ACCOUNTING FOR STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2013

ACCOUNTING FOR STOCK BASED COMPENSATION [Abstract]

ACCOUNTING FOR STOCK BASED COMPENSATION

7. ACCOUNTING FOR STOCK BASED COMPENSATION

During the three month and nine month periods ended September 30, 2013 and 2012, the Holding Company and Bank maintained the Dime Community Bancshares, Inc. 2001 Stock Option Plan for Outside Directors, Officers and Employees and the 2004 Stock Incentive Plan (collectively the "Stock Plans"), which are discussed more fully in Note 15 to the Company's audited consolidated financial statements for the year ended December 31, 2012, and which are subject to the accounting requirements of ASC 505-50 and ASC 718.

Stock Option Awards

Combined activity related to stock options granted under the Stock Plans during the periods presented was as follows:

	At or for the Three Months Ended September 30,						At or for the Nine Months Ended September 30,
	2013			2012			2013			2012
Options outstanding – beginning of period		2,273,733			2,830,302			2,456,137			2,893,760
Options granted		-			-			-			24,440
Options exercised		(493,690	)		(253,182	)		(671,312	)		(339,693	)
Options forfeited		-			(5,625	)		(4,782	)		(7,012	)
Options outstanding – end of period		1,780,043			2,571,495			1,780,043			2,571,495
Intrinsic value of options exercised	$	1,872		$	377		$	2,089		$	779
Compensation expense recognized		36			73			158			236
Remaining unrecognized compensation expense		177			408			177			408
Intrinsic value of outstanding options at period end		2,447			1,528			2,447			1,528
Intrinsic value of vested options at period end		2,347			1,293			2,347			1,293
Weighted average exercise price of vested options – end of period		16.53			15.65			16.53			15.65

There were no grants of stock options during the three-month periods ended September 30, 2013 and 2012, or the nine months ended September 30, 2013.  The  weighted average fair value per option at the date of grant for stock options granted during the nine months ended September 30, 2012 was estimated as follows:

Total options granted		24,440
Estimated fair value on date of grant	$	4.09
Pricing methodology utilized	Black- Scholes
Expected life (in years)		6.53
Interest rate		1.21	%
Volatility		45.17
Dividend yield		4.04

Restricted Stock Awards

The Company, from time to time, issues restricted stock awards to outside directors and certain officers under the 2004 Stock Incentive Plan.  Typically, awards to outside directors fully vest on the first anniversary of the grant date, while awards to officers vest in equal annual installments over a four-year period.

The following is a summary of activity related to the restricted stock awards granted under the 2004 Stock Incentive Plan during the periods indicated:

	At or for the Three Months Ended September 30,				At or for the Nine Months Ended September 30,
	2013		2012		2013			2012
Unvested allocated shares – beginning of period		318,314		328,003		328,003			324,454
Shares granted		-		-		145,925			141,289
Shares vested		-		-		(155,614	)		(135,369	)
Shares forfeited		-		-		-			(2,371	)
Unvested allocated shares – end of period		318,314		328,003		318,314			328,003
Compensation recorded to expense	$	499	$	471	$	1,511		$	1,370