  merger  or
               consolidation;  or  (2) the  shareholders  of  the
               Company   own   securities  of   the   institution
               resulting   from  such  merger  or   consolidation
               representing  80% or more of the  combined  voting
               power  of all such securities then outstanding  in
               substantially  the  same  proportions   as   their
               ownership  of  voting securities  of  the  Company
               before such merger or consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to  assume  and  perform  the  Company's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all
or substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a),  (b)  or (c) if the term "Bank" were substituted  for  the
term  "Company"  therein.  Such event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Palagiano's employment during the Employment  Period  or
thereafter,  whether  by the Company or by Mr.  Palagiano,  shall
have  no  effect  on the rights and obligations  of  the  parties
hereto under the Company's or the Bank's Retirement Plan and  the
Company's  Incentive Savings Plan, group life, health  (including
hospitalization, medical and major medical), dental, accident and
long  term  disability  insurance plans or  such  other  employee
benefit  plans  or  programs, or compensation plans  or  programs
(whether  or  not  employee  benefit  plans  or  programs)   and,
following the conversion of the Company to stock form, any  stock
option  and  appreciation rights plan, employee  stock  ownership
plan and restricted stock plan, as may be maintained by, or cover
employees of, the Company from time to time.

          15.  Successors and Assigns.

           (a)   The Company shall require any successor (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets  of  the Company to expressly assume and agree to  perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be  deemed  to  constitute  a material breach  of  the  Company's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Palagiano, his legal representatives and testate
or  intestate  distributees, and the  Company,  their  respective
successors  and  assigns, including any successor  by  merger  or
consolidation or a statutory receiver or any other person or firm
or   corporation  to  which  all  or  substantially  all  of  the
respective  assets and business of the Company  may  be  sold  or
otherwise transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Palagiano:

          [Home address deleted].

          If to the Company:

          Dime Community Bancorp, Inc.

          209 Havemeyer Street
          Brooklyn, New York 11211
          Attention: Corporate Secretary

          with a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright, Esq.

           17.  Indemnification and Attorneys' Fees.  The Company
shall  pay to or on behalf of Mr. Palagiano all reasonable costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however, that this section 17 shall not  obligate  the
Company  to  pay costs and legal fees on behalf of Mr.  Palagiano
under this Agreement in excess of $50,000.

          18.  Excise Tax Indemnification.

           (a)   This  section 18 shall apply if Mr.  Palagiano's
employment  is  terminated  in  circumstances  giving   rise   to
liability  for excise taxes under section 4999 of the  Code.   If
this  Section  18  applies, then, if for any  taxable  year,  Mr.
Palagiano shall be liable for the payment of an excise tax  under
section  4999  of  the Code with respect to any  payment  in  the
nature  of  compensation made by the Company  or  any  direct  or
indirect  subsidiary or affiliate of the Company to (or  for  the
benefit of) Mr. Palagiano, the Company shall pay to Mr. Palagiano
an amount equal to X determined under the following formula:

                           E x P
          X =   ____________________________________
                1 - [(FI x (1 - SLI)) + SLI + E + M]

          where
                     E  =  the rate at which the excise  tax
                           is assessed under section 4999 of the Code;

                     P  =  the amount with respect to which
                           such   excise  tax  is  assessed,  determined
                           without regard to this section 18;

                    FI  =  the  highest  marginal  rate  of
                           income tax applicable to Mr. Palagiano  under
                           the Code for the taxable year in question;

                   SLI  =      the  sum  of  the  highest
                           marginal  rates of income tax  applicable  to
                           Mr.  Palagiano under all applicable state and
                           local  laws for the taxable year in question;
                           and

                    M   =  the  highest  marginal  rate  of
                           Medicare  tax  applicable  to  Mr.  Palagiano
                           under  the  Code  for  the  taxable  year  in
                           question.

With respect to any payment in the nature of compensation that is
made to (or for the benefit of) Mr. Palagiano under the terms  of
this  Agreement, or otherwise, and on which an excise  tax  under
section 4999 of the Code will be assessed, the payment determined
under  this section 18(a) shall be made to Mr. Palagiano  on  the
earlier  of  (i) the date the Company or any direct  or  indirect
subsidiary  or affiliate of the Company is required  to  withhold
such tax, or (ii) the date the tax is required to be paid by  Mr.
Palagiano.

          (b)  Notwithstanding anything in this section 18 to the
contrary,  in  the event that Mr. Palagiano's liability  for  the
excise  tax under section 4999 of the Code for a taxable year  is
subsequently  determined to be different than  the  amount deter-
mined  by  the  formula (X + P) x E, where X, P and  E  have  the
meanings provided in section 18(a), Mr. Palagiano or the Company,
as the case may be, shall pay to the other party at the time that
the  amount  of  such  excise  tax  is  finally  determined,   an
appropriate  amount, plus interest, such that  the  payment  made
under  section 18(a), when increased by the amount of the payment
made to Mr. Palagiano under this section 18(b) by the Company, or
when  reduced  by the amount of the payment made to  the  Company
under this section 18(b) by Mr. Palagiano, equals the amount that
should  have  properly been paid to Mr. Palagiano  under  section
18(a).   The  interest  paid under this section  18(b)  shall  be
determined  at  the rate provided under section 1274(b)(2)(B)  of
the Code.  To confirm that the proper amount, if any, was paid to
Mr.  Palagiano under this section 18, Mr. Palagiano shall furnish
to  the  Company  a  copy  of each tax return  which  reflects  a
liability for an excise tax payment made by the Company, at least
20  days before the date on which such return is required  to  be
filed with the Internal Revenue Service.

           (c)  The provisions of this section 18 are designed to
reflect the provisions of applicable federal, state and local tax
laws in effect on the date of this Agreement.  If, after the date
hereof,  there shall be any change in any such laws, this section
18  shall  be  modified in such manner as Mr. Palagiano  and  the
Company may mutually agree upon if and to the extent necessary to
assure  that  Mr.  Palagiano  is fully  indemnified  against  the
economic  effects of the tax imposed under section  4999  of  the
Code or any similar federal, state or local tax.

           19.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           20.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           21.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

           22.   Governing Law.  This Agreement shall be governed
by  and construed and enforced in accordance with the laws of the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            23.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement, unless otherwise stated.

           24.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr. Palagiano.  No modifications of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

           25.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Company.

           26.   Provisions  of  Law.   Notwithstanding  anything
herein  contained to the contrary, any payments to Mr.  Palagiano
by  the Company, whether pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with section
18(k) of the  Federal  Deposit  Insurance  Act, 12 U.S.C. Section
1828(k), and any regulations promulgated thereunder.

          27.  Guarantee.  The Company hereby agrees to guarantee
the payment by the Bank of any benefits and compensation to which
the  Executive  is  or  may be entitled to under  the  terms  and
conditions of the employment agreement dated as of the  26th  day
of June, 1996 between the Bank and Mr. Palagiano, a copy of which
is attached hereto as Exhibit A.

           28.  Non-duplication.  In the event that Mr. Palagiano
shall  perform  services  for the Bank or  any  other  direct  or
indirect  subsidiary of the Company, any compensation or benefits
provided to Mr. Palagiano by such other employer shall be applied
to  offset  the  obligations of the Company hereunder,  it  being
intended that this Agreement set forth the aggregate compensation
and  benefits  payable to Mr. Palagiano for all services  to  the
Company and all of its direct or indirect subsidiaries.

           IN  WITNESS  WHEREOF,  the  Company  has  caused  this
Agreement  to  be executed and Mr. Palagiano has hereto  set  his
hand, all as of the day and year first above written.

                                   /s/ Vincent F. Palagiano
                                   VINCENT F. PALAGIANO

ATTEST                             DIME COMMUNITY BANCORP, INC.

By:  /s/ Evelyn McLoughlin         By:  /s/ Anthony Bergamo
      Assistant  Secretary              for the  Board  of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

                      EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered  into  as of the 26th day of June, 1996, by  and  between
Dime  Community Bancorp, Inc., a savings and loan holding company
organized  and operating under the laws of the State of  Delaware
and  having an office at 209 Havemeyer Street, Brooklyn, New York
11211  ("Company")  and  Michael P.  Devine,  residing  at  [home
address deleted].

                     W I T N E S S E T H :

          WHEREAS, Mr. Devine currently serves the Company in the
capacity  of  Executive  Vice  President,  Secretary  and   Chief
Operating  Officer  of  its  wholly owned  subsidiary,  The  Dime
Savings Bank of Williamsburgh ("Bank"); and

           WHEREAS, the Company desires to assure for itself  the
continued  availability of Mr. Devine's services and the  ability
of Mr. Devine to perform such services with a minimum of personal
distraction  in  the event of a pending or threatened  Change  in
Control (as hereinafter defined); and

          WHEREAS, Mr. Devine is willing to continue to serve the
Company on the terms and conditions hereinafter set forth;

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Company and Mr. Devine hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)  The Company hereby represents and warrants to Mr.
Devine that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Company; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A)  any  agreement or instrument to which the Company  is  a
party  or  by  which  it is bound, or (B) any provision  of  law,
including, without limitation, any statute, rule or regulation or
any  order  of  any order of any court or administrative  agency,
applicable to the Company or its business.

           (b)  Mr. Devine hereby represents and warrants to  the
Company that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

           2.    Employment.   The Company hereby  continues  the
employment  of  Mr.  Devine, and Mr. Devine hereby  accepts  such
continued  employment, during the period and upon the  terms  and
conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

           (b)  Except as provided in section 3(c), beginning  on
the   date  of  this  Agreement,  the  Employment  Period   shall
automatically  be extended for one (1) additional day  each  day,
unless either the Company or Mr. Devine elects not to extend  the
Agreement further by giving written notice to the other party, in
which   case  the  Employment  Period  shall  end  on  the  third
anniversary  of the date on which such written notice  is  given.
Upon termination of Mr. Devine's employment with the Company  for
any reason whatsoever, any daily extensions provided pursuant  to
this   section   3(b),  if  not  therefore  discontinued,   shall
automatically cease.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs, then the Employment Period shall be  extended
through and including the third anniversary of the earliest  date
after  the  effective  date of such Change in  Control  on  which
either  the  Company  or  Mr. Devine elects,  by  written  notice
pursuant  to  section 3(d) of this Agreement to the  non-electing
party,  to discontinue the Employment Period; provided,  however,
that this section shall not apply in the event that, prior to the
Change  in  Control (as defined in section 13 of this Agreement),
Mr.  Devine  has  provided written notice to the Company  of  his
intent to discontinue the Employment Period.

           (d)   The  Company or Mr. Devine may, at any  time  by
written  notice  given  to  the other, elect  to  terminate  this
Agreement.   Any  such  notice given  by  the  Company  shall  be
accompanied by a certified copy of a resolution, adopted  by  the
affirmative  vote of a majority of the entire membership  of  the
Board at a meeting of the Board duly called and held, authorizing
the giving of such notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:  (i)  Mr. Devine's employment with the Company  may  be
terminated during the Employment Period, in accordance  with  the
terms and conditions of this Agreement; and (ii) nothing in  this
Agreement  shall  mandate  or  prohibit  a  continuation  of  Mr.
Devine's  employment following the expiration of  the  Employment
Period  upon  such terms and conditions as the  Company  and  Mr.
Devine may mutually agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

           4.   Duties.  During the Employment Period, Mr. Devine
shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the  business and affairs of the Company and use his best efforts
to advance the Company's interests;

           (b)  serve as Executive Vice President, Secretary  and
Chief Operating Officer if duly appointed and/or elected to serve
in such position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board of Directors of  the
Company  ("Board"), in accordance with organization  Certificate,
By-laws,  Applicable Laws, Statutes and Regulations,  custom  and
practice  of  the  Company as in effect on the date  first  above
written.

Mr.  Devine  shall  have  such  authority  as  is  necessary   or
appropriate  to carry out his assigned duties. Mr.  Devine  shall
report  to  and  be subject to direction and supervision  by  the
Board.

          (d)  none of the functions, duties and responsibilities
to be performed by Mr. Devine pursuant to this Agreement shall be
deemed  to  include those functions, duties and  responsibilities
performed  by  Mr.  Devine in his capacity  as  director  of  the
Company.

          5.   Compensation -- Salary and Bonus. In consideration
for  services  rendered by Mr. Devine under this  Agreement,  the
Company shall pay to Mr. Devine a salary at an annual rate  equal
to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $340,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change  in  Control, the product of Mr. Devine's annual  rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                               (i)  1.06;

                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers of the Company (other than  Mr.
                    Devine) who are assistant vice presidents  or
                    more  senior  officers, divided  by  (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar year, of the officers of the Company
                    (other  than  Mr. Devine) who  are  assistant
                    vice presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately equal installments in accordance with the Company's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Devine of a salary in
excess  of  that prescribed under this section 5 or of additional
cash or non-cash compensation in a form other than salary, to the
extent  that  such payment is duly authorized  by  or  under  the
authority of the Board.

           (d)  No portion of the compensation paid to Mr. Devine
pursuant  to  this Agreement shall be deemed to  be  compensation
received  by  Mr.  Devine  in his capacity  as  director  of  the
Company.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr. Devine shall be treated as an employee of the Company and  be
entitled  to  participate  in  and  receive  benefits  under  the
Company's Retirement Plan, Incentive Savings Plan, group life and
health  (including  medical  and major  medical)  and  disability
insurance  plans,  and  such  other employee  benefit  plans  and
programs,   including  but  not  limited  to  any  long-term   or
short-term  incentive compensation plans or programs (whether  or
not  employee  benefit plans or programs),  as  the  Company  may
maintain  from  time to time, in accordance with  the  terms  and
conditions  of  such  employee benefit  plans  and  programs  and
compensation plans and programs and with the Company's  customary
practices.   Following a Change in Control, all such benefits  to
Mr.   Devine   shall  be  continued  on  terms   and   conditions
substantially identical to, and in no event less favorable  than,
those in effect prior to the Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"),  the  Company  will  provide,  or  cause  to   be
provided,  to  Mr.  Devine in connection  with  such  Conversion,
stock-based   compensation  and  benefits,   including,   without
limitation,   stock   options,  restricted  stock   awards,   and
participation  in tax-qualified stock bonus plans which,  in  the
aggregate,  are either (A) accepted by Mr. Devine in  writing  as
being  satisfactory for purposes of this Agreement or (B) in  the
written,  good faith opinion of a nationally recognized executive
compensation  consulting  firm  selected  by  the   Company   and
satisfactory  to  Mr.  Devine,  whose  agreement  shall  not   be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions.

          7.   Board Memberships and Personal Activities.

           (a)  Mr. Devine may serve as a member of the board  of
directors    of   such   business,   community   and   charitable
organizations as he may disclose to the Board from time to  time,
and  he may engage in personal business and investment activities
for  his  own  account; provided, however, that such service  and
personal  business and investment activities shall not materially
interfere   with  the  performance  of  his  duties  under   this
Agreement.

           (b)   Mr.  Devine  may also serve  as  an  officer  or
director of the Bank on such terms and conditions as the  Company
and  the Bank may mutually agree upon, and such service shall not
be  deemed  to materially interfere with Mr. Devine's performance
of  his duties hereunder or otherwise result in a material breach
of  this Agreement.  If Mr. Devine is discharged or suspended, or
is  subject  to  any regulatory prohibition or  restriction  with
respect  to  participation in the affairs of the Bank,  he  shall
(subject  to  the  Company's  powers  of  termination  hereunder)
continue  to perform services for the Company in accordance  with
this  Agreement  but  shall not directly  or  indirectly  provide
services to or participate in the affairs of the Bank in a manner
inconsistent  with the terms of such discharge or  suspension  or
any applicable regulatory order.

           8.    Working  Facilities and Expenses.  Mr.  Devine's
principal place of employment shall be at the Company's executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.   The  Company shall provide Mr. Devine, at his  principal
place of employment, with a private office, stenographic services
and  other  support  services  and  facilities  suitable  to  his
position  with  the  Company  and  necessary  or  appropriate  in
connection with the performance of his assigned duties under this
Agreement.   The  Company  shall  provide  Mr.  Devine  with   an
automobile   suitable  to  his  position  with  the  Company   in
accordance with its prior practices, and such automobile shall be
used  by  Mr.  Devine  in  carrying out  his  duties  under  this
Agreement,  including  commuting between his  residence  and  his
principal  place of employment.  The Company shall reimburse  Mr.
Devine   for  his  ordinary  and  necessary  business   expenses,
including, without limitation, all expenses associated  with  his
business   use  of  the  aforementioned  automobile,   fees   for
memberships in such clubs and organizations as Mr. Devine and the
Company  shall  mutually agree are necessary and appropriate  for
business  purposes and travel and entertainment expenses incurred
in  connection  with  the performance of his  duties  under  this
Agreement,  upon  presentation to  the  Company  of  an  itemized
account  of  such  expenses  in such  form  as  the  Company  may
reasonably require.  Mr. Devine shall be entitled to no less than
four  (4)  weeks  of  paid  vacation  during  each  year  in  the
Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

          (a)  In the event that Mr. Devine's employment with the
Company  shall terminate during the Employment Period on  account
of  the  termination of Mr. Devine's employment with the  Company
other than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

          (ii) a voluntary resignation by Mr. Devine other than a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement);

           (iii)      a  termination on account of  Mr.  Devine's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A)  Mr. Devine  has  been  absent  from  the
full-time service of the Company on account of his Disability (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive  months;  and (B) Mr. Devine  shall  have  failed  to
return  to  work  in the full-time service of the Company  within
thirty  (30) days after written notice requesting such return  is
given  to  Mr.  Devine  by the Company; then  the  Company  shall
provide  to  Mr.  Devine the benefits and pay to Mr.  Devine  the
amounts provided under section 9(b) of this Agreement.

          (b)  In the event that Mr. Devine's employment with the
Company  shall terminate under circumstances described in section
9(a)  of  this  Agreement  or  if  the  Company  terminates  this
Agreement  pursuant to section 3(d), the following  benefits  and
amounts shall be paid or provided to Mr. Devine (or, in the event
of his death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Company, payable when  due
but  in  no  event  later  than thirty (30)  days  following  his
termination of employment with the Company;

           (ii) (A) the benefits, if any, to which Mr. Devine and
his  family and dependents are entitled as a former employee,  or
family  or  dependents of a former employee, under  the  employee
benefit  plans and programs and compensation plans  and  programs
maintained  for  the  benefit  of  the  Company's  officers   and
employees,  in  accordance  with the  terms  of  such  plans  and
programs  in effect on the date of his termination of employment,
or  if  his  termination of employment occurs after a  Change  in
Control, on the date of his termination of employment or  on  the
date  of  such  Change  in  Control, whichever  results  in  more
favorable  benefits as determined by Mr. Devine, where credit  is
given   for  three  additional  years  of  service  and  age   in
determining  eligibility and benefits for any  plan  and  program
where  age and service are relevant factors, and (B) payment  for
all  unused  vacation days and floating holidays in the  year  in
which his employment is terminated, at his highest annual rate of
salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer,  if and to the extent necessary to provide  Mr.  Devine
and  his  family  and  dependents  for  the  Remaining  Unexpired
Employment Period, coverage identical to and in any event no less
favorable  than  the  coverage to  which  they  would  have  been
entitled  under  such plans (as in effect  on  the  date  of  his
termination  of employment, or, if his termination of  employment
occurs  after a Change in Control, on the date of his termination
of employment or during the one-year period ending on the date of
such  Change  in  Control, whichever results  in  more  favorable
benefits as determined by Mr. Devine) if he had continued working
for  the Company during the Remaining Unexpired Employment Period
at the highest annual rate of compensation (assuming, if a Change
in  Control has occurred, that the annual increases under section
5(c) would apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the present value of the salary and the bonus that  Mr.
Devine  would have earned if he had worked for the Company during
the  Remaining Unexpired Employment Period at the highest  annual
rate  of  salary (assuming, if a Change in Control has  occurred,
that the annual increases under section 5(c) would apply) and the
highest bonus as a percentage of the rate of salary provided  for
under  this  Agreement,  where  such  present  value  is  to   be
determined  using a discount rate of six percent (6%) per  annum,
compounded,   in   the  case  of  salary,  with   the   frequency
corresponding  to  the  Company's regular  payroll  periods  with
respect to its officers, and, in the case of bonus, annually;

           (v)  within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans  maintained  by,  or  covering employees  of,  the  Company
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Company  during the Remaining Unexpired Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees of, the Company as of the date of his termination where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable to the Company's contribution to which  he
would be entitled under any defined contribution plans maintained
by,  or covering employees of, the Company (including any "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if he had worked for the  Company  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment  Period which  is  prior  to  Mr.  Devine's
termination of employment with the Company, and been fully vested
in such plan or plans, over (B) the present value of the benefits
attributable  to  the  Company's contributions  to  which  he  is
actually  entitled  under  such plans  as  of  the  date  of  his
termination  of employment with the Company, where  such  present
values  are to be determined using a discount rate of six percent
(6%)  per  annum, compounded with the frequency corresponding  to
the  Company's  regular  payroll  periods  with  respect  to  its
officers;

          (vii)     the payments that would have been made to Mr.
Devine  under any incentive compensation plan maintained  by,  or
covering employees of, the Company (other than bonus payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working for the Company during the Remaining Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to Mr. Devine under such incentive compensation  plan,
multiplied by (B) the compensation that would have been  paid  to
Mr.  Devine during each calendar year at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the  Agreement, such payments to be made at the same time and  in
the  same  manner as payments are made to other officers  of  the
Company  pursuant  to  the terms of such  incentive  compensation
plan;   provided,  however,  that  payments  under  this  section
9(b)(vii) shall not be made to Mr. Devine for any year on account
of  which  no payments are made to any of the Company's  officers
under any such incentive compensation plan; and

           (viii)    the benefits to which Mr. Devine is entitled
under  the Company's Supplemental Executive Retirement  Plan  (or
other  excess benefits plan with the meaning of section 3(36)  of
ERISA or other special or supplemental plan) shall be paid to him
in  a  lump  sum,  where  such lump sum  is  computed  using  the
mortality  tables under the Company's tax-qualified pension  plan
and a discount rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty (30) days after the date of Mr. Devine's election,
and  if  the  amount may be increased by a subsequent  Change  in
Control, any additional payment shall be made within thirty  (30)
days of such Change in Control.

           (c)  Mr. Devine shall not be required to mitigate  the
amount  of any payment provided for in this section 9 by  seeking
other  employment  or  otherwise, nor shall  the  amount  of  any
payment  or benefit provided for in this section 9 be reduced  by
any compensation earned by Mr. Devine as the result of employment
by  another  employer, by retirement benefits, by offset  against
any  amount  claimed to be owed by Mr. Devine to the Company,  or
otherwise  except as specifically provided in section 9(b)  (iii)
of  this  Agreement or except as provided in section 28 to  avoid
duplication  of  payments.  The Company  and  Mr.  Devine  hereby
stipulate that the damages which may be incurred by Mr. Devine as
a  consequence  of  any such termination of  employment  are  not
capable  of  accurate  measurement as of  the  date  first  above
written  and that the benefits and payments provided for in  this
Agreement   constitute   a   reasonable   estimate   under    the
circumstances  of all damages sustained as a consequence  of  any
such  termination of employment, other than damages arising under
or  out  of  any  stock option, restricted stock  or  other  non-
qualified  stock acquisition or investment plan  or  program,  it
being  understood  and  agreed  that  this  Agreement  shall  not
determine  the  measurement of damages under  any  such  plan  or
program in respect of any termination of employment.

           10.   Termination Without Severance Benefits.  In  the
event  that  Mr.  Devine's  employment  with  the  Company  shall
terminate during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)  voluntary resignation by Mr. Devine other than  a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement); or

          (c)  Mr. Devine's death;

then  the  Company shall have no further obligations  under  this
Agreement, other than the payment to Mr. Devine (or, in the event
of  his death, to his estate) of his earned but unpaid salary  as
of  the  date  of  the  termination of his  employment,  and  the
provision of such other benefits, if any, to which he is entitled
as  a  former employee under the Company's employee benefit plans
and  programs and compensation plans and programs and payment for
all  unused  vacation days and floating holidays in the  year  in
which  his employment is terminated, at his highest annual salary
for such year.

          11.  Death and Disability.

           (a)   Death.  If Mr. Devine's employment is terminated
by  reason  of  Mr. Devine's death during the Employment  Period,
this Agreement shall terminate without further obligations to Mr.
Devine's  legal representatives under this Agreement, other  than
for  payment of amounts and provision of benefits under  sections
9(b)  (i)  and (ii); provided, however, that if Mr.  Devine  dies
while   in   the  employment  of  the  Company,  his   designated
beneficiary(ies) shall receive a death benefit,  payable  through
life  insurance or otherwise, which is the equivalent  on  a  net
after-tax  basis of the death benefit payable under a  term  life
insurance policy, with a stated death benefit of three times  Mr.
Devine's then Annual Base Salary.

            (b)   Disability.   If  Mr.  Devine's  employment  is
terminated  by  reason of Mr. Devine's Disability as  defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without further obligations to Mr. Devine, other  than
for  payment  of amounts and provision of benefits under  section
9(b)  (i) and (ii); provided, however, that in the event  of  Mr.
Devine's  Disability while in the employment of the Company,  the
Company  will pay to him a lump sum amount equal to  three  times
his then Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined  in  accordance with the terms of the Company's  long
term disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Devine's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

           (a)   Mr. Devine's termination of employment with  the
Company  shall  be  deemed  a "Termination  for  Cause"  if  such
termination occurs upon:

           (i)   Mr.  Devine's willful and continued  failure  to
substantially perform his duties with the Company (other than any
failure  resulting  from incapacity due  to  physical  or  mental
illness or any actual or anticipated failure following notice  by
Mr.  Devine of an intended Resignation for Good Reason)  after  a
written demand for substantial performance is delivered to him by
the  Board,  which demand specifically identifies the  manner  in
which  the  Board  believes  Mr.  Devine  has  not  substantially
performed his duties, and the failure to cure such breach  within
sixty  (60)  days  following  written  notice  thereof  from  the
Company;  or  (ii)  the  intentional  and  willful  engaging   in
dishonest conduct in connection with his performance of  services
for  the Company resulting in his conviction of a felony,  fraud,
personal dishonesty, incompetence, willful misconduct, breach  of
fiduciary  duty involving personal profit, willful  violation  of
any  law,  rule  or regulation (other than traffic violations  or
similar offenses), or final cease-and-desist order.

No  act, or failure to act, on Mr. Devine's part shall be  deemed
willful unless done, or omitted to be done, not in good faith and
without reasonable belief that such action or omission was in the
best  interest of the Company.  Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the
Board or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done,
by  Mr.  Devine  in good faith and in the best interests  of  the
Company.   Notwithstanding the foregoing, no termination  of  Mr.
Devine's employment shall be a Termination for Cause unless there
shall  have  been delivered to Mr. Devine a copy of a  resolution
duly  adopted by the affirmative vote of a majority of the  Board
of  Directors (or, following a Change in Control, an  affirmative
vote of three-quarters of the Board of Directors) at a meeting of
the  Board  called  and held for such purpose  (after  reasonable
notice  to Mr. Devine and an opportunity for Mr. Devine, together
with  his counsel, to be heard before the Board) finding that  in
good  faith  opinion  of  the  Board circumstances  described  in
section  12(a)  (i) or (ii) exist and specifying the  particulars
thereof in detail.

           (b)   Mr. Devine's termination of employment with  the
Company  shall  be deemed a Resignation for Good Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)   (A)  the assignment to Mr. Devine of any  duties
inconsistent   with  Mr.  Devine's  status  as   Executive   Vice
President,  Secretary and Chief Operating Officer of the  Company
or  (B)  a substantial adverse alteration in the nature or status
of Mr. Devine's responsibilities from those in effect immediately
prior  to  the alteration; or (C) any Change in Control described
in section 13(b);

           (ii) a reduction by the Company in Mr. Devine's annual
base  salary as in effect on the date first above written  or  as
the  same  may  be  increased  from time  to  time,  unless  such
reduction  was  mandated  at  the initiation  of  any  regulatory
authority having jurisdiction over the Company;

           (iii)      the  relocation of the Company's  principal
executive offices to a location outside the New York metropolitan
area  or  the Company's requiring Mr. Devine to be based anywhere
other  than the Company's principal executive offices except  for
required   travel  on  the  Company's  business  to   an   extent
substantially  consistent  with  Mr.  Devine's  business   travel
obligations at the date first above written;

           (iv)  the failure by the Company, without Mr. Devine's
consent, to pay to Mr. Devine, within seven (7) days of the  date
when due, (A) any portion of his compensation, or (B) any portion
of  an  installment of deferred compensation under  any  deferred
compensation program of the Company;

           (v)   the failure by the Company to continue in effect
any  compensation plan in which Mr. Devine participates which  is
material to his total compensation, including but not limited  to
the  Retirement Plan and the Company's Incentive Savings Plan  or
any substitute plans unless an equitable arrangement (embodied in
an  ongoing  substitute or alternative plan) has been  made  with
respect  to such plan, or the failure by the Company to  continue
his  participation therein (or in such substitute or  alternative
plan) on a basis not materially less favorable, both in terms  of
the   amount   of  benefits  provided  and  the  level   of   his
participation relative to other participants, unless such failure
is  the  result  of  action mandated at  the  initiation  of  any
regulatory authority having jurisdiction over the Company;

           (vi) the failure by the Company to continue to provide
Mr.  Devine with benefits substantially similar to those  enjoyed
by  Mr.  Devine  under  the Retirement  Plan  and  the  Company's
Incentive Savings Plan or under any of the Company's life, health
(including  hospitalization, medical and major medical),  dental,
accident, and long-term disability insurance benefits,  in  which
Mr.  Devine is participating, or the taking of any action by  the
Company which would directly or indirectly materially reduce  any
of  such  benefits or deprive Mr. Devine of the  number  of  paid
vacation  days to which he is entitled, on the basis of years  of
service  with the Company, rank or otherwise, in accordance  with
the  Company's normal vacation policy, unless such failure is the
result  of  action mandated at the initiation of  any  regulatory
authority having jurisdiction over the Company;

           (vii)      the  failure  of the Company  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the  Company  which  is not effected pursuant the  provisions  of
section  12(a) regarding Termination for Cause or on  account  of
Disability;

           (ix)  a  material  breach of  this  Agreement  by  the
Company, which the Company fails to cure within thirty (30)  days
following written notice thereof from Mr. Devine;

           (x)  in the event of a Change in Control described  in
section  13(b)  of this Agreement, a failure of  the  Company  to
provide,  or  cause to be provided, to Mr. Devine  in  connection
with  such  Change  in  Control,  stock-based  compensation   and
benefits,   including,   without   limitation,   stock   options,
restricted stock awards, and participation in tax-qualified stock
bonus  plans which, in the aggregate, are either (A) accepted  by
Mr.  Devine in writing as being satisfactory for purposes of this
Agreement  or  (B)  in  the  written, good  faith  opinion  of  a
nationally  recognized  executive  compensation  consulting  firm
selected  by  the Company and satisfactory to Mr.  Devine,  whose
agreement  shall  not  be  unreasonably  withheld,  are  no  less
favorable than the stock-based compensation and benefits  usually
and  customarily  provided to similarly  situated  executives  of
similar   financial  institutions  in  connection  with   similar
transactions; or

           (xi)  a  change  in the position to which  Mr.  Devine
reports;

          (xii)     in the event of a Change in Control described
in  section  13 of this Agreement, termination of employment  for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Company shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of the Company; (B) a corporation owned,  directly  or
indirectly,  by the stockholders of the Company in  substantially
the  same proportions as their ownership of stock of the Company;
or  (C)  Mr. Devine, or any group otherwise constituting a person
in  which Mr. Devine is a member, becomes the "beneficial  owner"
(as  defined  in Rule 13d-3 promulgated under the Exchange  Act),
directly  or  indirectly, of securities  issued  by  the  Company
representing 25% or more of the combined voting power of  all  of
the Company's then outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Company  to  effect a transaction described in section  13(a)  or
13(c)  of  this  Agreement)  whose  election  by  the  Board   or
nomination  for  election  by  the  Company's  stockholders   was
approved  by the affirmative vote of at least two-thirds  of  the
members  of Board then in office who were either members  of  the
Board  on  the  date first above written or whose  nomination  or
election  was  previously so approved cease  for  any  reason  to
constitute a majority of the members of the Board, but excluding,
for this purpose, any such individual whose initial assumption of
office  is  in  connection with an actual or threatened  election
contest relating to the election of directors of the Company  (as
such  terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or

          (c)  the shareholders of the Company approve either:

               (i)  a merger or consolidation of the Company with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (1) the members of the
               Board  of  the Company immediately prior  to  such
               merger  or  consolidation constitute  at  least  a
               majority of the members of the governing  body  of
               the  institution  resulting from  such  merger  or
               consolidation;  or  (2) the  shareholders  of  the
               Company   own   securities  of   the   institution
               resulting   from  such  merger  or   consolidation
               representing  80% or more of the  combined  voting
               power  of all such securities then outstanding  in
               substantially  the  same  proportions   as   their
               ownership  of  voting securities  of  the  Company
               before such merger or consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to  assume  and  perform  the  Company's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all
or substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a),  (b)  or (c) if the term "Bank" were substituted  for  the
term  "Company"  therein.  Such event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Devine's  employment during  the  Employment  Period  or
thereafter, whether by the Company or by Mr. Devine,  shall  have
no  effect  on  the rights and obligations of the parties  hereto
under  the  Company's  or  the Bank's  Retirement  Plan  and  the
Company's  Incentive Savings Plan, group life, health  (including
hospitalization, medical and major medical), dental, accident and
long  term  disability  insurance plans or  such  other  employee
benefit  plans  or  programs, or compensation plans  or  programs
(whether  or  not  employee  benefit  plans  or  programs)   and,
following the conversion of the Company to stock form, any  stock
option  and  appreciation rights plan, employee  stock  ownership
plan and restricted stock plan, as may be maintained by, or cover
employees of, the Company from time to time.

          15.  Successors and Assigns.

           (a)   The Company shall require any successor (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets  of  the Company to expressly assume and agree to  perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be  deemed  to  constitute  a material breach  of  the  Company's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Devine, his legal representatives and testate or
intestate   distributees,  and  the  Company,  their   respective
successors  and  assigns, including any successor  by  merger  or
consolidation or a statutory receiver or any other person or firm
or   corporation  to  which  all  or  substantially  all  of  the
respective  assets and business of the Company  may  be  sold  or
otherwise transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Devine:

          [Home address deleted].

          If to the Company:

          Dime Community Bancorp, Inc.

          209 Havemeyer Street
          Brooklyn, New York 11211
          Attention: Corporate Secretary

          with a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright, Esq.

           17.  Indemnification and Attorneys' Fees.  The Company
shall  pay  to  or on behalf of Mr. Devine all reasonable  costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however, that this section 17 shall not  obligate  the
Company to pay costs and legal fees on behalf of Mr. Devine under
this Agreement in excess of $50,000.

          18.  Excise Tax Indemnification.

           (a)   This  section  18 shall apply  if  Mr.  Devine's
employment  is  terminated  in  circumstances  giving   rise   to
liability  for excise taxes under section 4999 of the  Code.   If
this  Section  18  applies, then, if for any  taxable  year,  Mr.
Devine  shall  be liable for the payment of an excise  tax  under
section  4999  of  the Code with respect to any  payment  in  the
nature  of  compensation made by the Company  or  any  direct  or
indirect  subsidiary or affiliate of the Company to (or  for  the
benefit  of) Mr. Devine, the Company shall pay to Mr.  Devine  an
amount equal to X determined under the following formula:

                           E x P
          X =   ____________________________________
                1 - [(FI x (1 - SLI)) + SLI  + E + M]
          where
                     E  =  the rate at which the excise  tax
                           is assessed under section 4999 of the Code;

                     P  =  the amount with respect to which
                           such   excise  tax  is  assessed,  determined
                           without regard to this section 18;

                    FI  =  the  highest  marginal  rate  of
                           income  tax  applicable to Mr.  Devine  under
                           the Code for the taxable year in question;

                   SLI  =  the  sum  of  the  highest
                           marginal  rates of income tax  applicable  to
                           Mr.  Devine  under all applicable  state  and
                           local  laws for the taxable year in question;
                           and

                    M   =  the  highest  marginal  rate  of
                           Medicare  tax applicable to Mr. Devine  under
                           the Code for the taxable year in question.

With respect to any payment in the nature of compensation that is
made  to  (or for the benefit of) Mr. Devine under the  terms  of
this  Agreement, or otherwise, and on which an excise  tax  under
section 4999 of the Code will be assessed, the payment determined
under  this  section 18(a) shall be made to  Mr.  Devine  on  the
earlier  of  (i) the date the Company or any direct  or  indirect
subsidiary  or affiliate of the Company is required  to  withhold
such tax, or (ii) the date the tax is required to be paid by  Mr.
Devine.

          (b)  Notwithstanding anything in this section 18 to the
contrary, in the event that Mr. Devine's liability for the excise
tax  under section 4999 of the Code for a taxable year  is  subse
quently determined to be different than the amount determined  by
the  formula  (X  +  P) x E, where X, P and E have  the  meanings
provided in section 18(a), Mr. Devine or the Company, as the case
may  be, shall pay to the other party at the time that the amount
of  such excise tax is finally determined, an appropriate amount,
plus  interest,  such that the payment made under section  18(a),
when  increased by the amount of the payment made to  Mr.  Devine
under  this section 18(b) by the Company, or when reduced by  the
amount  of  the  payment made to the Company under  this  section
18(b)  by Mr. Devine, equals the amount that should have properly
been  paid to Mr. Devine under section 18(a).  The interest  paid
under this section 18(b) shall be determined at the rate provided
under  section  1274(b)(2)(B) of the Code.  To confirm  that  the
proper  amount, if any, was paid to Mr. Devine under this section
18,  Mr.  Devine shall furnish to the Company a copy of each  tax
return which reflects a liability for an excise tax payment  made
by  the  Company, at least 20 days before the date on which  such
return is required to be filed with the Internal Revenue Service.

           (c)  The provisions of this section 18 are designed to
reflect the provisions of applicable federal, state and local tax
laws in effect on the date of this Agreement.  If, after the date
hereof,  there shall be any change in any such laws, this section
18 shall be modified in such manner as Mr. Devine and the Company
may  mutually agree upon if and to the extent necessary to assure
that Mr. Devine is fully indemnified against the economic effects
of  the tax imposed under section 4999 of the Code or any similar
federal, state or local tax.

           19.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           20.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           21.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

           22.   Governing Law.  This Agreement shall be governed
by  and construed and enforced in accordance with the laws of the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            23.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement, unless otherwise stated.

           24.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr.  Devine.  No modifications of this Agreement shall  be  valid
unless made in writing and signed by the parties hereto.

           25.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Company.

           26.   Provisions  of  Law.   Notwithstanding  anything
herein  contained to the contrary, any payments to Mr. Devine  by
the Company, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with section 18(k)
of  the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k),
and any regulations promulgated thereunder.

          27.  Guarantee.  The Company hereby agrees to guarantee
the payment by the Bank of any benefits and compensation to which
the  Executive  is  or  may be entitled to under  the  terms  and
conditions of the employment agreement dated as of the  26th  day
of June, 1996 between the Bank and Mr. Devine, a copy of which is
attached hereto as Exhibit A.

           28.   Non-duplication.  In the event that  Mr.  Devine
shall  perform  services  for the Bank or  any  other  direct  or
indirect  subsidiary of the Company, any compensation or benefits
provided to Mr. Devine by such other employer shall be applied to
offset  the  obligations  of  the  Company  hereunder,  it  being
intended that this Agreement set forth the aggregate compensation
and  benefits  payable  to Mr. Devine for  all  services  to  the
Company and all of its direct or indirect subsidiaries.

           IN  WITNESS  WHEREOF,  the  Company  has  caused  this
Agreement to be executed and Mr. Devine has hereto set his  hand,
all as of the day and year first above written.

                                   /s/ Michael P. Devine
                                   MICHAEL P. DEVINE

ATTEST                             DIME COMMUNITY BANCORP, INC.

By:  /s/ Evelyn McLoughlin         By:  /s/ Anthony Bergamo
      Assistant  Secretary              for the  Board  of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

                      EMPLOYMENT AGREEMENT

           This  EMPLOYMENT AGREEMENT ("Agreement") is  made  and
entered  into  as of the 26th day of June, 1996, by  and  between
Dime  Community Bancorp, Inc., a savings and loan holding company
organized  and operating under the laws of the State of  Delaware
and  having an office at 209 Havemeyer Street, Brooklyn, New York
11211 ("Company") and Kenneth J. Mahon, [home address deleted].

                     W I T N E S S E T H :

           WHEREAS, Mr. Mahon currently serves the Company in the
capacity of Senior Vice President and Chief Financial Officer  of
its   wholly   owned  subsidiary,  The  Dime  Savings   Bank   of
Williamsburgh ("Bank"); and

           WHEREAS, the Company desires to assure for itself  the
continued availability of Mr. Mahon's services and the ability of
Mr.  Mahon  to perform such services with a minimum  of  personal
distraction  in  the event of a pending or threatened  Change  in
Control (as hereinafter defined); and

           WHEREAS, Mr. Mahon is willing to continue to serve the
Company on the terms and conditions hereinafter set forth;

           NOW,  THEREFORE, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Company and Mr. Mahon hereby agree as follows:

          1.   Representations and Warranties of the Parties.

           (a)  The Company hereby represents and warrants to Mr.
Mahon that:

           (i)   it  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of its obligations hereunder; and

           (ii)  the execution, delivery and performance of  this
Agreement  have  been duly authorized by all requisite  corporate
action on the part of the Company; and

           (iii)      neither the execution or delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A)  any  agreement or instrument to which the Company  is  a
party  or  by  which  it is bound, or (B) any provision  of  law,
including, without limitation, any statute, rule or regulation or
any  order  of  any order of any court or administrative  agency,
applicable to the Company or its business.

           (b)   Mr. Mahon hereby represents and warrants to  the
Company that:

           (i)   he  has  all  requisite power and  authority  to
execute,  enter  into and deliver this Agreement and  to  perform
each and every one of his obligations hereunder; and

            (ii)  neither  the  execution  or  delivery  of  this
Agreement, nor the performance of or compliance with any  of  the
terms  and conditions hereof, is prevented or in any way  limited
by  (A) any agreement or instrument to which he is a party or  by
which  he  is  bound, or (B) including, without  limitation,  any
statute,  rule  or  regulation or  any  order  of  any  court  or
administrative agency, applicable to him.

           2.    Employment.   The Company hereby  continues  the
employment  of  Mr.  Mahon,  and Mr. Mahon  hereby  accepts  such
continued  employment, during the period and upon the  terms  and
conditions set forth in this Agreement.

          3.   Employment Period.

           (a)   The terms and conditions of this Agreement shall
be   and  remain  in  effect  during  the  period  of  employment
established  under  this  section 3 ("Employment  Period").   The
Employment  Period shall be for an initial term  of  three  years
beginning  on the date of this Agreement and ending on the  third
anniversary date of this Agreement, plus such extensions, if any,
as are provided by the Board pursuant to section 3(b).

           (b)  Except as provided in section 3(c), beginning  on
the   date  of  this  Agreement,  the  Employment  Period   shall
automatically  be extended for one (1) additional day  each  day,
unless  either the Company or Mr. Mahon elects not to extend  the
Agreement further by giving written notice to the other party, in
which   case  the  Employment  Period  shall  end  on  the  third
anniversary  of the date on which such written notice  is  given.
Upon  termination of Mr. Mahon's employment with the Company  for
any reason whatsoever, any daily extensions provided pursuant  to
this   section   3(b),  if  not  therefore  discontinued,   shall
automatically cease.

           (c)   If,  prior  to the date on which the  Employment
Period  would  end  pursuant  to section  3(a)  or  (b)  of  this
Agreement, a Change in Control (as defined in section 13 of  this
Agreement)  occurs, then the Employment Period shall be  extended
through and including the third anniversary of the earliest  date
after  the  effective  date of such Change in  Control  on  which
either  the  Company  or  Mr.  Mahon elects,  by  written  notice
pursuant  to  section 3(d) of this Agreement to the  non-electing
party,  to discontinue the Employment Period; provided,  however,
that this section shall not apply in the event that, prior to the
Change  in  Control (as defined in section 13 of this Agreement),
Mr.  Mahon  has  provided written notice to the  Company  of  his
intent to discontinue the Employment Period.

           (d)   The  Company or Mr. Mahon may, at  any  time  by
written  notice  given  to  the other, elect  to  terminate  this
Agreement.   Any  such  notice given  by  the  Company  shall  be
accompanied by a certified copy of a resolution, adopted  by  the
affirmative  vote of a majority of the entire membership  of  the
Board at a meeting of the Board duly called and held, authorizing
the giving of such notice.

           (e)  Notwithstanding anything herein contained to  the
contrary:   (i)  Mr. Mahon's employment with the Company  may  be
terminated during the Employment Period, in accordance  with  the
terms and conditions of this Agreement; and (ii) nothing in  this
Agreement shall mandate or prohibit a continuation of Mr. Mahon's
employment following the expiration of the Employment Period upon
such  terms  and  conditions as the Company  and  Mr.  Mahon  may
mutually agree upon.

           (f)  For all purposes of this Agreement, any reference
to   the  "Remaining  Unexpired  Employment  Period"  as  of  any
specified  date  shall  mean  a period  commencing  on  the  date
specified and ending on the last day of the third (3rd) year from
the  date  specified,  or,  if neither  party  has  given  notice
electing a discontinuance of the Employment Period, on the  third
(3rd) anniversary of the date specified.

           4.    Duties.  During the Employment Period, Mr. Mahon
                 shall:

           (a)   except to the extent allowed under section 7  of
this  Agreement, devote his full business time and  attention  to
the  business and affairs of the Company and use his best efforts
to advance the Company's interests;

           (b) serve as Senior Vice President and Chief Financial
Officer  if  duly  appointed and/or  elected  to  serve  in  such
position; and

           (c)   have such functions, duties and responsibilities
not inconsistent with his title and office as may be assigned  to
him  by  or under the authority of the Board of Directors of  the
Company  ("Board"), in accordance with organization  Certificate,
By-laws,  Applicable Laws, Statutes and Regulations,  custom  and
practice  of  the  Company as in effect on the date  first  above
written.

Mr.   Mahon  shall  have  such  authority  as  is  necessary   or
appropriate  to  carry out his assigned duties. Mr.  Mahon  shall
report  to  and  be subject to direction and supervision  by  the
Board.

          5.   Compensation -- Salary and Bonus. In consideration
for  services  rendered by Mr. Mahon under  this  Agreement,  the
Company  shall pay to Mr. Mahon a salary at an annual rate  equal
to:

          (a)  during the period beginning on January 1, 1996 and
ending on December 31, 1996, no less than $178,000;

           (b)   during  each  calendar year  that  begins  after
December  31,  1996,  such  amount  as  the  Board  may,  in  its
discretion,  determine, but in no event less  than  the  rate  in
effect on December 31, 1996; or

           (c)  for each calendar year that begins on or after  a
Change  in  Control, the product of Mr. Mahon's  annual  rate  of
salary  in  effect  immediately  prior  to  such  calendar  year,
multiplied by the greatest of:

                               (i)  1.06;

                               (ii) the quotient of (A) the  U.S.
                    City  Average All Items Consumer Price  Index
                    for  All  Urban Consumers (or, if such  index
                    shall  cease  to  be  published,  such  other
                    measure  of general consumer price levels  as
                    the  Board may, in good faith, prescribe) for
                    October of the immediately preceding calendar
                    year,  divided by (B) the U.S.  City  Average
                    All  Items Consumer Price Index for All Urban
                    Consumers (or, if such index shall  cease  to
                    be  published, such other measure of  general
                    consumer  price levels as the Board  may,  in
                    good  faith,  prescribe) for October  of  the
                    second preceding calendar year; and

                               (iii)     the quotient of (A)  the
                    average annual rate of salary, determined  as
                    of  the  first day of such calendar year,  of
                    the  officers of the Company (other than  Mr.
                    Mahon)  who are assistant vice presidents  or
                    more  senior  officers, divided  by  (B)  the
                    average annual rate of salary, determined  as
                    of the first day of the immediately preceding
                    calendar year, of the officers of the Company
                    (other than Mr. Mahon) who are assistant vice
                    presidents or more senior officers;

The  salary  payable  under  this section  5  shall  be  paid  in
approximately equal installments in accordance with the Company's
customary payroll practices.  Nothing in this section 5 shall  be
construed as prohibiting the payment to Mr. Mahon of a salary  in
excess  of  that prescribed under this section 5 or of additional
cash or non-cash compensation in a form other than salary, to the
extent  that  such payment is duly authorized  by  or  under  the
authority of the Board.

           6.    Employee  Benefits  Plans  and  Programs;  Other
Compensation.   Except as otherwise provided in  this  Agreement,
Mr.  Mahon shall be treated as an employee of the Company and  be
entitled  to  participate  in  and  receive  benefits  under  the
Company's Retirement Plan, Incentive Savings Plan, group life and
health  (including  medical  and major  medical)  and  disability
insurance  plans,  and  such  other employee  benefit  plans  and
programs,   including  but  not  limited  to  any  long-term   or
short-term  incentive compensation plans or programs (whether  or
not  employee  benefit plans or programs),  as  the  Company  may
maintain  from  time to time, in accordance with  the  terms  and
conditions  of  such  employee benefit  plans  and  programs  and
compensation plans and programs and with the Company's  customary
practices.   Following a Change in Control, all such benefits  to
Mr.   Mahon   shall   be  continued  on  terms   and   conditions
substantially identical to, and in no event less favorable  than,
those in effect prior to the Change in Control.

           In the event of a conversion of the Bank from a mutual
savings  bank  to  a form of organization owned  by  stockholders
("Conversion"),  the  Company  will  provide,  or  cause  to   be
provided,  to  Mr.  Mahon  in connection  with  such  Conversion,
stock-based   compensation  and  benefits,   including,   without
limitation,   stock   options,  restricted  stock   awards,   and
participation  in tax-qualified stock bonus plans which,  in  the
aggregate,  are either (A) accepted by Mr. Mahon  in  writing  as
being  satisfactory for purposes of this Agreement or (B) in  the
written,  good faith opinion of a nationally recognized executive
compensation  consulting  firm  selected  by  the   Company   and
satisfactory  to  Mr.  Mahon,  whose  agreement  shall   not   be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions.

          7.   Board Memberships and Personal Activities.

           (a)   Mr. Mahon may serve as a member of the board  of
directors    of   such   business,   community   and   charitable
organizations as he may disclose to the Board from time to  time,
and  he may engage in personal business and investment activities
for  his  own  account; provided, however, that such service  and
personal  business and investment activities shall not materially
interfere   with  the  performance  of  his  duties  under   this
Agreement.

          (b)  Mr. Mahon may also serve as an officer or director
of  the Bank on such terms and conditions as the Company and  the
Bank  may  mutually  agree upon, and such service  shall  not  be
deemed  to  materially interfere with Mr. Mahon's performance  of
his duties hereunder or otherwise result in a material breach  of
this  Agreement.  If Mr. Mahon is discharged or suspended, or  is
subject to any regulatory prohibition or restriction with respect
to participation in the affairs of the Bank, he shall (subject to
the  Company's  powers  of  termination  hereunder)  continue  to
perform  services  for  the  Company  in  accordance  with   this
Agreement  but shall not directly or indirectly provide  services
to  or  participate  in  the affairs of  the  Bank  in  a  manner
inconsistent  with the terms of such discharge or  suspension  or
any applicable regulatory order.

           8.    Working  Facilities and Expenses.   Mr.  Mahon's
principal place of employment shall be at the Company's executive
offices  at  the address first above written, or  at  such  other
location in the New York metropolitan area as determined  by  the
Board.   The  Company shall provide Mr. Mahon, at  his  principal
place of employment, with a private office, stenographic services
and  other  support  services  and  facilities  suitable  to  his
position  with  the  Company  and  necessary  or  appropriate  in
connection with the performance of his assigned duties under this
Agreement.   The  Company  shall  reimburse  Mr.  Mahon  for  his
ordinary  and  necessary  business expenses,  including,  without
limitation,  fees for memberships in such clubs and organizations
as  Mr.  Mahon and the Company shall mutually agree are necessary
and   appropriate   for   business  purposes   and   travel   and
entertainment   expenses   incurred  in   connection   with   the
performance of his duties under this Agreement, upon presentation
to  the  Company of an itemized account of such expenses in  such
form  as the Company may reasonably require.  Mr. Mahon shall  be
entitled to no less than four (4) weeks of paid vacation   during
each year in the Employment Period.

          9.   Termination Giving Rise to Severance Benefits.

           (a)  In the event that Mr. Mahon's employment with the
Company  shall terminate during the Employment Period on  account
of  the  termination of Mr. Mahon's employment with  the  Company
other than:

           (i)   a  Termination for Cause (within the meaning  of
section 12(a) of this Agreement);

           (ii) a voluntary resignation by Mr. Mahon other than a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement);

           (iii)      a  termination on account  of  Mr.  Mahon's
death; or

            (iv)  a  termination  after  both  of  the  following
conditions  exist:  (A)  Mr.  Mahon  has  been  absent  from  the
full-time service of the Company on account of his Disability (as
defined in section 11(b) of this Agreement) for at least six  (6)
consecutive months; and (B) Mr. Mahon shall have failed to return
to  work  in  the full-time service of the Company within  thirty
(30) days after written notice requesting such return is given to
Mr.  Mahon by the Company; then the Company shall provide to  Mr.
Mahon  the  benefits  and pay to Mr. Mahon the  amounts  provided
under section 9(b) of this Agreement.

           (b)  In the event that Mr. Mahon's employment with the
Company  shall terminate under circumstances described in section
9(a)  of  this  Agreement  or  if  the  Company  terminates  this
Agreement  pursuant to section 3(d), the following  benefits  and
amounts shall be paid or provided to Mr. Mahon (or, in the  event
of his death, to his estate):

          (i)  his earned but unpaid salary as of the date of the
termination of his employment with the Company, payable when  due
but  in  no  event  later  than thirty (30)  days  following  his
termination of employment with the Company;

           (ii) (A) the benefits, if any, to which Mr. Mahon  and
his  family and dependents are entitled as a former employee,  or
family  or  dependents of a former employee, under  the  employee
benefit  plans and programs and compensation plans  and  programs
maintained  for  the  benefit  of  the  Company's  officers   and
employees,  in  accordance  with the  terms  of  such  plans  and
programs  in effect on the date of his termination of employment,
or  if  his  termination of employment occurs after a  Change  in
Control, on the date of his termination of employment or  on  the
date  of  such  Change  in  Control, whichever  results  in  more
favorable  benefits as determined by Mr. Mahon, where  credit  is
given   for  three  additional  years  of  service  and  age   in
determining  eligibility and benefits for any  plan  and  program
where  age and service are relevant factors, and (B) payment  for
all  unused  vacation days and floating holidays in the  year  in
which his employment is terminated, at his highest annual rate of
salary for such year;

           (iii)      continued  group  life,  health  (including
hospitalization, medical and major medical, dental, accident  and
long-term  disability insurance benefits), in  addition  to  that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking  into  account  the coverage provided  by  any  subsequent
employer, if and to the extent necessary to provide Mr. Mahon and
his  family and dependents for the Remaining Unexpired Employment
Period,  coverage identical to and in any event no less favorable
than  the  coverage to which they would have been entitled  under
such  plans  (as  in  effect on the date of  his  termination  of
employment, or, if his termination of employment occurs  after  a
Change  in  Control, on the date of his termination of employment
or  during the one-year period ending on the date of such  Change
in  Control,  whichever  results in more  favorable  benefits  as
determined  by  Mr. Mahon) if he had continued  working  for  the
Company during the Remaining Unexpired Employment Period  at  the
highest  annual rate of compensation (assuming, if  a  Change  in
Control  has  occurred, that the annual increases  under  section
5(c) would apply) under the Agreement;

           (iv) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the present value of the salary and the bonus that  Mr.
Mahon  would have earned if he had worked for the Company  during
the  Remaining Unexpired Employment Period at the highest  annual
rate  of  salary (assuming, if a Change in Control has  occurred,
that the annual increases under section 5(c) would apply) and the
highest bonus as a percentage of the rate of salary provided  for
under  this  Agreement,  where  such  present  value  is  to   be
determined  using a discount rate of six percent (6%) per  annum,
compounded,   in   the  case  of  salary,  with   the   frequency
corresponding  to  the  Company's regular  payroll  periods  with
respect to its officers, and, in the case of bonus, annually;

           (v)  within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to the excess, if any, of:  (A)  the present value of  the
benefits to which he would be entitled under any defined  benefit
plans  maintained  by,  or  covering employees  of,  the  Company
(including  any  "excess  benefit plan"  within  the  meaning  of
section 3(36) of the Employee Retirement Income Security  Act  of
1974,  as  amended  ("ERISA"), or other special  or  supplemental
plan)  as  in effect on the date of his termination,  if  he  had
worked  for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of compensation (assuming, if a
Change  in Control has occurred, that the annual increases  under
section  5(c)  would apply) under the Agreement  and  been  fully
vested  in such plan or plans and had continued working  for  the
Company  during the Remaining Unexpired Employment  Period,  such
benefits  to  be  determined as of the  date  of  termination  of
employment  by  adding to the service actually  recognized  under
such  plans an additional period equal to the Remaining Unexpired
Employment  Period  and by adding to the compensation  recognized
under  such plans for the year in which termination of employment
occurs  all  amounts  payable under sections  9(b)(i),  (iv)  and
(vii), over (B) the present value of the benefits to which he  is
actually entitled under any such plans maintained by, or covering
employees of, the Company as of the date of his termination where
such present values are to be determined using a discount rate of
six percent (6%) per annum, compounded monthly, and the mortality
tables  prescribed under section 72 of the Internal Revenue  Code
of 1986 ("Code");

           (vi) within thirty (30) days following his termination
of  employment with the Company, a lump sum payment in an  amount
equal  to  the  excess, if any, of (A) the present value  of  the
benefits  attributable to the Company's contribution to which  he
would be entitled under any defined contribution plans maintained
by,  or covering employees of, the Company (including any "excess
benefit  plan" within the meaning of section 3(36) of  ERISA,  or
other  special or supplemental plan) as in effect on the date  of
his  termination,  if he had worked for the  Company  during  the
Remaining Unexpired Employment Period at the highest annual  rate
of  compensation (assuming, if a Change in Control has  occurred,
that  the annual increases under section 5(c) would apply)  under
the   Agreement,  and  made  the  maximum  amount   of   employee
contributions, if any, required or permitted under such  plan  or
plans,  and  been  eligible  for the  highest  rate  in  matching
contributions  under  such  plan or plans  during  the  Remaining
Unexpired  Employment  Period  which  is  prior  to  Mr.  Mahon's
termination of employment with the Company, and been fully vested
in such plan or plans, over (B) the present value of the benefits
attributable  to  the  Company's contributions  to  which  he  is
actually  entitled  under  such plans  as  of  the  date  of  his
termination  of employment with the Company, where  such  present
values  are to be determined using a discount rate of six percent
(6%)  per  annum, compounded with the frequency corresponding  to
the  Company's  regular  payroll  periods  with  respect  to  its
officers;

          (vii)     the payments that would have been made to Mr.
Mahon  under  any incentive compensation plan maintained  by,  or
covering employees of, the Company (other than bonus payments  to
which section 9(b)(iv) of this Agreement is applicable) if he had
continued  working for the Company during the Remaining Unexpired
Employment  Period  and  had earned an incentive  award  in  each
calendar year that ends during the Remaining Unexpired Employment
Period  in  an  amount equal to the product of  (A)  the  maximum
percentage  rate  of  compensation at which  an  award  was  ever
available  to  Mr. Mahon under such incentive compensation  plan,
multiplied by (B) the compensation that would have been  paid  to
Mr. Mahon during each calendar year at the highest annual rate of
compensation (assuming, if a Change in Control has occurred, that
the  annual increases under section 5(c) would apply)  under  the
Agreement, such payments to be made at the same time and  in  the
same manner as payments are made to other officers of the Company
pursuant  to  the  terms  of  such incentive  compensation  plan;
provided,  however,  that payments under this  section  9(b)(vii)
shall  not be made to Mr. Mahon for any year on account of  which
no  payments are made to any of the Company's officers under  any
such incentive compensation plan; and

           (viii)     the benefits to which Mr. Mahon is entitled
under  the Company's Supplemental Executive Retirement  Plan  (or
other  excess benefits plan with the meaning of section 3(36)  of
ERISA or other special or supplemental plan) shall be paid to him
in  a  lump  sum,  where  such lump sum  is  computed  using  the
mortality  tables under the Company's tax-qualified pension  plan
and a discount rate of 6% per annum.

The  payments  specified in section 9(b)  (viii)  shall  be  made
within  thirty (30) days after the date of Mr. Mahon's  election,
and  if  the  amount may be increased by a subsequent  Change  in
Control, any additional payment shall be made within thirty  (30)
days of such Change in Control.

           (c)   Mr. Mahon shall not be required to mitigate  the
amount  of any payment provided for in this section 9 by  seeking
other  employment  or  otherwise, nor shall  the  amount  of  any
payment  or benefit provided for in this section 9 be reduced  by
any  compensation earned by Mr. Mahon as the result of employment
by  another  employer, by retirement benefits, by offset  against
any  amount  claimed to be owed by Mr. Mahon to the  Company,  or
otherwise  except as specifically provided in section 9(b)  (iii)
of  this  Agreement or except as provided in section 28 to  avoid
duplication  of  payments.   The Company  and  Mr.  Mahon  hereby
stipulate that the damages which may be incurred by Mr. Mahon  as
a  consequence  of  any such termination of  employment  are  not
capable  of  accurate  measurement as of  the  date  first  above
written  and that the benefits and payments provided for in  this
Agreement   constitute   a   reasonable   estimate   under    the
circumstances  of all damages sustained as a consequence  of  any
such  termination of employment, other than damages arising under
or  out  of  any  stock option, restricted stock  or  other  non-
qualified  stock acquisition or investment plan  or  program,  it
being  understood  and  agreed  that  this  Agreement  shall  not
determine  the  measurement of damages under  any  such  plan  or
program in respect of any termination of employment.

           10.   Termination Without Severance Benefits.  In  the
event   that  Mr.  Mahon's  employment  with  the  Company  shall
terminate during the Employment Period on account of:

           (a)   Termination  for Cause (within  the  meaning  of
section 12(a) of this Agreement);

           (b)   voluntary resignation by Mr. Mahon other than  a
Resignation for Good Reason (within the meaning of section  12(b)
of this Agreement); or

           (c)  Mr. Mahon's death;

then  the  Company shall have no further obligations  under  this
Agreement, other than the payment to Mr. Mahon (or, in the  event
of  his death, to his estate) of his earned but unpaid salary  as
of  the  date  of  the  termination of his  employment,  and  the
provision of such other benefits, if any, to which he is entitled
as  a  former employee under the Company's employee benefit plans
and  programs and compensation plans and programs and payment for
all  unused  vacation days and floating holidays in the  year  in
which  his employment is terminated, at his highest annual salary
for such year.

          11.  Death and Disability.

          (a)  Death.  If Mr. Mahon's employment is terminated by
reason  of  Mr. Mahon's death during the Employment Period,  this
Agreement  shall  terminate without further  obligations  to  Mr.
Mahon's  legal representatives under this Agreement,  other  than
for  payment of amounts and provision of benefits under  sections
9(b)  (i)  and  (ii); provided, however, that if Mr.  Mahon  dies
while   in   the  employment  of  the  Company,  his   designated
beneficiary(ies) shall receive a death benefit,  payable  through
life  insurance or otherwise, which is the equivalent  on  a  net
after-tax  basis of the death benefit payable under a  term  life
insurance policy, with a stated death benefit of three times  Mr.
Mahon's then Annual Base Salary.

            (b)   Disability.   If  Mr.  Mahon's  employment   is
terminated  by  reason of Mr. Mahon's Disability  as  defined  in
section 11(c) during the Employment Period, this Agreement  shall
terminate  without further obligations to Mr. Mahon,  other  than
for  payment  of amounts and provision of benefits under  section
9(b)  (i) and (ii); provided, however, that in the event  of  Mr.
Mahon's  Disability while in the employment of the  Company,  the
Company  will pay to him a lump sum amount equal to  three  times
his then Annual Base Salary.

          (c)  For purposes of this Agreement, "Disability" shall
be  defined  in  accordance with the terms of the Company's  long
term disability policy.

           (d)   Payments  under this section 11  shall  be  made
within 30 days after Mr. Mahon's death or disability.

            12.    Definition  of  Termination  for   Cause   and
Resignation for Good Reason.

           (a)   Mr.  Mahon's termination of employment with  the
Company  shall  be  deemed  a "Termination  for  Cause"  if  such
termination occurs upon:

           (i)   Mr.  Mahon's  willful and continued  failure  to
substantially perform his duties with the Company (other than any
failure  resulting  from incapacity due  to  physical  or  mental
illness or any actual or anticipated failure following notice  by
Mr.  Mahon  of an intended Resignation for Good Reason)  after  a
written demand for substantial performance is delivered to him by
the  Board,  which demand specifically identifies the  manner  in
which   the  Board  believes  Mr.  Mahon  has  not  substantially
performed his duties, and the failure to cure such breach  within
sixty  (60)  days  following  written  notice  thereof  from  the
Company;  or  (ii)  the  intentional  and  willful  engaging   in
dishonest conduct in connection with his performance of  services
for  the Company resulting in his conviction of a felony,  fraud,
personal dishonesty, incompetence, willful misconduct, breach  of
fiduciary  duty involving personal profit, willful  violation  of
any  law,  rule  or regulation (other than traffic violations  or
similar offenses), or final cease-and-desist order.

No  act,  or failure to act, on Mr. Mahon's part shall be  deemed
willful unless done, or omitted to be done, not in good faith and
without reasonable belief that such action or omission was in the
best  interest of the Company.  Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the
Board or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done,
by  Mr.  Mahon  in  good faith and in the best interests  of  the
Company.   Notwithstanding the foregoing, no termination  of  Mr.
Mahon's employment shall be a Termination for Cause unless  there
shall  have  been delivered to Mr. Mahon a copy of  a  resolution
duly  adopted by the affirmative vote of a majority of the  Board
of  Directors (or, following a Change in Control, an  affirmative
vote of three-quarters of the Board of Directors) at a meeting of
the  Board  called  and held for such purpose  (after  reasonable
notice  to  Mr. Mahon and an opportunity for Mr. Mahon,  together
with  his counsel, to be heard before the Board) finding that  in
good  faith  opinion  of  the  Board circumstances  described  in
section  12(a)  (i) or (ii) exist and specifying the  particulars
thereof in detail.

           (b)   Mr.  Mahon's termination of employment with  the
Company  shall  be deemed a Resignation for Good Reason  if  such
termination  occurs following any one or more  of  the  following
events:

           (i)   (A)  the assignment to Mr. Mahon of  any  duties
inconsistent with Mr. Mahon's status as Senior Vice President and
Chief  Financial  Officer of the Company  or  (B)  a  substantial
adverse  alteration  in  the nature  or  status  of  Mr.  Mahon's
responsibilities from those in effect immediately  prior  to  the
alteration;  or  (C) any Change in Control described  in  section
13(b);

           (ii)  a reduction by the Company in Mr. Mahon's annual
base  salary as in effect on the date first above written  or  as
the  same  may  be  increased  from time  to  time,  unless  such
reduction  was  mandated  at  the initiation  of  any  regulatory
authority having jurisdiction over the Company;

           (iii)      the  relocation of the Company's  principal
executive offices to a location outside the New York metropolitan
area  or  the Company's requiring Mr. Mahon to be based  anywhere
other  than the Company's principal executive offices except  for
required   travel  on  the  Company's  business  to   an   extent
substantially   consistent  with  Mr.  Mahon's  business   travel
obligations at the date first above written;

           (iv)  the failure by the Company, without Mr.  Mahon's
consent,  to pay to Mr. Mahon, within seven (7) days of the  date
when due, (A) any portion of his compensation, or (B) any portion
of  an  installment of deferred compensation under  any  deferred
compensation program of the Company;

           (v)   the failure by the Company to continue in effect
any  compensation plan in which Mr. Mahon participates  which  is
material to his total compensation, including but not limited  to
the  Retirement Plan and the Company's Incentive Savings Plan  or
any substitute plans unless an equitable arrangement (embodied in
an  ongoing  substitute or alternative plan) has been  made  with
respect  to such plan, or the failure by the Company to  continue
his  participation therein (or in such substitute or  alternative
plan) on a basis not materially less favorable, both in terms  of
the   amount   of  benefits  provided  and  the  level   of   his
participation relative to other participants, unless such failure
is  the  result  of  action mandated at  the  initiation  of  any
regulatory authority having jurisdiction over the Company;

           (vi) the failure by the Company to continue to provide
Mr. Mahon with benefits substantially similar to those enjoyed by
Mr.  Mahon  under the Retirement Plan and the Company's Incentive
Savings  Plan  or  under  any  of  the  Company's  life,   health
(including  hospitalization, medical and major medical),  dental,
accident, and long-term disability insurance benefits,  in  which
Mr.  Mahon is participating, or the taking of any action  by  the
Company which would directly or indirectly materially reduce  any
of  such  benefits  or deprive Mr. Mahon of the  number  of  paid
vacation  days to which he is entitled, on the basis of years  of
service  with the Company, rank or otherwise, in accordance  with
the  Company's normal vacation policy, unless such failure is the
result  of  action mandated at the initiation of  any  regulatory
authority having jurisdiction over the Company;

           (vii)      the  failure  of the Company  to  obtain  a
satisfactory agreement from any successor to assume and agree  to
perform this Agreement, as contemplated in section 15(a) of  this
Agreement;

           (viii)     any purported termination of employment  by
the  Company  which  is not effected pursuant the  provisions  of
section  12(a) regarding Termination for Cause or on  account  of
Disability;

           (ix)  a  material  breach of  this  Agreement  by  the
Company, which the Company fails to cure within thirty (30)  days
following written notice thereof from Mr. Mahon;

           (x)  in the event of a Change in Control described  in
section  13(b)  of this Agreement, a failure of  the  Company  to
provide, or cause to be provided, to Mr. Mahon in connection with
such  Change  in Control, stock-based compensation and  benefits,
including,  without limitation, stock options,  restricted  stock
awards,  and  participation in tax-qualified  stock  bonus  plans
which, in the aggregate, are either (A) accepted by Mr. Mahon  in
writing  as being satisfactory for purposes of this Agreement  or
(B) in the written, good faith opinion of a nationally recognized
executive  compensation consulting firm selected by  the  Company
and  satisfactory  to  Mr. Mahon, whose agreement  shall  not  be
unreasonably withheld, are no less favorable than the stock-based
compensation  and  benefits usually and customarily  provided  to
similarly  situated executives of similar financial  institutions
in connection with similar transactions; or

           (xi)  a  change  in the position to  which  Mr.  Mahon
reports;

          (xii)     in the event of a Change in Control described
in  section  13 of this Agreement, termination of employment  for
any  or no reason whatsoever during the period of sixty (60) days
beginning on the first anniversary of the effective date of  such
Change in Control.

           13.  Definition of Change in Control.  For purposes of
this Agreement, a Change in Control of the Company shall mean:

           (a)   the  occurrence  of any  event  upon  which  any
"person" (as such term is used in sections 13(d) and 14(d) of the
Securities  Exchange Act of 1934, as amended  ("Exchange  Act")),
other  than  (A) a trustee or other fiduciary holding  securities
under  an  employee benefit plan maintained for  the  benefit  of
employees  of the Company; (B) a corporation owned,  directly  or
indirectly,  by the stockholders of the Company in  substantially
the  same proportions as their ownership of stock of the Company;
or (C) Mr. Mahon, or any group otherwise constituting a person in
which  Mr. Mahon is a member, becomes the "beneficial owner"  (as
defined  in  Rule  13d-3  promulgated under  the  Exchange  Act),
directly  or  indirectly, of securities  issued  by  the  Company
representing 25% or more of the combined voting power of  all  of
the Company's then outstanding securities; or

           (b)   the  occurrence  of any  event  upon  which  the
individuals  who on the date first above written are  members  of
the  Board,  together with individuals (other than any individual
designated by a person who has entered into an agreement with the
Company  to  effect a transaction described in section  13(a)  or
13(c)  of  this  Agreement)  whose  election  by  the  Board   or
nomination  for  election  by  the  Company's  stockholders   was
approved  by the affirmative vote of at least two-thirds  of  the
members  of Board then in office who were either members  of  the
Board  on  the  date first above written or whose  nomination  or
election  was  previously so approved cease  for  any  reason  to
constitute a majority of the members of the Board, but excluding,
for this purpose, any such individual whose initial assumption of
office  is  in  connection with an actual or threatened  election
contest relating to the election of directors of the Company  (as
such  terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or

          (c)  the shareholders of the Company approve either:

               (i)  a merger or consolidation of the Company with
any  other  corporation,  other than a  merger  or  consolidation
following which both of the following conditions are satisfied:

                               (A)  either (1) the members of the
               Board  of  the Company immediately prior  to  such
               merger  or  consolidation constitute  at  least  a
               majority of the members of the governing  body  of
               the  institution  resulting from  such  merger  or
               consolidation;  or  (2) the  shareholders  of  the
               Company   own   securities  of   the   institution
               resulting   from  such  merger  or   consolidation
               representing  80% or more of the  combined  voting
               power  of all such securities then outstanding  in
               substantially  the  same  proportions   as   their
               ownership  of  voting securities  of  the  Company
               before such merger or consolidation; and

                               (B)  the entity which results from
               such  merger or consolidation expressly agrees  in
               writing   to  assume  and  perform  the  Company's
               obligations under this Agreement; or

               (ii) a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all
or substantially all of its assets; and

           (d)   any  event which would be described  in  section
13(a),  (b)  or (c) if the term "Bank" were substituted  for  the
term  "Company"  therein.  Such event shall be  deemed  to  be  a
Change  in Control under the relevant provision of section 13(a),
(b) or (c).

It  is understood and agreed that more than one Change in Control
may  occur  at the same or different times during the  Employment
Period and that the provisions of this Agreement shall apply with
equal  force  and  effect with respect to  each  such  Change  in
Control.

           14.   No Effect on Employee Benefit Plans or Programs.
Except  as  expressly provided in this Agreement, the termination
of  Mr.  Mahon's  employment  during  the  Employment  Period  or
thereafter, whether by the Company or by Mr. Mahon, shall have no
effect on the rights and obligations of the parties hereto  under
the  Company's  or the Bank's Retirement Plan and  the  Company's
Incentive   Savings   Plan,   group   life,   health   (including
hospitalization, medical and major medical), dental, accident and
long  term  disability  insurance plans or  such  other  employee
benefit  plans  or  programs, or compensation plans  or  programs
(whether  or  not  employee  benefit  plans  or  programs)   and,
following the conversion of the Company to stock form, any  stock
option  and  appreciation rights plan, employee  stock  ownership
plan and restricted stock plan, as may be maintained by, or cover
employees of, the Company from time to time.

          15.  Successors and Assigns.

           (a)   The Company shall require any successor (whether
direct  or  indirect,  by  purchase,  merger,  consolidation   or
otherwise)  to  all or substantially all of the  business  and/or
assets  of  the Company to expressly assume and agree to  perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be  deemed  to  constitute  a material breach  of  the  Company's
obligations under this Agreement.

          (b)  This Agreement will inure to the benefit of and be
binding upon Mr. Mahon, his legal representatives and testate  or
intestate   distributees,  and  the  Company,  their   respective
successors  and  assigns, including any successor  by  merger  or
consolidation or a statutory receiver or any other person or firm
or   corporation  to  which  all  or  substantially  all  of  the
respective  assets and business of the Company  may  be  sold  or
otherwise transferred.

           16.  Notices.  Any communication required or permitted
to   be   given  under  this  Agreement,  including  any  notice,
direction,   designation,  consent,  instruction,  objection   or
waiver,  shall  be in writing and shall be deemed  to  have  been
given  at  such time as it is delivered personally, or  five  (5)
days  after mailing if mailed, postage prepaid, by registered  or
certified mail, return receipt requested, addressed to such party
at  the address listed below or at such other address as one such
party may by written notice specify to the other party:

          If to Mr. Mahon:

          [Home address deleted].

          If to the Company:

          Dime Community Bancorp, Inc.

          209 Havemeyer Street
          Brooklyn, New York 11211
          Attention: Corporate Secretary

          with a copy to:

          Thacher Proffitt & Wood
          Two World Trade Center, 39th Floor
          New York, New York  10048

          Attention:  W. Edward Bright

           17.  Indemnification and Attorneys' Fees.  The Company
shall  pay  to  or  on behalf of Mr. Mahon all reasonable  costs,
including  legal  fees,  incurred by him in  connection  with  or
arising  out  of  his  consultation  with  legal  counsel  or  in
connection  with or arising out of any action, suit or proceeding
in  which he may be involved, as a result of his efforts, in good
faith,  to  defend  or  enforce  the  terms  of  this  Agreement;
provided,  however, that this section 17 shall not  obligate  the
Company to pay costs and legal fees on behalf of Mr. Mahon  under
this Agreement in excess of $50,000.

          18.  Excise Tax Indemnification.

           (a)   This  section  18  shall apply  if  Mr.  Mahon's
employment  is  terminated  in  circumstances  giving   rise   to
liability  for excise taxes under section 4999 of the  Code.   If
this Section 18 applies, then, if for any taxable year, Mr. Mahon
shall  be  liable for the payment of an excise tax under  section
4999  of  the Code with respect to any payment in the  nature  of
compensation  made  by  the Company or  any  direct  or  indirect
subsidiary or affiliate of the Company to (or for the benefit of)
Mr. Mahon, the Company shall pay to Mr. Mahon an amount equal  to
X determined under the following formula:

                               E x P
          X =   ____________________________________
                1 - [(FI x (1 - SLI)) + SLI  + E + M]
          where
                      E  =  the rate at which the excise  tax
                            is assessed under section 4999 of the Code;

                     P   =  the amount with respect to which
                            such   excise  tax  is  assessed,  determined
                            without regard to this section 18;

                     FI  =  the  highest  marginal  rate  of
                            income tax applicable to Mr. Mahon under  the
                            Code for the taxable year in question;

                    SLI  =  the  sum  of  the  highest
                            marginal  rates of income tax  applicable  to
                            Mr.  Mahon  under  all applicable  state  and
                            local  laws for the taxable year in question;
                            and

                     M   =  the  highest  marginal  rate  of
                            Medicare  tax applicable to Mr.  Mahon  under
                            the Code for the taxable year in question.

With respect to any payment in the nature of compensation that is
made to (or for the benefit of) Mr. Mahon under the terms of this
Agreement, or otherwise, and on which an excise tax under section
4999  of the Code will be assessed, the payment determined  under
this  section 18(a) shall be made to Mr. Mahon on the earlier  of
(i) the date the Company or any direct or indirect subsidiary  or
affiliate  of  the Company is required to withhold such  tax,  or
(ii) the date the tax is required to be paid by Mr. Mahon.

          (b)  Notwithstanding anything in this section 18 to the
contrary, in the event that Mr. Mahon's liability for the  excise
tax  under section 4999 of the Code for a taxable year  is  subse
quently determined to be different than the amount determined  by
the  formula  (X  +  P) x E, where X, P and E have  the  meanings
provided in section 18(a), Mr. Mahon or the Company, as the  case
may  be, shall pay to the other party at the time that the amount
of  such excise tax is finally determined, an appropriate amount,
plus  interest,  such that the payment made under section  18(a),
when  increased by the amount of the payment made  to  Mr.  Mahon
under  this section 18(b) by the Company, or when reduced by  the
amount  of  the  payment made to the Company under  this  section
18(b)  by  Mr. Mahon, equals the amount that should have properly
been  paid  to Mr. Mahon under section 18(a).  The interest  paid
under this section 18(b) shall be determined at the rate provided
under  section  1274(b)(2)(B) of the Code.  To confirm  that  the
proper  amount, if any, was paid to Mr. Mahon under this  section
18,  Mr.  Mahon shall furnish to the Company a copy of  each  tax
return which reflects a liability for an excise tax payment  made
by  the  Company, at least 20 days before the date on which  such
return is required to be filed with the Internal Revenue Service.

           (c)  The provisions of this section 18 are designed to
reflect the provisions of applicable federal, state and local tax
laws in effect on the date of this Agreement.  If, after the date
hereof,  there shall be any change in any such laws, this section
18  shall be modified in such manner as Mr. Mahon and the Company
may  mutually agree upon if and to the extent necessary to assure
that  Mr. Mahon is fully indemnified against the economic effects
of  the tax imposed under section 4999 of the Code or any similar
federal, state or local tax.

           19.  Severability.  A determination that any provision
of  this  Agreement is invalid or unenforceable shall not  affect
the validity or enforceability of any other provision hereof.

           20.  Waiver.  Failure to insist upon strict compliance
with  any of the terms, covenants or conditions hereof shall  not
be deemed a waiver of such term, covenant, or condition. A waiver
of  any  provision  of this Agreement must be  made  in  writing,
designated as a waiver, and signed by the party against  who  its
enforcement  is  sought.   Any waiver or relinquishment  of  such
right  or  power at any one or more times shall not be  deemed  a
waiver or relinquishment of such right or power at any other time
or times.

           21.   Counterparts. This Agreement may be executed  in
two  (2)  or more counterparts, each of which shall be deemed  an
original,  and  all of which shall constitute one  and  the  same
Agreement.

           22.   Governing Law.  This Agreement shall be governed
by  and construed and enforced in accordance with the laws of the
State  of  New  York,  without  reference  to  conflicts  of  law
principles.

            23.   Headings  and  Construction.  The  headings  of
sections in this Agreement are for convenience of reference  only
and  are not intended to qualify the meaning of any section.  Any
reference  to a section number shall refer to a section  of  this
Agreement, unless otherwise stated.

           24.   Entire Agreement; Modifications. This instrument
contains  the  entire agreement of the parties  relating  to  the
subject matter hereof, and supersedes in its entirety any and all
prior  agreements, understandings or representations relating  to
the  subject  matter hereof, including the Amended  and  Restated
Employment Agreement dated October 1, 1995 between the  Bank  and
Mr.  Mahon.   No modifications of this Agreement shall  be  valid
unless made in writing and signed by the parties hereto.

           25.   Arbitration Clause. Any dispute  or  controversy
arising  under  or  in connection with this  Agreement  shall  be
settled  exclusively by arbitration, conducted before a panel  of
three  arbitrators in New York, New York, in accordance with  the
rules  of  the American Arbitration Association then  in  effect.
Judgment  may be entered on the arbitrator's award in  any  court
having  jurisdiction;  the expense of such arbitration  shall  be
borne by the Company.

           26.   Provisions  of  Law.   Notwithstanding  anything
herein  contained to the contrary, any payments to Mr.  Mahon  by
the Company, whether pursuant to this Agreement or otherwise, are
subject  to  and conditioned upon their compliance  with  section
18(k)  of  the Federal Deposit Insurance Act, 12 U.S.C. Section
1828(k), and any regulations promulgated thereunder.

          27.  Guarantee.  The Company hereby agrees to guarantee
the payment by the Bank of any benefits and compensation to which
the  Executive  is  or  may be entitled to under  the  terms  and
conditions of the employment agreement dated as of the  26th  day
of  June, 1996 between the Bank and Mr. Mahon, a copy of which is
attached hereto as Exhibit A.

           28.   Non-duplication.  In the event  that  Mr.  Mahon
shall  perform  services  for the Bank or  any  other  direct  or
indirect  subsidiary of the Company, any compensation or benefits
provided to Mr. Mahon by such other employer shall be applied  to
offset  the  obligations  of  the  Company  hereunder,  it  being
intended that this Agreement set forth the aggregate compensation
and benefits payable to Mr. Mahon for all services to the Company
and all of its direct or indirect subsidiaries.

           IN  WITNESS  WHEREOF,  the  Company  has  caused  this
Agreement  to be executed and Mr. Mahon has hereto set his  hand,
all as of the day and year first above written.

                                   /s/ Kenneth J. Mahon
                                   KENNETH J. MAHON

ATTEST                             DIME COMMUNITY BANCORP, INC.

By:   /s/ Evelyn McLoughlin        By:  /s/ Anthony Bergamo
      Assistant  Secretary              for the  Board  of Directors

     [Seal]

         [Witnessed and attested to by Notary Public].

                  EMPLOYEE RETENTION AGREEMENT

          This Employee Retention Agreement ("Agreement") is made
and  entered into as of _______________   by and among  The  Dime
Savings  Bank  of  Williamsburgh, a savings  bank  organized  and
operating under the federal laws of the United States and  having
its executive offices at 209 Havemeyer Street, Brooklyn, New York
11211   ("Bank");  Dime  Community  Bancorp,  Inc.,  a   business
corporation organized and existing under the laws of the State of
Delaware  and  having  its  executive offices  at  209  Havemeyer
Street,  Brooklyn,  New  York  11211  ("Holding  Company");   and
,_________  an individual residing at ___________________________
__________________ ("Officer").

                     W I T N E S S E T H :

           Whereas,  effective as of the date of this  Agreement,
the  Bank has converted from a federal mutual savings bank  to  a
federal   stock  savings  bank  and  has  become  a  wholly-owned
subsidiary of the Holding Company; and

           Whereas,  the  Bank desires to secure for  itself  the
continued availability of the Officer's services; and

           Whereas, the Bank recognizes that a third party may at
some time in the future pursue a Change of Control of the Bank or
the  Holding Company and that this possibility may result in  the
departure or distraction of the Bank's officers; and

          Whereas, the Bank has determined that appropriate steps
should  be taken to encourage the continued attention and  dedica
tion  of  the  Bank's officers, including the Officer,  to  their
duties  for the Bank without the distraction that may arise  from
the possibility of a Change of Control of the Bank or the Holding
Company; and

           Whereas,  the Bank believes that, by assuring  certain
officers, including the Officer, of reasonable financial security
in  the  event of a Change of Control of the Bank or the  Holding
Company,  such  officers will be in a position to  perform  their
duties  free  from  financial  self  interest  and  in  the  best
interests of the Bank and its shareholders; and

            Whereas,  for  purposes  of  securing  the  Officer's
services  for  the  Bank,  the Board of  Directors  of  the  Bank
("Board") has authorized the proper officers of the Bank to enter
into  an  employee retention agreement with the  Officer  on  the
terms and conditions set forth herein; and

           Whereas, the Board of Directors of the Holding Company
has  authorized  the  Holding Company  to  guarantee  the  Bank's
obligations under such an employee retention agreement; and

           Whereas,  the Officer is willing to make the Officer's
services  available to the Bank on the terms and  conditions  set
forth herein;

           Now,  Therefore, in consideration of the premises  and
the  mutual covenants and obligations hereinafter set forth,  the
Bank,  the  Holding  Company  and the  Officer  hereby  agree  as
follows:

          Section 1.     Effective Date.

           (a)   This Agreement shall be effective as of the date
first above written and shall remain in effect during the term of
this  Agreement  which shall be for a period of three  (3)  years
commencing on the date of this Agreement, plus such extensions as
are provided pursuant to section 1(b); provided, however, that if
the term of this Agreement has not otherwise terminated, the term
of  this  Agreement will terminate on the date of  the  Officer's
termination  of employment with the Bank; and provided,  further,
that  the  obligations  under section 8 of this  Agreement  shall
survive  the term of this Agreement if payments become  due  here
under.

           (b)  Prior to each anniversary date of this Agreement,
the  Board shall consider the advisability of an extension of the
term  in  light of the circumstances then prevailing and may,  in
its  discretion, approve an extension to take effect  as  of  the
upcoming anniversary date.  If an extension is approved, the term
of  this Agreement shall be extended so that it will expire three
(3) years after such anniversary date.

           (c)  Notwithstanding anything herein contained to  the
contrary:   (i)  the Officer's employment with the  Bank  may  be
terminated  at  any time, subject to the terms and conditions  of
this  Agreement; and (ii) nothing in this Agreement shall mandate
or  prohibit a continuation of the Officer's employment following
the  expiration  of  the Assurance Period  upon  such  terms  and
conditions as the Bank and the Officer may mutually agree upon.

          Section 2.     Assurance Period.

          (a)  The assurance period ("Assurance Period") shall be
for  a  period commencing on the date of a Change of Control,  as
defined  in  section  10 of this Agreement,  and  ending  on  the
anniversary of the date on which the Assurance Period  commences,
plus  such  extensions as are provided pursuant to the  following
sentence.   The Assurance Period shall be automatically  extended
for  one  (1) additional day each day, unless either the Bank  or
the Officer elects not to extend the Assurance Period further  by
giving  written  notice to the other party,  in  which  case  the
Assurance  Period  shall  become  fixed  and  shall  end  on  the
anniversary  of the date on which such written notice  is  given;
provided,  however, that if following a Change  of  Control,  the
Office  of  Thrift Supervision (or its successor) is  the  Bank's
primary  federal  regulator, the Agreement shall  be  subject  to
extension not more frequently than annually and only upon  review
and approval of the Board.

           (b)  Upon termination of the Officer's employment with
the Bank, any daily extensions provided pursuant to the preceding
sentence,  if not theretofore discontinued, shall cease  and  the
remaining  unexpired Assurance Period under this Agreement  shall
be  a  fixed period ending on the later of the        anniversary
of the date of the Change of Control, as defined in section 10 of
this  Agreement, or the         anniversary of the date on  which
the daily extensions were discontinued.

          Section 3.     Duties.

           During  the  period of the Officer's  employment  that
falls within the Assurance Period, the Officer shall:  (a) except
to  the  extent allowed under section 6 of this Agreement, devote
his full business time and attention (other than during weekends,
holidays, vacation periods, and periods of illness, disability or
approved  leave  of absence) to the business and affairs  of  the
Bank  and  use his best efforts to advance the Bank's  interests;
(b)  serve  in the position to which the Officer is appointed  by
the  Bank,  which,  during the Assurance  Period,  shall  be  the
position  that  the Officer held on the day before the  Assurance
Period commenced or any higher office at the Bank to which he may
subsequently  be appointed; and (c) subject to the  direction  of
the  Board  and  the  By-laws of the Bank, have  such  functions,
duties,  responsibilities and authority commonly associated  with
such position.

          Section 4.     Compensation.

           In  consideration  for the services  rendered  by  the
Officer  during the Assurance Period, the Bank shall pay  to  the
Officer  during the Assurance Period a salary at an  annual  rate
equal to the greater of:

           (a)  the annual rate of salary in effect for  the
     Officer   on  the  day  before  the  Assurance   Period
     commenced; or

           (b)  such higher annual rate as may be prescribed
     by or under the authority of the Board;

provided,  however, that in no event shall the  Officer's  annual
rate  of  salary under this Agreement in effect at  a  particular
time during the Assurance Period be reduced without the Officer's
prior  written  consent.  The annual salary  payable  under  this
section  4 shall be subject to review at least once annually  and
shall  be  paid in approximately equal installments in accordance
with  the  Bank's customary payroll practices.  Nothing  in  this
section  4  shall be deemed to prevent the Officer from receiving
additional compensation other than salary for his services to the
Bank,  or additional compensation for his services to the Holding
Company,  upon such terms and conditions as may be prescribed  by
or  under the authority of the Board or the Board of Directors of
the Holding Company.

          Section 5.     Employee Benefit Plans and Programs.

           Except  as  otherwise provided in this Agreement,  the
Officer  shall,  during the Assurance Period, be  treated  as  an
employee  of the Bank and be eligible to participate  in  and  re
ceive  benefits  under  any  qualified or  non-qualified  defined
benefit or defined contribution retirement plan, group life,  hea
lth  (including  hospitalization,  medical  and  major  medical),
dental,  accident and long term disability insurance  plans,  and
such  other  employee benefit plans and programs, including,  but
not  limited  to,  any incentive compensation plans  or  programs
(whether  or not employee benefit plans or programs),  any  stock
option  and  appreciation rights plan, employee  stock  ownership
plan  and  restricted stock plan, as may from  time  to  time  be
maintained  by,  or cover employees of, the Bank,  in  accordance
with the terms and conditions of such employee benefit plans  and
programs and compensation plans and programs and with the  Bank's
customary practices.

          Section 6.     Board Memberships.

           The  Officer  may serve as a member of the  boards  of
directors  of  such  business, community and charitable  organiza
tions  as he may disclose to and as may be approved by the  Board
(which  approval shall not be unreasonably withheld), and he  may
engage in personal business and investment activities for his own
account;  provided,  however,  that  such  service  and  personal
business and investment activities shall not materially interfere
with the performance of his duties under this Agreement.

          Section 7.     Working Facilities and Expenses.

           During  the Assurance Period, the Officer's  principal
place  of employment shall be at the Bank's executive offices  at
the address first above written, or at such other location within
the  City  of  New  York  at which the Bank  shall  maintain  its
principal  executive offices, or at such other  location  as  the
Bank  and  the Officer may mutually agree upon.  The  Bank  shall
provide the Officer, at his principal place of employment, with a
private  office and support services and facilities  suitable  to
his  position  with  the  Bank and necessary  or  appropriate  in
connection with the performance of his assigned duties under this
Agreement.  The Bank shall reimburse the Officer for his ordinary
and  necessary business expenses, including, without  limitation,
the  Officer's  travel  and entertainment expenses,  incurred  in
connection  with  the performance of the Officer's  duties  under
this  Agreement,  upon presentation to the Bank  of  an  itemized
account  of such expenses in such form as the Bank may reasonably
require.

          Section 8.     Termination of Employment with Severance
                         Benefits.

           (a)   In the event that the Officer's employment  with
the Bank shall terminate during the Assurance Period, or prior to
the  commencement  of the Assurance Period but within  three  (3)
months  of and in connection with a Change of Control as  defined
in section 10 of this Agreement on account of:

           (i)   The  Officer's voluntary  resignation  from
     employment  with  the  Bank  within  ninety  (90)  days
     following:

                     (A)  the failure of the Bank's Board to
          appoint  or  re-appoint or elect or  re-elect  the
          Officer to serve in the same position in which the
          Officer  was  serving,  on  the  day  before   the
          Assurance  Period  commenced  or  a  more   senior
          office;

                     (B)  the failure of the stockholders of
          the  Holding  Company  to elect  or  re-elect  the
          Officer  as  a member of the Board, if  he  was  a
          member  of  the  Board  on  the  day  before   the
          Assurance Period commenced;

                    (C)  the expiration of a thirty (30) day
          period  following  the date on which  the  Officer
          gives  written notice to the Bank of its  material
          failure,  whether  by  amendment  of  the   Bank's
          Organization Certificate or By-laws, action of the
          Board  or  the  Holding Company's stockholders  or
          otherwise,  to vest in the Officer the  functions,
          duties,  or responsibilities vested in the Officer
          on  the  day before the Assurance Period commenced
          (or the functions, duties and responsibilities  of
          a  more senior office to which the Officer may  be
          appointed),  unless during such  thirty  (30)  day
          period, the Bank fully cures such failure;

                     (D)  the failure of the Bank to cure  a
          material  breach of this Agreement  by  the  Bank,
          within  thirty (30) days following written  notice
          from the Officer of such material breach;

                     (E)   a  reduction in the  compensation
          provided  to the Officer, or a material  reduction
          in  the benefits provided to the Officer under the
          Bank's program of employee benefits, compared with
          the  compensation and benefits that were  provided
          to  the  Officer on the day before  the  Assurance
          Period commenced;

                    (F)  a change in the Officer's principal
          place of employment that would result in a one-way
          commuting time in excess of the greater of (I)  30
          minutes  or  (II)  the  Officer's  commuting  time
          immediately prior to such change; or

           (ii) the discharge of the Officer by the Bank for
     any  reason other than for "cause" as provided  in  sec
     tion 9(a);

then,  subject to section 21, the Bank shall provide the benefits
and  pay  to  the Officer the amounts provided for under  section
8(b)  of  this Agreement; provided, however, that if benefits  or
payments  become  due  hereunder as a  result  of  the  Officer's
termination  of  employment  prior to  the  commencement  of  the
Assurance  Period, the benefits and payments provided  for  under
section 8(b) of this Agreement shall be determined as though  the
Officer  had remained in the service of the Bank (upon the  terms
and conditions in effect at the time of his actual termination of
service)  and had not terminated employment with the  Bank  until
the  date  on  which  the Officer's Assurance Period  would  have
commenced.

           (b)   Upon the termination of the Officer's employment
with  the Bank under circumstances described in section  8(a)  of
this  Agreement, the Bank shall pay and provide  to  the  Officer
(or,  in  the  event  of the Officer's death,  to  the  Officer's
estate):

           (i)  the Officer's earned but unpaid compensation
     (including,   without  limitation,  all   items   which
     constitute  wages under section 190.1 of the  New  York
     Labor  Law  and  the payment of which is not  otherwise
     provided for under this section 8(b)) as of the date of
     the  termination of the Officer's employment  with  the
     Bank,  such payment to be made at the time and  in  the
     manner  prescribed by law applicable to the payment  of
     wages but in no event later than thirty (30) days after
     termination of employment;

          (ii) the benefits, if any, to which the Officer is
     entitled  as  a  former  employee  under  the  employee
     benefit  plans and programs and compensation plans  and
     programs  maintained  for the  benefit  of  the  Bank's
     officers and employees;

           (iii)     continued group life, health (including
     hospitalization,  medical and major medical),  accident
     and  long term disability insurance benefits,  in  addi
     tion to that provided pursuant to section 8(b)(ii)  and
     after taking into account the coverage provided by  any
     subsequent employer, if and to the extent necessary  to
     provide  for  the Officer, for the remaining  unexpired
     Assurance  Period, coverage equivalent to the  coverage
     to  which  the  Officer would have been entitled  under
     such plans (as in effect on the date of his termination
     of  employment,  or, if his termination  of  employment
     occurs  after a Change of Control, on the date of  such
     Change  of Control, whichever benefits are greater)  if
     the  Officer had continued working for the Bank  during
     the remaining unexpired Assurance Period at the highest
     annual   rate  of  compensation  achieved  during   the
     Officer's period of actual employment with the Bank;

            (iv)  within  thirty  (30)  days  following  the
     Officer's  termination of employment with the  Bank,  a
     lump  sum  payment, in an amount equal to  the  present
     value  of the salary that the Officer would have earned
     if  the  Officer  had continued working  for  the  Bank
     during the remaining unexpired Assurance Period at  the
     highest  annual  rate  of salary  achieved  during  the
     Officer's  period of actual employment with  the  Bank,
     where  such present value is to be determined  using  a
     discount   rate  equal  to  the  applicable  short-term
     federal  rate prescribed under section 1274(d)  of  the
     Internal  Revenue  Code  of 1986  ("Code"),  compounded
     using  the  compounding periods  corresponding  to  the
     Bank's  regular payroll periods for its officers,  such
     lump  sum  to be paid in lieu of all other payments  of
     salary provided for under this Agreement in respect  of
     the period following any such termination;

            (v)   within  thirty  (30)  days  following  the
     Officer's  termination of employment with the  Bank,  a
     lump  sum payment in an amount equal to the excess,  if
     any, of:

                     (A)  the present value of the aggregate
          benefits  to  which the Officer would be  entitled
          under  any  and  all  qualified and  non-qualified
          defined  benefit pension plans maintained  by,  or
          covering  employees of, the Bank  if  the  Officer
          were  100%  vested  thereunder and  had  continued
          working   for   the  Bank  during  the   remaining
          unexpired  Assurance Period such  benefits  to  be
          determined  as  of  the  date  of  termination  of
          employment  by  adding  to  the  service  actually
          recognized  under such plans an additional  period
          equal  to the remaining unexpired Assurance Period
          and by adding to the compensation recognized under
          such  plans  for the year in which termination  of
          employment   occurs  all  amounts  payable   under
          sections 8(b)(i), (iv) and (vii);

                     (B)   the present value of the benefits
          to  which  the Officer is actually entitled  under
          such  defined benefit pension plans as of the date
          of his termination;

     where  such  present values are to be determined  using
     the   mortality   tables   prescribed   under   section
     415(b)(2)(E)(v)  of  the  Code  and  a  discount  rate,
     compounded  monthly, equal to the  annualized  rate  of
     interest  prescribed  by the Pension  Benefit  Guaranty
     Corporation  for  the valuation of immediate  annuities
     payable   under  terminating  single-employer   defined
     benefit  plans  for  the month in which  the  Officer's
     termination  of  employment  occurs  ("Applicable  PBGC
     Rate").

            (vi)  within  thirty  (30)  days  following  the
     Officer's  termination of employment with the  Bank,  a
     lump  sum  payment in an amount equal  to  the  present
     value  of the additional employer contributions (or  if
     greater  in  the  case  of a leveraged  employee  stock
     ownership  plan or similar arrangement, the  additional
     assets allocable to him through debt service, based  on
     the fair market value of such assets at termination  of
     employment) to which he would have been entitled  under
     any   and   all  qualified  and  non-qualified  defined
     contribution plans maintained by, or covering employees
     of, the Bank, if he were 100% vested thereunder and had
     continued  working  for the Bank during  the  remaining
     unexpired  Assurance Period at the highest annual  rate
     of compensation achieved during the Officer's period of
     actual employment with the Bank, and making the maximum
     amount  of  employee contributions,  if  any,  required
     under  such  plan or plans, such present  value  to  be
     determined   on   the  basis  of  the  discount   rate,
     compounded   using   the   compounding   period    that
     corresponds  to  the  frequency  with  which   employer
     contributions are made to the relevant plan,  equal  to
     the Applicable PBGC Rate;

           (vii)     the payments that would have been  made
     to  the  Officer under any cash bonus or  long-term  or
     short-term  cash incentive compensation plan maintained
     by,  or  covering  employees of, the Bank,  if  he  had
     continued  working  for the Bank during  the  remaining
     unexpired  Assurance Period and had earned the  maximum
     bonus  or  incentive award in each calendar  year  that
     ends  during the remaining unexpired Assurance  Period,
     such payments to be equal to the product of:

                     (A)   the  maximum percentage  rate  at
          which  an award was ever available to the  Officer
          under such incentive compensation plan; multiplied
          by

                     (B)   the  salary that would have  been
          paid to the Officer during each such calendar year
          at  the  highest  annual rate of  salary  achieved
          during  the remaining unexpired Assurance  Period,
          such payments to be made (without discounting  for
          early  payment) within thirty (30) days  following
          the Officer's termination of employment; and

The  Bank and the Officer hereby stipulate that the damages which
may be incurred by the Officer following any such termination  of
employment are not capable of accurate measurement as of the date
first  above  written  and  that the payments  and  benefits  con
templated  by this section 8(b) constitute a reasonable  estimate
under the circumstances of all damages sustained as a consequence
of any such termination of employment, other than damages arising
under or out of any stock option, restricted stock or other  non-
qualified  stock acquisition or investment plan  or  program,  it
being  understood  and  agreed  that  this  Agreement  shall  not
determine  the  measurement of damages under  any  such  plan  or
program  in  respect  of  any termination  of  employment.   Such
damages  shall  be payable without any requirement  of  proof  of
actual  damage  and without regard to the Officer's  efforts,  if
any, to mitigate damages.  The Bank and the Officer further agree
that  the  Bank may condition the payments and benefits (if  any)
due  under sections 8(b)(iii), (iv), (v), (vi) and (vii)  on  the
receipt  of the Officer's resignation from any and all  positions
which  he holds as an officer, director or committee member  with
respect  to the Bank, the Company or any subsidiary or  affiliate
of either of them.

          Section 9.     Termination without Severance Benefits.

           In  the  event that the Officer's employment with  the
Bank shall terminate during the Assurance Period on account of:

           (a)   the  discharge of the Officer for  "cause,"
     which,  for  purposes  of  this  Agreement  shall  mean
     personal  dishonesty, incompetence, willful misconduct,
     breach  of  fiduciary duty involving  personal  profit,
     intentional  failure to perform stated duties,  willful
     violation  of any law, rule or regulation  (other  than
     traffic violations or similar offenses) or final  cease
     and  desist  order,  or  any material  breach  of  this
     Agreement,  in each case as measured against  standards
     generally  prevailing  at  the  relevant  time  in  the
     savings  and  community  banking  industry;   provided,
     however, that the Officer shall not be deemed  to  have
     been  discharged for cause unless and  until  he  shall
     have received a written notice of termination from  the
     Board,  accompanied  by a resolution  duly  adopted  by
     affirmative vote of a majority of the entire Board at a
     meeting  called  and  held  for  such  purpose   (after
     reasonable notice to the Officer and a reasonable oppor
     tunity  for  the  Officer  to  make  oral  and  written
     presentations to the members of the Board, on  his  own
     behalf,  or  through a representative, who may  be  his
     legal  counsel, to refute the grounds for the  proposed
     determination) finding that in the good  faith  opinion
     of  the Board grounds exist for discharging the Officer
     for cause; or

           (b)   the  Officer's voluntary  resignation  from
     employment  with the Bank for reasons other than  those
     specified in section 8(a)(i); or

           (c)  the Officer's death; or

           (d)  a determination that the Officer is eligible
     for long-term disability benefits under the Bank's long-
     term  disability insurance program or, if there  is  no
     such program, under the federal Social Security Act;

then  the Bank shall have no further obligations under this Agree
ment, other than the payment to the Officer (or, in the event  of
his  death, to his estate) of his earned but unpaid salary as  of
the  date of the termination of his employment, and the provision
of  such other benefits, if any, to which the Officer is entitled
as  a  former employee under the employee benefit plans  and  pro
grams  and  compensation  plans and programs  maintained  by,  or
covering employees of, the Bank.

          Section 10.    Change of Control.

           (a)   A  Change  of  Control of the Bank  ("Change  of
Control") shall be deemed to have occurred upon the happening  of
any of the following events:

          (i)  approval by the stockholders of the Bank of a
     transaction  that  would result in the  reorganization,
     merger or consolidation of the Bank, respectively, with
     one  or  more  other persons, other than a  transaction
     following which:

                      (A)    at  least  51%  of  the  equity
          ownership  interests of the entity resulting  from
          such  transaction are beneficially  owned  (within
          the  meaning of Rule 13d-3 promulgated  under  the
          Exchange  Act) in substantially the same  relative
          proportions by persons who, immediately  prior  to
          such  transaction, beneficially owned (within  the
          meaning  of  Rule  13d-3  promulgated  under   the
          Exchange  Act)  at  least 51% of  the  outstanding
          equity ownership interests in the Bank; and

                     (B)   at  least  51% of the  securities
          entitled  to  vote generally in  the  election  of
          directors  of  the  entity  resulting  from   such
          transaction  are  beneficially owned  (within  the
          meaning  of  Rule  13d-3  promulgated  under   the
          Exchange  Act) in substantially the same  relative
          proportions by persons who, immediately  prior  to
          such  transaction, beneficially owned (within  the
          meaning  of  Rule  13d-3  promulgated  under   the
          Exchange  Act)  at  least 51%  of  the  securities
          entitled  to  vote generally in  the  election  of
          directors of the Bank;

           (ii) the acquisition of substantially all of  the
     assets of the Bank or beneficial ownership (within  the
     meaning  of  Rule 13d-3 promulgated under the  Exchange
     Act)  of  20% or more of the outstanding securities  of
     the Bank entitled to vote generally in the election  of
     directors  by  any person or by any persons  acting  in
     concert, or approval by the stockholders of the Bank of
     any  transaction which would result in an  acquisition;
     or

          (iii)     a complete liquidation or dissolution of
     the  Bank, or approval by the stockholders of the  Bank
     of a plan for such liquidation or dissolution;

           (iv)  the occurrence of any event if, immediately
     following such event, at least fifty percent  (50%)  of
     the  members of the Board do not belong to any  of  the
     following groups:

                    (A)  individuals who were members of the
          Board on the date of this Agreement; or

                    (B)    individuals  who  first  became
          members  of  the  Board after  the  date  of  this
          Agreement either:

                              (1)  upon election to serve as
               a  member of the Board by affirmative vote of
               three-quarters (3/4) of the members  of  such
               Board, or a nominating committee thereof,  in
               office at the time of such first election; or

                               (2)   upon  election  by  the
               stockholders  of  the Board  to  serve  as  a
               member  of  the Board, but only if  nominated
               for  election by affirmative vote  of  three-
               quarters  (3/4) of the members of the  Board,
               or  of  a  nominating committee  thereof,  in
               office at the time of such first nomination;

     provided,  however, that such individual's election  or
     nomination  did not result from an actual or threatened
     election contest (within the meaning of Rule 14a-11  of
     Regulation 14A promulgated under the Exchange  Act)  or
     other  actual or threatened solicitation of proxies  or
     consents   (within  the  meaning  of  Rule  14a-11   of
     Regulation  14A  promulgated under  the  Exchange  Act)
     other than by or on behalf of the Board of the Bank;

          (v)  any event which would be described in section
     10(a)(i),  (ii),  (iii) or (iv) if  the  term  "Holding
     Company" were substituted for the term "Bank" therein.

          (b)  In no event, however, shall a Change of Control be
deemed  to  have  occurred  as a result  of  any  acquisition  of
securities  or  assets of the Holding Company, the  Bank  or  any
subsidiary of either of them, by the Holding Company, the Bank or
any subsidiary of either of them, or by any employee benefit plan
maintained by any of them.

           Section 11.    No Effect on Employee Benefit Plans  or
                          Programs.

           The termination of the Officer's employment during the
Assurance  Period or thereafter, whether by the Bank  or  by  the
Officer,  shall  have no effect on the rights and obligations  of
the  parties  hereto under the Bank's qualified and non-qualified
defined  benefit or defined contribution retirement plans,  group
life,   health  (including  hospitalization,  medical  and  major
medical),  dental,  accident and long term  disability  insurance
plans  or  such  other  employee benefit plans  or  programs,  or
compensation  plans or programs (whether or not employee  benefit
plans  or  programs) and any defined contribution plan,  employee
stock  ownership plan, stock option and appreciation rights plan,
and  restricted  stock plan, as may be maintained  by,  or  cover
employees of, the Bank from time to time; provided, however, that
nothing  in  this  Agreement shall be  deemed  to  duplicate  any
compensation  or benefits provided under any agreement,  plan  or
program  covering the Officer to which the Bank  or  the  Holding
Company  is a party and any duplicative amount payable under  any
such agreement, plan or program shall be applied as an offset  to
reduce the amounts otherwise payable hereunder.

          Section 12.    Successors and Assigns.

          This Agreement will inure to the benefit of and be bind
ing  upon  the Officer, his legal representatives and testate  or
intestate  distributees, and the Bank and  the  Holding  Company,
their  respective successors and assigns, including any successor
by  merger or consolidation or a statutory receiver or any  other
person  or firm or corporation to which all or substantially  all
of  the respective assets and business of the Bank or the Holding
Company may be sold or otherwise transferred.

          Section 13.    Notices.

           Any communication required or permitted to be given un
der this Agreement, including any notice, direction, designation,
consent,  instruction, objection or waiver, shall be  in  writing
and  shall be deemed to have been given at such time as it is  de
livered  personally, or five (5) days after  mailing  if  mailed,
postage  prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or
at  such  other  address as one such party may by written  notice
specify to the other party:

          If to the Officer:

                ________________
                ________________
                ________________

          If to the Bank:

               The Dime Savings Bank of Williamsburgh
               209 Havemeyer Street
               Brooklyn, New York  11211

               Attention:  Corporate Secretary

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:  W. Edward Bright, Esq.

          If to the Holding Company:

               Dime Community Bancorp, Inc.
               209 Havemeyer Street
               Brooklyn, New York  11211

               Attention:  Corporate Secretary

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:  W. Edward Bright, Esq.

          Section 14.    Indemnification and Attorneys' Fees.

           The Bank shall indemnify, hold harmless and defend the
Officer  against reasonable costs, including legal fees, incurred
by  the  Officer in connection with or arising out of any action,
suit or proceeding in which the Officer may be involved, as a  re
sult  of  the  Officer's efforts, in good  faith,  to  defend  or
enforce the terms of this Agreement; provided, however, that  the
Officer shall have substantially prevailed on the merits pursuant
to   a  judgment,  decree  or  order  of  a  court  of  competent
jurisdiction or of an arbitrator in an arbitration proceeding, or
in  a  settlement; provided, further, that this section 14  shall
not  obligate the Bank to pay costs and legal fees on  behalf  of
the  Officer  under  this Agreement in excess  of  $20,000.   For
purposes  of  this  Agreement,  any  settlement  agreement  which
provides  for payment of any amounts in settlement of the  Bank's
obligations  hereunder  shall  be  conclusive  evidence  of   the
Officer's entitlement to indemnification hereunder, and any  such
indemnification payments shall be in addition to amounts  payable
pursuant  to  such settlement agreement, unless  such  settlement
agreement expressly provides otherwise.

          Section 15.    Severability.

          A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforce
ability of any other provision hereof.

          Section 16.    Waiver.

           Failure to insist upon strict compliance with  any  of
the  terms, covenants or conditions hereof shall not be deemed  a
waiver  of  such term, covenant, or condition.  A waiver  of  any
provision  of this Agreement must be made in writing,  designated
as a waiver, and signed by the party against whom its enforcement
is  sought.  Any waiver or relinquishment of any right  or  power
hereunder at any one or more times shall not be deemed  a  waiver
or  relinquishment of such right or power at any  other  time  or
times.

          Section 17.    Counterparts.

           This Agreement may be executed in two (2) or more coun
terparts, each of which shall be deemed an original, and  all  of
which shall constitute one and the same Agreement.

          Section 18.    Governing Law.

           This Agreement shall be governed by and construed  and
enforced  in  accordance  with the federal  laws  of  the  United
States,  and in the absence of controlling federal law, the  laws
of  the State of New York, without reference to conflicts of  law
principles.

          Section 19.    Headings and Construction.

           The headings of sections in this Agreement are for con
venience  of  reference only and are not intended to qualify  the
meaning of any section.  Any reference to a section number  shall
refer to a section of this Agreement, unless otherwise stated.

          Section 20.    Entire Agreement; Modifications.

           This  instrument contains the entire agreement of  the
parties relating to the subject matter hereof, and supersedes  in
its  entirety any and all prior agreements, understandings or rep
resentations  relating to the subject matter hereof.   No  modifi
cations  of this Agreement shall be valid unless made in  writing
and signed by the parties hereto.

          Section 21.    Required Regulatory Provisions.

           The following provisions are included for the purposes
of  complying with various laws, rules and regulations applicable
to the Bank:

           (a)  Notwithstanding anything herein contained to
     the contrary, in no event shall the aggregate amount of
     compensation payable to the Officer under section  8(b)
     hereof  (exclusive  of  amounts  described  in  section
     8(b)(i))  exceed the three times the Officer's  average
     annual total compensation for the last five consecutive
     calendar  years  to  end prior to  his  termination  of
     employment with the Bank (or for his entire  period  of
     employment  with  the Bank if less than  five  calendar
     years).

           (b)  Notwithstanding anything herein contained to
     the  contrary, any payments to the Officer by the Bank,
     whether  pursuant to this Agreement or  otherwise,  are
     subject  to and conditioned upon their compliance  with
     section  18(k)  of  the Federal Deposit  Insurance  Act
     ("FDI  Act"),   12 U.S.C. Section 1828(k),  and  any
     regulations promulgated thereunder.

           (c)  Notwithstanding anything herein contained to
     the  contrary, if the Officer is suspended from  office
     and/or temporarily prohibited from participating in the
     conduct of the affairs of the Bank pursuant to a notice
     served under section 8(e)(3) or 8(g)(1) of the FDI Act,
     12 U.S.C. Section 1818(e)(3) or 1818(g)(1), the  Bank's
     obligations under this Agreement shall be suspended  as
     of the date of service of such notice, unless stayed by
     appropriate proceedings.  If the charges in such notice
     are dismissed, the Bank, in its discretion, may (i) pay
     to the Officer all or part of the compensation withheld
     while  the  Bank's obligations hereunder were suspended
     and  (ii)  reinstate, in whole or in part, any  of  the
     obligations which were suspended.

           (d)  Notwithstanding anything herein contained to
     the   contrary,  if  the  Officer  is  removed   and/or
     permanently  prohibited  from  participating   in   the
     conduct of the Bank's affairs by an order issued  under
     section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C.
     Section 1818(e)(4) or (g)(1), all prospective obligations
     of the Bank under this Agreement shall terminate as of the
     effective  date  of  the order, but vested  rights  and
     obligations  of the Bank and the Officer shall  not  be
     affected.

           (e)  Notwithstanding anything herein contained to
     the  contrary,  if the Bank is in default  (within  the
     meaning  of section 3(x)(1) of the FDI Act,  12  U.S.C.
     Section 1813(x)(1), all prospective obligations  of the
     Bank under this Agreement shall terminate as of the date
     of default, but vested rights and obligations of the Bank
     and the Officer shall not be affected.

           (f)  Notwithstanding anything herein contained to
     the  contrary, all prospective obligations of the  Bank
     hereunder  shall be terminated, except  to  the  extent
     that a continuation of this Agreement is necessary  for
     the  continued  operation of  the  Bank:   (i)  by  the
     Director of the Office of Thrift Supervision ("OTS") or
     his   designee   or   the  Federal  Deposit   Insurance
     Corporation ("FDIC"), at the time the FDIC enters  into
     an  agreement to provide assistance to or on behalf  of
     the Bank under the authority contained in section 13(c)
     of the FDI Act, 12 U.S.C. Section 1823(c); (ii) by  the
     Director  of the OTS or his designee at the  time  such
     Director  or designee approves a supervisory merger  to
     resolve  problems related to the operation of the  Bank
     or  when the Bank is determined by such Director to  be
     in  an  unsafe or unsound condition.  The vested rights
     and obligations of the parties shall not be affected.
     
If  and to the extent any of the foregoing provisions shall cease
to  be  required by applicable law, rule or regulation, the  same
shall become inoperative as though eliminated by formal amendment
of this Agreement.

          Section 22.    Guaranty.

           The Holding Company hereby irrevocably and uncondition
ally  guarantees to the Officer the payment of all  amounts,  and
the  performance of all other obligations, due from the  Bank  in
accordance  with  the terms of this Agreement  as  and  when  due
without  any  requirement  of  presentment,  demand  of  payment,
protest  or  notice of dishonor or nonpayment.  For  purposes  of
this section 22, the application of sections 21(a), (c), (d), (e)
or  (f) to the Bank shall have no effect on the Holding Company's
obligations hereunder.

            Section   23.     Maximum  Limitations  on  Severance
                              Benefits.

           Notwithstanding  anything in  this  Agreement  to  the
contrary, in the event that the payments provided to the  Officer
(or  in  the  event  of  his death, to  his  estate)  under  this
Agreement constitute an "excess parachute payment" under  section
280G of the Code, such payments shall be limited to the lesser of
             
           (a)   2.99  times his average compensation  (including
salary, bonuses, amounts contributed on behalf of the Officer  to
any  employee  benefit plans and programs and compensation  plans
and  programs maintained for the benefit of the Holding Company's
officers   and   employees  and  any  other  cash   or   non-cash
compensation paid to the Officer) for the period of five  taxable
years  ending immediately prior to his termination of employment;
or

           (b)   whichever  of the following amounts  yields  the
larger  net payment to the Officer, after provision for  the  tax
(if any) imposed under section 4999 of the Code:

           (i)  the  amount determined  under  section 23(a); or

           (ii) the maximum amount (if any) which may be
                paid  to the Officer hereunder without giving rise
                to any tax under section 4999 of the Code;

as determined by the Officer in his sole discretion.

           In  Witness Whereof, the Bank and the Holding  Company
have  caused  this Agreement to be executed and the  Officer  has
hereunto  set  his hand, all as of the day and year  first  above
written.

                                _________________________________
                                  _______________

ATTEST:                         The Dime Savings Bank of Williamsburgh

By ___________________
       Secretary                 By  _____________________________
                                     Name:
[Seal]                               Title:

ATTEST:                       Dime Community Bancorp, Inc.

By____________________
       Secretary                 By  _____________________________
                                     Name:
[Seal]                               Title:

STATE OF NEW YORK   )
                    : ss.:
COUNTY OF KINGS     )

           On  this _____  day of ____________ , 19__, before  me
personally came ________________________________ , to  me  known,
and  known  to me to be the individual described in the foregoing
instrument, who, being by me duly sworn, did depose and say  that
he  resides at the address set forth in said instrument, and that
he signed his name to the foregoing instrument.

                                         ________________________
                                             Notary Public

STATE OF NEW YORK   )
                    : ss.:
COUNTY OF KINGS     )

           On  this _____ day of __________________ , 19__, before
me personally came ________________________________, to  me known,
who, being by me duly sworn, did depose and  say that he   resides
at _____________________________________________________ , that he
is a member of the Board of Directors of The Dime Savings Bank  of
Williamsburgh, the savings bank described in  and  which  executed
the foregoing instrument; that he knows the  seal of  said  mutual
savings  bank;  that  the  seal affixed to said instrument is such
seal;  that  it  was  so  affixed  by authority  of  the Board  of
Directors  of  said  savings  bank;  and  that he signed  his name
thereto by like authority.

                                        __________________________
                                             Notary Public

STATE OF NEW YORK   )
                    : ss.:
COUNTY OF KINGS     )

           On this ____ day of ________________ , 19__, before me
personally came _________________________________________________
,  to  me known, who, being by me duly sworn, did depose and  say
that he resides at ______________________________________________
, that he is a member of the Board of Directors of Dime Community
Bancorp,  Inc.,  the corporation described in and which  executed
the  foregoing  instrument;  that  he  knows  the  seal  of  said
corporation;  that  the seal affixed to said instrument  is  such
seal;  that it was so affixed by order of the Board of  Directors
of  said corporation; and that he signed his name thereto by like
order.

                                       __________________________
                                             Notary Public

                 Employee Stock Ownership Plan of
                   Dime Community Bancorp, Inc.
                      and Certain Affiliates

                   Adopted on February 8, 1996
                      Effective July 1, 1995

                            AMENDMENT

Effective  as  of July 1, 1995, the Employee Stock Ownership  Plan  of
Dime Community Bancorp, Inc. and Certain Affiliates ("Plan") is hereby
amended as follows:

1.   The effective date on the cover page is deleted and the following
     is substituted therefor:

            "Effective July 1, 1995"

2.   Section  1.14  is  deleted in its entirety and the  following  is
     substituted therefor:

            "Effective Date means July 1, 1995."

3.   Section 1.44 is amended in its entirety to read as follows:

            Section  1.44   Plan Year means  the  period
          commencing  on  the Effective Date and  ending  on
          June  30, 1996 and each fiscal year beginning July
          1 and ending June 30 thereafter.

4.   Section 7.2 is amended in its entirety to read as follows:

            Section  7.2   Allocation of Released Shares or Other
                           Property.

                           Subject  to  the  limitations  of
          Article VIII, in the event that Financed Shares or
          other   property  are  released  from   the   Loan
          Repayment  Account for a Plan Year  in  accordance
          with  section 6.4, such released Shares  or  other
          property shall be allocated among the Accounts  of
          the Eligible Participants for the Plan Year in the
          proportion  that each such Eligible  Participant's
          Allocation  Compensation for the  portion  of  the
          immediately  preceding calendar year during  which
          he  was  a  Participant  bears  to  the  aggregate
          Allocation    Compensation   of    all    Eligible
          Participants  for the portion of  the  immediately
          preceding calendar year during which they were Par
          ticipants.

5.   Section 8.2(c)(v) is amended in its entirety to read as follows:

                "(v)  Limitation  Year  means  the  calendar year."

                                Page 1 of 2

           In  Witness Whereof, the undersigned has hereunto  set  his
hand this _____ day of ________, 1996 pursuant to authority granted by
the Board of Directors on _______, 1996.

                                   Dime Community Bancorp, Inc.

                                   Name:
                                   Title:

                                Page 2 of 2

                                   June 12, 1996

Employee Stock Ownership Plan Trust of
 Dime Community Bancorp, Inc. and Certain Affiliates
c/o The Dime Savings Bank of Williamsburgh
209 Havemeyer Street
Brooklyn, NY  11211
Attention:  Mr. Vincent F. Palagiano,
Chief Executive Officer

Dear Mr. Palagiano:

       This   letter  confirms  Dime  Community  Bancorp,  Inc.'s
commitment  to  fund  a  leveraged  ESOP  in  an  amount  up   to
$11,638,000.   The commitment is subject to the  following  terms
and conditions:

     1.   Lender:  Dime Community Bancorp, Inc. (the "Company").

          2.    Borrower:  Employee Stock Ownership Plan Trust of
          Dime  Community  Bancorp, Inc. and  Certain  Affiliates
          ("Borrower").

          3.   Trustee:  Marine Midland Bank.

          4.    Security:   Unreleased shares  of  stock  of  the
          Company held in the Employee Stock Ownership Plan Trust
          of Dime Community Bancorp, Inc. and Certain Affiliates.

          5.     Maturity:   Generally,  up  to  10  years   from
          takedown.

          6.    Amortization:  Equal principal payments on annual
          basis,  with  pro-rated principal payments for  partial
          years.   Certain principal payments may be deferred  to
          the  extent  that such payments would be  nondeductible
          for  federal  income tax purposes or  our  consolidated
          annual  return  on average assets or annual  return  on
          average equity (after provision for the payment)  would
          be  less than 0.5% or 4%, respectively, for the  fiscal
          year in which the payment would otherwise be due.

Employee Stock Ownership Plan Trust of
 Dime Community Bancorp, Inc. and Certain Affiliates
 June 12, 1996                                              Page 2

          7.   Pricing:  Eight percent (8%) per annum.

          8.   Interest Payments:  Annually, 365 day basis.

          9.    Funding:   In full by June 26, 1996, unless  such
          date is waived by the Company.

          10.   Prepayment:  Voluntary prepayments are  permitted
          at  any  time provided advance notice is given  by  the
          Borrower to the Company.

          11.   Conditions Precedent to Closing:  Receipt by  the
          Company of all supporting loan documents in a form  and
          with  terms and conditions satisfactory to the  Company
          and its counsel.

          12.   Closing  Date:   Not later than  June  26,  1996,
          unless such date is waived by the Company.

          13.   Other:   Loan to be structured to comply  in  all
          respects  with the Employee Retirement Income  Security
          Act of 1974, as amended ("ERISA").

      If  the  terms and conditions are agreeable to you,  please
indicate  your  acceptance  by  signing  the  enclosed  copy  and
returning it to my attention.

                                 Sincerely,

                                 Dime Community Bancorp, Inc.

                                 By: /s/ Michael P. Devine
                                     Michael P. Devine
                                     Executive Vice President and Secretary

Accepted on Behalf of
Employee Stock Ownership Plan Trust of
 Dime Community Bancorp, Inc. and Certain Affiliates
By:  Marine Midland Bank, as Trustee              Date: June 14, 1996
     Name: /s/ Richard A. Glover
     Title: Vice President

                         LOAN AGREEMENT

                         by and between

              EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                               of
                  DIME COMMUNITY BANCORP, INC.
                     AND CERTAIN AFFILIATES

                              and

                  DIME COMMUNITY BANCORP, INC.

                  Made and Entered Into as of
                         June 26, 1996

                       TABLE OF CONTENTS
                                                                     Page

                           ARTICLE I

                          DEFINITIONS

Section 1.1   Business Day ..........................................   1
Section 1.2   Code ..................................................   1
Section 1.3   Default ...............................................   2
Section 1.4   ERISA .................................................   2
Section 1.5   Event of Default ......................................   2
Section 1.6   Fiscal Year ...........................................   2
Section 1.7   Independent Counsel ...................................   2
Section 1.8   Loan ..................................................   2
Section 1.9   Loan Documents ........................................   2
Section 1.10  Pledge Agreement ......................................   2
Section 1.11  Principal Amount ......................................   2
Section 1.12  Promissory Note .......................................   2
Section 1.13  Register ..............................................   2

                           ARTICLE II

                  THE LOAN; PRINCIPAL AMOUNT;
              INTEREST; SECURITY; INDEMNIFICATION

Section 2.1   The Loan; Principal Amount. ...........................   2
Section 2.2   Interest. .............................................   3
Section 2.3   Promissory Note.  .....................................   4
Section 2.4   Payment of Trust Loan. ................................   4
Section 2.5   Prepayment. ...........................................   5
Section 2.6   Method of Payments. ...................................   5
Section 2.7   Use of Proceeds of Loan. ..............................   6
Section 2.9   Registration of the Promissory Note. ..................   6

                          ARTICLE III

         REPRESENTATIONS AND WARRANTIES OF THE BORROWER

Section 3.1   Power, Authority, Consents. ...........................   7
Section 3.2   Due Execution, Validity, Enforceability. ..............   7
Section 3.3   Properties, Priority of Liens. ........................   7
Section 3.4   No Defaults, Compliance with Laws. ....................   7
Section 3.5   Purchases of Common Stock. ............................   8

                                (i)

                           ARTICLE IV

          REPRESENTATIONS AND WARRANTIES OF THE LENDER

Section 4.1   Power, Authority, Consents. ...........................   8
Section 4.2   Due Execution, Validity, Enforceability. ..............   8
Section 4.3   ESOP; Contributions. ..................................   9
Section 4.4   Trustee; Committee. ...................................   9
Section 4.5   Compliance with Laws; Actions. ........................   9

                           ARTICLE V

                       EVENTS OF DEFAULT

Section 5.1   Events of Default under Loan Agreement. ...............   9
Section 5.2   Lender's Rights upon Event of Default. ................  10

                           ARTICLE VI

                    MISCELLANEOUS PROVISIONS

Section 6.1   Payments Due to the Lender. ...........................  10
Section 6.2   Payments. .............................................  11
Section 6.3   Survival. .............................................  11
Section 6.4   Modifications, Consents and Waivers; Entire Agreement..  11
Section 6.5   Remedies Cumulative. ..................................  11
Section 6.6   Further Assurances; Compliance with Covenants. ........  11
Section 6.7   Notices. ..............................................  12
Section 6.8   Counterparts. .........................................  13
Section 6.9   Construction; Governing Law. ..........................  13
Section 6.10  Severability. .........................................  13
Section 6.11  Binding Effect; No Assignment or Delegation. ..........  14

EXHIBIT A  Form of Promissory Note .................................  A-1
EXHIBIT B  Form of Pledge Agreement ................................  B-1
EXHIBIT C  Form of Assignment ......................................  C-1
EXHIBIT D  Form of Irrevocable Proxy ...............................  D-1

                                       (ii)

                         LOAN AGREEMENT

           This  LOAN  AGREEMENT ("Loan Agreement") is  made  and
entered into as of the 26th day of June, 1996, by and between the
EMPLOYEE  STOCK  OWNERSHIP PLAN TRUST OF DIME COMMUNITY  BANCORP,
INC. AND CERTAIN AFFILIATES ("Borrower"), a trust forming part of
the Employee Stock Ownership Plan of Dime Community Bancorp, Inc.
and  Certain  Affiliates  ("ESOP"), acting  through  and  by  its
Trustee,  MARINE MIDLAND BANK ("Trustee"), a banking  corporation
organized  under the laws of the State of New York and having  an
office  at  250 Park Avenue, New York, New York 10177;  and  Dime
Community  Bancorp, Inc. ("Lender"), a corporation organized  and
existing  under  the  laws of the state of  Delaware,  having  an
office at 209 Havemeyer Street, Brooklyn, New York 11211.

                     W I T N E S S E T H :

           Whereas,  the  Compensation Committee  of  the  Lender
("Committee") has authorized the Borrower to purchase  shares  of
common  stock  of Dime Community Bancorp, Inc. ("Common  Stock"),
either  directly  from Dime Community Bancorp, Inc.  or  in  open
market  purchases in an amount not to exceed 1,163,800 shares  of
Common  Stock  or,  if  less, shares of Common  Stock  having  an
aggregate  purchase  price  of Eleven Million,  Six  Hundred  and
Thirty Eight Thousand Dollars ($11,638,000.00); and

           Whereas,  the  Committee has  further  authorized  the
Borrower  to  borrow  funds from the Lender for  the  purpose  of
financing authorized purchases of Common Stock; and

           Whereas, the Lender is willing to make a loan  to  the
Borrower for such purpose;

          Now, Therefore, the parties hereto agree as follows:

                           ARTICLE I

                          DEFINITIONS

           The following definitions shall apply for purposes  of
this  Loan  Agreement,  except to the  extent  that  a  different
meaning is plainly indicated by the context:

           Section 1.1    Business Day means any day other than a
Saturday,  Sunday or other day on which banks are  authorized  or
required  to close under federal law or the laws of the State  of
New York.

           Section 1.2    Code means the Internal Revenue Code of
1986  (including the corresponding provisions of  any  succeeding
law).

           Section  1.3     Default means an event  or  condition
which would constitute an Event of Default.  The determination as
to  whether  an event or condition would constitute an  Event  of
Default  shall  be  determined without regard to  any  applicable
requirement of notice or lapse of time.

           Section  1.4     ERISA  means the Employee  Retirement
Income  Security  Act  of  1974, as amended  (including  the  cor
responding provisions of any succeeding law).

           Section  1.5     Event of Default means  an  event  or
condition described in Article 5.

           Section  1.6    Fiscal Year means the fiscal  year  of
Dime Community Bancorp.

            Section  1.7     Independent  Counsel  means  Thacher
Proffitt  & Wood or other counsel mutually satisfactory  to  both
the Lender and the Borrower.

          Section 1.8    Loan means the loan described in section
2.1.

          Section 1.9    Loan Documents means, collectively, this
Loan Agreement, the Promissory Note and the Pledge Agreement  and
all  other  documents now or hereafter executed and delivered  in
connection   with  such  documents,  including  all   amendments,
modifications and supplements of or to all such documents.

           Section  1.10    Pledge Agreement means the  agreement
described in section 2.8(a).

           Section 1.11   Principal Amount means the face  amount
of  the  Promissory  Note, determined as  set  forth  in  section
2.1(c).

           Section  1.12    Promissory Note means the  promissory
note described in section 2.3.

          Section 1.13   Register means the register described in
section 2.9.

                           ARTICLE II

                  THE LOAN; PRINCIPAL AMOUNT;
              INTEREST; SECURITY; INDEMNIFICATION

          Section 2.1    The Loan; Principal Amount.

           (a)   The Lender hereby agrees to lend to the Borrower
such  amounts,  and at such times, as shall be  determined  under
this  section 2.1; provided, however, that in no event shall  the
aggregate amount lent under this Loan Agreement from time to time
exceed  the lesser of (i) Eleven Million, Six Hundred and  Thirty
Eight  Thousand  Dollars ($11,638,000.00) or (ii)  the  aggregate
amount  paid by the Borrower, exclusive of commissions, fees  and
other charges, to purchase 1,163,800 shares of Common Stock.

           (b)  Subject to the limitations of section 2.1(a), the
Borrower  shall determine the amounts borrowed under  this  Agree
ment, and the times at which such borrowings are effected.   Each
such  determination shall be evidenced in a writing  which  shall
set  forth  the amount to be borrowed and the date on  which  the
Lender  shall  disburse such amount, and such  writing  shall  be
furnished to the Lender by notice from the Borrower.  The  Lender
shall disburse to the Borrower the amount specified in each  such
notice on the date specified therein or, if later, as promptly as
practicable  following  the  Lender's  receipt  of  such  notice;
provided,  however, that the Lender shall have no  obligation  to
disburse  funds  pursuant to this Agreement following  the  occur
rence of a Default or an Event of Default until such time as such
Default or Event of Default shall have been cured.

           (c)   For  all  purposes of this Loan  Agreement,  the
Principal  Amount on any date shall be equal to  the  excess,  if
any, of:

           (i)  the aggregate amount disbursed by the Lender
     pursuant to section 2.1(b) on or before such date; over

           (ii)  the  aggregate amount of any repayments  of
     such amounts made before such date.

The  Lender shall maintain on the Register a record of, and shall
record  on the Promissory Note, the Principal Amount, any changes
in  the Principal Amount and the effective date of any changes in
the Principal Amount.

          Section 2.2    Interest.

           (a)  The Borrower shall pay to the Lender interest  on
the  Principal Amount, for the period commencing on the  date  of
this  Loan  Agreement and continuing until the  Principal  Amount
shall  be paid in full, the rate of eight percent (8%) per annum.
Interest  payable under this Agreement shall be computed  on  the
basis  of  a  year of 365 days and actual days elapsed (including
the first day but excluding the last) occurring in the period  to
which the computation relates.

           (b)   Except  as  otherwise provided in  this  section
2.2(b), accrued interest on the Principal Amount shall be payable
by  the  Borrower  quarterly in arrears commencing  on  the  last
Business  Day of the first calendar quarter to end following  the
date of this Agreement and continuing on the last Business Day of
each  calendar quarter thereafter and upon the payment or  prepay
ment of such Loan.  All interest on the Principal Amount shall be
paid  by the Borrower in immediately available funds.  The Lender
shall  remit  to the Borrower, at least three (3)  Business  Days
before  the  end  of each calendar quarter, a  statement  of  the
interest  payment  due  under section 2.2(a)  for  such  quarter;
provided,  however,  that a delay or failure  by  the  Lender  in
providing  the Borrower with such statement shall not  alter  the
Borrower's obligation to make such payment.

           (c)  Anything in this Loan Agreement or the Promissory
Note  to  the  contrary notwithstanding, the  obligation  of  the
Borrower  to  make payments of interest shall be subject  to  the
limitation that payments of interest shall not be required to  be
made  to  the  Lender  to the extent that  the  Lender's  receipt
thereof would not be permissible under the law or laws applicable
to  the Lender limiting rates of interest which may be charged or
collected  by the Lender.  Any such payment referred  to  in  the
preceding sentence shall be made by the Borrower to the Lender on
the  earliest interest payment date or dates on which the receipt
thereof  would  be permissible under the laws applicable  to  the
Lender  limiting  rates  of interest  which  may  be  charged  or
collected by the Lender.  Such deferred interest shall  not  bear
interest.

          Section 2.3    Promissory Note.

          The Loan shall be evidenced by a Promissory Note of the
Borrower in substantially the form of Exhibit A attached  hereto,
dated the date hereof, payable to the order of the Lender in  the
Principal Amount and otherwise duly completed.

          Section 2.4    Payment of Trust Loan.

           (a)   The Principal Amount of the Loan shall be repaid
in  annual installments payable on the last Business Day of  each
Fiscal  Year ending after the date of this Agreement.  The amount
of  each such annual installment shall be equal to a fraction  of
the  Principal  Amount  on  the due  date  of  such  installment,
determined in accordance with the following schedule:

             Installment Due on       Fraction of Outstanding
             Last Business Day of     Principal Amount
             Fiscal Year Ending
                     in

                    1996                 1/120
                    1997                  1/10
                    1998                  1/10
                    1999                  1/10
                    2000                  1/10
                    2001                  1/10
                    2002                  1/10
                    2003                  1/10
                    2004                  1/10
                    2005                  1/10
10th anniversary of loan           entire outstanding
                                   Principal Amount

;  provided, however, that the Borrower shall not be required  to
make  any payment of principal due to be made in any Fiscal  Year
to  the  extent that (i) following such payment, the consolidated
return on average assets of Dime Community Bancorp. Inc. for such
Fiscal Year would be less than one-half of one percent (0.5%)  or
the  consolidated return on average equity for such  Fiscal  Year
would  be less than four percent (4%) or (ii) such payment  would
not be deductible for federal income tax purposes for such Fiscal
Year under section 404 of the Code.

     (b)  Any payment not required to made pursuant to the clause
(i) of the proviso in section 2.4(a) shall be deferred to and  be
payable  on  the earlier of the tenth (10th) anniversary  of  the
loan origination date or the last day of the first Fiscal Year in
which such proviso would not apply to alleviate a requirement  of
payment;  and payment not required to be made pursuant to  clause
(ii) of section 2.4(a) shall be deferred to and be payable on the
last  day of the first Fiscal Year in which such payment  may  be
made on a tax deductible basis.

          Section 2.5    Prepayment.

           The  Borrower shall be entitled to prepay the Loan  in
whole  or  in part, at any time and from time to time;  provided,
however, that the Borrower shall give notice to the Lender of any
such  prepayment; and provided, further, that any partial  prepay
ment of the Loan shall be in an amount not less than TEN THOUSAND
DOLLARS  ($10,000.00).  Any such prepayment  shall  be:  (a)  per
manent  and irrevocable: (b) accompanied by all accrued  interest
through the date of such prepayment; (c) made without premium  or
penalty; and (d) applied in the inverse order of the maturity  of
the installments thereof unless the Lender and the Borrower agree
to apply such prepayments in some other order.

          Section 2.6    Method of Payments.

          (a)  All payments of principal, interest, other charges
(including indemnities) and other amounts payable by the Borrower
hereunder shall be made in lawful money of the United States,  in
immediately  available  funds,  to  the  Lender  at  the  address
specified  in or pursuant to this Loan Agreement for  notices  to
the  Lender, not later than 3:00 P.M., New York time, on the date
on which such payment shall become due.  Any such payment made on
such  date  but after such time shall, if the amount  paid  bears
interest,  and  except  as  expressly provided  to  the  contrary
herein,  be  deemed  to  have been made on,  and  interest  shall
continue  to  accrue  and  be payable  thereon  until,  the  next
succeeding Business Day.  If any payment of principal or interest
becomes due on a day other than a Business Day, such payment  may
be  made on the next succeeding Business Day, and when paid, such
payment  shall include interest to the day on which such  payment
is in fact made.

          (b)  Notwithstanding anything to the contrary contained
in  this  Loan  Agreement  or the Promissory  Note,  neither  the
Borrower  nor the Trustee shall be obligated to make any payment,
repayment or prepayment on the Promissory Note or take or refrain
from  taking  any other action hereunder or under the  Promissory
Note  if doing so would cause the ESOP to cease to be an employee
stock ownership plan within the meaning of section 4975(e)(7)  of
the  Code or qualified under section 401(a) of the Code or  cause
the  Borrower  to  cease to be a tax exempt trust  under  section
501(a)  of the Code or if such act or failure to act would  cause
the  Borrower  or  the  Trustee  to  engage  in  any  "prohibited
transaction"  as such term is defined in section 4975(c)  of  the
Code  and  the  regulations promulgated thereunder which  is  not
exempted  by  section  4975(c)(2) or (d)  of  the  Code  and  the
regulations promulgated thereunder or in section 406 of ERISA and
the  regulations promulgated thereunder which is not exempted  by
section  408(b)  of  ERISA and the regulations promulgated  there
under; provided, however, that in each case, the Borrower or  the
Trustee  or  both, as the case may be, may act  or  refrain  from
acting pursuant to this section 2.6(b) on the basis of an opinion
of Independent Counsel.  The Borrower and the Trustee may consult
with  Independent  Counsel, and any opinion of  such  Independent
Counsel  shall be full and complete authorization and  protection
in  respect  of  any action taken or suffered or  omitted  by  it
hereunder  in good faith and in accordance with such  opinion  of
Independent  Counsel.  Nothing contained in this  section  2.6(b)
shall  be construed as imposing a duty on either the Borrower  or
the  Trustee to consult with Independent Counsel.  Any obligation
of  the Borrower or the Trustee to make any payment, repayment or
prepayment  on  the Promissory Note or to take  or  refrain  from
taking any other act hereunder or under the Promissory Note which
is excused pursuant to this section 2.6(b) shall be considered  a
binding  obligation of the Borrower or the Trustee, or  both,  as
the  case  may  be,  for  the purposes of determining  whether  a
Default  or Event of Default has occurred hereunder or under  the
Promissory  Note  and  nothing in this section  2.6(b)  shall  be
construed  as  providing  a  defense to  any  remedies  otherwise
available upon a Default or an Event of Default hereunder  (other
than the remedy of specific performance).

          Section 2.7    Use of Proceeds of Loan.

           The  entire proceeds of the Loan shall be used  solely
for  acquiring  shares of Common Stock, and for no other  purpose
whatsoever.

          Section 2.8    Security.

          (a)  In order to secure the due payment and performance
by  the  Borrower  of  all  of its obligations  under  this  Loan
Agreement, simultaneously with the execution and delivery of this
Loan Agreement by the Borrower, the Borrower shall:

           (i)   pledge  to  the Lender  as  Collateral  (as
     defined  in  the Pledge Agreement), and  grant  to  the
     Lender  a  first priority lien on and security interest
     in,  the  Common  Stock purchased  with  the  Principal
     Amount, by the execution and delivery to the Lender  of
     a  Pledge  Agreement  in the form  attached  hereto  as
     Exhibit B; and

           (ii) execute and deliver, or cause to be executed
     and  delivered, such other agreements, instruments  and
     documents as the Lender may reasonably require in order
     to effect the purposes of the Pledge Agreement and this
     Loan Agreement.

           (b)   The Lender shall release from encumbrance  under
the Pledge Agreement and transfer to the Borrower, as of the date
on  which  any payment or prepayment of the Principal  Amount  is
made,  a  number  of  shares of Common Stock held  as  Collateral
pursuant to section 6.4 of the ESOP.

          Section 2.9    Registration of the Promissory Note.

          (a)  The Lender shall maintain a Register providing for
the  registration of the Principal Amount and any stated interest
and of transfer and exchange of the Promissory Note.  Transfer of
the  Promissory Note may be effected only by the surrender of the
old  instrument and either the reissuance by the Borrower of  the
old  instrument to the new holder or the issuance by the Borrower
of  a  new instrument to the new holder.  The old Promissory Note
so  surrendered shall be cancelled by the Lender and returned  to
the Borrower after such cancellation.

          (b)  Any new Promissory Note issued pursuant to section
2.9(a)  shall  carry the same rights to interest (unpaid  and  to
accrue)  carried  by  the Promissory Note so  transferred  or  ex
changed so that there will not be any loss or gain of interest on
the  note surrendered.  Such new Promissory Note shall be subject
to  all of the provisions and entitled to all of the benefits  of
this  Agreement.   Prior to due presentment for  registration  or
transfer,  the Borrower may deem and treat the registered  holder
of  any  Promissory Note as the holder thereof  for  purposes  of
payment and all other purposes.  A notation shall be made on each
new  Promissory Note of the amount of all payments  of  principal
and interest theretofore paid.

                          ARTICLE III

         REPRESENTATIONS AND WARRANTIES OF THE BORROWER

           The  Borrower  hereby represents and warrants  to  the
Lender as follows:

          Section 3.1    Power, Authority, Consents.

           The  Borrower  has the power to execute,  deliver  and
perform  this Loan Agreement, the Promissory Note and the  Pledge
Agreement,  all of which have been duly authorized by  all  neces
sary and proper corporate or other action.

          Section 3.2    Due Execution, Validity, Enforceability.

           Each  of the Loan Documents, including, without limita
tion,  this  Loan Agreement, the Promissory Note and  the  Pledge
Agreement, have been duly executed and delivered by the Borrower;
and each constitutes the valid and legally binding obligation  of
the Borrower, enforceable in accordance with its terms.

          Section 3.3    Properties, Priority of Liens.

           The  liens which have been created and granted by  the
Pledge  Agreement constitute valid, first liens on the properties
and  assets covered by the Pledge Agreement, subject to no  prior
or equal lien.

          Section 3.4    No Defaults, Compliance with Laws.

           The Borrower is not in default in any material respect
under  any agreement, ordinance, resolution, decree, bond,  note,
indenture, order or judgment to which it is a party or  by  which
it  is bound, or any other agreement or other instrument by which
any  of  the  properties  or assets owned  by  it  is  materially
affected.

          Section 3.5    Purchases of Common Stock.

           Upon  consummation of any purchase of Common Stock  by
the  Borrower  with the proceeds of the Loan, the Borrower  shall
acquire  valid, legal and marketable title to all of  the  Common
Stock  so  purchased, free and clear of any liens, other  than  a
pledge to the Lender of the Common Stock so purchased pursuant to
the  Pledge Agreement.  Neither the execution and delivery of the
Loan  Documents nor the performance of any obligation  thereunder
violates any provision of law or conflicts with or results  in  a
breach  of  or creates (with or without the giving of  notice  or
lapse  of  time, or both) a default under any agreement to  which
the  Borrower is a party or by which it is bound or  any  of  its
properties  is  affected.  No consent of any  federal,  state  or
local  governmental authority, agency or other  regulatory  body,
the  absence of which could have a materially adverse  effect  on
the Borrower or the Trustee, is or was required to be obtained in
connection  with  the execution, delivery or performance  of  the
Loan  Documents and the transactions contemplated therein  or  in
connection therewith, including, without limitation, with respect
to  the transfer of the shares of Common Stock purchased with the
proceeds of the Loan pursuant thereto.

                           ARTICLE IV

          REPRESENTATIONS AND WARRANTIES OF THE LENDER

           The  Lender  hereby  represents and  warrants  to  the
Borrower as follows:

          Section 4.1    Power, Authority, Consents.

           The  Lender  has  the  power to execute,  deliver  and
perform  this  Loan  Agreement,  the  Pledge  Agreement  and  all
documents executed by the Lender in connection with the Loan, all
of  which  have been duly authorized by all necessary and  proper
corporate or other action.  No consent, authorization or approval
or other action by any governmental authority or regulatory body,
and no notice by the Lender to, or filing by the Lender with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance of this Loan Agreement.

          Section 4.2    Due Execution, Validity, Enforceability.

           This Loan Agreement and the Pledge Agreement have been
duly executed and delivered by the Lender; and each constitutes a
valid  and  legally binding obligation of the Lender, enforceable
in accordance with its terms.

          Section 4.3    ESOP; Contributions.

           The  ESOP  and  the Borrower have been  duly  created,
organized  and  maintained by the Lender in compliance  with  all
applicable laws, regulations and rulings.  The ESOP qualifies  as
an  "employee stock ownership plan" as defined in section 4975(e)
(7)  the  Code.  The ESOP provides that the Lender may  make  con
tributions  to  the  ESOP in an amount necessary  to  enable  the
Trustee to amortize the Loan in accordance with the terms of  the
Promissory Note and this Loan Agreement, and the Lender will make
such contributions; provided, however, that no such contributions
shall  be  required  if they would adversely affect  the  qualifi
cation of the ESOP under section 401(a) of the Code.

          Section 4.4    Trustee; Committee.

           The Lender has taken such action as is required to  be
taken  by it to duly appoint the Trustee and the members  of  the
Committee.   The  Lender expressly acknowledges and  agrees  that
this Loan Agreement, the Promissory Note and the Pledge Agreement
are  being executed by the Trustee not in its individual capacity
but solely as trustee of and on behalf of the Borrower.

          Section 4.5    Compliance with Laws; Actions.

           Neither  the execution and delivery by the  Lender  of
this  Loan  Agreement  or any instruments required  thereby,  nor
compliance with the terms and provisions of any such documents by
the  Lender, constitutes a violation of any provision of any  law
or any regulation, order, writ, injunction or decree or any court
or governmental instrumentality, or an event of default under any
agreement, to which the Lender is a party or by which the  Lender
is  bound  or to which the Lender is subject, which violation  or
event  of  default would have a material adverse  effect  on  the
Lender.   There is no action or proceeding pending or  threatened
against  either of the ESOP or the Borrower before any  court  or
administrative agency.

                           ARTICLE V

                       EVENTS OF DEFAULT

          Section 5.1    Events of Default under Loan Agreement.

          Each of the following events shall constitute an "Event
of Default" hereunder:

           (a)   Failure to make any payment or mandatory  prepay
ment of principal of the Promissory Note when due, or failure  to
make  any  payment of interest on the Promissory Note  not  later
than five (5) Business Days after the date when due.

           (b)  Failure by the Borrower to perform or observe any
term,  condition or covenant of this Loan Agreement or of any  of
the  other  Loan  Documents, including, without  limitation,  the
Promissory Note and the Pledge Agreement.

           (c)  Any representation or warranty made in writing to
the  Lender  in  any  of the Loan Documents or  any  certificate,
statement  or  report made or delivered in compliance  with  this
Loan  Agreement,  shall  have been false  or  misleading  in  any
material respect when made or delivered.

          Section 5.2    Lender's Rights upon Event of Default.

           If an Event of Default under this Loan Agreement shall
occur  and  be  continuing, the Lender shall have  no  rights  to
assets of the Borrower other than:  (a) contributions (other than
contributions  of Common Stock) that are made by  the  Lender  to
enable the Borrower to meet its obligations pursuant to this Loan
Agreement  and  earnings attributable to the investment  of  such
contributions  and (b) "Eligible Collateral" (as defined  in  the
Pledge Agreement); provided, however, that: (i) the value of  the
Borrower's assets transferred to the Lender following an Event of
Default in satisfaction of the due and unpaid amount of the  Loan
shall not exceed the amount in default (without regard to amounts
owing  solely as a result of any acceleration of the Loan);  (ii)
the  Borrower's assets shall be transferred to the Lender  follow
ing  an Event of Default only to the extent of the failure of the
Borrower to meet the payment schedule of the Loan; and (iii)  all
rights  of  the  Lender to the Common Stock  purchased  with  the
proceeds of the Loan covered by the Pledge Agreement following an
Event  of  Default shall be governed by the terms of  the  Pledge
Agreement.

                           ARTICLE VI

                    MISCELLANEOUS PROVISIONS

          Section 6.1    Payments Due to the Lender.

           If any amount is payable by the Borrower to the Lender
pursuant  to any indemnity obligation contained herein, then  the
Borrower  shall pay, at the time or times provided therefor,  any
such  amount and shall indemnify the Lender against and  hold  it
harmless from any loss or damage resulting from or arising out of
the  nonpayment or delay in payment of any such amount.   If  any
amounts  as  to which the Borrower has so indemnified the  Lender
hereunder  shall  be assessed or levied against the  Lender,  the
Lender  may  notify  the  Borrower  and  make  immediate  payment
thereof,  together  with  interest  or  penalties  in  connection
therewith,  and shall thereupon be entitled to and shall  receive
immediate reimbursement therefor from the Borrower, together with
interest  on each such amount as provided in section 2.2(c).  Not
withstanding  any other provision contained in  this  Loan  Agree
ment,  the covenants and agreements of the Borrower contained  in
this  section  6.1 shall survive:  (a) payment of the  Promissory
Note and (b) termination of this Loan Agreement.

          Section 6.2    Payments.

           All  payments hereunder and under the Promissory  Note
shall be made without set-off or counterclaim and in such amounts
as  may be necessary in order that all such payments shall not be
less  than the amounts otherwise specified to be paid under  this
Loan Agreement and the Promissory Note, subject to any applicable
tax  withholding  requirements.  Upon  payment  in  full  of  the
Promissory  Note,  the  Lender shall mark  such  Promissory  Note
"Paid" and return it to the Borrower.

          Section 6.3    Survival.

           All  agreements, representations and  warranties  made
herein shall survive the delivery of this Loan Agreement and  the
Promissory Note.

           Section  6.4   Modifications, Consents and  Waivers;
                          Entire Agreement.

          No modification, amendment or waiver of or with respect
to any provision of this Loan Agreement, the Promissory Note, the
Pledge Agreement, or any of the other Loan Documents, nor consent
to  any  departure  from any of the terms or conditions  thereof,
shall in any event be effective unless it shall be in writing and
signed  by the party against whom enforcement thereof is  sought.
Any  such  waiver  or  consent shall be  effective  only  in  the
specific  instance  and  for the purpose  for  which  given.   No
consent  to  or demand on a party in any case shall,  of  itself,
entitle it to any other or further notice or demand in similar or
other  circumstances.  This Loan Agreement  embodies  the  entire
agreement  and understanding between the Lender and the  Borrower
and  supersedes all prior agreements and understandings  relating
to the subject matter hereof.

          Section 6.5    Remedies Cumulative.

          Each and every right granted to the Lender hereunder or
under  any  other document delivered hereunder or  in  connection
herewith, or allowed it by law or equity, shall be cumulative and
may  be  exercised from time to time.  No failure on the part  of
the  Lender or the holder of the Promissory Note to exercise, and
no  delay  in  exercising, any right shall operate  as  a  waiver
thereof,  nor shall any single or partial exercise of  any  right
preclude any other or future exercise thereof or the exercise  of
any  other right.  The due payment and performance of the  obliga
tions  under  the Loan Documents shall be without regard  to  any
counterclaim, right of offset or any other claim whatsoever which
the  Borrower may have against the Lender and without  regard  to
any  other  obligation of any nature whatsoever which the  Lender
may  have  to  the Borrower, and no such counterclaim  or  offset
shall  be asserted by the Borrower in any action, suit or proceed
ing  instituted by the Lender for payment or performance of  such
obligations.

           Section  6.6     Further Assurances;  Compliance  with
                            Covenants.

           At any time and from time to time, upon the request of
the  Lender,  the Borrower shall execute, deliver and acknowledge
or cause to be executed, delivered and acknowledged, such further
documents  and instruments and do such other acts and  things  as
the  Lender  may reasonably request in order to fully effect  the
terms  of  this Loan Agreement, the Promissory Note,  the  Pledge
Agreement,  the  other Loan Documents and any  other  agreements,
instruments  and  documents  delivered  pursuant  hereto  or   in
connection with the Loan.

          Section 6.7    Notices.

           Except  as otherwise specifically provided for herein,
all  notices, requests, reports and other communications pursuant
to  this  Loan  Agreement shall be in writing, either  by  letter
(delivered  by hand or commercial messenger service  or  sent  by
registered  or  certified mail, return receipt requested,  except
for  routine  reports  delivered in compliance  with  Article  VI
hereof  which may be sent by ordinary first-class mail) or  telex
or facsimile, addressed as follows:

          (a)  If to the Borrower:

                    Employee Stock Ownership Plan Trust
                    of Dime Community Bancorp, Inc.
                    and Certain Affiliates
                    c/o The Dime Savings Bank of Williamsburgh
                    209 Havemeyer Street
                    Brooklyn, New York  11211
                    Attention:     Mr. Vincent F. Palagiano
                                   Chief Executive Officer

               with copies to:

                    Marine Midland Bank
                    250 Park Avenue
                    New York, New York  10177
                    Attention:     Mr. Richard A. Glover
                                   Vice President

                    Thacher Proffitt & Wood
                    Two World Trade Center, 39th Floor
                    New York New York  10048
                    Attention:     W. Edward Bright, Esq.

                    Helm, Shapiro, Anito & McCale, P.C.
                    20 Corporate Woods Boulevard
                    Albany, New York  12211-2350
                    Attention:     Brian P. Goldstein, Esq.

          (b)  If to the Lender:

                    Dime Community Bancorp, Inc.
                    209 Havemeyer Street
                    Brooklyn, New York  11211
                    Attention:     Mr. Vincent F. Palagiano
                                   Chief Executive Officer

               with a copy to:

                    Thacher Proffitt & Wood
                    Two World Trade Center, 39th Floor
                    New York New York  10048
                    Attention:     W. Edward Bright, Esq.

Any notice, request or communication hereunder shall be deemed to
have been given on the day on which it is delivered by hand or by
commercial  messenger service, or sent by telex or facsimile,  to
such  party at its address specified above, or, if sent by  mail,
on  the  third Business Day after the day deposited in the  mail,
postage  prepaid, addressed as aforesaid.  Any party  may  change
the  person or address to whom or which notices are to  be  given
hereunder,  by  notice duly given hereunder;  provided,  however,
that any such notice shall be deemed to have been given only when
actually received by the party to whom it is addressed.

          Section 6.8    Counterparts.

           This  Loan  Agreement may be signed in any  number  of
counterparts which, when taken together, shall constitute one and
the same document.

          Section 6.9    Construction; Governing Law.

           The headings used in the table of contents and in this
Loan  Agreement are for convenience only and shall not be  deemed
to constitute a part hereof.  All uses herein of any gender or of
singular or plural terms shall be deemed to include uses  of  the
other  genders  or plural or singular terms, as the  context  may
require.  All references in this Loan Agreement to an Article  or
section shall be to an Article or section of this Loan Agreement,
unless  otherwise specified.  This Loan Agreement, the Promissory
Note, the Pledge Agreement and the other Loan Documents shall  be
governed  by,  and construed and interpreted in accordance  with,
the laws of the State of New York.

          Section 6.10   Severability.

            Wherever  possible,  each  provision  of  this   Loan
Agreement  shall be interpreted in such manner as to be effective
and  valid under applicable law; however, the provisions of  this
Loan  Agreement  are  severable, and if any clause  or  provision
hereof shall be held invalid or unenforceable in whole or in part
in  any  jurisdiction, then such invalidity  or  unenforceability
shall  affect only such clause or provision, or part thereof,  in
such  jurisdiction and shall not in any manner affect such clause
or  provision in any other jurisdiction, or any other  clause  or
provision  in this Loan Agreement in any jurisdiction.   Each  of
the  covenants, agreements and conditions contained in this  Loan
Agreement is independent, and compliance by a party with  any  of
them  shall  not  excuse non-compliance by such  party  with  any
other.   The  Borrower shall not take any action  the  effect  of
which shall constitute a breach or violation of any provision  of
this Loan Agreement.

            Section  6.11    Binding  Effect;  No  Assignment  or
Delegation.

           This Loan Agreement shall be binding upon and inure to
the benefit of the Borrower and its successors and the Lender and
its  successors and assigns.  The rights and obligations  of  the
Borrower  under this Agreement shall not be assigned or delegated
without  the  prior  written  consent  of  the  Lender,  and  any
purported assignment or delegation without such consent shall  be
void.

          In Witness Whereof, the parties hereto have caused this
Loan  Agreement  to be duly executed as of the date  first  above
written.

                              Employee Stock Ownership Plan Trust
                                of Dime Community Bancorp, Inc.

                              By    Marine Midland Bank, as Trustee

                              By:     /s/ Richard A. Glover

                              Title:  Vice President

                              Dime Community Bancorp, Inc.

                              By:     /s/ Michael P. Devine

                              Title:  Executive Vice President

                           EXHIBIT A
                       TO LOAN AGREEMENT
                         BY AND BETWEEN
             EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF
                  DIME COMMUNITY BANCORP, INC.
                     AND CERTAIN AFFILIATES
                              AND
                    DIME COMMUNITY BANCORP, INC.

                    FORM OF PROMISSORY NOTE

$11,638,000                                       Brooklyn, New York
PRINCIPAL AMOUNT                                  June 26, 1996

           FOR  VALUE  RECEIVED, the undersigned, Employee  Stock
Ownership Plan Trust of Dime Community Bancorp, Inc. and  Certain
Affiliates  ("Borrower"),  acting by  and  through  its  Trustee,
Marine  Midland Bank ("Trustee"), hereby promises to pay  to  the
order  of Dime Community Bancorp, Inc. ("Lender") ELEVEN MILLION,
SIX   HUNDRED   THIRTY-EIGHT  THOUSAND  DOLLARS  ($11,638,000.00)
payable  in  accordance with the Loan Agreement made and  entered
into  between  the Borrower and the Lender as of  June  26,  1996
("Loan  Agreement")  pursuant to which this  Promissory  Note  is
issued, in one annual installment of $96,983.33, payable on  June
28, 1996 and nine annual installments of ONE MILLION, ONE HUNDRED
SIXTY-THREE   THOUSAND,   EIGHT  HUNDRED   DOLLARS   ($1,163,800)
commencing  on the last Business Day of June, 1997 and continuing
on  the last Business Day of June of each calendar year until the
last  Business  Day  of  June, 2005, and one  annual  installment
payable  on  June  26, 2006, at which time the  entire  Principal
Amount then outstanding and all accrued interest shall become due
and  payable; provided, however, that the Borrower shall  not  be
required to make any payment of principal due to be made  in  any
Fiscal  Year  to the extent that (i) following such payment,  the
consolidated  return on average assets of Dime Community  Bancorp
Inc.  for  such  Fiscal Year would be less than one-half  of  one
percent  (0.5%) or the consolidated return on average equity  for
such  Fiscal  Year would be less than four percent (4%)  or  (ii)
such  payment  would  not be deductible for  federal  income  tax
purposes for such Fiscal Year under section 404 of the Code.  Any
payment  not required to made pursuant to the clause (i)  of  the
above  proviso shall be deferred to and be payable on the earlier
of  the tenth (10th) anniversary of the loan origination date  or
the last day of the first Fiscal Year in which such proviso would
not  apply to alleviate a requirement of payment; and payment not
required to be made pursuant to clause (ii) of the above  proviso
shall  be deferred to and be payable on the last day of the first
Fiscal Year in which such payment may be made on a tax deductible
basis.

           This  Promissory Note shall bear interest at the  rate
per annum set forth or established under the Loan Agreement, such
interest to be payable quarterly in arrears, commencing  on  June
28, 1996 and thereafter on the last Business Day of each calendar
quarter and upon payment or prepayment of this Promissory Note.

           Anything  herein to the contrary notwithstanding,  the
obligation of the Borrower to make payments of interest shall  be
subject to the limitation that payments of interest shall not  be
required to be made to the Lender to the extent that the Lender's
receipt  thereof would not be permissible under the law  or  laws
applicable to the Lender limiting rates of interest which may  be
charged  or  collected  by  the Lender.   Any  such  payments  of
interest  which  are  not  made as a  result  of  the  limitation
referred  to  in  the preceding sentence shall  be  made  by  the
Borrower to the Lender on the earliest interest payment  date  or
dates on which the receipt thereof would be permissible under the
laws  applicable to the Lender limiting rates of  interest  which
may  be  charged  or  collected by  the  Lender.   Such  deferred
interest shall not bear interest.

           Payments  of  both  principal  and  interest  on  this
Promissory  Note are to be made at the principal  office  of  the
Lender at 209 Havemeyer Street, Brooklyn, New York 11211, or such
other  place as the holder hereof shall designate to the Borrower
in  writing, in lawful money of the United States of  America  in
immediately available funds.

           Failure  to  make  any payment of  principal  on  this
Promissory  Note  when due, or failure to  make  any  payment  of
interest on this Promissory Note not later than five (5) Business
Days  after  the date when due, shall constitute a  default  here
under, whereupon the principal amount of and accrued interest  on
this Promissory Note shall immediately become due and payable  in
accordance with the terms of the Loan Agreement.

           This  Promissory Note is secured by a Pledge Agreement
between the Borrower and the Lender of even date herewith and  is
entitled to the benefits thereof.

                                Employee Stock Ownership Plan Trust
                                of Dime Community Bancorp, Inc.
                                and Certain Affiliates

                                By     Marine Midland Bank, as Trustee

                                By:    /s/ Richard A. Glover

                                Title: Vice President

                           EXHIBIT B
                       TO LOAN AGREEMENT
                         BY AND BETWEEN
             EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF
                  DIME COMMUNITY BANCORP, INC.
                     AND CERTAIN AFFILIATES
                              AND
                   DIME COMMUNITY BANCORP, INC.

                    FORM OF PLEDGE AGREEMENT

           This PLEDGE AGREEMENT ("Pledge Agreement") is made  as
of  the 26th day of June, 1996, by and between the EMPLOYEE STOCK
OWNERSHIP PLAN TRUST OF DIME COMMUNITY BANCORP, INC. AND  CERTAIN
AFFILIATES,  acting  by and through its Trustee,  MARINE  MIDLAND
BANK, a banking corporation organized under the laws of the State
of  New York and having office at 250 Park Avenue, New York,  New
York   10177  ("Pledgor"),  and  Dime  Community  Bancorp,  Inc.,
corporation organized and existing under the laws of the State of
New York, having an office at 209 Havemeyer Street, Brooklyn, New
York 11211 ("Pledgee").

                     W I T N E S S E T H :

           Whereas,  this Pledge Agreement is being executed  and
delivered  to the Pledgee pursuant to the terms of a  Loan  Agree
ment of even date herewith ("Loan Agreement"), by and between the
Pledgor and the Pledgee;

           Now,  Therefore, in consideration of the mutual  agree
ments  contained  herein and in the Loan Agreement,  the  parties
hereto do hereby covenant and agree as follows:

           Section  1.   Definitions.  The following  definitions
shall apply for purposes of this Pledge Agreement, except to  the
extent  that  a  different meaning is plainly  indicated  by  the
context; all capitalized terms used but not defined herein  shall
have  the  respective  meanings assigned  to  them  in  the  Loan
Agreement:

           (a)   Collateral  shall mean the Pledged  Shares  and,
     subject to section 5 hereof, and to the extent permitted  by
     applicable  law,  all rights with respect thereto,  and  all
     proceeds of such Pledged Shares and rights.

          (b)  Event of Default shall mean an event so defined in
     the Loan Agreement.

           (c)  Liabilities shall mean all the obligations of the
     Pledgor  to  the  Pledgee,  howsoever  created,  arising  or
     evidenced, whether direct or indirect, absolute  or  contin-
     gent,  now  or hereafter existing, or due or to become  due,
     under the Loan Agreement and the Promissory Note.

          (d)  Pledged Shares shall mean all the shares of Common
     Stock  of  Dime  Community Bancorp, Inc.  purchased  by  the
     Pledgor with the proceeds of the loan made by the Pledgee to
     the  Pledgor  pursuant to the Loan Agreement, but  excluding
     any such shares previously released pursuant to section 4.

           Section  2.   Pledge.  To secure the  payment  of  and
performance of all the Liabilities, the Pledgor hereby pledges to
the Pledgee, and grants to the Pledgee a security interest in and
lien upon, the Collateral.

           Section  3.   Representations and  Warranties  of  the
Pledgor.  The Pledgor represents, warrants, and covenants to  the
Pledgee as follows:

           (a)   the execution, delivery and performance of  this
     Pledge  Agreement  and the pledging of the  Collateral  here
     under  do  not  and  will not conflict  with,  result  in  a
     violation  of,  or constitute a default under any  agreement
     binding upon the Pledgor;

           (b)   the Pledged Shares are and will continue  to  be
     owned  by the Pledgor free and clear of any liens or  rights
     of  any other person except the lien hereunder and under the
     Loan  Agreement  in favor of the Pledgee, and  the  security
     interest  of  the  Pledgee in the  Pledged  Shares  and  the
     proceeds  thereof is and will continue to be  prior  to  and
     senior to the rights of all others;

          (c)  this Pledge Agreement is the legal, valid, binding
     and enforceable obligation of the Pledgor in accordance with
     its terms;

          (d)  the Pledgor shall, from time to time, upon request
     of  the Pledgee, promptly deliver to the Pledgee such  stock
     powers, proxies, and similar documents, satisfactory in form
     and substance to the Pledgee, with respect to the Collateral
     as the Pledgee may reasonably request; and

          (e)  subject to the first sentence of section 4(b), the
     Pledgor  shall not, so long as any Liabilities are  outstand
     ing, sell, assign, exchange, pledge or otherwise transfer or
     encumber any of its rights in and to any of the Collateral.

          Section 4.  Eligible Collateral.

           (a)   As  used  herein the term "Eligible  Collateral"
shall mean that amount of Collateral which has an aggregate  fair
market  value  equal to the amount by which  the  Pledgor  is  in
default (without regard to any amounts owing solely as the result
of  an  acceleration of the Loan Agreement) or such lesser amount
of  Collateral as may be required pursuant to section 13 of  this
Pledge Agreement.

           (b)   The  Pledged Shares shall be released from  this
Pledge  Agreement in a manner conforming to the  requirements  of
Treasury Regulations Section 54.4975-7(b)(8), as the same may  be
from time to time amended or supplemented, and section 6.4(b)  of
the ESOP.  Subject to such Regulations, the Pledgee may from time
to time, after any Default or Event of Default, and without prior
notice  to the Pledgor, transfer all or any part of the  Eligible
Collateral into the name of the Pledgee or its nominee,  with  or
without  disclosing that such Eligible Collateral is  subject  to
any  rights  of  the Pledgor and may from time to  time,  whether
before  or  after  any of the Liabilities shall  become  due  and
payable,  without notice to the Pledgor, take all or any  of  the
following  actions:  (i) notify the parties obligated on  any  of
the  Eligible  Collateral to make payment to the Pledgee  of  any
amounts due or to become due thereunder, (ii) release or exchange
all  or  any  part of the Eligible Collateral, or  compromise  or
extend  or renew for any period (whether or not longer  than  the
original period) any obligations of any nature of any party  with
respect  thereto, and (iii) take control of any proceeds  of  the
Eligible Collateral.

          Section 5.  Delivery.

           (a)   The  Pledgor shall deliver to the  Pledgee  upon
execution  of  this  Pledge Agreement (i) an  assignment  by  the
Pledgor  of  all  the  Pledgor's rights to and  interest  in  the
Pledged  Shares  and  (ii)  an irrevocable  proxy,  in  form  and
substance satisfactory to the Pledgee, signed by the Pledgor with
respect to the Pledged Shares.

           (b)   So long as no Default or Event of Default  shall
have  occurred  and  be  continuing, (i)  the  Pledgor  shall  be
entitled to exercise any and all voting and other rights  pertain
ing  to  the  Collateral or any part thereof for any purpose  not
inconsistent  with the terms of this Pledge Agreement,  and  (ii)
the  Pledgor  shall  be  entitled to receive  any  and  all  cash
dividends  or  other  distributions paid in respect  of  the  Col
lateral.

          Section 6.  Events of Default.

           (a)   If  a  Default or an Event of Default  shall  be
existing,  in addition to the rights it may have under  the  Loan
Agreement, the Promissory Note, and this Pledge Agreement, or  by
virtue  of  any  other instrument, (i) the Pledgee may  exercise,
with  respect to the Eligible Collateral, from time to  time  any
rights  and remedies available to it under the Uniform Commercial
Code  as in effect from time to time in the State of New York  or
otherwise  available to it and (ii) the Pledgee  shall  have  the
right,  for  and in the name, place and stead of the Pledgor,  to
execute endorsements, assignments, stock powers and other  instru
ments of conveyance or transfer with respect to all or any of the
Eligible  Collateral.  Written notification of  intended  disposi
tion  of  any  of the Eligible Collateral shall be given  by  the
Pledgee  to  the Pledgor at least three (3) Business Days  before
such  disposition.  Subject to section 13 below, any proceeds  of
any  disposition  of Eligible Collateral may be  applied  by  the
Pledgee  to  the  payment  of expenses  in  connection  with  the
Eligible  Collateral,  including, without limitation,  reasonable
attorneys'  fees  and  legal expenses, and any  balance  of  such
proceeds may be applied by the Pledgee toward the payment of such
of  the  Liabilities  as are in Default, and  in  such  order  of
application,  as  the Pledgee may from time to  time  elect.   No
action  of the Pledgee permitted hereunder shall impair or affect
its  rights  in and to the Eligible Collateral.  All  rights  and
remedies  of  the Pledgee expressed hereunder are in addition  to
all other rights and remedies possessed by it, including, without
limitation, those contained in the documents referred to  in  the
definition of Liabilities in section 1 hereof.

           (b)   In  any  sale of any of the Eligible  Collateral
after  a Default or an Event of Default shall have occurred,  the
Pledgee  is  hereby authorized to comply with any  limitation  or
restriction in connection with such sale as it may be advised  by
counsel  is  necessary  in order to avoid  any  violation  of  ap
plicable law (including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders  and
purchasers  or  further  restrict  such  prospective  bidders  or
purchasers to persons who will represent and agree that they  are
purchasing  for their own account for investment and not  with  a
view  to the distribution or resale of such Eligible Collateral),
or  in  order to obtain such required approval of the sale or  of
the  purchase  by any governmental regulatory authority  or  offi
cial,  and the Pledgor further agrees that such compliance  shall
not  result in such sale's being considered or deemed not to have
been  made  in  a commercially reasonable manner, nor  shall  the
Pledgee  be liable or accountable to the Pledgor for any discount
allowed  by  reason of the fact that such Eligible Collateral  is
sold in compliance with any such limitation or restriction.

           Section 7.  Payment in Full.  Upon the payment in full
of  all  outstanding  Liabilities, this  Pledge  Agreement  shall
terminate  and the Pledgee shall forthwith assign,  transfer  and
deliver  to the Pledgor, against receipt and without recourse  to
the Pledgee, all Collateral then held by the Pledgee pursuant  to
this Pledge Agreement.

          Section 8.  No Waiver.  No failure or delay on the part
of  the  Pledgee in exercising any right or remedy  hereunder  or
under  any  other document which confers or grants any rights  in
the  Pledgee  in respect of the Liabilities shall  operate  as  a
waiver  thereof nor shall any single or partial exercise  of  any
such  right  or  remedy preclude any other  or  further  exercise
thereof  or  the  exercise of any other right or  remedy  of  the
Pledgee.

          Section 9. Binding Effect; No Assignment or Delegation.
This  Pledge  Agreement shall be binding upon and  inure  to  the
benefit  of  the  Pledgor, the Pledgee and their  respective  suc
cessors  and assigns, except that the Pledgor may not  assign  or
transfer  its rights hereunder without the prior written  consent
of  the  Pledgee  (which consent shall not unreasonably  be  with
held).   Each  duty or obligation of the Pledgor to  the  Pledgee
pursuant  to  the  provisions of this Pledge Agreement  shall  be
performed  in  favor of any person or entity  designated  by  the
Pledgee, and any duty or obligation of the Pledgee to the Pledgor
may  be performed by any other person or entity designated by the
Pledgee.

           Section  10.   Governing Law.  This  Pledge  Agreement
shall be governed by and construed in accordance with the laws of
the  State  of New York applicable to agreements to be  performed
wholly within the State of New York.

           Section 11.  Notices.  All notices, requests,  instruc
tions  or  documents hereunder shall be in writing and  delivered
personally  or  sent  by United States mail,  registered  or  cer
tified, return receipt requested, with proper postage prepaid, as
follows:

          (a)  If to the Pledgee:

                    Dime Community Bancorp, Inc.
                    209 Havemeyer Street
                    Brooklyn, New York  11211
                    Attention:     Mr. Vincent F. Palagiano
                                   Chief Executive Officer

               with a copy to:

                    Thacher Proffitt & Wood
                    Two World Trade Center, 39th Floor
                    New York, New York  10048
                    Attention:     W. Edward Bright, Esq.

          (b)  If to the Pledgor:

                    Employee Stock Ownership Plan Trust
                      of Dime Community Bancorp, Inc.
                      and Certain Affiliates
                    c/o The Dime Savings Bank of Williamsburgh
                    209 Havemeyer Street
                    Brooklyn, New York  11211
                    Attention:     Mr. Vincent F. Palagiano
                                   Chief Executive Officer

               with copies to:

                    Marine Midland Bank
                    250 Park Avenue
                    New York, New York  10177
                    Attention:     Mr. Richard A. Glover
                                   Vice President

                    Thacher Proffitt & Wood
                    Two World Trade Center, 39th Floor
                    New York, New York  10048
                    Attention:     W. Edward Bright, Esq.

or  at  such other address as either of the parties may designate
by  written  notice to the other party.  If delivered personally,
the  date on which a notice, request, instruction or document  is
delivered shall be the date on which such delivery is made,  and,
if  delivered  by  mail, the date on which such notice,  request,
instruction  or document is deposited in the mail  shall  be  the
date  of delivery.  Each notice, request, instruction or document
shall bear the date on which it is delivered.

           Section  12.  Interpretation.  Wherever possible  each
provision of this Pledge Agreement shall be interpreted  in  such
manner as to be effective and valid under applicable law, but  if
any provision hereof shall be prohibited by or invalid under such
law,  such provisions shall be ineffective to the extent of  such
prohibition or invalidity, without invalidating the remainder  of
such provision or the remaining provisions hereof.

          Section 13.  Construction.  All provisions hereof shall
be  construed  so  as  to maintain (a) the ESOP  as  a  qualified
leveraged employee stock ownership plan under section 401(a)  and
4975(e)(7) of the Internal Revenue Code of 1986 (the "Code"), (b)
the  Trust  as exempt from taxation under section 501(a)  of  the
Code  and  (c)  the  Trust Loan as an exempt loan  under  section
54.4975-7(b)  of  the Treasury Regulations and  as  described  in
Department of Labor Regulation section 2550.408b-3.

          In Witness Whereof, this Pledge Agreement has been duly
executed by the parties hereto as of the day and year first above
written.

                             Employee Stock Ownership Plan Trust
                              of Dime Community Bancorp, Inc.
                              and Certain Affiliates

                             By     Marine Midland Bank, as Trustee
                                    and not in any other capacity

                             By:    /s/ Richard A. Glover

                             Title: Vice President

                             Dime Community Bancorp, Inc.

                             By:    /s/ Michael P. Devine

                             Title: Executive Vice President

                           EXHIBIT C
                       TO LOAN AGREEMENT
                         BY AND BETWEEN
             EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF
                  DIME COMMUNITY BANCORP, INC.
                     AND CERTAIN AFFILIATES
                              AND
                    DIME COMMUNITY BANCORP, INC.

                       FORM OF ASSIGNMENT

           In  consideration of the loan made by  Dime  Community
Bancorp,  Inc.  ("Lender") to the Employee Stock  Ownership  Plan
Trust  of  Dime  Community Bancorp, Inc. and  Certain  Affiliates
("Borrower") pursuant to the Loan Agreement of even date herewith
between  the  Lender  and  the Borrower  ("Loan  Agreement")  and
pursuant  to  the  Pledge Agreement between the  Lender  and  the
Borrower   of   even  date  herewith  pertaining   thereto,   the
undersigned  Borrower hereby transfers, assigns  and  conveys  to
Lender  all its right, title and interest in and to those certain
shares of common stock of the Lender which it shall purchase with
the proceeds of the loan made pursuant to the Loan Agreement, and
agrees  to  transfer  and  endorse  to  Lender  the  certificates
representing  such shares as and when required  pursuant  to  the
Loan Agreement or Pledge Agreement.

                               Employee Stock Ownership Plan Trust
                                of Dime Community Bancorp, Inc.
                                and Certain Affiliates
                                                            
                               By      Marine Midland Bank, as Trustee
                                       and not in any other capacity
                                                            
                               By:     /s/ Richard A. Glover
                                                            
                               Title:  Vice President

June 26, 1996

                           EXHIBIT D
                       TO LOAN AGREEMENT
                         BY AND BETWEEN
             EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF
                  DIME COMMUNITY BANCORP, INC.
                     AND CERTAIN AFFILIATES
                              AND
                    DIME COMMUNITY BANCORP, INC.

                   FORM OF IRREVOCABLE PROXY

     In consideration of the loan made by Dime Community Bancorp,
Inc.  ("Lender") to the Employee Stock Ownership  Plan  Trust  of
Dime  Community Bancorp, Inc. and Certain Affiliates ("Borrower")
pursuant to the Loan Agreement of even date herewith between  the
Lender  and  the  Borrower  ("Loan  Agreement")  and  the  Pledge
Agreement  between  the  Lender and the  Borrower  of  even  date
herewith  pertaining  thereto, the  undersigned  Borrower  hereby
appoints the Lender as its proxy, with power of substitution,  to
represent and to vote those certain shares of common stock of the
Lender which it shall purchase with the proceeds of the loan made
pursuant  to  the  Loan  Agreement.  This  proxy,  when  properly
executed,  shall  be irrevocable and shall give the  Lender  full
power  and  authority to vote on any and all  matters  for  which
other  holders  of  shares  of common stock  of  the  Lender  are
entitled to vote.

                              Employee Stock Ownership Plan Trust
                               of Dime Community Bancorp, Inc.
                               and Certain Affiliates
                                                          
                              By:   Marine Midland Bank, as Trustee
                                     and not in any other capacity
                                                          
                              By:    /s/ Richard A. Glover

                              Title: Vice President

June 26, 1996

                     AMENDMENT NUMBER SEVEN

                               TO

             THE DIME SAVINGS BANK OF WILLIAMSBURGH

                      401(k) SAVINGS PLAN

                    IN RSI RETIREMENT TRUST

Pursuant   to   Section  11.1  of  The  Dime  Savings   Bank   of
Williamsburgh  401(k)  Savings  Plan  in  RSI  Retirement   Trust
("Plan"), the Plan is amended as follows, effective as of May 31,
1996:

1.    INTRODUCTION  - A new paragraph shall be added  immediately
prior  to  the  last paragraph, and the last paragraph  shall  be
amended, to read in their entirety as follows:

     Effective   as  of  May  31,  1996,  the  Employer   adopted
     resolutions   ceasing  matching  Bank  Contributions   under
     section 3.4 of the Plan.

2.    ARTICLE  III - Section 3.4 of the Plan shall be amended  to
read in its entirety as follows:

          3.4  Bank Contributions

           Effective as of May 31, 1996, the Employer  shall  not
     make  any  contributions to the Plan to match  Participant's
     Basic Contributions.

3.    ARTICLE IV - The first paragraph of section 4.2 of the Plan
shall be amended to read as follows:

     If a Participant who is not fully vested in the Net Value of
     his  Accounts terminates employment on or subsequent to  the
     Restatement  Date,  the  Units  representing  the  nonvested
     portion   of  his  Accounts  shall  constitute  Forfeitures.
     Forfeitures  shall be treated as employer contributions  and
     shall be applied to reduce the amount of subsequent employer
     contributions (including Basic Contributions) at the end  of
     the  Plan  Year or any other subsequent Plan Year until  the
     amounts are completely utilized.

                     AMENDMENT NUMBER EIGHT

                             TO

             THE DIME SAVINGS BANK OF WILLIAMSBURGH

                      401(k) SAVINGS PLAN

                    IN RSI RETIREMENT TRUST

Pursuant   to   Section  11.1  of  The  Dime  Savings   Bank   of
Williamsburgh  401(k)  Savings  Plan  in  RSI  Retirement   Trust
("Plan"),  the Plan is amended as follows, effective as  of  June
26, 1996:

1.    INTRODUCTION  - A new paragraph shall be added  immediately
prior to the last paragraph to read in its entirety as follows:

     Effective as of June 26, 1996, Pioneer Savings Bank,  F.S.B.
     and  its parent Conestoga Bancorp, Inc. were acquired by the
     Employer.  In connection with this acquisition, the Employer
     amended  the  Plan to give credit to employees of  specified
     "acquired companies" for purposes of vesting and eligibility
     to  participate, and to permit immediate participation as of
     the  date  of  such acquisition for eligible employees  with
     respect  to  compensation for the full payroll  period  that
     includes the date of such acquisition.

2.   ARTICLE I - The following new Section 1.4, the definition of
Acquired  Company, is added to the Plan to read as  follows,  and
all references and cross-references are renumbered:

          1.4   Acquired  Company  means  any  of  the  following
          companies   which  is  acquired  by,   or   merged   or
          consolidated with, the Bank or its holding company:
          
                    1.   Pioneer Savings Bank, F.S.B.
                    2.   Conestoga Bancorp, Inc.

3.    ARTICLE I - The following paragraph is added to the end  of
the definition of Compensation, Section 1.18:

     For    purposes    of   determining   Basic   Contributions,
     Compensation  of  an Employee of an Acquired  Company  shall
     include  amounts received from the Acquired  Company  during
     the  payroll period in which the date of the transaction  by
     which  such  company became an Acquired Company  occurs,  if
     such   amounts   would  otherwise  be   considered   to   be
     Compensation under this Section 1.18.
     
4.    ARTICLE  I - The following new subsection (c) is  added  to
section 1.47, Period of Service, as follows:

          (c)    For  purposes  of  determining  eligibility   to
          participate  and  vesting  of contributions  under  the
          Plan,  the Period of Service of any individual who  was
          employed  by  an Acquired Company on the  date  of  the
          transaction  by which such company became  an  Acquired
          Company,  shall include service recognized for purposes
          of  vesting  and eligibility to participate  under  the
          Merged Plan of such Acquired Company.
          
5.    ARTICLE I - The following new Section 1.37 is added to  the
Plan, and all references and cross-references are renumbered:
           
     Merged  Plan  means a defined contribution  plan  permitting
     salary  reduction contributions or, if none,  other  defined
     contribution plan of an Acquired Company.

6.   ARTICLE II - The following sentence is added to the  end  of
     Section 2.3:
     
     Employees of  an  Acquired  Company  who  are  eligible  to
     participate  on the date of the transaction  by  which  such
     company  became  an  Acquired Company,  may  also  elect  to
     participate  as  of the first day of the payroll  period  in
     which such transaction occurs.

                     AMENDMENT NUMBER NINE

                               TO

             THE DIME SAVINGS BANK OF WILLIAMSBURGH

                      401(k) SAVINGS PLAN

                    IN RSI RETIREMENT TRUST

Pursuant   to   Section  11.1  of  The  Dime  Savings   Bank   of
Williamsburgh  401(k)  Savings  Plan  in  RSI  Retirement   Trust
("Plan"),  the Plan is amended as follows, effective as  of  June
26, 1996:

1.    INTRODUCTION  - A new paragraph shall be added  immediately
prior to the last paragraph to read in its entirety as follows:

     Effective June 26, 1996, the Pioneer Savings Bank,  FSB  Tax
     Deferral  Savings  Plan  in RSI Retirement  Trust  ("Pioneer
     Plan") was merged with and into the Plan.  Except and to the
     extent specifically required to the contrary under the terms
     of  this Plan, the rights and benefits, if any, of a  former
     employee  of  Pioneer  Savings  Bank,  F.S.B.  or  Conestoga
     Bancorp, Inc. whose employment terminated prior to June  26,
     1996,  shall be determined in accordance with the provisions
     of the Pioneer Plan in effect prior to June 26, 1996.

2.    ARTICLE I - The following new sentence is added to the  end
of Section 1.11 Bank Contributions:

     Bank  Contributions  shall include bank  contributions  made
     prior  to  June  26,  1996  on  behalf  of  an  Employee  in
     accordance with the provisions of the Pioneer Plan.

3.    ARTICLE I - The following new sentence is added to the  end
of Section 1.13 Basic Contributions:

     Basic  Contributions shall include basic contributions  made
     prior  to  June  26,  1996  on behalf  of  the  Employee  in
     accordance with the provisions of the Pioneer Plan.

4.    ARTICLE I - The following new sentence is added to the  end
of Section 1.57, Rollover Contributions:

     Rollover  Contributions shall include rollover contributions
     made  prior  to June 26, 1996 on behalf of the  Employee  in
     accordance with the provisions of the Pioneer Plan.

5.    ARTICLE VIII - The following new subsection (g) is added to
section 8.4, Operational Provisions:

          (g)   A loan made in accordance with the provisions  of
          the  Pioneer  Plan  prior to June 26,  1996,  shall  be
          deemed  to  be  a loan made in accordance with  Article
          VIII of this Plan.

                       Severance Pay Plan

                               of

             The Dime Savings Bank of Williamsburgh

                  Adopted on February 8, 1996
                 Effective on November 1, 1995

                       TABLE OF CONTENTS

                                                                       Page

                           ARTICLE I

                            PURPOSE

          Section 1  Statement of Purpose ............................   1

                           ARTICLE II

                          DEFINITIONS

          Section 2.1   Acquired Company .............................   1
          Section 2.2   Acquired Employee ............................   1
          Section 2.3   Bank .........................................   1
          Section 2.4   Board ........................................   2
          Section 2.5   Cause ........................................   2
          Section 2.6   Change of Control ............................   2
          Section 2.7   Employee .....................................   4
          Section 2.8   FDI Act ......................................   4
          Section 2.9   Involuntary Severance ........................   4
          Section 2.10  Officer ......................................   4
          Section 2.11  OTS ..........................................   4
          Section 2.12  Plan .........................................   4
          Section 2.13  Plan Administrator ...........................   4
          Section 2.14  Plan Year ....................................   4
          Section 2.15  Salary .......................................   4
          Section 2.16  Service ......................................   5

                           ARTICLE III

                            BENEFITS

          Section 3.1   Severance Benefits for Employees .............   5
          Section 3.2   Severance Benefits for Acquired Employees.....   6
          Section 3.3   Vesting ......................................   7
          Section 3.4   Indemnification ..............................   7

                                (i)

                                                                       Page
                           ARTICLE IV

                         ADMINISTRATION

          Section 4.1   Named Fiduciaries ............................   8
          Section 4.2   Plan Administrator ...........................   8
          Section 4.3   Claims Procedure .............................   9
          Section 4.4   Claims Review Procedure ......................  10
          Section 4.5   Allocation of Fiduciary Responsibilities and
                        Employment of Advisors .......................  10
          Section 4.6   Other Administrative Provisions ..............  11

                           ARTICLE V

                         MISCELLANEOUS

          Section 5.1   Rights of Employees .........................   11
          Section 5.2   Non-alienation of Benefits ..................   12
          Section 5.3   Non-Duplication of Benefits .................   12
          Section 5.4   Construction ................................   12
          Section 5.5   Headings ....................................   12
          Section 5.6   Governing Law ...............................   12
          Section 5.7   Severability ................................   12
          Section 5.8   Termination or Amendment ....................   13
          Section 5.9   Required Regulatory Provisions ..............   13
          Section 5.10  Withholding .................................   14
          Section 5.11  Status as Welfare Benefit Plan Under ERISA ..   14

                                (ii)

  SEVERANCE PAY PLAN OF THE DIME SAVINGS BANK OF WILLIAMSBURGH

                           ARTICLE I

                            PURPOSE

           Section 1      Statement of Purpose.

           The  Dime  Savings Bank of Williamsburgh  adopts  this
Severance  Pay  Plan  for the benefit of its eligible  Employees.
The Bank recognizes that, as a public company, it will be subject
to  the  possibility  of  a negotiated or unsolicited  change  of
control which may result in a loss of employment for some of  its
Employees and that it may acquire other companies in transactions
which may result in a loss of employment for the employees of the
Acquired Companies.  The purpose of the Plan is to encourage  the
Bank's  Employees  and  those of Acquired Companies  to  continue
working  for  their employers with their full time and  attention
devoted  to  their  employer's affairs  by  providing  prescribed
income security and job placement assistance in the event  of  an
Involuntary Severance following a Change of Control.

                           ARTICLE II

                          DEFINITIONS

           For  purposes of the Plan, the following  terms  shall
have  the  meanings  assigned to them below, unless  a  different
meaning is plainly indicated by the context:

           Section  2.1     Acquired Company  means  any  of  the
following   companies  which  is  acquired  by,  or   merged   or
consolidated with, the Bank:

                    1.   Pioneer Savings Bank, F.S.B.
                    2.   Conestoga Bancorp, Inc.

           Section 2.2    Acquired Employee means a person who is
employed  by  an Acquired Company at the time when  such  company
becomes  an Acquired Company and who becomes an employee  of  the
Bank   immediately  thereafter.   An  Acquired   Employee   whose
employment  by  the  Bank terminates for any reason  and  who  is
subsequently  re-employed by the Bank shall not be considered  an
Acquired Employee following such re-employment.

           Section  2.3     Bank means The Dime Savings  Bank  of
Williamsburgh (or its successors or assigns, whether  by  merger,
consolidation, sale of assets, statutory receivership,  operation
of  law or otherwise) and any affiliate of The Dime Savings  Bank
of  Williamsburgh  which,  with the  approval  of  the  Board  of
Directors of The Dime Savings Bank of Williamsburgh, and  subject
to  such conditions as may be imposed by such Board, adopts  this
Plan.

           Section 2.4   Board means the Board of Directors  of
The Dime Savings Bank of Williamsburgh.

           Section 2.5   Cause means, with respect to the conduct
of  an  Employee in connection with his employment with the Bank,
personal dishonesty, incompetence, willful misconduct, breach  of
fiduciary duty involving personal profit, intentional failure  to
perform  stated  duties, willful violation of any  law,  rule  or
regulation (other than traffic violations or similar offenses) or
final  cease  and  desist order in each case as measured  against
standards  generally  prevailing at  the  relevant  time  in  the
savings  and community banking industry; provided, however,  that
following a Change of Control of the Bank or a company which owns
100%  of  the  outstanding common stock of the Bank, an  Employee
shall not be deemed to have been discharged for Cause unless  and
until he shall have received a written notice of termination from
the   Board,   accompanied  by  a  resolution  duly  adopted   by
affirmative vote of a majority of the entire Board at  a  meeting
called and held for such purpose (after reasonable notice to  the
Employee  and a reasonable opportunity for the Employee  to  make
oral  and  written presentations to the members of the Board,  on
his own behalf, or through a representative, who may be his legal
counsel,  to  refute the grounds for the proposed  determination)
finding that in the good faith opinion of the Board grounds exist
for discharging the Employee for "Cause".

          Section 2.6    Change of Control means:

           (a)   with  respect to The Dime Savings  Bank  of
                 Williamsburgh:

                     (i)   the occurrence of any event  upon
          which  any  "person"  (as such  term  is  used  in
          sections   13(d)  and  14(d)  of  the   Securities
          Exchange   Act  of  1934,  as  amended  ("Exchange
          Act")),   other  than  (A)  a  trustee  or   other
          fiduciary  holding  securities under  an  employee
          benefit   plan  maintained  for  the  benefit   of
          employees   of   The   Dime   Savings   Bank    of
          Williamsburgh;  (B) a corporation owned,  directly
          or  indirectly, by the stockholders  of  The  Dime
          Savings Bank of Williamsburgh in substantially the
          same  proportions as their ownership of  stock  of
          The Dime Savings Bank of Williamsburgh; or (C) any
          group constituting a person in which employees  of
          The   Dime  Savings  Bank  of  Williamsburgh   are
          substantial   members,  becomes  the   "beneficial
          owner" (as defined in Rule 13d-3 promulgated under
          the  Exchange  Act), directly  or  indirectly,  of
          securities  issued  by The Dime  Savings  Bank  of
          Williamsburgh  representing 25%  or  more  of  the
          combined  voting power of all of The Dime  Savings
          Bank    of    Williamsburgh's   then   outstanding
          securities; or

                     (ii)  the occurrence of any event  upon
          which the individuals who on the date the Plan  is
          adopted  are  members of the Board, together  with
          individuals  whose  election  by  the   Board   or
          nomination  for election by The Dime Savings  Bank
          of  Williamsburgh's stockholders was  approved  by
          the affirmative vote of at least two-thirds of the
          members  of  the  Board then in  office  who  were
          either members of the Board on the date this  Plan
          is  adopted  or whose nomination or  election  was
          previously  so approved, cease for any  reason  to
          constitute a majority of the members of the Board,
          but   excluding,  for  this  purpose,   any   such
          individual whose initial assumption of  office  is
          in   connection  with  an  actual  or   threatened
          election  contest  relating  to  the  election  of
          directors   of   The   Dime   Savings   Bank    of
          Williamsburgh  (as such terms  are  used  in  Rule
          14a-11  of  Regulation 14A promulgated  under  the
          Exchange Act); or

                     (iii)     the shareholders of The  Dime
          Savings  Bank of Williamsburgh (or,  if  The  Dime
          Savings Bank of Williamsburgh is not then a  stock
          form  institution, the Board of The  Dime  Savings
          Bank of Williamsburgh) approve either:

                              (A)  a merger or consolidation
               of  The  Dime  Savings Bank of  Williamsburgh
               with  any  other corporation,  other  than  a
               merger or consolidation following which  both
               of the following conditions are satisfied:

                                         (I)  either (1) the
                    members of the Board of The Dime Savings
                    Bank  of Williamsburgh immediately prior
                    to    such   merger   or   consolidation
                    constitute  at least a majority  of  the
                    members  of  the governing body  of  the
                    institution  resulting from such  merger
                    or    consolidation;    or    (2)    the
                    shareholders of The Dime Savings Bank of
                    Williamsburgh  own  securities  of   the
                    institution  resulting from such  merger
                    or  consolidation  representing  80%  or
                    more of the combined voting power of all
                    such  securities  then  outstanding   in
                    substantially  the same  proportions  as
                    their ownership of voting securities  of
                    The  Dime  Savings Bank of Williamsburgh
                    before such merger or consolidation; and

                                          (II)   the  entity
                    which   results  from  such  merger   or
                    consolidation   expressly   agrees    in
                    writing  to assume and perform The  Dime
                    Savings    Bank    of    Williamsburgh's
                    obligations under the Plan; or

                                (B)    a  plan  of  complete
               liquidation  of  The  Dime  Savings  Bank  of
               Williamsburgh or an agreement for the sale or
               disposition  by  The  Dime  Savings  Bank  of
               Williamsburgh of all or substantially all  of
               its assets; and

           (b)   with respect to any company which owns 100%
     of  the outstanding common stock The Dime Savings  Bank
     of  Williamsburgh, any event that would be described in
     section  2.6(a)  if  the  name  of  such  company  were
     substituted   for   "The   Dime   Savings    Bank    of
     Williamsburgh" therein; and

           (c)   with  respect to an Acquired  Company,  the
     transaction  by which such company becomes an  Acquired
     Company.

In  no  event, however, shall the transaction by which  The  Dime
Savings Bank of Williamsburgh converts from a mutual savings bank
to  a  stock savings bank, or any transaction by which a  company
wholly  owned  by The Dime Savings Bank of Williamsburgh  becomes
the  parent company of The Dime Savings Bank of Williamsburgh  be
deemed a Change of Control.

           Section 2.7    Employee means any person, including an
Officer,  who is employed by the Bank, other than: (a)  a  person
who  is  compensated on an hourly rate basis; (b)  a  person  who
works  for  the  Bank on a part-time or temporary basis;  (c)  an
Employee receiving long-term disability benefits; or (d) a person
who  has  an employment contract, change of control agreement  or
other agreement with the Bank or who is covered by other programs
which  provide severance benefits or by their terms exclude  such
person from participation in this Plan.

           Section  2.8     FDI  Act means  the  Federal  Deposit
Insurance Act, as the same may be amended from time to time,  and
the corresponding provisions of any successor statute.

           Section  2.9     Involuntary Severance means  (a)  the
discharge or dismissal of an Employee by the Bank other than  for
Cause, or the resignation by the Employee from his position  with
the Bank, which resignation the Employee is asked or compelled by
the  Bank  to tender other than for Cause; or (b) termination  of
employment at an Employee's election within sixty (60) days after
any  action following a Change of Control which, either alone  or
together with other actions, results in: (i) the reduction in the
Employee's  Salary by more than 20%; (ii) the assignment  of  the
Employee to a job requiring relocation of his residence in  order
to be able to commute without unreasonable difficulty, expense or
inconvenience; (iii) the assignment of the Employee to duties  or
to  an  office  or  working  space  which  involves  unreasonable
personal embarrassment; or (iv) a material adverse change in  the
Employee's title, position or responsibilities at the Bank.

           Section  2.10    Officer means,  in  the  case  of  an
Employee,  an officer of the Bank and in the case of an  Acquired
Employee,  a  person  who is an officer of the  Acquired  Company
immediately  prior to the closing of the transaction pursuant  to
which such company becomes an Acquired Company.

            Section  2.11    OTS  means  the  Office  of   Thrift
Supervision of the United States Department of the Treasury,  and
its successors.

           Section 2.12   Plan means this Severance Pay  Plan  of
The  Dime  Savings  Bank of Williamsburgh, as  the  same  may  be
amended from time to time.

            Section   2.13     Plan   Administrator   means   the
Compensation  Committee of the Board of  Directors  of  The  Dime
Savings Bank of Williamsburgh.

           Section 2.14   Plan Year means the calendar year.

           Section  2.15    Salary means (a) in the  case  of  an
Employee, the highest basic annual rate of salary of the Employee
for  his  services to the Bank (excluding overtime,  bonuses  and
other  forms of additional compensation) attained by the Employee
during  his employment with the Bank, and (b) in the case  of  an
Acquired Employee, the highest basic annual rate of salary of  an
the  Acquired  Employee for his services to the Acquired  Company
(excluding  overtime,  bonuses  and  other  forms  of  additional
compensation) attained by the Employee during his employment with
the Acquired Company.

           Section  2.16   Service means service rendered  by  an
Employee  that  is, or would be, recognized under the  Retirement
Plan  of The Dime Savings Bank of Williamsburgh in RSI Retirement
Trust  for  vesting  purposes as of the date  of  the  Employee's
Involuntary Severance.

                          ARTICLE III

                            BENEFITS

           Section 3.1  Severance Benefits for Employees.

           (a)  An Employee with at least one (1) year of Service
whose  employment with the Bank is terminated under circumstances
constituting an Involuntary Severance, other than for Cause, as a
result  of,  within twelve months following or within  three  (3)
months prior to, a Change of Control with respect to the Bank  or
any  company which owns 100% of the outstanding common  stock  of
the Bank shall be entitled to the following benefits:

           (i)  if the Employee is or has, at any time after
     November 1, 1995, been an Officer of the Bank, he shall
     be  entitled, as severance pay, to a weekly payment  in
     an  amount equal to one week's Salary, commencing  with
     the  first  week  following the date of the  Employee's
     Involuntary  Severance  and continuing  for  twice  the
     number  of  weeks as the Employee has  whole  years  of
     Service, or, if less, for thirty-nine (39) weeks; or

           (ii) if the Employee is not an Employee described
     in   section  3.1(a)(i),  he  shall  be  entitled,   as
     severance  pay, to a weekly payment in an amount  equal
     to  one  week's Salary, commencing with the first  week
     following   the  date  of  the  Employee's  Involuntary
     Severance and continuing for the same number  of  weeks
     as  the  Employee  has whole years of Service,  or,  if
     less, for twenty-six (26) weeks;

provided,  however, that in no event shall any Employee described
in section 3.1(a)(i) or (ii) receive, as severance pay under this
Plan, less than four weeks' Salary.

           (b)   Each Employee who is entitled to payments  under
section  3.1(a)(i)  or  (ii) shall,  for  the  duration  of  such
payments,  continue  to  be eligible  for  all  of  the  benefits
provided  under  the Bank's employee benefit plans  and  programs
(excluding tax-qualified plans and other plans which by law  must
restrict  participation to active employees) as if he were  still
an  Employee and working at the Bank, except that he shall  cease
to  accrue vacation and shall be paid a lump sum payment  at  the
date  of  his Involuntary Severance in lieu of any unused accrued
vacation.

           (c)   Each Employee who is entitled to benefits  under
section  3.1(a)(i) or (ii) shall also be entitled to outplacement
services as follows:

           (i)   an  Employee described in section 3.1(a)(i)
     shall  be  entitled  to  utilize  the  services  of  an
     outplacement counseling firm at the Bank's expense  for
     assistance    in   preparing   a   resume,   developing
     interviewing  skills, identifying career  opportunities
     and  evaluating job offers and for access to office and
     secretarial facilities, provided that the fee for  such
     services shall not exceed 12% of the Employee's Salary;
     and

           (ii) if the Employee is not an Employee described
     in  section 3.1(a)(i), he shall be entitled to  utilize
     the  services of an outplacement counseling firm at the
     Bank's  expense, for assistance in preparing a  resume,
     developing  interviewing  skills,  identifying   career
     opportunities and evaluating job offers, provided  that
     the  fee for such services shall not exceed 6%  of  the
     Employee's Salary or $1,000, whichever is higher.

The  outplacement  firm  utilized by any  Employee  or  group  of
Employees  shall  be  selected by the Plan Administrator  or,  if
permitted  by the Plan Administrator selected by the Employee  or
Employees subject to the Plan Administrator's approval.

           Section   3.2     Severance  Benefits  for   Acquired
                             Employees.

          (a)  An Acquired Employee with at least one (1) year of
Service  whose  employment  with the  Bank  is  terminated  under
circumstances constituting an Involuntary Severance,  other  than
for Cause within twelve months following a Change of Control with
respect to the relevant Acquired Company shall be entitled to the
following benefits:

           (i)   if  the  Employee was  an  Officer  of  the
     Acquired  Company, he shall be entitled,  as  severance
     pay,  to  a  weekly payment in an amount equal  to  one
     week's Salary, commencing with the first week following
     the  date  of the Employee's Involuntary Severance  and
     continuing  for  twice  the  number  of  weeks  as  the
     Employee  has whole years of Service, or, if less,  for
     thirty-nine (39) weeks; or

           (ii) if the Employee is not an Employee described
     in   section  3.1(a)(i),  he  shall  be  entitled,   as
     severance  pay, to a weekly payment in an amount  equal
     to  one  week's Salary, commencing with the first  week
     following   the  date  of  the  Employee's  Involuntary
     Severance and continuing for the same number  of  weeks
     as  the  Employee  has whole years of Service,  or,  if
     less, for twenty-six (26) weeks;

provided,  however, that in no event shall any Employee described
in section 3.1(a)(i) or (ii) receive, as severance pay under this
Plan, less than four weeks' Salary.

           (b)   Each Employee who is entitled to payments  under
section  3.1(a)(i)  or  (ii) shall,  for  the  duration  of  such
payments,  continue  to  be eligible  for  all  of  the  benefits
provided  under  the Bank's employee benefit plans  and  programs
(excluding tax-qualified plans and other plans which by law  must
restrict  participation to active employees) as if he were  still
an  Employee and working at the Bank, except that he shall  cease
to  accrue vacation and shall be paid a lump sum payment  at  the
date  of  his Involuntary Severance in lieu of any unused accrued
vacation.

           (c)   Each Employee who is entitled to benefits  under
section  3.1(a)(i) or (ii) shall also be entitled to outplacement
services as follows:

           (i)   an  Employee described in section 3.1(a)(i)
     shall  be  entitled  to  utilize  the  services  of  an
     outplacement counseling firm at the Bank's expense  for
     assistance    in   preparing   a   resume,   developing
     interviewing  skills, identifying career  opportunities
     and  evaluating job offers and for access to office and
     secretarial facilities, provided that the fee for  such
     services shall not exceed 12% of the Employee's Salary;
     and

           (ii) if the Employee is not an Employee described
     in  section 3.1(a)(i), he shall be entitled to  utilize
     the  services of an outplacement counseling firm at the
     Bank's  expense, for assistance in preparing a  resume,
     developing  interviewing  skills,  identifying   career
     opportunities and evaluating job offers, provided  that
     the  fee for such services shall not exceed 6%  of  the
     Employee's Salary or $1,000, whichever is higher.

The  outplacement  firm  utilized by any  Employee  or  group  of
Employees  shall  be  selected by the Plan Administrator  or,  if
permitted  by the Plan Administrator selected by the Employee  or
Employees subject to the Plan Administrator's approval.

          Section 3.3    Vesting.

           The benefits to be provided under this Article III  of
the   Plan  to  an  Employee  shall  be  completely  vested   and
nonforfeitable  upon the occurrence of a Change of  Control  with
respect  to  the  Bank  or any company which  owns  100%  of  the
outstanding common stock of the Bank.

          Section 3.4    Indemnification.

          The Bank shall indemnify, hold harmless and defend each
Employee   against   costs  or  expenses,  including   reasonable
attorneys'  fees, incurred by him or arising out of  any  action,
suit  or  proceeding in which he may be involved, as a result  of
his efforts, in good faith, to defend or enforce his rights under
this  Plan;  provided,  however, that  the  Employee  shall  have
substantially  prevailed on the merits pursuant  to  a  judgment,
decree  or order of a court of competent jurisdiction  or  of  an
arbitrator in an arbitration proceeding, or in a settlement.  For
purposes  of  this  Agreement,  any  settlement  agreement  which
provides  for payment of any amounts in settlement of the  Bank's
obligations  hereunder  shall  be  conclusive  evidence  of   the
Employee's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts  payable
pursuant  to  such settlement agreement, unless  such  settlement
agreement expressly provides otherwise.

                           ARTICLE IV

                         ADMINISTRATION

           Section 4.1  Named Fiduciaries.

           The term "Named Fiduciary" shall mean (but only to the
extent  of the responsibilities of each of them) the Plan Adminis
trator and the Board.  This Article V is intended to allocate  to
each Named Fiduciary the responsibility for the prudent execution
of the functions assigned to him or it, and none of such responsi
bilities  or any other responsibility shall be shared by  two  or
more of such Named Fiduciaries.  Whenever one Named Fiduciary  is
required  by  the Plan to follow the directions of another  Named
Fiduciary, the two Named Fiduciaries shall not be deemed to  have
been assigned a shared responsibility, but the responsibility  of
the  Named  Fiduciary giving the directions shall be  deemed  his
sole  responsibility, and the responsibility of  the  Named  Fidu
ciary  receiving those directions shall be to follow them insofar
as  such  instructions are on their face proper under  applicable
law.

           Section 4.2  Plan Administrator.

           The  Plan  Administrator shall subject to  the  respon
sibilities of the Board, have the responsibility for the  day-to-
day  control,  management, operation and  administration  of  the
Plan.    The   Plan  Administrator  shall  have   the   following
responsibilities:

           (a)  To maintain records necessary or appropriate
     for the administration of the Plan;

           (b)   To  give and receive such instructions,  notices,
     information,  materials,  reports  and  certifications  as
     may  be  necessary or appropriate  in  the administration of
     the Plan;

           (c)   To prescribe forms and make rules and  regulations
     consistent with the terms of the Plan and  with the inter-
     pretations and other actions of the Committee;

           (d)   To  require such proof or evidence  of  any
     matter  from any person as may be necessary or appropriate
     in the administration of the Plan;

           (e)   To  prepare and file, distribute or furnish
     all  reports, plan descriptions, and other  information
     concerning  the  Plan, including,  without  limitation,
     filings  with  the  Secretary  of  Labor  and  employee
     communications as shall be required of the  Plan  Admin
     istrator under ERISA;

           (f)   To determine any question arising in connec
     tion  with  the  Plan, including any question  of  Plan
     interpretation,  and the Plan Administrator's  decision
     or  action  in  respect  thereof  shall  be  final  and
     conclusive  and  binding upon  all  persons  having  an
     interest under the Plan;

           (g)   To  review and dispose of claims under  the
     Plan  filed  pursuant to section  4.3  and  appeals  of
     claims decisions pursuant to section 4.4;

           (h)   If  the Plan Administrator shall  determine
     that  by reason of illness, senility, insanity, or  for
     any other reason, it is undesirable to make any payment
     to   the   person  entitled  thereto,  to  direct   the
     application  of any amount so payable  to  the  use  or
     benefit  of  such person in any manner  that  the  Plan
     Administrator  may deem advisable or to direct  in  the
     Plan Administrator's discretion the withholding of  any
     payment  under the Plan due to any person  under  legal
     disability until a representative competent to  receive
     such  payment in his behalf shall be appointed pursuant
     to law;

           (i)  To discharge such other responsibilities  or
     follow  such directions as may be assigned or given  by
     the Board; and

           (j)  To perform any duty or take any action which
     is allocated to the Plan Administrator under the Plan.

The  Plan Administrator shall have the power and authority  neces
sary or appropriate to carry out his responsibilities.

           Section 4.3  Claims Procedure.

           Any claim relating to benefits under the Plan shall be
filed with the Plan Administrator on a form prescribed by it.  If
a  claim  is  denied in whole or in part, the Plan  Administrator
shall  give  the  claimant written notice of such  denial,  which
notice shall specifically set forth:

           (a)  The reasons for the denial;

           (b)  The pertinent Plan provisions on which the denial
                was based;

           (c)  Any additional material or information necessary
                for  the  claimant to perfect his  claim  and  an
                explanation  of  why such material  or  information
                is needed; and

           (d)   An explanation of the Plan's procedure  for
                 review of the denial of the claim.

In  the  event that the claim is not granted and notice of denial
of  a claim is not furnished by the 30th day after such claim was
filed, the claim shall be deemed to have been denied on that  day
for  the purpose of permitting the claimant to request review  of
the claim.

           Section 4.4  Claims Review Procedure.

           Any  person whose claim filed pursuant to section  4.3
has been denied in whole or in part by the Plan Administrator may
request  review  of the claim by the Plan Administrator,  upon  a
form  prescribed by the Plan Administrator.  The  claimant  shall
file  such form (including a statement of his position) with  the
Plan  Administrator no later than 60 days after  the  mailing  or
delivery of the written notice of denial provided for in  section
4.3,  or,  if such notice is not provided, within 60  days  after
such  claim  is  deemed  denied pursuant  to  section  4.3.   The
claimant  shall  be permitted to review pertinent  documents.   A
decision  shall  be  rendered  by  the  Plan  Administrator   and
communicated to the claimant not later than 30 days after receipt
of  the  claimant's written request for review.  However, if  the
Plan   Administrator   finds  it  necessary,   due   to   special
circumstances  (for  example, the need to  hold  a  hearing),  to
extend  this period and so notifies the claimant in writing,  the
decision  shall  be rendered as soon as practicable,  but  in  no
event  later  than  120  days after the  claimant's  request  for
review.   The Plan Administrator's decision shall be  in  writing
and shall specifically set forth:

           (a)  The reasons for the decision; and

           (b)   The pertinent Plan provisions on which  the
                 decision is based.

Any such decision of the Plan Administrator shall be binding upon
the  claimant and the Bank, and the Plan Administrator shall take
appropriate action to carry out such decision.

           Section 4.5  Allocation  of Fiduciary Responsibilities
                        and Employment of Advisors.

           Any Named Fiduciary may:

           (a)   Allocate any of his or its responsibilities
     (other than trustee responsibilities) under the Plan to
     such other person or persons as he or it may designate,
     provided that such allocation and designation shall  be
     in writing and filed with the Plan Administrator;

           (b)   Employ one or more persons to render advice
     to  him or it with regard to any of his or its respons-
     ibilities under the Plan; and

           (c)  Consult with counsel, who may be counsel  to
     the Bank.

           Section 4.6  Other Administrative Provisions.

          (a)  Any person whose claim has been denied in whole or
in   part  must  exhaust  the  administrative  review  procedures
provided  in  section  4.4  prior to  initiating  any  claim  for
judicial review.

          (b)  No bond or other security shall be required of the
Plan  Administrator, or any officer or Employee of  the  Bank  to
whom   fiduciary  responsibilities  are  allocated  by  a   Named
Fiduciary, except as may be required by ERISA.

           (c)   Subject to any limitation on the application  of
this  section 4.6(c) pursuant to ERISA, neither the Plan  Adminis
trator, nor any officer or Employee of the Bank to whom fiduciary
responsibilities  are allocated by a Named  Fiduciary,  shall  be
liable  for  any act of omission or commission by himself  or  by
another  person,  except  for  his  own  individual  willful  and
intentional malfeasance.

          (d)  The Plan Administrator may, except with respect to
actions under section 4.4, shorten, extend or waive the time (but
not beyond 60 days) required by the Plan for filing any notice or
other  form  with  the Plan Administrator, or  taking  any  other
action under the Plan.

           (e)   Any  person, group of persons, committee,  corpo
ration  or  organization  may serve in more  than  one  fiduciary
capacity with respect to the Plan.

           (f)  Any action taken or omitted by any fiduciary with
respect  to  the  Plan,  including any decision,  interpretation,
claim denial or review on appeal, shall be conclusive and binding
on  the  Bank and all interested parties and shall be subject  to
judicial  modification  or reversal only  to  the  extent  it  is
determined by a court of competent jurisdiction that such  action
or  omission  was  arbitrary and capricious and contrary  to  the
terms of the Plan.

                           ARTICLE V

                         MISCELLANEOUS

           Section 5.1  Rights of Employees.

           No  Employee  shall have any right  or  claim  to  any
benefit  under the Plan except in accordance with the  provisions
of the Plan. The establishment of the Plan shall not be construed
as  conferring upon any Employee or other person any legal  right
to  a continuation of employment or to any terms or conditions of
employment, nor as limiting or qualifying the right of  the  Bank
to discharge any Employee.

           Section 5.2  Non-alienation of Benefits.

          The right to receive a benefit under the Plan shall not
be   subject  in  any  manner  to  anticipation,  alienation,  or
assignment,  nor  shall such right be liable for  or  subject  to
debts, contracts, liabilities, or torts.

          Section 5.3   Non-Duplication of Benefits.

          No provisions in this Plan shall be deemed to duplicate
any  compensation or benefits provided under any agreement,  plan
or program covering the Employee to which the Bank is a party and
any duplicative amount payable under any such agreement, plan  or
program  shall  be  applied as an offset to  reduce  the  amounts
otherwise payable hereunder.

          Section 5.4   Construction.

           Whenever  appropriate in the Plan, words used  in  the
singular may be read in the plural; words used in the plural  may
be read in the singular; and the masculine gender shall be deemed
equally  to  refer  to the feminine gender or  the  neuter.   Any
reference  to a section number shall refer to a section  of  this
Plan, unless otherwise stated.

          Section 5.5   Headings.

           The  headings of sections are included solely for  con
venience of reference, and if there is any conflict between  such
headings and the text of the Plan, the text shall control.

          Section 5.6   Governing Law.

          Except to the extent preempted by federal law, the Plan
shall  be construed, administered and enforced according  to  the
laws  of  the State of New York applicable to contracts   between
citizens and residents of the State of New York entered into  and
to be performed entirely within such jurisdiction.

          Section 5.7   Severability.

           The  invalidity or unenforceability, in  whole  or  in
part,  of  any provision of this Plan shall in no way affect  the
validity or enforceability of the remainder of such provision  or
of  any other provision of this Plan, and any provision, or  part
thereof,  deemed to be invalid or unenforceable shall be reformed
as  necessary to render it valid and enforceable to  the  maximum
possible extent.

           Section 5.8  Termination or Amendment.

           The  Bank  intends to keep this Plan in  effect,  but,
subject  to  the  provisions of section  4  hereunder,  the  Bank
expressly reserves the right to terminate or amend the  Plan,  in
whole  or  in part, at any time by action of the Board; provided,
however,  that  no such amendment or termination which  adversely
affects  the current or prospective rights of any Employee  shall
be  effective  earlier than six (6) months after  written  notice
thereof is given to such Employee.

           Section 5.9  Required Regulatory Provisions.

           The following provisions are included for the purposes
of  complying with various laws, rules and regulations applicable
to the Bank:

           (a)  Notwithstanding anything herein contained to
     the contrary, in no event shall the aggregate amount of
     compensation payable to any person under Article III of
     this  Plan exceed the three times such person's average
     annual total compensation for the last five consecutive
     calendar  years  to  end prior to  his  termination  of
     employment with the Bank (or for his entire  period  of
     employment with the Bank and its predecessors, if  less
     than five calendar years).

           (b)  Notwithstanding anything herein contained to
     the contrary, any payments to the Employee by the Bank,
     whether pursuant to this Plan or otherwise, are subject
     to  and  conditioned upon their compliance with section
     18(k)  of  the FDI Act and any regulations  promulgated
     thereunder.

           (c)  Notwithstanding anything herein contained to
     the  contrary, if the Employee is suspended from office
     and/or temporarily prohibited from participating in the
     conduct of the affairs of the Bank pursuant to a notice
     served under section 8(e)(3) or 8(g)(1) of the FDI Act,
     the  Bank's  obligations  under  this  Plan  shall   be
     suspended  as  of the date of service of  such  notice,
     unless  stayed  by  appropriate  proceedings.   If  the
     charges in such notice are dismissed, the Bank, in  its
     discretion, may (i) pay to the Employee all or part  of
     the  compensation withheld while the Bank's obligations
     hereunder were suspended and (ii) reinstate,  in  whole
     or   in  part,  any  of  the  obligations  which   were
     suspended.

           (d)  Notwithstanding anything herein contained to
     the   contrary,  if  the  Employee  is  removed  and/or
     permanently  prohibited  from  participating   in   the
     conduct of the Bank's affairs by an order issued  under
     section  8(e)(4)  or  8(g)(1)  of  the  FDI  Act,   all
     prospective  obligations of the Bank  under  this  Plan
     shall  terminate as of the effective date of the order,
     but  vested rights and obligations of the Bank and  the
     Employee shall not be affected.

           (e)  Notwithstanding anything herein contained to
     the  contrary,  if the Bank is in default  (within  the
     meaning  of  section  3(x)(1)  of  the  FDI  Act,   all
     prospective  obligations of the Bank  under  this  Plan
     shall  terminate as of the date of default, but  vested
     rights  and  obligations of the Bank and  the  Employee
     shall not be affected.

           (f)  Notwithstanding anything herein contained to
     the  contrary, all prospective obligations of the  Bank
     hereunder  shall be terminated, except  to  the  extent
     that  a continuation of this Plan is necessary for  the
     continued  operation of the Bank:  (i) by the  Director
     of the OTS or his designee or the FDIC, at the time the
     FDIC enters into an agreement to provide assistance  to
     or  on behalf of the Bank under the authority contained
     in  section 13(c) of the FDI Act; (ii) by the  Director
     of the OTS or his designee at the time such Director or
     designee  approves  a  supervisory  merger  to  resolve
     problems related to the operation of the Bank  or  when
     the  Bank  is determined by such Director to be  in  an
     unsafe  or  unsound condition.  The vested  rights  and
     obligations of the parties shall not be affected.

If  and to the extent that any of the foregoing provisions  shall
cease  to be required by applicable law, rule or regulation,  the
same  shall become inoperative automatically as though eliminated
by formal amendment of the Plan.

           Section 5.10  Withholding.

           Payments  from  this  Plan shall  be  subject  to  all
applicable federal, state and local income withholding taxes.

           Section  5.11  Status as Welfare Benefit  Plan  Under
                          ERISA.

           This Plan is an "employee welfare benefit plan" within
the  meaning  of  section 3(1) of the Employee Retirement  Income
Security  Act  of  1974,  as  amended  ("ERISA")  and  shall   be
construed,  administered and enforced according to the provisions
of ERISA.

               Retirement Plan for Board Members

                               of

                  Dime Community Bancorp, Inc.

                  Adopted on February 8, 1996
                   Effective on June 26, 1996

                       TABLE OF CONTENTS
                                                                      Page

                           ARTICLE I

                          Definitions
                                                                        x
Section 1.1   Annual Compensation ...................................   1
Section 1.2   Bank ..................................................   1
Section 1.3   Beneficiary ...........................................   1
Section 1.4   Board .................................................   1
Section 1.5   Board Member ..........................................   1
Section 1.6   Change of Control of the Bank .........................   1
Section 1.7   Code ..................................................   3
Section 1.8   Committee .............................................   3
Section 1.9   Company ...............................................   3
Section 1.10  Participant ...........................................   3
Section 1.11  Participating Company .................................   3
Section 1.12  Person ................................................   3
Section 1.13  Predecessor Board .....................................   3
Section 1.14  Plan ..................................................   3
Section 1.15  Reorganization Date ...................................   3
Section 1.16  Retired Participant ...................................   4
Section 1.17  Spouse ................................................   4
Section 1.18  Years of Service ......................................   4

                           ARTICLE II

                          ELIGIBILITY

Section 2.1   Participation .........................................   4
Section 2.2   Termination of Participation ..........................   4

                           ARTICLE III

                      RETIREMENT BENEFITS

Section 3.1   Normal Benefits .......................................   5
Section 3.2   Payments ..............................................   5
Section 3.3   Optional Forms of Retirement Allowance ................   5
Section 3.4   Payments of Small Amounts .............................   6
Section 3.5   Automatic Death Benefit for Spouse ....................   7
Section 3.6   Beneficiaries  ........................................   7
Section 3.7   Payment upon Change in Control ........................   8

                                (i)

                                                                      Page

                           ARTICLE IV

                         ADMINISTRATION

Section 4.1   Duties of the Committee ...............................   8
Section 4.2   Liabilities of the Committee ..........................   8
Section 4.3   Expenses ..............................................   9

                           ARTICLE V

                   AMENDMENT AND TERMINATION

Section 5.1   Amendment and Termination .............................   9

                           ARTICLE VI

                    MISCELLANEOUS PROVISIONS

Section 6.1  Plan Documents .........................................   9
Section 6.2  Construction of Language ...............................   9
Section 6.3  Non-Alienation of Benefits .............................  10
Section 6.4  Indemnification ........................................  10
Section 6.5  Severability ...........................................  10
Section 6.6  Waiver .................................................  10
Section 6.7  Notices ................................................  10
Section 6.8  Operation as an Unfunded Plan ..........................  11
Section 6.9  Required Regulatory Provisions .........................  11
Section 6.10 Governing Law ..........................................  11

                                (ii)

               RETIREMENT PLAN FOR BOARD MEMBERS

                               OF

                  DIME COMMUNITY BANCORP, INC.

                           ARTICLE I

                          DEFINITIONS

           The following definitions shall apply for the purposes
of  this Plan unless a different meaning is plainly indicated  by
the context:

           Section 1.1    Annual Compensation means, on any  date
for  any  Board Member, the amount of compensation paid  to  such
Board Member for service as a Board Member during the twelve (12)
month  period  ending on such date, including retainer  payments,
fees  paid  solely on the basis of attendance at  meetings  as  a
Board  Member and any amounts thereof deferred at the request  of
the Board Member, but excluding compensation in the form of stock
options,  appreciation rights or restricted  property,  or  other
special forms of remuneration.  In the case of a Board Member who
is  a  non-employee director and who later becomes  an  employee-
director,  "Annual  Compensation"  means  the  amount   of   such
compensation  during  the  twelve (12) month  period  immediately
preceding service as a employee-director.

           Section  1.2     Bank means The Dime Savings  Bank  of
Williamsburgh,  a federal stock savings bank, and  any  successor
thereto.

           Section 1.3    Beneficiary means the Person or Persons
designated by the Participant or Retired Participant to receive a
survivor  benefit under one of the optional forms  of  retirement
allowance provided under section 3.3.  If more than one Person is
designated, each shall have an equal share unless the Participant
or Retired Participant directed otherwise.

           Section  1.4    Board means the Board of Directors  of
the Company.

          Section 1.5    Board Member means any individual who is
a  voting member of the Board or a voting member of the Board  of
Directors  of  the  Bank  or a voting  member  of  the  board  of
directors of a Participating Company.

           Section 1.6    Change of Control of the Bank means any
of the following events:

           (a)   the occurrence of any event upon which  any
     "person"  (as such term is used in sections  13(d)  and
     14(d)  of  the  Securities Exchange  Act  of  1934,  as
     amended ("Exchange Act")), other than (A) a trustee  or
     other  fiduciary holding securities under  an  employee
     benefit plan maintained for the benefit of employees of
     the   Bank;  (B)  a  corporation  owned,  directly   or
     indirectly,  by  the  stockholders  of  the   Bank   in
     substantially  the same proportions as their  ownership
     of  stock of the Bank; or (C) any group constituting  a
     person  in  which employees of the Bank are substantial
     members, becomes the "beneficial owner" (as defined  in
     Rule   13d-3  promulgated  under  the  Exchange   Act),
     directly  or  indirectly, of securities issued  by  the
     Bank  representing 25% or more of the  combined  voting
     power of all of the Bank's then outstanding securities;
     or

           (b)   the occurrence of any event upon which  the
     individuals  who on the date the Plan  is  adopted  are
     members  of the Board, together with individuals  whose
     election by the Board or nomination for election by the
     Bank's  stockholders was approved  by  the  affirmative
     vote of at least two-thirds of the members of the Board
     then in office who were either members of the Board  on
     the  date  this Plan is adopted or whose nomination  or
     election  was  previously so approved,  cease  for  any
     reason  to constitute a majority of the members of  the
     Board,  but  excluding,  for  this  purpose,  any  such
     individual  whose initial assumption of  office  is  in
     connection  with  an  actual  or  threatened   election
     contest  relating to the election of directors  of  the
     Bank  (as  such  terms  are  used  in  Rule  14a-11  of
     Regulation 14A promulgated under the Exchange Act); or

          (c)  the shareholders of the Bank (or, if the Bank
     is  not then a stock form institution, the Board of the
     Bank) approve either:

                     (i)   a merger or consolidation of  the
          Bank  with  any other corporation,  other  than  a
          merger  or consolidation following which  both  of
          the following conditions are satisfied:

                              (A)  either (1) the members of
               the  Board of the Bank immediately  prior  to
               such  merger  or consolidation constitute  at
               least  a  majority  of  the  members  of  the
               governing  body of the institution  resulting
               from such merger or consolidation; or (2) the
               shareholders  of the Bank own  securities  of
               the institution resulting from such merger or
               consolidation representing 80% or more of the
               combined  voting power of all such securities
               then  outstanding in substantially  the  same
               proportions  as  their  ownership  of  voting
               securities of the Bank before such merger  or
               consolidation; and

                               (B)  the entity which results
               from  such  merger or consolidation expressly
               agrees  in writing to assume and perform  the
               Bank's obligations under the Plan; or

                     (ii) a plan of complete liquidation  of
          the   Bank  or  an  agreement  for  the  sale   or
          disposition  by  the Bank of all or  substantially
          all of its assets; and

           (d)   with respect to any company which owns 100%
     of  the  outstanding common stock the Bank,  any  event
     that  would be described in section 1.6(a), (b) or  (c)
     if  the name of such company were substituted for  "the
     Bank" therein.

In  no  event, however, shall the transaction by which  the  Bank
converts  from a mutual savings bank to a stock savings bank,  or
any  transaction  by which a company wholly  owned  by  the  Bank
becomes  the  parent company of the Bank be deemed  a  Change  of
Control of the Bank.

           Section 1.7    Code means the Internal Revenue Code of
1986  (including the corresponding provisions of  any  succeeding
law).

           Section 1.8        Committee  means  the  Compensation
Committee of the Board and any successor thereto.

           Section 1.9     Company means Dime Community  Bancorp,
Inc. and any successor thereto.

           Section 1.10    Participant means a Board  Member  who
satisfies  the eligibility requirements set forth in section  2.1
and  whose participation in the Plan has not terminated  pursuant
to section 2.2.

           Section 1.11   Participating Company means any savings
bank,  savings and loan association, bank, corporation, financial
institution or other business organization or institution  which,
with  the prior approval of the Board, and subject to such  terms
and  conditions as may be imposed by the Board, shall adopt  this
Plan for the benefit of members of its board of directors.

           Section 1.12    Person means an individual, a  corpora
tion,  a bank, a savings bank, a savings and loan association,  a
financial  institution, a partnership, an association,  a  joint-
stock  company,  a trust, an estate, any unincorporated  organiza
tion and any other business organization or institution.

           Section 1.13   Predecessor Board means, with the prior
approval of the Board and subject to such terms and conditions as
may  be imposed by the Board, the board of trustees or the  board
of directors of a Participating Company, prior to the date such a
company became a Participating Company.

          Section 1.14   Plan means the Retirement Plan for Board
Members,  as amended from time to time.  The Plan may be referred
to  as  the  "Retirement Plan for Board Members of Dime Community
Bancorp, Inc."

           Section 1.15   Reorganization Date means the effective
date  of the transaction pursuant to which The Dime Savings  Bank
of   Williamsburgh  becomes  a  wholly-owned  subsidiary  of  the
Company.

           Section 1.16     Retired Participant  means  a  former
Participant  who is receiving a retirement allowance  under  this
Plan  or who is entitled to receive a retirement allowance  under
this Plan at a future date.

           Section  1.17    Spouse  means an  individual  who  is
legally married to a Participant or Retired Participant.

           Section  1.18    Years  of Service  means  the  period
beginning  on  the first day of the month in which an  individual
becomes a Board Member and ending on the last day of the month in
which  such individual ceases to be a Board Member, but excluding
(a) any period during which the individual was a salaried officer
of  the  Company or any Participating Company, and (b) any period
during  which the individual was a salaried officer of any  other
institution  whose  board of directors or board  of  trustees  is
considered  a  Predecessor Board.  The Years  of  Service  of  an
individual with two or more non-consecutive periods of service as
a  Board Member shall be equal to the sum of such non-consecutive
periods.   For purposes of determining an individual's  Years  of
Service,  service  as a member of a Predecessor  Board  shall  be
deemed service as a Board Member.  The maximum number of Years of
Service of any Board Member for purposes of the Plan shall be 10.

                           ARTICLE II

                          ELIGIBILITY

          Section 2.1    Participation.

           A  person  who is a Board Member on the Reorganization
Date shall become a Participant in the Plan on the Reorganization
Date.    A   person  who  becomes  a  Board  Member   after   the
Reorganization  Date  shall  become a  Participant  in  the  Plan
immediately upon becoming a Board Member.  Any person who  was  a
Board Member prior to the Reorganization Date, but who ceased  to
be  a Board Member prior to the Reorganization Date, shall not be
eligible  for benefits under this Plan unless he again becomes  a
Board Member after the Reorganization Date.

          Section 2.2    Termination of Participation.

           Participation in the Plan shall cease on  the  date  a
Participant ceases to be a Board Member for whatever reason.

                          ARTICLE III

                      RETIREMENT BENEFITS

          Section 3.1    Normal Benefits.

           (a)  Any Participant who terminates service as a Board
Member  after  attaining age 65 shall be  entitled  to  a  normal
retirement  allowance from the Bank, commencing as of  the  first
day  of the month following the month in which he ceases to be  a
Board   Member,  in  an  annual  amount  equal  to   his   Annual
Compensation  as of the date on which he ceases  to  be  a  Board
Member  multiplied by a fraction, the numerator of which  is  his
Years of Service and the denominator of which is 10.

           (b)   A  Participant who ceases to be a  Board  Member
prior  to  attaining  age  65 but after completing  10  Years  of
Service  shall  be  entitled to a deferred  retirement  allowance
beginning  on the first day of the month following  the  date  he
attains  age  65,  in  an  annual  amount  equal  to  his  Annual
Compensation  as of the date on which he ceases  to  be  a  Board
Member.   In  lieu  thereof, such person  may  elect  to  have  a
retirement  allowance commence as of the first day of  any  month
after  the later of (i) the month in which he attains age  55  or
(ii)  the month in which he ceases to be a Board Member, and  the
amount  of the retirement allowance shall be equal to the  amount
payable at age 65 multiplied by a factor specified in Appendix A.
Any  such  election  shall be made at  least  30  days  prior  to
termination of service as a Board Member.

          Section 3.2    Payments.

           Retirement allowances under section 3.1 shall be  paid
in  monthly  installments, each installment being one-twelfth  of
the annual retirement allowance.  The first payment shall be made
in  accordance  with section 3.1 and installments shall  continue
until the Retired Participant's death.

          Section 3.3    Optional Forms of Retirement Allowance.

           (a)   With the approval of the Committee and  on  such
terms  and  conditions  as the Committee  may  prescribe,  a  Par
ticipant  or  Retired Participant entitled  to  a  retirement  al
lowance  under  section  3.1 may elect,  at  any  time  prior  to
termination  of service as a Board Member, to convert  the  allow
ance  otherwise payable on his account into any one of the follow
ing optional forms of retirement allowance:

           (i)  Option 1 (100% Survivor Option).   A reduced
     retirement allowance payable during his life, with  the
     provision that after his death an amount equal  to  his
     reduced retirement allowance shall continue during  the
     life  of,  and shall be paid to, such person,  if  then
     living,  as  he shall have named as his Beneficiary  in
     his written election of the option.

           (ii)  Option 2 (50% Survivor Option).   A reduced
     retirement allowance payable during his life, with  the
     provision that after his death an amount equal to  one-
     half of his reduced retirement allowance shall continue
     during  the life of, and shall be paid to, such person,
     if  then  living, as he shall have named as his Benefic
     iary in his written election of the option.

           (iii)      Option  3  (5,  10  or  15  Year  Term
     Certain).    A  reduced  retirement  allowance  payable
     during  his  life, with the provision  that  an  amount
     equal   to  his  reduced  retirement  allowance   shall
     continue to be paid for a term certain elected  by  the
     Participant or Retired Participant of 5, 10 or 15 years
     from  the  commencement  of such retirement  allowance,
     and,  in the event of his death before the end of  such
     term, the same amount shall continue to be paid for the
     remainder of such term to the person (or persons)  whom
     he   shall   have   named   as  his   Beneficiary   (or
     Beneficiaries) in his written election of the option or
     any change thereof.

           (b)   Where Option 1 or Option 2 has been elected,  if
payments begin during the Retired Participant's lifetime  and  if
the   Beneficiary  is  living  at  the  date   of   the   Retired
Participant's  death, then the payments to the Beneficiary  shall
commence  as  of the first day of the month after  the  month  in
which the Retired Participant died and shall continue during  the
lifetime  of the Beneficiary, the last installment being  payable
on  the first day of the month during which the Beneficiary dies.
Where  Option  3 has been elected, if payments begin  during  the
Retired Participant's lifetime, and if the Participant or Retired
Participant  dies  prior to the expiration of the  term  elected,
then  the  payments to the Beneficiary shall commence as  of  the
first  day  of the month after the month in which the Participant
or  Retired Participant died, and payments shall continue for the
remainder of such term.

           (c)  If Option 1 or Option 2 has been elected and  the
designated  Beneficiary dies after the retirement  allowance  has
commenced  to  be paid to the Retired Participant who  designated
him  but before the death of such Retired Participant, the amount
of the reduced retirement allowance to which such Retired Partici
pant  is  then  entitled shall remain unchanged and all  payments
shall cease upon the death of the Retired Participant.

           (d)  The retirement allowance payable to a Participant
or  Retired  Participant electing one of the  optional  forms  of
retirement  allowance  set  forth  in  section  3.3(a)  shall  be
determined  by  multiplying  the retirement  allowance  otherwise
payable  under  section 3.1 by the appropriate adjustment  factor
set forth in Appendix B.

           (e)  Any election under this section 3.3 shall be made
in  writing  in the form and manner prescribed by the  Committee,
shall be revocable until termination of service as a Board Member
and shall thereafter be irrevocable.

          Section 3.4    Payments of Small Amounts.

          Notwithstanding any other provision of the Plan, if the
present  value  of  the retirement allowance  payable  to  a  Par
ticipant or Retired Participant and his Beneficiary shall at  any
time after termination of service as a Board Member and prior  to
the  commencement of payment thereof be less than  $10,000,  then
the Committee may direct that it be paid in such lump sum in lieu
of  all  other  benefits under the Plan.  For  purposes  of  this
section  3.4,  present  values  shall  be  determined  using  the
interest rate and mortality assumptions then in use under section
415  of the Code for purposes of valuing lump sum payments  under
tax-qualified defined benefit plans, assuming payment would begin
at the later of age 65 or the date of termination of service.

          Section 3.5    Automatic Death Benefit for Spouse.

           If  (a)  a Participant or Retired Participant  who  is
entitled  to a retirement allowance under section 3.1 should  die
prior  to the commencement of such retirement allowance and prior
to  electing  an  optional  form of  retirement  allowance  under
section 3.3 or (b) a Participant who is not entitled to a  retire
ment allowance under section 3.1 should die while a Board Member,
and  if such Participant or Retired Participant is survived by  a
Spouse, there shall be paid to such surviving Spouse, until  such
Spouse dies, a monthly survivor's allowance in an amount equal to
that amount which would have been provided to such Spouse had the
Participant or Retired Participant retired immediately  prior  to
his  death  (whether  or  not he would  have  been  eligible  for
retirement) and had he effectively elected to take Option 2 under
section  3.3 with his Spouse as his Beneficiary and with payments
commencing on the first day of the month following his death.

          Section 3.6    Beneficiaries.

          (a)  A Participant or Retired Participant may designate
a  Beneficiary or Beneficiaries to receive any survivor  benefits
payable  upon his death under an optional form of benefit elected
pursuant to section 3.3.

           (b)   If the Participant or Retired Participant elects
Option 1 or Option 2 under section 3.3, he may only designate one
Beneficiary  and such Beneficiary must be a natural person.   Any
designation  shall  be made in writing in  the  form  and  manner
prescribed  by  the  Committee,  shall  be  revocable  until  the
retirement  allowance commences to be paid, and shall  thereafter
be irrevocable.

           (c)   If the Participant or Retired Participant elects
Option  3 under section 3.3, he may designate one or more  Benefi
ciaries  who may be, but need not be, natural persons.  Any  such
election  shall  be  made  in writing  in  the  form  and  manner
prescribed  by  the  Committee,  shall  be  revocable  until  the
retirement  allowance commences to be paid, and shall  thereafter
be  irrevocable;  provided,  however,  that  the  Participant  or
Retired  Participant  may  change or revoke  the  Beneficiary  or
Beneficiaries designated at any time or from time  to  time,  but
such  changes or revocations shall be effective only if  received
by  the  Committee  prior  to the Participant's  or  Retired  Par
ticipant's death.

           (d)   A  Beneficiary designated by  a  Participant  or
Retired Participant to receive a survivor benefit, other  than  a
benefit  payable  for such Beneficiary's life,  may  designate  a
Beneficiary  of his own to receive such survivor benefit  in  the
event  the  Beneficiary designated by the Participant or  Retired
Participant  dies  prior to receiving complete  payment  of  such
survivor  benefit.  If a Participant or Retired  Participant  who
has elected Option 3 dies without a Beneficiary, then the present
value  of any unpaid installments shall be paid to the estate  of
such  Participant  or Retired Participant in lieu  of  all  other
payments.   If  a  Beneficiary of a deceased Retired  Participant
entitled  to  payments under Option 3 dies without a Beneficiary,
then  the present value of any unpaid installments shall be  paid
to  the estate of such Beneficiary in lieu of all other payments.
In  determining such present values, the interest rate  and  life
expectancy  tables prescribed under section 415 of the  Code  for
purposes of valuing lump sum payments under tax-qualified defined
benefit plans shall be used.

          Section 3.7    Payment upon Change in Control.

          Upon a Change of Control of the Bank, each Board Member
shall be entitled to an immediate lump sum payment of the present
value  of  a  single life annuity, commencing upon  a  Change  of
Control  of the Bank and continuing for life in an annual  amount
equal  to  his Annual Compensation multiplied by a fraction  (not
greater  than one) the numerator of which is his Years of Service
and  the denominator of which is 10.  In determining such present
values,  the interest rate and life expectancy tables  prescribed
under  section 415 of the Code for purposes of valuing  lump  sum
payments under tax-qualified defined benefit plans shall be used.

                           ARTICLE IV

                         ADMINISTRATION

          Section 4.1    Duties of the Committee.

           The  Committee shall have full responsibility for  the
management, operation, interpretation and administration  of  the
Plan  in accordance with its terms, and shall have such authority
as  is  necessary or appropriate in carrying out its responsibili
ties.   Actions taken by the Committee pursuant to  this  section
4.1  shall be conclusive and binding upon the Bank, the  Company,
the  Participating Companies, Participants, Retired  Participants
and other interested parties.

          Section 4.2    Liabilities of the Committee.

           Neither the Committee nor its individual members shall
be  deemed to be a fiduciary with respect to this Plan; nor shall
any  of  the foregoing individuals or entities be liable  to  any
Participant  or  Retired  Participant  in  connection  with   the
management,  operation, interpretation or administration  of  the
Plan, any such liability being solely that of the Company.

          Section 4.3    Expenses.

           Any  expenses  incurred in the management,  operation,
interpretation or administration of the Plan shall be paid by the
Company.  In no event shall the benefits otherwise payable  under
this Plan be reduced to offset the expenses incurred in managing,
operating, interpreting or administering the Plan.

                           ARTICLE V

                   AMENDMENT AND TERMINATION

          Section 5.1    Amendment and Termination.

           The Board shall have the right to amend the Plan, from
time  to time and at any time, in whole or in part, and to termin
ate  the  Plan;  provided, however, that  no  such  amendment  or
termination shall reduce the accrued benefits of, or impose  more
stringent  vesting requirements on any benefits accrued  by,  any
Participant, Retired Participant or Beneficiary through the  date
of the amendment or termination of the Plan.

                           ARTICLE VI

                    MISCELLANEOUS PROVISIONS

          Section 6.1    Plan Documents.

          The Secretary of the Board shall provide a copy of this
Plan to each Board Member who becomes a Participant in the Plan.

          Section 6.2    Construction of Language.

           Wherever  appropriate in the Plan, words used  in  the
singular  may be read in the plural, words in the plural  may  be
read  in  the singular, and words importing the masculine  gender
shall  be deemed equally to refer to the feminine or the  neuter.
Any reference to an article or section shall be to an article  or
section of the Plan, unless otherwise indicated.

          Section 6.3    Non-Alienation of Benefits.

          The right to receive a benefit under the Plan shall not
be  subject in any manner to anticipation, alienation  or  assign
ment,  nor  shall such rights be liable for or subject to  debts,
contracts, liabilities or torts.

          Section 6.4    Indemnification.

           The  Company shall indemnify, hold harmless and defend
each  Board  Member,  Participant, Retired  Participant  and  the
Beneficiaries of each, against their reasonable costs,  including
legal fees, incurred by them, or arising out of any action,  suit
or proceeding in which they may be involved, as a result of their
efforts,  in  good faith, to defend or enforce the terms  of  the
Plan.

          Section 6.5    Severability.

           A  determination that any provision  of  the  Plan  is
invalid  or unenforceable shall not affect the validity or  enfor
ceability of any other provision hereof.

          Section 6.6    Waiver.

           Failure to insist upon strict compliance with  any  of
the  terms,  covenants or conditions of the  Plan  shall  not  be
deemed a waiver of such term, covenant or condition.  A waiver of
any provision of the Plan must be made in writing, designated  as
a waiver, and signed by the party against whom its enforcement is
sought.   Any  waiver  or relinquishment of any  right  or  power
hereunder at any one or more times shall not be deemed  a  waiver
or  relinquishment of such right or power at any  other  time  or
times.

          Section 6.7    Notices.

           Any  communication required or permitted to  be  given
under  the  Plan,  including any notice, direction,  designation,
comment,  instruction, objection or waiver, shall be  in  writing
and  shall  be deemed to have been given at such time  as  it  is
delivered  personally or 5 days after mailing if mailed,  postage
prepaid,  by  registered  or certified mail,  return  receipt  re
quested, addressed to such party at the address listed below,  or
at  such  other  address as one such party may by written  notice
specify to the other party:

                    (a)  if to the Company:

                         Dime Community Bancorp, Inc.
                         209 Havemeyer Street
                         Brooklyn, New York  11211

                         Attention:  Corporate Secretary

                     (b) if to any party other than the Company,
                         to  such  party at the address last furnished
                         by such party by written notice to the Company.

          Section 6.8    Operation as an Unfunded Plan.

          The Plan is intended to be (a) a contractual obligation
of  the Company to pay the benefits as and when due in accordance
with  its terms, (b) an unfunded and non-qualified plan such that
the benefits payable shall not be taxable to the recipients until
such  benefits are paid and (c) a plan covering persons  who  are
independent contractors of the Company.  The Plan is not intended
to  be subject to or comply with the requirements of the Employee
Retirement Income Security Act of 1974, as amended, or of section
401(a)  of the Code.  The Company may establish a trust to  which
assets  may be transferred by the Company in order to  provide  a
portion  or all of the benefits otherwise payable by the  Company
under  the Plan; provided, however, that the assets of such trust
shall be subject to the claims of the creditors of the Company in
the event that it is determined that the Company is insolvent  or
that  grounds  exist  for the appointment  of  a  conservator  or
receiver.  The Plan shall be administered and construed so as  to
effectuate these intentions.

          Section 6.9    Required Regulatory Provisions.

            Notwithstanding  anything  herein  contained  to  the
contrary,  any benefits paid by the Company, whether pursuant  to
this Plan or otherwise, are subject to and conditioned upon their
compliance  with  section 18(k) of the Federal Deposit  Insurance
Act   ("FDI  Act"),  12  U.S.C.  Section 1828(k),  and  any
regulations promulgated thereunder.

          Section 6.10   Governing Law.

           The Plan shall be construed, administered and enforced
according  to  the  laws of the State of New York  applicable  to
contracts between citizens and residents of the State of New York
entered   into   and  to  be  performed  entirely   within   such
jurisdiction,  except to the extent that such laws are  preempted
by federal law.

                           Appendix A

                   Early Commencement Factors

        Number of Years     Factor
        Payments Commence
        Prior to Age 65
             
              0            1.0000
              1             .9205
              2             .8496
              3             .7860
              4             .7289
              5             .6774
              6             .6308
              7             .5885
              8             .5500
              9             .5149
             10             .4829

                           Appendix B

Factors for Determining Optional Benefit Forms under Section 3.3

      Age     Option 1   Option 2              Option 3       
                                    5 Year     10 Year    15 Year
                                    Certain    Certain    Certain
                                             
      50       90.0%      94.7%       99.6%      98.4%      97.1%
      51       89.4       94.4        99.6       98.3       96.6
      52       88.8       94.1        99.6       98.2       96.2
      53       88.2       93.7        99.5       98.1       95.8
      54       87.6       93.4        99.5       98.0       95.4
      55       87.0       93.0        99.4       97.9       95.0
      56       86.4       92.7        99.3       97.5       94.2
      57       85.8       92.4        99.2       97.1       93.4
      58       85.2       92.0        99.1       96.7       92.6
      59       84.6       91.7        98.9       96.3       91.8
      60       84.0       91.3        98.8       95.9       91.0
      61       83.2       90.8        98.6       95.2       90.0
      62       82.4       90.4        98.4       94.5       89.0
      63       81.6       89.9        98.2       93.8       88.0
      64       80.8       89.4        98.0       93.1       87.0
      65       80.0       88.9        97.8       92.4       86.0
      66       79.3       88.5        97.4       91.4       84.4
      67       78.6       88.0        97.1       90.4       82.8
      68       77.9       87.6        96.7       89.4       81.2
      69       77.2       87.1        96.4       88.4       79.6
      70       76.5       86.7        96.0       87.4       78.0
      71       75.9       86.3        95.4       85.8       76.0
      72       75.3       85.9        94.8       84.2       74.0
      73       74.7       85.5        94.2       82.6       72.0
      74       74.1       85.1        93.6       81.0       70.0
      75       73.5       84.7        93.0       79.4       68.0

           For  Options  1 and 2, the survivorship factors  shown
above  assume  that the Participant (or Retired Participant)  and
the  Beneficiary are the same age.  For each whole year that  the
Beneficiary   is   older   than  the  Participant   (or   Retired
Participant),  add  Factor B in the case  of  Option  2,  to  the
percentage  shown  above (but never go above  99.0%).   For  each
whole  year  that the Beneficiary is younger than the Participant
(or Retired Participant), subtract Factor B in the case of Option
2,  from  the percentages shown above.  Factor B for all  members
for  Option 1 is .7% for the first 10 years, .5% for the next  10
years and .3% for over 20 years, and Factor B for Option 2 is .4%
for  the  first 10 years, .3% for the next 10 years and  .2%  for
over 20 years.

  

 9
 1,000

                   YEAR
                          JUN-30-1996
                               JUN-30-1996
                                          17,055
                       1,056,380
                               115,130
                                     0
                    498,655
                          96,132
                            96,024
                                        583,227
                                      7,812
                               1,371,821
                                     950,114
                                     5,000
                             39,196
                                     22,708
                                0
                                          0
                                           145
                                     212,926
               1,371,821
                                 39,654
                               11,665
                                 1,300
                                52,619
                              22,508
                              23,516
                           29,103
                                    2,979
                                 164
                                  3,521
                                 13,478
                       7,297
                                      0
                                      (1,032)
                                     6,265
                                        0
                                        0
                                    7.98
                                      6,551
                                         0
                                 4,671
                                  8,109
                                 5,174
                                    1,023
                                        14
                                7,812
                             7,812
                                  0
                              0

Includes interest bearing escrow accounts of $133,950 at June 30, 1996
Includes reserve of $668 acquired from Conestoga Bancorp, Inc.