8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 26, 2005

DIME COMMUNITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-27782	11-3297463
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

209 Havemeyer Street, Brooklyn, New York 11211

(Address of principal executive offices, including zip code)

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

None

(Former name or former address, if changed since last report)

Item 7.         Financial Statements and Exhibits.

(a)                                  Not applicable.

(b)                                 Not applicable.

(c)                                  Exhibits.

The following exhibits are furnished herewith:

Exhibit Number	Description
99.1	Press Release reporting results of operations for the quarter ended March 31, 2005.
99.2	Text of management conference call discussing earnings for the quarter ended March 31, 2005.

Item 9.                                   Regulation FD Disclosure.

This information, furnished under "Item 9. Regulation FD Disclosure," is also intended to be furnished under "Item 12. Results of Operations and Financial Condition," in accordance with SEC Release No. 33-8216.

On April 26, 2005, Dime Community Bancshares, Inc. (the “Company”) issued a press release reporting its results of operations for the quarter ended March 31, 2005. This news release is attached as Exhibit 99.1.

On April 27, 2005, management conducted a conference call discussing its financial results for the quarter ended March 31, 2005. A copy of the text of this conference call is attached as Exhibit 99.2.

The text of both the press release and conference call provides certain information that may be considered non-GAAP financial information. These items include cash earnings, tangible stockholders' equity and all related calculations.

SIGNATURES

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

DIME COMMUNITY BANCSHARES, INC.

/s/ KENNETH J. MAHON

By: ___________________________________________

Kenneth J. Mahon

Executive Vice President and Chief Financial Officer

Dated:April 27, 2005

EX-99.1 CHARTER

Exhibit 99.1

Contact:      Kenneth J. Mahon

                    Exec. VP and Chief Financial Officer

                    718-782-6200 extension 8265

Stephanie Prince

Director of Corporate Marketing

718-782-6200 extension 8250

DIME COMMUNITY BANCSHARES REPORTS FIRST QUARTER 2005 EARNINGS

Brooklyn, NY - April 26, 2005 - Dime Community Bancshares, Inc. (NASDAQ: DCOM, the "Company"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported net income of $10.9 million, or 30 cents per diluted share, for the quarter ended March 31, 2005, compared to $12.3 million, or 33 cents per diluted share, for the quarter ended March 31, 2004 and $10.2 million, or 29 cents per diluted share, for the quarter ended December 31, 2004.

Earnings, excluding income from prepayment fees on loans and gains or losses on the sale of assets, were $9.9 million, or 28 cents per diluted share, for the quarter ended March 31, 2005, compared to $10.4 million, or 28 cents per diluted share, for the quarter ended March 31, 2004 and $9.6 million, or 27 cents per diluted share, for the quarter ended December 31, 2004.

First Quarter Highlights

§   Real estate loan originations totaled $115.0 million, with an average interest rate of 5.49%.

§   Loan sales to Fannie Mae totaled $24.4 million.

§   The annualized loan amortization rate increased to 15% from 11% sequentially.

§   Total assets declined by 0.8% annualized.

§   Net interest margin was 2.87%, six basis points lower sequentially.

§   Non-interest expenses declined 6% year-over-year and 11% sequentially.

§   The Company repurchased 184,700 shares into treasury during the quarter.

“The first quarter was highlighted by higher than expected prepayment fee income that brought reported earnings one penny above the range we had estimated at the beginning of the quarter," said Vincent F. Palagiano, Chairman and Chief Executive Officer. "During the quarter, we began to see the lagging effect of the tightening of monetary policy by the Federal Open Market Committee upon our average cost of funds and net interest margin. We are pleased with the overall performance of our deposit funding costs, which, despite increasing 11 basis points during the quarter, continue to significantly lag the overall movement in interest rates over the past nine months."

Mr. Palagiano further noted, “We are currently actively exploring expansion of our branch network. Branch development is being considered in anticipation of resuming a strategy to grow our earning assets as interest rates approach more normalized ranges, allowing the Bank to more fully leverage its strong capital base.”

FINANCIAL RESULTS 

For the quarter ended March 31, 2005, the Company’s pre-tax income was $17.2 million, compared to $19.3 million in the same quarter of the previous year. This $2.1 million decrease was primarily due to decreases of $1.1 million in net interest income and $1.6 million in non-interest income, which was partially offset by a decrease of $607,000 in non-interest expense. Average earning assets grew by $274 million year-over-year, however, net interest income declined due to a 42 basis point contraction in net interest margin from 3.29% at March 31, 2004 to 2.87% at March 31, 2005. The decline in non-interest income reflected a decline of $958,000 in prepayment fees and the absence of any gains on the sale of securities this quarter ($516,000 of gains were recorded during the quarter ended March 31, 2004). The decrease of $607,000 in non-interest expense was due mainly to lower expenses in the ESOP and executive benefits plans, and in core computer service costs.

On a linked quarter basis, the Company’s pre-tax income increased $844,000 from $16.4 million in the December 2004 quarter, to $17.2 million in the March 2005 quarter. A decrease of $826,000 in net interest income was offset by a $518,000 increase in prepayment fee income ($1.6 million earned in prepayment fee income this quarter) combined with a reduction of $1.2 million in non-interest expense. Various cost savings activities implemented over the past several quarters, including a reduction in certain supplemental executive benefit plans, freezing the Board of Directors’ retirement plan, and a reduction in core processing costs, contributed to the reduction in non-interest expense.

Net interest margin declined 6 basis points to 2.87% during the March 2005 quarter from 2.93% in the December 2004 quarter. The decline was due to an increase of 13 basis points in the average cost on interest bearing liabilities (primarily the cost of deposits) combined with a decrease in the yield on real estate loans of 3 basis points to 5.62%. However, since loans in the Bank’s pipeline as of March 31, 2005 had an average rate of 5.55%, we expect a slowdown in the rate of decline in the yield on mortgage assets.

Average deposits per branch approximated $108 million at March 31, 2005, lower than the $114 million average at March 31, 2004 and the $111 million average at December 31, 2004. The loan-to-deposit ratio was 114% at March 31, 2005, compared to 101% at March 31, 2004 and 113% at December 31, 2004. Core deposits comprised 56% of total deposits at March 31, 2005, compared to 57% at both March 31, 2004 and December 31, 2004.

Over the past nine months, management has elected not to grow deposits due to the Company’s reluctance to add loans at the then prevailing unsustainably low loan rates.

Non-interest income, excluding gains or losses on the sale of assets, totaled $3.9 million during the quarter ended March 31, 2005, compared to $5.0 million in the quarter ended March 31, 2004 and $3.3 million in the quarter ended December 31, 2004. The variances resulted primarily from prepayment fee income, which totaled $1.6 million in the quarter ended March 31, 2005, $2.5 million in the quarter ended March 31, 2004 and $1.1 million in the quarter ended December 31, 2004.

The Company recorded a net gain of $135,000 on the sale of $24.4 million in loans to Fannie Mae during the quarter ended March 31, 2005. The Company recorded net gains of $357,000 on the sale of $23.6 million in loans to Fannie Mae during the quarter ended December 31, 2004 and $60,000 on the sale of $5.6 million in loans to Fannie Mae during the quarter ended March 31, 2004.

There were no gains or losses recorded on sales of securities during the quarters ended March 31, 2005 and December 31, 2004. The Company recorded gains of $516,000 on the sale of securities during the quarter ended March 31, 2004.

Non-interest expense totaled $9.8 million during the quarter ended March 31, 2005, a decrease of $607,000, or 6%, from the prior year quarter, and a decline of $1.2 million, or 11%, sequentially. During the quarter ended December 31, 2004, the Company incurred a non-recurring charge of $640,000 that resulted from the data system conversion completed in November 2004. In the quarter ended March 31, 2005, cost savings of $236,000 were realized from adjustments made to various benefit plans. In addition, the core deposit premium associated with the deposits acquired as a result of a 1999 acquisition became fully amortized as of January 2005, reducing non-interest expense by $158,000 during the March 31, 2005 quarter. Finally, cost savings realized from the recent data system conversion also contributed to the reduced level of non-interest expense during the March 2005 quarter.

The effective tax rate was 36.8% for the quarter ended March 31, 2005. The effective tax rate is expected to approximate 36.0% during the year ending December 31, 2005.

Mr. Palagiano concluded, “As can be seen from our loan commitment rates and the growing volume of our loan pipeline, we believe that we are nearing the point in the interest rate cycle where it is prudent to begin to grow assets once again, while continuing to closely manage our interest rate exposure on both the asset and liability sides of our balance sheet. In addition, we believe that the continued building of our capital base will best position the Company for any future market scenario.”

REAL ESTATE LENDING AND CREDIT QUALITY

Real estate loan originations totaled $115.0 million during the quarter ended March 31, 2005. The average rate on these originations was 5.49%, modestly lower than the 5.55% realized during the quarter ended December 31, 2004. Real estate loan prepayment and amortization during the March 2005 quarter approximated 15% of the loan portfolio on an annualized basis, compared to 26% during the March 2004 quarter and 11% during the December 2004 quarter.

At March 31, 2005, the multifamily and mixed use loan commitment pipeline approximated $160.5 million, at an average rate of 5.55%, of which $17.3 million is intended for sale to Fannie Mae.

The Bank maintained its long record of outstanding credit quality during the most recent quarter. Non-performing loans were $2.7 million at March 31, 2005, representing 0.08% of total assets.

STOCKHOLDERS EQUITY & SHARE REPURCHASE PROGRAM

The Company’s total stockholders’ equity at March 31, 2005 was $282.8 million, or 8.39% of total assets, compared to $275.8 million, or 8.18% of total assets at March 31, 2004. Tangible stockholders’ equity was $233.0 million at quarter end, equal to 7.01% of tangible assets, compared to $217.8 million, or 6.57% of tangible assets at March 31, 2004.

The return on average stockholders’ equity was 15.47% during the first quarter of 2005 and the return on tangible equity was 18.95%. The cash return on average tangible equity, which management considers the best measurement of the Company’s internal capital generation, was 19.63%.

During the March 2005 quarter, the Company repurchased 184,700 shares of its common stock into treasury. As of March 31, 2005, the Company had an additional 1.2 million shares remaining eligible for repurchase under its tenth stock repurchase program, approved in May 2004.

OUTLOOK

While first quarter results were better than expected, we continue to believe that lower loan originations, a lower prepayment speed, and lower prepayment fee income will characterize the full year of 2005, when compared to 2004. In 2004, $1.01 billion of loans were originated, prepayment speed equaled 24%, and prepayment fee income totaled $9.8 million. In the first quarter of 2005, prepayment speed equaled 15%, and prepayment fee income totaled $1.6 million. The Company believes that these may well be high-water marks for 2005. As noted, deposit costs have begun to trend upward as well, which will further pressure the cost of funds as the year progresses. We believe that the net result of these factors will result in moderate contraction of the Company’s net interest margin in the second quarter and as such, the Company now expects second quarter earnings per share will be in a range of $0.26 to $0.28 cents.

CONFERENCE CALL

Management will conduct a conference call at 10:00 A.M. Eastern Time, on Wednesday, April 27, 2005, to discuss the Company’s operating performance for the quarterly period ended March 31, 2005.

The conference call will also be available via the Internet by accessing the following Web address: www.dsbwdirect.com or www.vcall.com. Web users should go to the site at least fifteen minutes prior to the call to register, download and install any necessary audio software. The webcast will be available until May 27, 2005.

ABOUT DIME COMMUNITY BANCSHARES

Dime Community Bancshares, Inc., a unitary thrift holding company, is the parent company of The Dime Savings Bank of Williamsburgh, Brooklyn, New York, founded in 1864. With $3.37 billion in assets as of March 31, 2005, the Bank has twenty branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Bank can be found on the Bank's Internet website at www.dimedirect.com.

Statements made herein that are forward looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995 are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, those related to overall business conditions and market interest rates, particularly in the markets in which the Company operates, fiscal and monetary policy, changes in regulations affecting financial institutions and other risks and uncertainties discussed in the Company's Securities and Exchange Commission filings. The Company disclaims any obligation to publicly announce future events or developments which may affect the forward-looking statements herein.

-tables to follow -

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands except share amounts)

	March 31,
	2005	December 31,
ASSETS:	(Unaudited)	2004
Cash and due from banks	$25,575	$26,581
Investment securities held to maturity	585	585
Investment securities available for sale	92,568	54,840
Mortgage-backed securities held to maturity	415	465
Mortgage-backed securities available for sale	482,395	519,420
Federal funds sold and other short-term assets	117,507	103,291
Real estate Loans:
One-to-four family and cooperative apartment	132,169	138,125
Multi-family and underlying cooperative	1,892,421	1,916,118
Commercial real estate	440,094	424,060
Construction and land acquisition	10,538	15,558
Unearned discounts and net deferred loan fees	(328)	(463)
Total real estate loans	2,474,894	2,493,398
Other loans	2,650	2,916
Allowance for loan losses	(15,230)	(15,543)
Total loans, net	2,462,314	2,480,771
Loans held for sale	1,290	5,491
Premises and fixed assets, net	16,648	16,652
Federal Home Loan Bank of New York capital stock	25,325	25,325
Goodwill	55,638	55,638
Other assets	90,132	88,207
TOTAL ASSETS	$3,370,392	$3,377,266
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Checking and NOW	$136,302	$138,402
Savings	359,104	362,656
Money Market	725,067	749,040
Sub-total	1,220,473	1,250,098
Certificates of deposit	947,500	959,951
Total Due to depositors	2,167,973	2,210,049
Escrow and other deposits	78,546	48,284
Securities sold under agreements to repurchase	205,584	205,584
Federal Home Loan Bank of New York advances	506,500	506,500
Subordinated Notes Sold	25,000	25,000
Trust Preferred Notes Payable	72,165	72,165
Other liabilities	31,854	27,963
TOTAL LIABILITIES	3,087,622	3,095,545
STOCKHOLDERS' EQUITY:
Common stock ($0.01 par, 125,000,000 shares authorized,
50,289,996 shares and 50,111,988 shares issued at
March 31, 2005 and December 31, 2004, respectively,
and 37,190,852 shares and 37,165,740 shares outstanding
at March 31, 2005 and December 31, 2004, respectively)	503	501
Additional paid-in capital	199,269	198,183
Retained earnings	264,140	258,237
Unallocated common stock of Employee Stock Ownership Plan	(4,726)	(4,749)
Unearned common stock of Recognition and Retention Plan	(3,071)	(2,612)
Common stock held by the Benefit Maintenance Plan	(7,348)	(7,348)
Treasury stock (13,099,144 shares and 12,946,248 shares
at March 31, 2005 and December 31, 2004, respectively)	(159,839)	(157,263)
Accumulated other comprehensive loss income, net	(6,158)	(3,228)
TOTAL STOCKHOLDERS' EQUITY	282,770	281,721
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$3,370,392	$3,377,266

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands except per share amounts)

	For the Three Months Ended
	March 31,	December 31,	March 31,
	2005	2004	2004
Interest income:
Loans secured by real estate	$34,848	$35,193	$33,615
Other loans	32	47	63
Mortgage-backed securities	4,490	4,792	4,712
Investment securities	606	643	312
Other	954	778	343
Total interest income	40,930	41,453	39,045
Interest expense:
Deposits and escrow	9,381	9,139	9,004
Borrowed funds	8,573	8,512	5,925
Total interest expense	17,954	17,651	14,929
Net interest income	22,976	23,802	24,116
Provision for loan losses	60	100	60
Net interest income after
provision for loan losses	22,916	23,702	24,056
Non-interest income:
Service charges and other fees	1,408	1,375	1,560
Net gain on sales and
redemptions of assets	135	357	576
Prepayment fee income	1,585	1,067	2,543
Other	926	867	938
Total non-interest income	4,054	3,666	5,617
Non-interest expense:
Compensation and benefits	5,607	5,883	5,716
Occupancy and equipment	1,336	1,293	1,263
Core deposit intangible amortization	48	206	206
Other	2,767	3,618	3,180
Total non-interest expense	9,758	11,000	10,365
Income before taxes	17,212	16,368	19,308
Income tax expense	6,341	6,138	6,968
Net Income	$10,871	$10,230	$12,340
Earnings per Share:
Basic	$0.31	$0.29	$0.35
Diluted	$0.30	$0.29	$0.33
Average common shares
outstanding for Diluted EPS	35,757,992	35,861,646	36,863,260

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(In thousands except per share amounts)

	For the Three Months Ended
	March 31,	December 31,	March 31,
	2005	2004	2004
Performance and Other Selected Ratios:
Return on Average Assets	1.30%	1.20%	1.60%
Return on Average Stockholders' Equity	15.47%	14.56%	17.72%
Return on Average Tangible Stockholders' Equity	18.95%	17.94%	22.28%
Net Interest Spread	2.59%	2.71%	3.05%
Net Interest Margin	2.87%	2.93%	3.29%
Non-interest Expense to Average Assets	1.16%	1.29%	1.34%
Efficiency Ratio	36.28%	40.57%	35.55%
Effective Tax Rate	36.84%	37.50%	36.09%
Tangible Equity to Tangible Assets at period end	7.01%	6.88%	6.57%
Per Share Data:
Reported EPS (Diluted)	$0.30	$0.29	$0.33
Stated Book Value	7.60	7.58	7.37
Tangible Book Value	6.27	6.16	5.82
Average Balance Data:
Average Assets	$ 3,357,138	$ 3,417,550	$ 3,094,199
Average Interest Earning Assets	3,204,674	3,250,859	2,931,156
Average Stockholders' Equity	281,038	281,073	278,585
Average Tangible Stockholders' Equity	229,509	228,126	221,521
Average Loans	2,481,554	2,493,365	2,218,390
Average Deposits	2,183,923	2,226,096	2,144,642
Asset Quality Summary:
Net charge-offs (recoveries)	($ 1)	$ 59	$ 30
Nonperforming Loans	2,712	1,459	1,381
Nonperforming Loans/ Total Loans	0.11%	0.06%	0.06%
Nonperforming Assets/Total Assets	0.08%	0.04%	0.04%
Allowance for Loan Loss/Total Loans	0.61%	0.62%	0.66%
Allowance for Loan Loss/Nonperforming Loans	561.68%	1065.32%	1085.59%
Regulatory Capital Ratios (Bank Only):
Tangible Capital Ratio	8.23%	7.88%	7.16%
Leverage Capital Ratio	8.23%	7.88%	7.16%
Risk -Based Capital Ratio	13.13%	12.83%	14.40%
Non-GAAP Disclosures - Cash Earnings Reconciliation and Ratios (1):
Net Income	$10,871	$10,230	$12,340
Additions to Net Income:
Core Deposit Intangible Amortization	48	206	206
Non-cash stock benefit plan expense	343	453	795
Cash Earnings	$11,262	$10,889	$13,341
Cash EPS (Diluted)	0.31	0.30	0.36
Cash Return on Average Assets	1.34%	1.27%	1.72%
Cash Return on Average Tangible Stockholders' Equity	19.63%	19.09%	24.09%

(1) Cash earnings and related data are "Non-GAAP Disclosures." These disclosures present information which management considers useful to the readers of this report since they present a measure of the tangible equity generated from operations during each period presented. Tangible equity generation is a significant financial measure since banks are subject to regulatory requirements involving the maintenance of minimum tangible capital levels.

DIME COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

ANALYSIS OF NET INTEREST INCOME

	For the Three Months Ended
		March 31, 2005			December 31, 2004			March 31, 2004
			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	$2,478,992	$34,848	5.62%	$2,490,166	$35,193	5.65%	$2,214,940	$33,615	6.07%
Other loans	2,562	32	5.00	3,199	47	5.88	3,450	63	7.30
Mortgage-backed securities	504,077	4,490	3.56	550,525	4,792	3.48	543,070	4,712	3.47
Investment securities	68,252	606	3.55	56,173	643	4.58	37,715	312	3.31
Other short-term investments	150,791	954	2.53	150,796	778	2.06	131,981	343	1.04
Total interest earning assets	3,204,674	$40,930	5.11%	3,250,859	$41,453	5.10%	2,931,156	$39,045	5.33%
Non-interest earning assets	152,464			166,691			163,043
Total assets	$3,357,138			$3,417,550			$3,094,199
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
NOW, Super Now accounts	$43,071	$80	0.75%	$44,092	$99	0.89%	$36,919	$88	0.96%
Money Market accounts	724,333	2,745	1.54	791,133	2,893	1.45	763,185	2,691	1.42
Savings accounts	360,842	491	0.55	363,969	440	0.48	367,196	494	0.54
Certificates of deposit	961,947	6,065	2.56	933,990	5,707	2.43	884,235	5,731	2.61
Borrowed Funds	804,339	8,573	4.32	809,282	8,512	4.18	578,296	5,925	4.12
Total interest-bearing liabilities	2,894,532	$17,954	2.52%	2,942,466	$17,651	2.39%	2,629,831	$14,929	2.28%
Checking accounts	93,730			92,912			93,107
Other non-interest-bearing liabilities	87,838			101,099			92,676
Total liabilities	3,076,100			3,136,477			2,815,614
Stockholders' equity	281,038			281,073			278,585
Total liabilities and stockholders' equity	$3,357,138			$3,417,550			$3,094,199
Net interest income		$22,976			$23,802			$24,116
Net interest spread			2.59%			2.71%			3.05%
Net interest-earning assets	$310,142			$308,393			$301,325
Net interest margin			2.87%			2.93%			3.29%
Ratio of interest-earning assets
to interest-bearing liabilities			110.71%			110.48%			111.46%

EX-99.2 BYLAWS

Exhibit 99.2

VINCENT F. PALAGIANO

Thank you, Stephanie. Good morning and welcome everyone.

Overall, the first quarter came in better than we expected. Earnings per share were 30 cents compared to 29 cents in the fourth quarter. Core earnings, which excludes prepayment fees and gains and losses on the sale of assets, was 28 cents, one penny higher than in the fourth quarter. Prepayment fee income was higher than we expected and accounted for the total difference between core and reported earnings.

Ken is going to discuss the financial details with you in a few moments. This morning I’m going to focus my comments on conditions as we see them in the multifamily lending market.

Lenders continue to view the New York multifamily market as an attractive place to be, and new lenders continue to be drawn to our marketplace - including some lenders that haven’t traditionally bothered with the 3 million dollar and under market, like insurance companies and real estate conduits. At the same time, if you just walk around the neighborhoods of New York, you’ll see new multifamily properties rising everywhere. It appears to be a very healthy marketplace at the moment with lots of cash being offered to owners and developers.

We’ve been competing a little more aggressively now that rates have begun their inevitable climb upward, as we said we would. Application volume is running ahead of what it was last spring, when rates were at their lowest. If you remember, this was what led us to back away from the origination market a little. Rates in our primary 5-year product are up around 100 basis points since then.

In general we extend offers, or letters of intent, on approximately 70% of the applications we receive. Typically, 25% of our offers are accepted, but occasionally that number will spike as it did last spring when treasury rates jumped.

When our offers are declined, it’s generally due to either rate, the amount of cash offered, or some combination. The amount of cash offered is often a function of the cap rate that is used. Historically, Dime has been a very conservative lender. Now while we remain conservative, we have extended our limits a bit for certain high quality loans.

From our perspective, over the past several years there’s been an element of irrationality in the multifamily marketplace, not always coming from the same source. Early in the first quarter we lost a number of loans because the borrowers were offered rates below 5%. We have not made loan offers below 5% since last spring. It’s for reasons like this that our loan originations have run below our peers over the past 2-3 quarters.

An example of the ongoing irrational competition occurred just recently. We lost in the bidding for a 15-year self-liquidating loan. Our offer was at 6%, which at that time was at market, 150 basis points over the ten-year treasury rate. The ‘winner’ offered a rate of 50 basis points lower - 5.50%. While this was a very desirable loan because it had a 32% loan-to-value, we just felt that at 5-1/2% the Bank wouldn’t be properly compensated for the interest rate risk of this loan even though it had a duration of about 7 years - especially in a rising rate market.

Real estate originations in the first quarter were $115 million, $7 million higher than fourth quarter levels - but still very low compared to our quarterly numbers over the past several years. This was in keeping with our slow growth strategy through the 1^st quarter. The average rate on loans originated was 5.49% with an average term to re-pricing of 6 years. This was 6 basis points lower than the fourth quarter average rate of 5.55%. The average rate has been slowly climbing from the low point of 4.8% during the second quarter of ’04.

The composition of new loans includes a larger percentage of pure commercial real estate. Because we didn’t originate much commercial real estate over the past several years, there’s room in our portfolio to grow this component of loans. Pure commercial real estate still represents only 11% of our current portfolio today. Rates for these loans typically run ¼ to ½% higher for terms similar to multifamily loans. Interestingly, refinances of existing Dime portfolio loans picked up again during the quarter. They represented 28% of the first quarter loan origination volume, as compared to 14% in the fourth quarter and 31% in last year’s first quarter. This still looks to us like a temporary condition that will evaporate as the year progresses.

The originations we closed during the first quarter carried an average loan-to-value of 58% and an average debt service ratio of 2.19. Of the 74 loans, virtually all of them were below $4 million.

We also sold $24.4 million of loans to Fannie Mae at an average rate of 5.50%. The loans we sold had a weighted average term to re-pricing of 7.9 years. This is part of the value we derive from the Fannie partnership - we can sell longer-term loans and yet still keep the loan relationship with the customer and generate fee income as well.

Amortization speed was 15% annualized, higher than the 11% in the fourth quarter, and higher than we expected. The end result was a slight decrease in the size of the portfolio of about 1%. Our portfolio yield on real estate loans may begin to stabilize now that loan rates have moved above 5-1/2%. The portfolio yield averaged only three basis points lower during the first quarter compared to the fourth quarter, and flat compared with the third quarter.

Nonperforming loans increased from the end of the fourth quarter to 8 basis points of total assets. This is higher than at the end of the fourth quarter primarily due to one loan, for $1.3 million dollars, which we are actively managing and expect to resolve favorably.

At the end of the quarter, the loan commitment pipeline was $160 million, up from the $97 million pipeline at the end of the fourth quarter. Growth of the pipeline can be attributed to the somewhat more competitive stance we have taken on underwriting, as I mentioned a moment ago. We’ve also expanded the types of properties we’ll lend on to include more pure commercial properties, which we previously haven’t originated in any significant volume.

Our pipeline at April 26th had an average rate of 5.62% on volume of $175 million. This is the first time in several quarters where the rate on loans in the pipeline matches the average yield of the existing real estate loan portfolio.

I know I’ve presented you with a lot of new detail this morning. After Ken’s comments, I’ll be happy to answer your questions on anything I’ve discussed.

KENNETH J. MAHON

Thank you Vinny.

The quarter played out pretty much as expected.

Fed policy seems to be having an effect on rates in the multifamily market, but still not as great as we would like to see. Even the Fed is wondering why long rates aren’t higher, which is another reason we think it’s prudent to be cautious before adding too many new assets to the books at these yields. Nevertheless, since loan applications are moving up to the 5-1/2 to 6% range, we’re starting to think about growing the funding side of the balance sheet once again to match potential loan growth. Today’s pipeline numbers are very encouraging.

In the meantime, earnings and returns remain high; book value per share has been rising and the Company’s tangible capital ratio now stands at 7 percent. Even with the higher capital ratio, return on average tangible equity is still almost 19%. If we don’t think a prudent and profitable growth strategy is going to present itself the rest of the year, there will be plenty of opportunity, and capital, for us to repurchase our shares more aggressively.

One of our objectives at the beginning of the year was to keep operating expenses under control. As a result, our efficiency ratio remains nearly unchanged from last year at 36%. In fact, operating expenses declined on a linked quarter basis. Most of the reduction was due to efficiencies gained in our core processing conversion, and the rest was due to changes we made in the officer and employee benefit plans.

As for Nonperforming assets, we continue to have one of the lowest levels of Nonperforming assets among active lenders in the industry at 8 basis points of total assets.

Because prepayment speeds came in above our forecast, prepayment fee income was also higher. We expected about 750 thousand dollars in prepayment fees, but received about 1.5 million. If our outlook turns out to be wrong, and the level of refinancing runs much higher in the multifamily sector for the rest of the year, this should lead to higher than anticipated earnings, but at the moment our outlook hasn’t changed, and we still expect prepayment speeds to stay below 15 percent throughout the year.

As of yesterday, the mortgage commitment pipeline stood at 175 million dollars, compared to the 115 million of originations for the entire 1^st quarter. The reason is that we’ve become more competitive in matching the terms offered by our largest competitors on high quality loans. If we compete on rates and terms, we feel there will be enough loan demand to fill our needs, even as the refinance market slows down.

Probably the most significant change on the balance sheet was in deposits, which declined at a 7-1/2 percent annualized rate. Because there was no need for additional funding, we elected not to aggressively compete for deposits. That may change in the second half of the year, and so we’re re-visiting our pricing strategies and at the same time actively pursuing de novo branch sites.

Loan sales to Fannie Mae in the quarter amounted to $23.6 million of multi-family loans, of which $14.1 million were originally earmarked for the portfolio. Instead, we made the decision to sell them when the bond market had a mini-rally for a short time in January. What we sold were 7-year repricing loans with an average coupon of 5.0%. Because they were originally supposed to go to the portfolio, gains amounted to only $34,000, or about 24 basis points. The remaining 9-1/2 million dollars of loans were sold on a flow basis, which produced gains of $87,000 (or about 92 basis points, which is our normal spread on Fannie Mae sales).

Looking to next quarter, we expect to see some moderate contraction of net interest margin because it appears likely that short-term rates will continue to rise. Just a reminder, too, that when comparing our net interest margin to our multifamily peers, there is no prepayment fee income in our margin - it is all classified as fee income, which is clearly disclosed in all of our earnings releases. The reason that’s important is that when prepayment fee income dries up, you won’t see a huge decline in our margin. The other good news is that the yield on earning assets appears to be bottoming out because, as Vinny pointed out, new loan commitments are being made at rates close to our embedded portfolio yield. Because we’re already halfway through the 2^nd quarter, any new loan growth we add from current production will not show up until the 3^rd quarters numbers. Therefore, at this point we expect earnings per share to be in a range of 26 - 28 cents for June, which includes only about 1 million dollars of prepayment fee income.

With that, I’ll turn it back to Mr. Palagiano. Operator?