DIME COMMUNITY BANCSHARES, INC. REPORTS EARNINGS

Quarterly EPS of $0.28; Bank Celebrates 150^th Anniversary this Month

Brooklyn, NY – April 24, 2014 - Dime Community Bancshares, Inc. (Nasdaq: DCOM) (the "Company" or "Dime"), the parent company of The Dime Savings Bank of Williamsburgh (the "Bank"), today reported financial results for the quarter ended March 31, 2014.  Consolidated net income for the quarter ended March 31, 2014 was $10.0 million, or $0.28 per diluted share, compared to $10.3 million, or $0.29 per diluted share, for the quarter ended December 31, 2013, and $10.6 million, or $0.30 per diluted share, for the quarter ended March 31, 2013.

Vincent F. Palagiano, Chairman and Chief Executive Officer of Dime, commented, "We are pleased to report another solid quarter of earnings, despite compressing margins and a highly competitive lending environment."  Mr. Palagiano continued, "During the most recent quarter, we capitalized on a unique opportunity to repurchase a large portfolio of performing loans from a third party investor.  The repurchase was appealing to us due to the relatively short duration of the assets being acquired, as well as our familiarity with their underwriting and credit quality, and puts us well on our way to achieving our growth target for the year."

During the quarter ended March 31, 2014, as previously mentioned, the Company repurchased from a third-party investor approximately $200 million of fully performing multifamily loans that were originated by Dime between 2002 and 2009.  There was no transfer of servicing rights in connection with the repurchase since Dime was servicing the loans.  This acquisition helped generate asset growth of 6.3% during the first quarter of 2014, putting Dime solidly on its path toward meeting its 8% to 10% balance sheet growth target for 2014.  Credit quality remains excellent, with non-performing loans approximating 32 basis points of total loans, and delinquencies between 30 and 89 days approximating only 1 basis point of total loans.

"And on another note," continued Mr. Palagiano, "I want to add how proud the employees and directors of Dime are to be affiliated with this Bank as it reached a significant milestone on April 19th, 2014, the 150th anniversary of the date of incorporation of The Dime Savings Bank of Williamsburgh.  In 1864, local community leaders formed a mutual savings bank in Williamsburg primarily to encourage thrift among people of modest means.  Today that bank, now shareholder-owned, is the largest bank still headquartered in Brooklyn, continuing to deliver what customers want most: personal service, trust, and stability.  Thank you for being part of the story with us."

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Management's Discussion of Quarterly Operating Results

·	Net Interest Margin

As previously forecasted, net interest margin ("NIM") continues to contract, resulting from the wave of refinancing activity that began in late 2012 and continues today, albeit at a declining rate.  Reported NIM was 3.06% during the quarter ended March 31, 2014 compared to 3.24% during the December 2013 quarter. The "core" NIM, which excludes the effect of loan prepayment fee income, decreased from 2.90% during the December 2013 quarter to 2.79% during the March 2014 quarter, caused primarily by a reduction of 16 basis points in the average yield on real estate loans.  Both loan amortization activity and prepayment fee income moderated somewhat during the quarter ended March 31, 2014, compared to their historically high levels during 2013, consistent with the forecast provided in the Outlook section of the Company's January 27, 2014 earnings release.

Competition for multifamily loans in the New York metropolitan market continued to keep new loan rates low during the quarter, even as the benchmark Treasury rates moved slightly higher.  During the most recent quarter, prime, low loan-to-value multifamily offering rates ranged from 3.25% to 3.75% for a 5 or 7-year repricing term.  Generally, borrowers expressed a preference for a 7-year repricing term, despite the higher interest rate and debt service compared to the 5-year repricing term.

Partially offsetting the lower asset yields was a reduction of 4 basis points in the average overall cost of funds.  A 46 basis point decrease in the average cost of borrowings drove this decline, as Dime continued to avail itself of favorable wholesale borrowing rates.  The cost of deposits rose slightly, reflecting new deposit volumes at the start of the promotional deposit season.

·	Net Interest Income

Net interest income was $30.3 million in the quarter ended March 31, 2014, down $512,000 from $30.8 million reported in the December 2013 quarter, and down $2.0 million from $32.3 million reported in the March 2013 quarter. Prepayment fee income on loans totaled $2.7 million during the March 2014 quarter, compared to $3.2 million recognized in the December 2013 quarter accounting for the linked quarter $512,000 decline in net interest income.

·	Provision/Allowance For Loan Losses

The Company experienced net charge-offs of $6,000 during the quarter ended March 31, 2014, and recorded a provision of $281,000 to the allowance for loan losses, resulting in a net addition of $276,000 to the allowance for loan losses from December 31, 2013 to March 31, 2014.  The $281,000 provision recorded during the most recent quarter reflected the growth in the Bank's loan portfolio during the period.

As a result of the growth in the loan portfolio, the allowance for loan losses as a percentage of total loans declined from 0.54% at December 31, 2013 to 0.52% at March 31, 2014.

·	Non-Interest Income

Non-interest income was $3.1 million for the quarter ended March 31, 2014, an increase of $1.2 million from the previous quarter.

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The loans repurchased during the quarter ended March 31, 2014 had been subject to a "First Loss Position" recourse provision.  As a result of the repurchase, the liability for the first loss position approximating $1.0 million that had previously been recorded was reversed.  This reversal was recognized as mortgage banking income (a component non-interest income) during the March 2014 quarter.

During the quarter ended March 31, 2014, Dime also recognized a non-recurring gain of $649,000 on the sale of a real estate property.

Partially offsetting these items were reductions of approximately $150,000 in mortgage banking servicing fee income during the quarter ended March 31, 2014, reflecting the reduction in the serviced loan portfolio during the period.

·	Non-Interest Expense

Non-interest expense was $15.8 million in the quarter ended March 31, 2014, exceeding the forecasted level of $15.5 million as a result of higher seasonal marketing costs.

Non-interest expense was 1.53% of average assets during the most recent quarter. The efficiency ratio approximated 48.5% during the same period.

·	Income Tax Expense

The effective tax rate approximated 41.7% during the most recent quarter, generally in line with the 41.0% forecasted level.

Management's Discussion of the 1^st Quarter 2014 Balance Sheet

Total assets were $4.28 billion at March 31, 2014, up $252.2 million, or 6.3%, from December 31, 2013.

The total real estate loan portfolio grew by approximately $246.1 million, due primarily to the repurchase of approximately $200 million of loans during the period.

New real estate portfolio originations were $216.3 million during the most recent quarter (excluding the previously discussed whole loan repurchase transaction), compared to $213.8 million experienced during the 4^th quarter of 2013.  For further comparative and trending purposes, real estate loan originations in the 2^nd and 3^rd quarters of 2013 were $325.6 million and $289.6 million, respectively, although amortizations and satisfactions were also higher during those periods.

Federal Home Loan Bank of New York ("FHLBNY") advances increased by $123.2 million during the quarter ended March 31, 2014, providing the largest single component of funding for the loan growth experienced during the period.  Deposits also grew by $79.8 million during the most recent quarter, driven by successful promotional certificate of deposit ("CD") and money market programs.  Mortgagor escrow deposit growth of $40.7 million during the quarter ended March 31, 2014 provided another  recurring source of funding.

·	Real Estate Loans

As previously discussed, real estate loans increased $246.1 million during the quarter ended March 31, 2014.  Real estate loan originations were $216.3 million during the March 2014 quarter, at a weighted

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average interest rate of 3.68%. Of this amount, $75.0 million represented loan refinances from the existing portfolio.

Also during the quarter, loan amortization and satisfactions, including the $75.0 million of refinances of existing loans, totaled $178.4 million, or 18.7% (annualized) of the quarterly average portfolio balance, at an average rate of 5.11%.  Total loan commitments stood at $117.0 million at March 31, 2014, with a weighted average rate of 3.81%.  The average yield on the loan portfolio (excluding prepayment fee income) during the quarter ended March 31, 2014 was 4.00%, compared to 4.16% during the December 2013 quarter and 4.65% during the March 2013 quarter.

·	Credit Summary

Non-performing loans were $12.8 million, or 0.32% of total loans, at March 31, 2014, compared to $12.5 million, or 0.34% of total loans, at December 31, 2013.  The increase in dollar amount resulted primarily from the addition of one non-performing loan during the period.  Accruing loans delinquent between 30 and 89 days decreased to $470,000, or approximately 0.01% of total loans, at March 31, 2014, compared to $1.6 million, or 0.04% of total loans, at December 31, 2013.  All of the loans included in the $200 million loan repurchase during the most recent quarter remained current as of March 31, 2014.

At March 31, 2014, non-performing assets represented 4.0% of the sum of tangible capital plus the allowance for loan losses (this statistic is otherwise known as the "Texas Ratio") (see table on page 11).  This number compares very favorably to both industry and regional averages.

·	Deposits and Borrowed Funds

Retail deposits increased $79.8 million from December 31, 2013 to March 31, 2014, reflecting net growth of $38.8 million in money market deposits and $40.0 million in CDs (primarily 5-year CDs) during the period.  The Bank continued to gather money markets and CDs utilizing promotional activities tied to non-interest bearing checking relationships.  At March 31, 2014, bank-wide average deposit balances approximated $103.5 million per branch.

On a net basis, FHLBNY advances grew by $123.2 million during the quarter ended March 31, 2014.  As a component of total borrowing activities during the March 2014 quarter, the Bank added $208.2 million of new fixed-rate, long-term FHLBNY advances, with a weighted average life approximating 4.0 years and a weighted average cost of 1.49%.  The Bank intends to continue the use of longer-term FHLBNY advances to supplement deposit funding and to help mitigate its interest rate risk profile against stressed rate conditions.  Some residual borrowing activity during the quarter was short-term in nature in order to manage near-term cash flows.

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Capital

While tangible capital grew during the quarter ended March 31, 2014, the Company's consolidated Tier 1 core leverage ratio (tangible common equity) declined during the period as a result of the $252.2 million growth in assets.  Consolidated tangible capital was 9.25% of tangible assets at March 31, 2014, a reduction of 43 basis points from December 31, 2013.

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The Bank's tangible (leverage) capital ratio was 9.22% at March 31, 2014, down from 9.52% at December 31, 2013, also due to asset growth during the March 2014 quarter. The Bank's Total Risk-Based Capital Ratio was 13.13% at March 31, 2014, compared to 13.36% at December 31, 2013.

Reported diluted EPS exceeded the quarterly cash dividend rate per share by 100% during the quarter ended March 31, 2014, equating to a 50% payout ratio. Additions to capital from earnings during the most recent quarterly period enabled tangible book value per share to increase $0.17 sequentially during the most recent quarter, to $10.64 at March 31, 2014.

OUTLOOK FOR THE QUARTER ENDING JUNE 30, 2014

At March 31, 2014, Dime had outstanding loan commitments totaling $117.0 million, all of which are likely to close during the quarter ending June 30, 2014, at an average interest rate approximating 3.81%.  Absent the recognition of significant prepayment income, the average yield on the $200 million of repurchased loans should approximate 3.5%.

Balance sheet growth remains targeted to approximate 8.0% - 10.0% for the year ending December 31, 2014.  This target remains subject to change to reflect market conditions.  Loan prepayments and amortization are currently projected to run in the 15% - 20% range throughout the year.

On the funding side of the balance sheet, deposit funding costs are expected to remain near current historically low levels through the second quarter of 2014.  The Bank has $141.6 million of CDs maturing at an average cost of 1.13% during the quarter ending June 30, 2014.  Offering rates on 12-month term CDs currently approximate 50 basis points.  The Company has $15.0 million in short-term borrowings due to mature during the quarter ending June 30, 2014.  In the coming quarter, management expects to utilize a combination of FHLBNY advances and retail deposits to fund growth.  Advances are anticipated to be a combination of both short-term and longer duration (3 to 5 year fixed terms) to meet various funding strategies.

The Bank anticipates continuing promotional deposit campaigns throughout the second quarter of 2014, the success of which will determine the direction and degree of both deposit and borrowings funding, as well as the overall cost of funds for the June 2014 quarter.

Loan loss provisioning will likely continue to be a function of annualized loan portfolio growth, incurred and anticipated losses, and the overall credit quality of the loan portfolio.

Absent any unforeseen items, non-interest expense is expected to approximate $15.8 million during the June 2014 quarter.  The Company projects that the consolidated effective tax rate will approximate 41.0% in the June 2014 quarter.

ABOUT DIME COMMUNITY BANCSHARES, INC.

The Company (Nasdaq: DCOM) had $4.28 billion in consolidated assets as of March 31, 2014, and is the parent company of the Bank. The Bank was founded in 1864, is headquartered in Brooklyn, New York, and currently has twenty-five branches located throughout Brooklyn, Queens, the Bronx and Nassau County, New York. More information on the Company and Dime can be found on the Dime's Internet website at www.dime.com.

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This News Release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions.

Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of Dime; changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive than the Company anticipates; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates.

Contact: Kenneth Ceonzo

Director of Investor Relations

718-782-6200 extension 8279