DIME BANCORP INC, 10-K, 2000-03-30

DIME BANCORP INC
10-K, 2000-03-30
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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

(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 001-13094

DIME BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 11-3197414
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
589 FIFTH AVENUE, NEW YORK, NEW YORK 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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(212) 326-6170
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE
STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the registrant (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 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. []

The aggregate market value of the shares of registrant's common stock held
by non-affiliates (assuming, solely for purposes of this Form, that all
directors are affiliates) was $1,322,517,641 as of February 29, 2000 (based on
the closing New York Stock Exchange price on such date).

The number of shares of common stock of the registrant outstanding as of
February 29, 2000 was 111,240,660 shares.

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DIME BANCORP, INC.

1999 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

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PAGE
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PART I
Item 1. Business.................................................... 1
Item 2. Properties.................................................. 13
Item 3. Legal Proceedings........................................... 13
Item 4. Submission of Matters to a Vote of Security Holders......... 17

PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters......................................... 17
Item 6. Selected Financial Data..................................... 18
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 19
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 46
Item 8. Financial Statements and Supplementary Data................. 47
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 47

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 47

Item 11. Executive Compensation...................................... 50

Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 68
Item 13. Certain Relationships and Related Transactions.............. 69

PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K......................................................... 70

SIGNATURES.............................................................. 75
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PART I

Certain statements contained in this Annual Report on Form 10-K are
forward-looking and may be identified by the use of words such as "believe,"
"expect," "anticipate," "should," "planned," "estimated," and "potential." These
forward-looking statements are based on the current expectations of the Company
(as defined below). A variety of factors could cause the Company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in such forward-looking statements. The risks and
uncertainties that may affect the operations, performance, development and
results of the Company's business include interest rate movements, competition
from both financial and non-financial institutions, changes in applicable laws
and regulations, the timing and occurrence (or non-occurrence) of transactions
and events that may be subject to circumstances beyond the Company's control and
general economic conditions.

ITEM 1. BUSINESS

GENERAL

Dime Bancorp, Inc. (the "Holding Company" or "Dime Bancorp," and, together
with its direct and indirect subsidiaries, the "Company" or "Dime"), is a
unitary savings and loan holding company incorporated in the State of Delaware
and headquartered in New York, New York. The Holding Company's principal
subsidiary is The Dime Savings Bank of New York, FSB, a federally-chartered
savings bank ("Dime FSB"). The principal subsidiary of Dime FSB is North
American Mortgage Company ("NAMC"), a mortgage banking company that was acquired
in October 1997 (the "NAMC Acquisition"). At December 31, 1999, the Company
operated 127 branches located throughout the greater New York City metropolitan
area and conducted its mortgage banking activities nationwide through locations
in 41 states. At December 31, 1999, the Company had assets of $23.9 billion,
deposits of $14.3 billion and stockholders' equity of $1.5 billion.

During 1999, the Company, in transactions accounted for under the purchase
method, acquired: (i) KeyBank National Association's ("KeyBank") Long Island
banking franchise, which included 28 branches (the "KeyBank Branch
Acquisition"); (ii) Citibank N.A.'s ("Citibank") indirect automobile finance
business (the "Citibank Auto Business Acquisition"); (iii) Lakeview Financial
Corp. ("Lakeview"), the then holding company for Lakeview Savings Bank, which
operated 11 branches in northern New Jersey (the "Lakeview Acquisition"); and
(iv) certain assets and the leases on all of the 15 residential real estate loan
production offices of T&N Mortgage, Inc., which was headquartered in Monroe,
Louisiana. For further information regarding these acquisitions, see Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note 2 of Notes to Consolidated Financial Statements in Item 8,
"Financial Statements and Supplementary Data."

For internal management purposes, the Company has four business segments:
Retail Banking; Commercial Banking; Mortgage Banking; and Investment Portfolio.
Further information regarding these business segments is set forth below and in
Note 24 of Notes to Consolidated Financial Statements in Item 8, "Financial
Statements and Supplementary Data."

RETAIL BANKING

General

The Company's Retail Banking segment, which focuses on individuals,
includes deposit accounts and related services, securities brokerage services,
insurance products, consumer lending activities and mainte-

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nance of a portfolio of residential real estate loans receivable. Products and
services offered by this business segment, most of which are available 24 hours
a day and seven days a week, are delivered through a multi-channel distribution
network, including on-line banking.

Deposits

The Company's total deposits amounted to $14.3 billion at December 31,
1999, of which $13.0 billion were associated with retail customers. (The
remaining balance of total deposits consisted of escrow deposits relating to
serviced mortgage loans and commercial banking-related customer deposits.) At
that date, the Company operated 41 branches in New York City, 50 branches on
Long Island, a total of 8 branches in New York's Westchester and Rockland
Counties and 28 branches in New Jersey. In addition to its branch system, the
Company's deposit gathering network at the end of 1999 included its telephone
banking center and 248 automated teller machines owned by the Company.

The Company attracts deposits by offering a broad selection of deposit
instruments and programs for retail and private banking customers. These include
demand accounts, savings accounts, money market accounts, time deposit accounts,
individual retirement and Keogh accounts and automatic payroll and Social
Security deposit programs. The Company's deposit levels are subject to
fluctuations resulting from numerous factors outside the Company's control,
including general economic conditions, market interest rates and competition
both from other depository institutions and alternative investments. Depositor
behavior is affected by a variety of factors, including risk-related returns on
other available investments, the rates paid by the Company compared to other
institutions and the Company's ability to satisfy customer needs. These factors
may affect the Company's willingness or ability to compete for deposits and,
therefore, the level of its deposits.

Dime FSB is a member of the Bank Insurance Fund ("BIF") of the Federal
Deposit Insurance Corporation ("FDIC"), with approximately 66% of its deposits
insured by the BIF and the remainder insured by the Savings Association
Insurance Fund ("SAIF") of the FDIC, in each case up to applicable limits.

Securities Brokerage Services

Securities brokerage services are provided by the Company through Dime
Securities, Inc., a wholly-owned subsidiary that is a registered broker-dealer.
The services provided by Dime Securities, Inc. primarily consist of the
execution of securities transactions, on an agency basis, solely upon the order
and for the accounts of its customers. In addition, Dime Securities, Inc.
provides standardized and individualized investment and financial planning
advice to individuals and business entities. Products sold by Dime Securities,
Inc., which are not BIF- or SAIF-insured, include: mutual funds; government,
corporate and municipal bonds; equity securities and equity options; annuities;
and unit investment trusts.

Insurance Activities

The Company's insurance agency subsidiaries include The Dime Agency, Inc.,
Dime NJ Agency, Inc. and North American Mortgage Insurance Services. These
subsidiaries currently sell certain tax-deferred annuities and products issued
by various insurance companies, including individual and group life, disability
and accidental death insurance, as well as hazard, mortgage and automobile
insurance.

Consumer Lending

The Company's consumer loans receivable portfolio at December 31, 1999
totaled $2.5 billion and was comprised largely of home equity loans and lines of
credit and automobile loans. This loan portfolio also included manufactured home
loans, loans secured by deposits, boat loans, unsecured and secured personal
loans, property improvement loans, government-guaranteed student loans and
unsecured revolving lines-of-credit and overdraft checking loans. The Company
generates consumer loans through its retail branch system, its NAMC loan
production network, direct mail and general marketing initiatives.

Home equity loans, which represented approximately 60% of the Company's
total consumer loan portfolio at December 31, 1999, are underwritten following
guidelines similar to those for conventional

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residential real estate loans (see "Mortgage Banking -- Residential Real Estate
Loan Production"). The loan-to-value ratio on any home equity loan originated by
the Company during 1999, together with any prior lien, generally did not exceed
90% at the time of origination. Loans made pursuant to home equity lines of
credit have adjustable interest rates that, after an introductory period, are
based generally on a fixed margin over the prime lending rate.

Automobile loans represented approximately 36% of the total consumer loan
portfolio at the end of 1999, up from less than 1% one-year earlier. This
increase reflects the impact of the Citibank Auto Business Acquisition.

Residential Real Estate Loans Receivable Portfolio

At December 31, 1999, the Company maintained a residential real estate
loans receivable portfolio of $8.2 billion, consisting of one-to-four family
first mortgage loans and cooperative apartment loans. During 1999, the Company
continued to manage the level of this loan portfolio consistent with its
strategy to reduce the percentage of such loans to total loans receivable.

COMMERCIAL BANKING

General

The Company's Commercial Banking segment provides both lending and deposit
products and services to business customers. This segment includes commercial
real estate lending and business banking activities.

Commercial Real Estate Lending

At December 31, 1999, the Company's commercial real estate loans receivable
amounted to $3.5 billion, of which approximately $2.2 billion were secured by
properties located in the State of New York. The Company maintains commercial
real estate loan production offices in the greater New York City metropolitan
area, as well as in Florida, Massachusetts, Pennsylvania and Virginia.

The Company's underwriting policies with respect to commercial real estate
loans are based primarily on the loan-to-value ratio of the property and an
assessment as to the adequacy of the underlying project's cash flow and its
coverage of operating expenses and debt service payments. The Company's
underwriting policies generally require an appraisal of the underlying property,
an engineer's report and a "Phase I" environmental assessment. Loan-to-value
ratios at the time of origination are usually not more than 75%.

Business Banking

The Company's business banking activities consist of providing loans
(including lease financing and asset-based lending), deposit products and cash
management and other services to small- and medium-sized businesses. The Company
originates business loans principally to finance seasonal working capital needs,
expansion, renovation and equipment purchases. In general, the ability of the
borrower to generate sufficient cash flows from operations to liquidate the debt
is a critical component of the credit decision. At December 31, 1999, the
Company's business loans receivable amounted to $1.0 billion.

MORTGAGE BANKING

General

The Company's Mortgage Banking segment activities, which are conducted
principally through NAMC, include the production of residential real estate
loans either for the Company's portfolio or for sale into the secondary market
and servicing loans for the Company and others.

Residential Real Estate Loan Production

The Company produces fixed-rate and adjustable-rate residential real estate
loans through a multi-channel, multi-regional network. During 1999, the
Company's residential real estate loan production

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amounted to $22.4 billion, of which approximately 39% was originated through
mortgage brokers, approximately 37% was originated directly by the Company and
approximately 24% was purchased through correspondent lenders.

The Company's residential real estate loan production includes loans: (i)
that meet the standard underwriting policies and purchase limits established by
Federal National Mortgage Association ("FNMA") and Federal Home Loan Mortgage
Corporation ("FHLMC") guidelines ("conforming conventional loans"); (ii) in
amounts in excess of the FNMA and FHLMC purchase limits ("jumbo loans"); (iii)
insured or guaranteed under Federal Housing Administration ("FHA") or Veterans
Administration ("VA") programs; (iv) that conform to programs established by
various state and local authorities; and (v) exclusively for sale to specified
secondary market investors that conform to the requirements of such investors,
which may be more or less stringent than those for conforming conventional
loans.

Underwriting policies and guidelines for residential real estate loans
produced for the Company's portfolio are generally in conformance with those of
FNMA and FHLMC. Such policies and guidelines include requiring an appraisal of
the value of the collateral for the purpose of determining the loan-to-value
ratio (i.e., the ratio that the principal amount of the loan bears to the value
of the collateral securing the loan at the time of origination) and the
collateral's adequacy as security. The collateral's value is the lower of the
purchase price or the appraised value, except for refinance loans, where the
appraised value is used. With respect to residential first mortgage loans having
a loan-to-value ratio in excess of 80% at the date of origination, the Company
generally requires private mortgage insurance underwritten by FNMA- and
FHLMC-approved insurers in accordance with FNMA and FHLMC coverage levels.

When the Company makes residential real estate loans to borrowers whose
creditworthiness does not meet standard FNMA and FHLMC underwriting guidelines
("subprime loans"), it sells the loans, as well as the right to service them,
into the secondary market, without recourse to the Company, and receives a fee
for their origination.

The Company administers a formal process for approving and monitoring, and
conducts annual reviews of, its mortgage brokers and correspondents. Mortgage
broker performance is assessed primarily by monitoring loan credit quality.
Correspondent-purchased loans are contractually required to be underwritten by
the correspondent lenders in accordance with the Company's guidelines and,
unless a correspondent lender has been delegated underwriting authority, all
loans are re-underwritten by the Company prior to purchase. Correspondent
lenders with delegated underwriting status are generally subject to more
stringent financial and operational requirements than those without such status
and have undergone a comprehensive on-site review conducted by the Company.
Mortgage brokers and correspondent lenders demonstrating unacceptable
performance or insufficient loan activity are removed from the Company's
programs.

Secondary Market Activities

During 1999, the Company continued its strategy of selling into the
secondary market substantially all of its fixed-rate residential real estate
loan production. Further, during 1999, the Company opportunistically sold
adjustable-rate residential real estate loans into the secondary market. In
total, $22.5 billion of residential real estate loans held for sale were sold by
the Company into the secondary market during 1999.

Conforming conventional loans produced by the Company for sale into the
secondary market are typically pooled and exchanged for securities backed by
such loans (mortgage-backed securities ("MBS")), which are generally sold to
investment banking firms. The Company may also sell conforming conventional
loans, as whole loans, directly to FNMA or FHLMC or to private investors. Jumbo
loans produced for sale in the secondary market are sold to private investors.
FHA-insured and VA-guaranteed loans produced for sale in the secondary market
are pooled to form Government National Mortgage Association ("GNMA") MBS, issued
by the Company, which are sold to investment banking firms.

In June 1999, NAMC entered into a strategic alliance with FNMA under which
NAMC delivers all of its fixed-rate agency-eligible conforming conventional
residential real estate loan originations to FNMA.

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NAMC utilizes FNMA's automated loan underwriting system as its primary agency
loan underwriting system.

Loan Servicing

At December 31, 1999, the Company's residential real estate loans serviced
for others portfolio (excluding loans being subserviced by the Company)
consisted of approximately 350,000 loans with principal balances totaling $37.0
billion. In return for servicing these loans, the Company earns fees based upon
the outstanding principal balances of the loans. Minimum servicing fees for
substantially all loans serviced under MBS programs are established by the
sponsoring entities. At year-end 1999, the Company was subservicing, for a fee,
approximately 12,000 residential real estate loans with principal balances of
$1.3 billion in connection with sales of loan servicing rights. In addition, at
that date, the Mortgage Banking segment was servicing approximately 87,000
residential real estate loans owned by the Company with principal balances of
approximately $9.7 billion.

Loan servicing consists of collecting principal and interest payments from
borrowers, remitting aggregate principal and interest payments to investors,
making loan-related advances when required, accounting for principal and
interest, collecting funds for payment of loan-related expense such as taxes and
insurance, inspecting the collateral as required, contacting delinquent
borrowers, conducting foreclosures and property dispositions in the event of
unremedied defaults and generally administering loans.

INVESTMENT PORTFOLIO

The Company, pursuant to established policies and guidelines, invests in
certain debt and equity securities and money market investments. These
investments are made in conjunction with the Company's overall liquidity,
interest rate risk and credit risk management processes. In addition, as a
member of the Federal Home Loan Bank of New York ("FHLBNY"), Dime FSB is
required to maintain a specified investment in the capital stock of the FHLBNY
(see "Regulation and Supervision -- Federal Home Loan Bank System").

EMPLOYEES

The Company had 6,928 full-time equivalent employees at December 31, 1999.
Employees of the Company are not represented by any collective bargaining group.
The Company considers its employee relations to be satisfactory.

COMPETITION

The Company experiences substantial competition both in attracting and
retaining deposits and in making loans. Its most direct competition for deposits
historically has come from other thrift institutions and commercial banks doing
business in the greater New York City metropolitan area. The Company also
competes for funds with money market mutual funds, corporate and governmental
debt securities and other investment alternatives. The Company's competition for
loans comes principally from other thrift institutions, commercial banks,
mortgage banking companies, consumer finance companies, insurance companies and
other institutional investors and lenders. A number of institutions with which
the Company competes for deposits and loans have significantly greater assets
and capital than the Company.

REGULATION AND SUPERVISION

General

Dime FSB is a federal savings bank and a member of the FHLBNY and is
subject to the regulations, examinations and reporting requirements of the
Office of Thrift Supervision (the "OTS"), as the primary regulator of federal
savings associations, and of the FDIC, as insurer of Dime FSB's deposits.
Additionally, Dime FSB is subject to certain limited regulation by the Board of
Governors of the Federal Reserve System

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(the "Federal Reserve Board"). As a savings and loan holding company, the
Holding Company is also subject to the regulations, examinations and reporting
requirements of the OTS.

The description of statutory provisions and regulations applicable to
savings associations and savings and loan holding companies set forth below does
not purport to be a complete description of the statutes and regulations
described or of all such statutes and regulations and their effects on Dime FSB
and the Holding Company. The regulatory framework has been established primarily
for the protection of depositors and the financial system generally and is not
intended for the protection of stockholders or other creditors.

Deposit Insurance

The FDIC administers two separate deposit insurance funds: the BIF, of
which Dime FSB is a member, and the SAIF. As of December 31, 1999, approximately
66% of Dime FSB's deposits were BIF-insured and approximately 34% of its
deposits were SAIF-insured. Pursuant to the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), the FDIC established a
risk-based assessment system for insured depository institutions that takes into
account the risks attributable to different categories and concentrations of
assets and liabilities. Under this system, both BIF-insured and SAIF-insured
depository institutions are placed into one of nine confidential assessment risk
categories using a two-step process based first on capital ratios and then on
other factors. Currently, both BIF-insured and SAIF-insured deposit assessment
rates range between $0.00 and $0.27 for each $100 of insured deposits.

Under the Deposit Insurance Funds Act of 1996 (the "Funds Act"),
assessments are imposed on insured depository institutions with respect to both
BIF- and SAIF-assessable deposits in order to pay for a portion of the debt
service of certain bonds issued by the Federal Financing Corporation (the "FICO
Bonds"). Pursuant to the Funds Act, between January 1, 1997 and December 31,
1999, BIF-assessable deposits were assessed at a rate equal to 20% of the rate
applied to SAIF-assessable deposits for purposes of the FICO Bonds debt service
assessment. Effective January 1, 2000, there is no difference between the
assessment rates on BIF- and SAIF-assessable deposits. The FICO assessment rate
is adjusted quarterly to reflect changes in the assessment bases of the BIF and
SAIF. The average annual assessment rate during 1999 was $0.01185 for each $100
of BIF-assessable deposits and $0.05925 for each $100 of SAIF-assessable
deposits.

Capital Requirements

Under federal statute and OTS regulations, savings associations are
required to comply with three separate capital adequacy standards. These
institutions are required to have core capital equal to 3% of adjusted total
assets, tangible capital equal to at least 1.5% of adjusted total assets and
total risk-based capital equal to at least 8% of total risk-weighted assets. The
OTS is also authorized to establish individual minimum capital requirements for
a savings association consistent with these capital standards. The OTS has not
established any such individual minimum capital requirements for Dime FSB. There
are potentially severe consequences for failing to meet these regulatory capital
requirements.

Core capital includes common stockholders' equity (including common stock,
common stock surplus and retained earnings, but excluding any unrealized gains
or losses, net of related taxes, on certain securities available for sale),
non-cumulative perpetual preferred stock and any related surplus and minority
interests in the equity accounts of fully consolidated subsidiaries. Intangible
assets, other than servicing assets valued in accordance with applicable
regulations and purchased credit card relationships ("PCCRS"), generally must be
deducted from core capital. Servicing assets and PCCRS may represent in the
aggregate up to 100% of core capital, although the aggregate amount of
non-mortgage servicing assets and PCCRS may not exceed 25% of core capital.
Servicing assets and PCCRS that are includable in capital are each subject to a
limitation equal to the lesser of 90% of fair value or 100% of the remaining
unamortized book value. In addition, certain deferred tax assets and investments
in and loans to non-includable subsidiaries must be deducted from core capital.

Tangible capital means core capital less any intangible assets (except for
mortgage servicing assets includable in core capital) and investments in
subsidiaries that are not "includable subsidiaries" (except as permitted by
regulation).

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For purposes of the risk-based capital requirement, total risk-based
capital means core capital plus supplementary capital, so long as the amount of
supplementary capital that is used to satisfy the requirement does not exceed
the amount of core capital. Supplementary capital includes, among other things,
subordinated debt issued pursuant to OTS regulations, general valuation loan and
lease loss allowances up to a maximum of 1.25% of risk-weighted assets and up to
45% of unrealized gains on certain securities available for sale. Risk-weighted
assets are determined by multiplying certain categories of the savings
association's assets, including off-balance sheet equivalents, by an assigned
risk weight of 0% to 100% based on the credit risk associated with those assets
as specified in OTS regulations. The OTS adopted a rule, effective January 1,
1994, incorporating an interest-rate risk component into its existing risk-based
capital requirement. In March 1995, the OTS extended a waiver of the interest
rate risk capital deduction until it issued a Thrift Bulletin establishing an
appeals process and notified thrift institutions of the effective date. Although
the OTS issued the Thrift Bulletin on August 21, 1995, it also announced that
the automatic interest rate risk capital deduction would not be implemented
until the OTS issued a notice otherwise.

Pursuant to FDICIA, the OTS adopted prompt corrective action ("PCA")
regulations that established five capital categories for savings associations
("well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized") and require
certain mandatory actions and authorize other discretionary actions to be taken
by the OTS with respect to institutions in the three undercapitalized
categories, with the nature and extent of such actions dependent primarily on
the category in which the institution is placed. The OTS has specified by
regulation the relevant capital level for each category. Under OTS regulations,
an institution is considered well capitalized if its ratio of total risk-based
capital to risk-weighted assets is 10% or more, its ratio of core capital to
risk-weighted assets is 6% or more, its ratio of core capital to adjusted total
assets is 5% or greater, and it is not subject to any order or directive by the
OTS to meet a specific capital level.

In addition, an institution's primary federal bank regulatory agency is
authorized to downgrade the institution's capital category to the next lower
category upon a determination that the institution is in an unsafe or unsound
condition or is engaged in an unsafe or unsound practice. An unsafe or unsound
practice can include receipt by the institution of a less than satisfactory
rating on its most recent examination with respect to its asset quality,
management, earnings or liquidity.

For information concerning Dime FSB's regulatory capital status, see Note
15 of Notes to Consolidated Financial Statements in Item 8, "Financial
Statements and Supplementary Data."

The Federal Deposit Insurance Act (the "FDI Act") generally prohibits a
depository institution from making any capital distribution (including payment
of a dividend) or paying any management fee to its holding company if the
depository institution would be "undercapitalized." "Undercapitalized"
depository institutions are subject to limitations on, among other things, asset
growth, acquisitions, branching, new business lines, acceptance of brokered
deposits and borrowings from the Federal Reserve System and are required to
submit a capital restoration plan. The federal bank regulatory agencies may not
accept a capital plan without determining, among other things, that the plan is
based on realistic assumptions and is likely to succeed in restoring the
depository institution's capital. In addition, for a capital restoration plan to
be acceptable, the depository institution's holding company, if any, must
guarantee that the institution will comply with such capital restoration plan.
If the depository institution fails to submit an acceptable plan, it is treated
as if it is "significantly undercapitalized." "Significantly undercapitalized"
depository institutions may be subject to a number of requirements and
restrictions, including orders to sell sufficient voting stock to become
"adequately capitalized," requirements to reduce total assets and cessation of
receipt of deposits from correspondent banks. "Critically undercapitalized"
institutions are subject to the appointment of a receiver or conservator.

Depositor Preference

The FDI Act provides that, in the event of the "liquidation or other
resolution" of an insured depository institution, the claims of depositors of
such institution (including claims by the FDIC as subrogee of insured
depositors) and certain claims for administrative expenses of the FDIC, as a
receiver, would be afforded a

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priority over other general unsecured claims against such an institution. If an
insured depository institution fails, insured and uninsured depositors, along
with the FDIC, will be placed ahead of unsecured, non-deposit creditors,
including a holding company for the institution (such as the Holding Company),
in order of priority of payment.

Loans-to-One-Borrower Limitations and Loans to Insiders

Savings associations are subject to loans-to-one-borrower limitations under
federal law and OTS regulations. At December 31, 1999, Dime FSB's
loans-to-one-borrower limitation was approximately $216 million.

Savings associations are also subject to Sections 22(g) and 22(h) of the
Federal Reserve Act. These provisions, among other things, limit a savings
institution's extension of credit to the principal stockholders, directors and
executive officers of the savings institution and its affiliates and to the
related interests of these persons.

Liquid Assets

OTS regulations require a savings institution to maintain, for each
calendar quarter, an average daily balance of liquid assets (as defined) equal
to at least 4% of either (i) its liquidity base (the institution's net
withdrawable accounts plus short-term borrowings) at the end of the preceding
calendar quarter or (ii) the average daily balance of its liquidity base during
the preceding calendar quarter. Monetary penalties may be imposed for failure to
meet liquidity ratio requirements.

Restrictions on Capital Distributions

OTS regulations limit the ability of savings associations to make capital
distributions. Capital distributions include: (i) cash dividends; (ii) payments
to repurchase, redeem, retire or otherwise acquire an institution's shares or
debt instruments included in total capital and any extension of credit to
finance an affiliate's acquisition of the savings association's shares or
interests; (iii) payments to stockholders of another institution in a cash-out
merger, or payments of cash or other property to the savings association's
owners or affiliates made in connection with a corporate restructuring; (iv)
other distributions charged against capital if the savings association would not
be "well capitalized" following the distribution; and (v) any other transaction
that the OTS determines to entail a payout of capital.

Under current OTS regulations, which became effective April 1, 1999, a
savings association is required to file an application prior to making a capital
distribution if: (i) it is not eligible for expedited treatment under the OTS
application processing rules; (ii) the total amount of all capital
distributions, including the proposed capital distribution, for the applicable
calendar year would exceed an amount equal to the savings association's net
income for that year to date plus the savings association's retained net income
for the preceding two years; (iii) the savings association would not be at least
adequately capitalized under the PCA regulations of the OTS following the
distribution; or (iv) the capital distribution would violate a prohibition
contained in any statute, regulation or agreement with the OTS (or with the
FDIC) or a condition imposed in an OTS-approved application or notice.

A savings association that is not required to file an application must file
a notice with the OTS at least 30 days prior to a capital distribution if: (i)
it would not be well capitalized under the PCA regulations of the OTS following
the distribution; (ii) the proposed capital distribution would reduce the amount
of or retire any part of the savings association's common or preferred stock or
retire any part of debt instruments such as notes or debentures included in
capital, other than regular payments required under a debt instrument approved
by the OTS; or (iii) it is a subsidiary of a savings and loan holding company.

The OTS may disapprove a notice or deny an application if the proposed
capital distribution would: (i) make the association undercapitalized,
significantly undercapitalized, or critically undercapitalized under the PCA
regulations of the OTS; (ii) raise safety or soundness concerns; or (iii)
violate a prohibition

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contained in any statute, regulation or agreement with the OTS (or with the
FDIC), or a condition imposed in an OTS-approved application or notice.

The Holding Company's ability to pay dividends on its common stock ("Common
Stock") is limited by restrictions imposed by Delaware law. In general,
dividends may be paid out of the Holding Company's surplus, as defined by
Delaware law, or in the absence of such surplus, out of its net profits for the
current and/or immediately preceding fiscal year.

Transactions with Affiliates

Under federal law and regulation, transactions between a savings
association and its "affiliates," which term includes its holding company and
other companies controlled by its holding company, are subject to quantitative
and qualitative restrictions. Savings associations are restricted in their
ability to engage in certain types of transactions with their affiliates. These
"covered transactions" include: (i) purchasing or investing in securities issued
by an affiliate; (ii) lending or extending credit to, or guaranteeing credit of,
an affiliate; (iii) purchasing assets from an affiliate; and (iv) accepting
securities issued by an affiliate as collateral for a loan or extension of
credit. Covered transactions are permitted between a savings association and a
single affiliate up to 10% of the capital stock and surplus of the association,
and between a savings association and all of its affiliates up to 20% of the
capital stock and surplus of the institution. The purchase of low-quality assets
by a savings association from an affiliate is not permitted. Each loan or
extension of credit to an affiliate by a savings association must be secured by
collateral with a market value ranging from 100% to 130% (depending on the type
of collateral) of the amount of credit extended. Notwithstanding the foregoing,
a savings association is not permitted to make a loan or extension of credit to
any affiliate unless the affiliate is engaged only in activities that the
Federal Reserve Board has determined to be permissible for bank holding
companies. Savings associations also are prohibited from purchasing or investing
in securities issued by an affiliate, other than shares of a subsidiary. Covered
transactions between a savings association and an affiliate, and certain other
transactions with or benefiting an affiliate, must be on terms and conditions at
least as favorable to the institution as those prevailing at the time for
comparable transactions with non-affiliated companies. This arms-length
requirement applies to all covered transactions, as well as to: (i) the sale of
securities or other assets to an affiliate; (ii) the payment of money or the
furnishing of services to an affiliate; (iii) any transaction in which an
affiliate acts as agent or broker or receives a fee for its services to the
savings association or to any other person; or (iv) any transaction or series of
transactions with a third party if any affiliate has a financial interest in the
third party or is a participant in the transaction or series of transactions.

Community Reinvestment Act ("CRA")

Under the CRA and the implementing OTS regulations, a savings association
has a continuing and affirmative obligation to help meet the credit needs of its
local communities, including low- and moderate-income neighborhoods, consistent
with the safe and sound operation of the institution.

As part of its CRA activities, Dime FSB originates loans for affordable
housing (which are generally loans to low- or moderate-income borrowers). In
order to generate these loans, Dime FSB's specifically designated staff uses a
variety of outreach initiatives, including participation in seminars and housing
fairs, such as those targeted to first-time home buyers, loan application
materials in a variety of foreign languages and cooperative ventures with
not-for-profit groups. Dime FSB's CRA lending activities also include loans in
low- or moderate-income neighborhoods, community development financing for new
construction and rehabilitation of affordable multifamily housing and targeted
commercial projects. Typically, these project loans are made in partnership with
government subsidy programs.

The OTS assigns a CRA rating based upon a Lending Test, Investment Test and
Service Test keyed to, respectively, the number of loans, the number of
investments and the level of availability of retail banking services in a
savings association's assessment area. The Lending Test is the primary component
of the assigned composite rating. An "outstanding" rating on the Lending Test
automatically results in at least a "satisfactory" rating on the composite, but
an institution cannot receive a "satisfactory" or better rating on the

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composite if it does not receive at least a "low satisfactory" rating on the
Lending Test. Alternatively, a savings association may elect to be assessed by
complying with a strategic plan approved by the OTS.

Following each of the five most recent CRA examinations of Dime FSB by the
OTS, the most recent of which covered the period August 1997 through September
1999, Dime FSB received an "outstanding" CRA rating, which is the highest rating
that an institution may receive.

Savings Association Investment Powers

Federal savings associations are subject to comprehensive regulation
governing their investments and activities. Among other things, a federal
savings association may invest up to 3% of its assets in service corporations,
an unlimited percentage of its assets in operating subsidiaries (which may only
engage in activities permissible for the association itself) and, under certain
conditions, in finance subsidiaries. Other than investments in service
corporations, operating subsidiaries, finance subsidiaries, stock of government-
sponsored agencies such as FHLMC and FNMA and certain "pass-through investments"
in entities engaging only in activities that a federal savings association may
conduct directly, federal savings associations generally are not permitted to
make equity investments. A service corporation in which a federal savings
association may invest is permitted to engage in activities reasonably related
to the activities of a federal savings association as the OTS may approve on a
case-by-case basis and certain activities pre-approved by the OTS.

Under federal law, a savings association may not acquire or retain,
directly or through a subsidiary, any corporate debt securities that, when
acquired, were not rated in one of the four highest rating categories by at
least one nationally recognized rating agency, unless such activity is done
through a separately capitalized affiliate (other than a subsidiary or an
insured depository institution).

Federal law and regulations empower Dime FSB to exercise any authority to
make investments or engage in activities that Dime FSB was authorized to
exercise or engage in under New York law in effect at the time it converted to a
federal mutual charter, whether or not Dime FSB had utilized such authority as a
state-chartered mutual savings bank. These so-called "grandfathered" powers are
in addition to the powers Dime FSB possesses as a federal savings bank. Among
these grandfathered powers is the authority to make "leeway" investments. Under
this authority, Dime FSB, subject to certain limitations, may make equity and
other investments that do not qualify under any other provision of the
grandfathered powers, so long as no one such investment exceeds 1% of Dime FSB's
assets and the total of all such investments does not exceed 5% of its assets.
However, certain specific types of investments are prohibited under this
provision, including the acquisition of common stock in a commercial bank or
life insurance company.

The exercise of these grandfathered powers, or any other activity, is
subject to the authority of the FDIC to issue regulations or orders it deems
necessary to prevent actions or practices that pose a serious threat to the BIF
or the SAIF. The FDIC has authority, upon making such determination, to prohibit
a savings association from engaging in that activity.

Acquisition of Control of Savings Associations

The Home Owners Loan Act ("HOLA") prohibits a savings and loan holding
company, directly or indirectly, from: (i) acquiring control of a savings
association or another savings and loan holding company, without prior OTS
approval; (ii) generally acquiring more than 5% of the voting shares of a
savings and loan holding company or a savings association that is not a
controlled subsidiary; or (iii) acquiring control of an "uninsured institution,"
as defined in the HOLA. No director or officer of a savings and loan holding
company or individual owning, controlling or holding power to vote more than 25%
of the holding company's voting shares may: (i) hold, solicit or exercise
proxies in respect of any voting rights in a mutual savings association; or (ii)
except with the prior approval of the OTS, acquire control of any savings
association that is not a subsidiary of such holding company.

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Federal Home Loan Bank ("FHLB") System

Dime FSB is a member of the FHLB system, which consists of 12 regional
FHLBs. The FHLB system provides a central credit facility primarily for member
institutions. Members are required to hold shares of the capital stock of the
regional FHLB in which they are a member in an amount at least equal to the
greater of: (i) 1% of its aggregate outstanding principal amount of its
residential mortgage loans, home purchase contracts and similar obligations at
the beginning of each calendar year; (ii) 0.3% of its total assets; or (iii) 5%
of its FHLB advances or borrowings.

Federal Reserve System

Dime FSB is subject to various regulations promulgated by the Federal
Reserve Board, including, but not limited to, Regulation B (Equal Credit
Opportunity Act), Regulation D (Federal Reserve Act), Regulation E (Electronic
Fund Transfers Act), Regulation Z (Truth in Lending Act), Regulation CC
(Expedited Funds Availability Act) and Regulation DD (Truth in Savings Act).

FHLB system members are authorized to borrow from the Federal Reserve
"discount window," but Federal Reserve Board regulations require institutions to
exhaust all FHLB sources before borrowing from a Federal Reserve Bank.

Federal Securities Laws

The Holding Company is subject to the periodic reporting, proxy
solicitation, tender offer, insider trading and other requirements and
restrictions under the Securities Exchange Act of 1934.

Recent Legislation

On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act of 1999 (the "GLB Act"). The GLB Act significantly
reforms various aspects of the financial services industry.

The GLB Act contains provisions that permit affiliations among commercial
banks, insurance companies, securities firms and other financial service
providers by revising and expanding the Bank Holding Company Act of 1956 (the
"BHC Act") to permit a holding company to engage in a full range of financial
activities as a "financial holding company." "Financial activities" is broadly
defined to include not only banking, insurance and securities activities, but
also merchant banking and additional activities that the Federal Reserve Board,
in consultation with the Secretary of the Treasury, determines to be financial
in nature, incidental to such financial activities or complementary activities
that do not pose a substantial risk to the safety and soundness of depository
institutions or the financial system generally.

The GLB Act provides that no company may acquire control of an insured
savings association after May 4, 1999, unless that company engages, and
continues to engage, only in the financial activities permissible for either a
multiple savings and loan holding company or a financial holding company.
However, any company that was a unitary savings and loan holding company on May
4, 1999 (or becomes a unitary savings and loan holding company pursuant to an
application pending on that date) may continue to operate under present law as
long as the company continues to control only one savings institution, excluding
supervisory acquisitions, and each controlled institution meets the qualified
thrift lender test. The GLB Act further requires that a grandfathered unitary
savings and loan holding company must continue to control at least one savings
association, or a successor institution, that it controlled on May 4, 1999. The
Holding Company is a grandfathered unitary savings and loan holding company.

The GLB Act also permits national banks to engage in expanded activities
through the formation of financial subsidiaries, which may engage in any
activity authorized for national banks directly or any financial activity
permitted under the new sections of the BHC Act or permitted by regulation,
except for insurance underwriting, real estate investment or development, or
merchant banking.

The GLB Act also contains a number of other provisions that will affect the
operations of all financial institutions, such as provisions relating to the
financial privacy of consumers and provisions authorizing federal

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banking regulators to adopt rules that will limit the ability of banks and other
financial entities to disclose non-public information about consumers to
non-affiliated entities. These limitations are expected to require more
disclosure to consumers and, in some circumstances, to require consent by the
consumer before information is allowed to be provided to a third party.

The GLB Act also makes significant changes to the FHLB system, including
broadening the purposes for which FHLB advances may be used, eliminating the
requirement that federal savings associations be FHLB members and changing the
method of calculating the Resolution Funding Corporation (the "RFC") obligations
payable by the FHLBs. Previously, the aggregate amount of the annual RFC
obligation paid by all FHLBs was $300 million. The GLB Act imposes an annual
obligation equal to 20% of the net earnings of the FHLBs.

The Company is currently unable to predict the effect, if any, that the GLB
Act will have on its financial condition and results of operations.

Legislative and Regulatory Proposals

The operations of a savings association and a savings and loan holding
company are affected by the economic, fiscal and monetary policies of the United
States and its agencies and regulatory authorities, particularly the Federal
Reserve Board. The fiscal and economic policies of various governmental entities
and the monetary policies of the Federal Reserve Board have a direct effect on
the Company's business operations and the availability, growth and distribution
of the Company's investments and deposits.

In addition, proposals to change the laws and regulations governing the
operations and taxation of savings associations and other financial institutions
and companies that control such institutions are frequently raised in Congress
and before the OTS and other bank regulatory authorities. The likelihood of any
major changes in the future and the effect such changes might have on the
Company are impossible to determine.

TAXATION

The Holding Company files consolidated federal income tax returns with its
eligible 80%-or-greater-owned subsidiaries on a calendar year basis. The maximum
corporate federal income tax rate applicable to the Holding Company and its
subsidiaries currently is 35%, subject to the 20% alternative minimum tax
applicable to corporations, as discussed below.

The 20% alternative minimum tax applies generally to taxable income, with
certain adjustments, plus items of tax preference ("AMTI") and is imposed to the
extent that the alternative minimum tax exceeds the regular income tax for the
taxable year. The amount of AMTI that can be offset by net operating loss
("NOL") carryforwards is limited to 90% of AMTI. Therefore, for taxable years in
which available NOL carryforwards completely offset taxable income, the Holding
Company (and its subsidiaries) would be subject to an effective minimum federal
tax rate of 2% of AMTI (as determined before offset by NOL carryforwards). Any
alternative minimum tax paid by the Company would be available as a carryforward
tax credit, which, subject to certain limitations, could be used to reduce its
otherwise determined regular federal tax liability.

For federal income tax purposes, the deduction available to Dime FSB for
bad debts is equal to its actual loss experience. The use of reserves for bad
debts is no longer available. Generally, federal bad debt reserve balances in
existence on December 31, 1987 will be subject to recapture upon distribution of
such reserves to shareholders. For New York State and New York City tax
purposes, thrift institutions continue to use the reserve method of tax
accounting for bad debts and determine a deduction for bad debts in a manner
similar to prior law, including an alternative deduction equal to 32% of the
thrift's taxable income as specially determined for this law.

New York State and New York City each imposes an annual franchise tax on
banking corporations, based on net income allocable to New York State or New
York City, respectively, at a rate of 9%. If, however, the application of an
alternative minimum tax (based on taxable assets allocated to New York,
"alternative" net income, or a flat minimum fee) results in a greater tax, an
alternative minimum tax will be imposed. In

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addition, New York State imposes a tax surcharge equal to 17% of the New York
State franchise tax allocable to business activities carried on in the
Metropolitan Commuter Transportation District. NOLs cannot be carried back or
forward for New York State or New York City tax purposes. These taxes apply to
the Holding Company, Dime FSB and certain of Dime FSB's subsidiaries. Certain
subsidiaries of a banking corporation may be subject to a general business
corporation tax in lieu of the tax on banking corporations. The rules regarding
the determination of income allocated to New York and alternative minimum taxes
differ for these subsidiaries.

The Holding Company and certain of its subsidiaries are also subject to
state and local taxation in states other than New York. Most states provide a
statutory apportionment methodology that determines the allocable income subject
to tax in those states. In certain cases, the income and activities of the
affiliated group are used to determine the tax liability of the entity doing
business in that state. Further, the ability to utilize NOL carryovers varies by
state. New Jersey imposes a Savings Institution Tax based on net income
attributed to New Jersey on the basis of separate accounting at a rate of 3% and
NOLs cannot be carried back or forward. In addition, the Holding Company is
subject to an annual franchise tax imposed by Delaware, its state of
incorporation. This franchise tax is the higher of an amount determined by
reference to authorized shares or assumed capital (asset size), but cannot
exceed $150,000.

For additional information regarding income taxes of the Company, see Note
20 of Notes to Consolidated Financial Statements in Item 8, "Financial
Statements and Supplementary Data."

ITEM 2. PROPERTIES

The Company leases its principal executive offices in New York City and its
administrative headquarters located in Uniondale, New York. The Company also
leases the executive offices for its mortgage banking operations in Tampa,
Florida and owns both its residential real estate loan production headquarters
located in Santa Rosa, California and its residential real estate and consumer
loan servicing operations center in Albion, New York.

At December 31, 1999, Dime FSB operated 127 full-service branches in the
greater New York City metropolitan area, of which 57 were owned and 70 were
leased. At that date, the Company leased approximately 260 residential real
estate loan production facilities in 41 states.

For further information regarding the Company's properties and lease
obligations, see Notes 6 and 23 of Notes to Consolidated Financial Statements in
Item 8, "Financial Statements and Supplementary Data."

ITEM 3. LEGAL PROCEEDINGS

On January 13, 1995, Anchor Savings Bank FSB ("Anchor FSB") filed suit in
the United States Court of Federal Claims against the United States for breach
of contract and taking of property without compensation in contravention of the
Fifth Amendment to the United States Constitution. Anchor FSB's lawsuit was
assumed by Dime FSB upon consummation of the merger of Anchor Bancorp, Inc.
("Anchor Bancorp"), the holding company for Anchor FSB, and Anchor FSB with and
into the Holding Company and Dime FSB, respectively, on January 13, 1995 (the
"Anchor Merger"). The action arose because the passage of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") and the
regulations adopted by the OTS pursuant to FIRREA deprived Anchor FSB of the
ability to include supervisory goodwill and certain other assets for purposes of
computing its regulatory capital as the Federal Savings and Loan Insurance
Corporation ("FSLIC") had agreed. The direct effect was to cause Anchor FSB to
go from an institution that substantially exceeded its regulatory capital
requirements to one that was critically undercapitalized upon the effectiveness
of the FIRREA-mandated capital requirements.

From 1982 to 1985, Anchor FSB had acquired eight FSLIC-insured institutions
that were in danger of failing and causing a loss to the FSLIC. Four
institutions were acquired with some financial assistance from the FSLIC and
four were unassisted "supervisory" cases. In acquiring the institutions, Anchor
FSB assumed liabilities determined to exceed the assets it acquired by over $650
million at the dates of the respective acquisitions. The difference between the
fair values of the assets acquired and the liabilities assumed in the

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transactions were recorded on Anchor FSB's books as goodwill. At the time of
these acquisitions, the FSLIC had agreed that this supervisory goodwill was to
be amortized over periods of up to 40 years. Without that agreement, Anchor FSB
would not have made the acquisitions. When FIRREA was enacted, Anchor FSB still
had over $500 million of regulatory capital as a result of its supervisory
acquisitions, which included regulatory capital from supervisory goodwill and
other capital enhancements used by the FSLIC in connection with the transactions
affected by FIRREA. At the same time, the supervisory goodwill had in excess of
20 years remaining to be amortized under the agreements with the FSLIC. In
addition, until the formation of Anchor Bancorp in 1991, the FIRREA-mandated
capital requirements impacted $157 million associated with preferred stock
issued to the FSLIC as a result of one of the acquisitions. FIRREA further
required the remaining supervisory goodwill to be eliminated by December 31,
1994 for regulatory capital purposes. The elimination of the supervisory
goodwill resulted in severe limitations on Anchor FSB's activities and required
the disposition of valuable assets under liquidation-like circumstances, as a
result of which Anchor FSB was severely damaged. The complaint asks that the
Government make Anchor FSB whole for the effects of the loss, which are
estimated to exceed substantially the amount of its capital impacted by FIRREA.

There are approximately 120 cases involving similar issues still pending in
the United States Court of Federal Claims, which has entered summary judgment
for the plaintiffs in a small number of the cases as to liability, but not
damages. The first three of those cases, referred to as the Winstar cases, were
appealed to the United States Supreme Court, which, on July 1, 1996, affirmed
the decision that the Government was liable for breach of contract in those
cases.

All of the Winstar-related cases, including Dime FSB's lawsuit were
assigned to the Chief Judge of the Court of Federal Claims who issued an Omnibus
Case Management Order ("OCMO") that controls the proceedings in all these cases.
The OCMO imposes procedures and schedules different from most cases in the Court
of Federal Claims. Under the OCMO, Dime FSB, in early 1997, moved for partial
summary judgment as to the existence of a contract and the inconsistency of the
Government's actions with that contract in each of the related transactions. The
Government has disputed the existence of a contract in each case, cross-moved
for summary judgment and submitted a filing acknowledging that it is not aware
of any affirmative defenses. Initial briefing on the Dime FSB motions was
completed on August 1, 1997. In August 1997, the Court held a hearing on summary
judgment motions in four other cases. As part of that hearing, the Court heard
argument on eleven issues that the plaintiffs contend are common to many of the
pending cases, including Dime FSB's case. The Court issued its order on December
22, 1997, ruling in favor of the plaintiffs on all eleven "common" issues. The
Court's order directed the Government to submit a "show cause" filing by
February 20, 1998 asserting why judgment for the plaintiff should not be entered
on each of the common issues with respect to each pending summary judgment
motion. The Government then submitted a filing in response to the "show cause"
order, but asserted that it might need further discovery as to certain issues.
At a status conference on March 11, 1998, the Court directed each of the
plaintiffs to submit a proposed form of order for entry of judgment as to
liability on the Winstar contract issues and an accompanying brief by March 31,
1998 and directed the Government to respond by April 30, 1998 with a filing
asserting any basis for not entering the order proposed by the plaintiff. On
March 31, 1998, Dime FSB, as directed by the Court, submitted a proposed order
imposing liability on the Government as to each of Dime FSB's claims. On April
30, 1998, the Government served its opposition to the entry of the order. Final
submissions were made on May 15, 1998 by Dime FSB and May 22, 1998 by the
Government. In September 1999, the Government filed supplemental papers in
support of its pending summary judgment motion. Dime FSB responded to such
filings in early November 1999, at which time it again requested entry of
summary judgment on liability in its favor. No date has been set for argument on
Dime FSB's request to enter judgment. It is not possible to predict whether the
Court will grant any of Dime FSB's motions for partial summary judgment or, if
so, when it will schedule a trial on damages and any remaining liability issues.
As evidenced by their discussion, this case and all similar cases have been
subject to significant delays.

Commencing in April 1998, the oldest 30 of the pending cases (after
excluding certain specific cases) that elected to proceed were allowed to
commence full discovery as to liability and damages in their cases. The second
30 cases commenced discovery in 1999. This pattern will continue for all
remaining cases. Cases will not be assigned to trial judges until after the fact
discovery is completed. Dime FSB is among the first 30

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plaintiffs and commenced full case-specific discovery on April 1, 1998.
Case-specific fact discovery in Dime FSB's case ended on July 31, 1999, and
expert discovery will continue until the spring of 2000. On October 29, 1999,
Dime FSB filed its experts reports relating to its damage claims with the
Government. The Government's expert reports were filed on March 16, 2000.

There have been four court decisions determining damages in the
Winstar-related cases. A decision in the first of these cases was handed down on
April 9, 1999, and it ordered the Government to pay $909 million in restitution
and non-overlapping reliance damages to the plaintiff, Glendale Federal Bank,
FSB ("Glendale Federal"). A second decision was issued on April 16, 1999 in the
California Federal Bank ("California Federal") case, and the Government was
ordered to pay damages of $33 million on a cost of replacement capital theory. A
third decision was handed down in the La Salle Talman case on September 29,
1999. The Government, in that case, was ordered to pay approximately $5 million
under the reliance theory. In the Landmark Land Company, Inc. decision, the
Government, on March 5, 2000, was ordered to pay approximately $39 million in
restitution damages to the plaintiff and the FDIC. The four courts did not enter
judgment for lost profits (otherwise known as expectancy damages). The
determinations of damages by the Court of Federal Claims in the Glendale
Federal, California Federal and La Salle Talman cases have been appealed. It is
impossible, therefore, to predict the measure of damages that will be upheld in
cases in which liability is found.

During the summer of 1998, there were settlements in a total of four of the
Winstar-related cases in which the Government agreed to make payments to the
plaintiffs. In addition, there also was a settlement in a pending, small case in
September 1999. Dime FSB believes that the circumstances of the five settled
cases were materially different from Dime FSB's case, and Dime FSB does not
believe that these settlements will affect the final outcome of its case. The
Company is unaware of any other pending settlements in this litigation.

The Company continues to believe that its claim is meritorious, that it is
one of the more significant cases before the Court, and that it is entitled to
damages, which, as noted, are estimated to exceed substantially its regulatory
capital impacted by FIRREA. The Company also believes that it is entitled to
damages under each of the primary damage theories considered by the courts in
the Glendale Federal, California Federal and La Salle Talman cases so far
decided.

On March 5, 2000, North Fork announced its intention to make a hostile bid
to acquire all of the outstanding Common Stock and to terminate the Merger. In
connection with that hostile bid, Fleet Boston Corporation ("Fleet Boston")
announced that it had agreed, among other things, to invest an aggregate of $250
million in exchange for preferred stock of North Fork and rights to purchase
North Fork's common stock.

On March 6, 2000, North Fork filed a lawsuit in the Delaware Court of
Chancery against the Holding Company, members of the Holding Company's Board of
Directors (the "Board") and Hudson, challenging a number of the provisions in
the Merger Agreement and alleging, among other things, breaches of fiduciary
duties by the Board. The complaint seeks, among other things, an order
invalidating certain provisions of the Merger Agreement, including: (i) the
Holding Company's agreement not to engage in any discussions with, or provide
confidential information to, any person making an offer to merge with or acquire
the Holding Company, until the completion of the Merger; (ii) the Board's
agreement to recommend that the Holding Company's stockholders ("Dime
Stockholders") adopt the Merger Agreement; and (iii) the Holding Company's
agreement not to terminate the Merger Agreement prior to June 30, 2000 if Dime
Stockholders fail to adopt its terms.

On March 9, 2000, North Fork amended its complaint to include allegations
of breach of fiduciary duties by the Board for compelling a premature
stockholder vote on the Merger Agreement and of false and misleading statements
in the Holding Company's proxy statement/prospectus supplement dated March 7,
2000. After the Holding Company postponed its special stockholders meeting on
the Merger Agreement from March 15, 2000 to March 24, 2000, North Fork withdrew
its additional motion for a temporary restraining order to enjoin the March 15th
meeting, but reserved its right to proceed in the future.

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On March 17, 2000, North Fork moved for an expedited hearing and partial
summary judgment with respect to its challenges to the provisions of the Merger
Agreement. The Holding Company intends to vigorously oppose these motions.

The Holding Company is the subject of at least 14 putative class action
lawsuits filed on or after March 6, 2000 by Dime Stockholders: Brecher v. Toal,
et. al., Miller v. Toal, et. al., Weiss v. Toal, et. al., Susser v. Toal, et.
al., Lifshitz v. Toal, et. al., Pill v. Toal, et. al., Milite v. Toal, et. al.,
Steiner v. Toal, et. al., Shiry v. Toal, et. al., Lewis v. Toal, et. al., and
Coleman v. Toal, et. al., each filed in the Delaware Court of Chancery on March
6, 2000; Great Neck Capital Appreciation Partnership v. Dime Bancorp, Inc.,
filed in the Delaware Court of Chancery on March 7, 2000; Silverberg v. Dime
Bancorp, Inc., filed in the Supreme Court of the State of New York, County of
Queens on March 9, 2000; and Graifman v. Koons, et. al., filed in the Supreme
Court of the State of New York, County of New York, on March 15, 2000. Each of
these purported class action lawsuits alleges, among other things, breaches of
fiduciary duties by the Board and challenges the stock option granted by the
Holding Company to Hudson in connection with the Merger Agreement, purported
benefits to the Holding Company's directors and officers that will result from
the Merger, and the rejection by the Board of North Fork's exchange offer
regarding the Common Stock (the "Exchange Offer"), as further described in Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Recent Developments."

On March 10, 2000, the Dime Stockholder plaintiffs in some of the putative
class action lawsuits filed a motion for partial summary judgment seeking a
determination invalidating the same provisions of the Merger Agreement that were
the subject of North Fork's complaint. The Holding Company intends to vigorously
oppose these motions.

On March 10, 2000, the Holding Company filed suit in the Supreme Court of
the State of New York, County of New York, against North Fork and Fleet Boston.
The complaint alleges violations of New York's antitrust laws, including a
conspiracy between North Fork and Fleet Boston to: (i) diminish competition in a
variety of banking markets; (ii) diminish competition for the purchase of banks
and thrifts in some markets; and (iii) eliminate a stronger competitor (i.e.,
the combined institution resulting from the Merger). In addition, the complaint
alleges that Fleet Boston's divestiture of branches from the Fleet Financial-
BankBoston Corporation merger to Sovereign Bancorp, Inc. ("Sovereign") is part
of the conspiracy, as Sovereign is not capable of competing effectively in
markets with Fleet Boston and Fleet Boston may use monopoly profits gained in
those markets to fund the Exchange Offer. The suit asks the court to: (i) enjoin
North Fork and Fleet Boston from acting in concert to acquire the Holding
Company or otherwise interfere with the Merger; (ii) enjoin the proposed branch
divestiture from Fleet Boston to Sovereign and require divestiture to a banking
organization with a reasonable opportunity to improve competition in the markets
served; and (iii) declare violations of the New York antitrust laws.

On March 13, 2000, North Fork filed a motion in the Delaware Court of
Chancery to enjoin prosecution of the action filed by the Holding Company in New
York County, alleging that such action must be brought as counterclaims in North
Fork's lawsuit in the Delaware Court of Chancery. On March 17, 2000, the Holding
Company filed a response opposing this motion. On March 20, 2000, the Delaware
Court of Chancery refused to enjoin the Holding Company from prosecuting its
antitrust claims in the New York courts. The Holding Company intends to proceed
vigorously with this prosecution.

On March 21, 2000, the Holding Company filed suit in the United States
District Court for the Eastern District of New York against North Fork and
members of North Fork's board of directors seeking preliminary and permanent
injunctive relief in connection with alleged misrepresentations contained in
North Fork's proxy statement, dated March 13, 2000, soliciting proxies against
the Merger, in violation of the Securities Exchange Act of 1934.

The Holding Company believes that its various claims against North Fork and
Fleet Boston are meritorious and that the various claims made against the
Holding Company and the Board are without merit. However, it is not possible to
predict the outcome of these claims at this time. For a discussion of the Merger
and recent developments related thereto, see Item 7. "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Recent
Developments."

16
<PAGE> 19

Certain claims, suits, complaints and investigations involving the Company,
arising in the ordinary course of business, have been filed or are pending. The
Company is of the opinion, after discussion with legal counsel representing the
Company in these proceedings, that the aggregate liability or loss, if any,
arising from the ultimate disposition of these matters would not have a material
adverse effect on the Company's consolidated financial position or results of
operations.

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

No matter was submitted to the Holding Company's stockholders during the
quarter ended December 31, 1999.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol "DME." On February 29, 2000, there were approximately 19,277 holders
of record of the Common Stock.

The following table sets forth, for the quarters indicated, the high and
low sales prices of the Common Stock based on the NYSE Composite Tape and cash
dividends declared per share of Common Stock.

<TABLE>
<CAPTION>
SALES PRICE
----------------- DIVIDENDS
HIGH LOW DECLARED
---- --- ---------
<S> <C> <C> <C>
1999:
Fourth quarter............................................ $19 11/16 $14 3/4 $0.06
Third quarter............................................. 21 13/16 16 1/4 0.06
Second quarter............................................ 25 1/8 19 13/16 0.06
First quarter............................................. 27 3/16 22 0.05

1998:
Fourth quarter............................................ $28 $17 1/8 $0.05
Third quarter............................................. 33 1/16 18 1/4 0.05
Second quarter............................................ 32 1/2 27 5/8 0.05
First quarter............................................. 31 1/4 23 0.04
</TABLE>

The Board periodically considers the payment of dividends on the Common
Stock, taking into account the Company's financial condition and level of net
income, its future prospects, economic conditions, industry practices and other
factors, including the dividend restrictions described in "Regulation and
Supervision -- Restrictions on Capital Distributions" under Item 1, "Business."

17
<PAGE> 20

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
EARNINGS SUMMARY
Net interest income.................. $ 578,485 $ 527,233 $ 483,062 $ 461,295 $ 409,626
Provision for loan losses............ 29,500 32,000 49,000 41,000 39,650
Non-interest income.................. 568,243 525,030 145,291 85,978 74,712
Non-interest expense:
General and administrative
expense.......................... 589,470 561,863 336,962 301,690 297,949
Amortization of mortgage servicing
assets........................... 122,786 92,291 29,751 19,382 20,652
Amortization of goodwill........... 18,520 11,487 4,501 1,177 844
SAIF recapitalization
assessment....................... -- -- -- 26,280 --
Restructuring and
related expense.................. -- -- 9,931 3,504 15,331
----------- ----------- ----------- ----------- -----------
Total non-interest
expense................... 730,776 665,641 381,145 352,033 334,776
----------- ----------- ----------- ----------- -----------
Income before income tax expense and
extraordinary items................ 386,452 354,622 198,208 154,240 109,912
Income tax expense................... 142,512 113,479 75,034 49,984 47,727
----------- ----------- ----------- ----------- -----------
Income before extraordinary items.... 243,940 241,143 123,174 104,256 62,185
Extraordinary items -- losses on
early extinguishment of debt, net
of tax benefits.................... (4,127) (4,057) (1,460) -- --
----------- ----------- ----------- ----------- -----------
Net income........................... $ 239,813 $ 237,086 $ 121,714 $ 104,256 $ 62,185
=========== =========== =========== =========== ===========
PER COMMON SHARE
Basic earnings:
Income before extraordinary
items............................ $ 2.19 $ 2.13 $ 1.15 $ 1.00 $ 0.63
Net income......................... 2.15 2.09 1.14 1.00 0.63
Diluted earnings:
Income before extraordinary
items............................ 2.17 2.09 1.13 0.96 0.57
Net income......................... 2.13 2.06 1.12 0.96 0.57
Cash dividends declared.............. 0.23 0.19 0.12 -- --
Dividend payout ratio................ 10.70% 9.09% 10.53% --% --%
Book value at December 31,........... $ 13.67 $ 12.42 $ 11.30 $ 9.76 $ 10.25

PERFORMANCE RATIOS
Return on average assets............. 1.09% 1.11% 0.60% 0.52% 0.30%
Return on average stockholders'
equity............................. 16.46 17.84 11.04 10.36 6.56
Interest rate spread................. 2.97 2.68 2.42 2.29 1.98
Net interest margin.................. 2.91 2.68 2.51 2.40 2.07
Non-interest income to total
revenues........................... 49.55 49.90 23.12 15.71 15.43
Efficiency ratio..................... 51.40 54.59 51.98 51.83 57.11
</TABLE>

18
<PAGE> 21

ASSET QUALITY
Non-performing assets................ $ 86,053 $ 83,343 $ 146,749 $ 244,845 $ 315,800
Non-performing assets to total
assets............................. 0.36% 0.37% 0.67% 1.30% 1.55%
Non-accrual loans to loans
receivable......................... 0.46 0.43 0.92 1.78 2.60
Allowance for loan losses to loans
receivable......................... 0.92 0.82 0.81 0.99 1.31
Allowance for loan losses to
non-accrual loans.................. 202.27 190.67 88.01 55.58 50.29
CAPITAL RATIOS
Stockholders' equity to total
assets............................. 6.34% 6.21% 6.02% 5.42% 4.80%
Average stockholders' equity to
average total assets............... 6.63 6.21 5.46 5.05 4.62
Dime FSB:
Tangible and core.................. 5.90 5.82 5.64 6.06 5.16
Tier 1 risk-based.................. 8.80 9.58 10.29 11.96 10.76
Total risk-based................... 10.33 10.37 11.17 13.08 12.01
OTHER DATA
Loans serviced for others(1)......... $37,110,485 $27,009,693 $21,986,111 $11,036,624 $ 9,514,560
Common shares outstanding (in
thousands)......................... 110,895 111,570 116,358 104,744 99,706
</TABLE>

- ---------------
(1) Excludes loans being subserviced by the Company.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RECENT ACQUISITION ACTIVITY

The following is a discussion of acquisitions consummated by the Company
during 1999. Each of these acquisitions was accounted for as a purchase.
Accordingly, the results of these acquisitions are reflected in the Company's
financial statements for the periods subsequent to their respective acquisition
dates.

On October 18, 1999, the Company acquired KeyBank's Long Island banking
franchise, which included 28 branches. In connection with the KeyBank Branch
Acquisition, the Company acquired assets of $1.1 billion, including cash of
$614.4 million and loans receivable of $501.9 million, and assumed liabilities
of $1.3 billion, substantially all of which were deposits.

19
<PAGE> 22

On August 1, 1999, the Company acquired Citibank's indirect automobile
finance business for $906.7 million in cash. In connection with the Citibank
Auto Business Acquisition, the Company acquired assets of $953.0 million,
consisting substantially of loans receivable, and assumed deposits of $51.1
million.

On May 21, 1999, Lakeview was acquired by the Company. Lakeview was the
holding company for Lakeview Savings Bank, which operated 11 branches in
northern New Jersey. At the date of the Lakeview Acquisition, Lakeview had
consolidated assets of $560.6 million, including loans receivable of $286.9
million, and consolidated liabilities of $515.9 million, including deposits of
$461.9 million. Under the terms of the related agreement, holders of Lakeview's
common stock received either 0.9 of a share of Common Stock or $24.26 in cash
for each outstanding share of Lakeview common stock. In connection therewith,
the Holding Company issued 2,852,321 shares of Common Stock from treasury at an
assigned value of $69.2 million and paid a total of $41.4 million in cash.

Total goodwill arising from the acquisitions consummated during 1999
amounted to $324.7 million. This goodwill is being amortized over periods
ranging from 10 to 18 years.

RECENT DEVELOPMENTS

On September 15, 1999, the Holding Company entered into the Merger
Agreement with Hudson, the holding company for Hudson United Bank, a New Jersey
state-chartered commercial bank. At December 31, 1999, Hudson, on a consolidated
basis, had assets of $9.7 billion, deposits of $6.5 billion and stockholders'
equity of $519.2 million. The Merger Agreement, among other things, provides
that: (i) Hudson is to merge with and into the Holding Company, with the Holding
Company as the surviving legal entity, in a transaction accounted for as a
pooling of interests; (ii) the combined company is to remain a Delaware
corporation but is to change its name to Dime United Bancorp, Inc. ("Dime
United"); (iii) each issued share of Common Stock is to be combined into 0.60255
of a share of Dime United common stock; and (iv) each outstanding share of
Hudson common stock is to be converted into one share of Dime United common
stock. In connection with the Merger, Dime FSB is to merge with and into Hudson
United Bank, with Hudson United Bank as the surviving legal entity and the
combined institution to remain as a New Jersey state-chartered commercial bank
under the name "DimeBank." The Merger remains subject to the approval of various
regulatory agencies and the respective stockholders of the Holding Company and
Hudson. Either the Holding Company or Hudson may terminate the Merger Agreement
if the Merger is not consummated by June 30, 2000.

On February 10, 2000, the Holding Company and Hudson mailed a joint proxy
statement/prospectus, dated February 9, 2000, to their respective stockholders.
This document notified stockholders that each of the Holding Company and Hudson
intended to hold special stockholders meetings on March 15, 2000 to consider
approval of the Merger.

On March 5, 2000, North Fork announced its intention to make a hostile bid
to acquire all of the outstanding shares of Common Stock and to terminate the
Merger. On March 6, 2000, North Fork filed preliminary proxy materials with the
Securities and Exchange Commission (the "Commission") with which it proposed to
solicit proxies to vote against the Merger.

On March 8, 2000, the Holding Company mailed to its stockholders a
supplement to the February 9, 2000 joint proxy statement/prospectus stating,
among other things, its recommendation that Dime Stockholders not tender shares
of Common Stock in North Fork's offer, if and when it commenced. On March 9,
2000, the Holding Company and Hudson announced that they were both voluntarily
postponing their respective special stockholders meetings until March 24, 2000
in order to allow information to be disseminated.

of North Fork's common stock and $2.00 in cash for each share of Common Stock
tendered to North Fork. The Exchange Offer is conditioned on the satisfaction of
a number of factors, including, but not limited to: (i) termination of the
Merger Agreement; (ii) the Holding Company entering into a merger agreement with
North Fork; (iii) receipt of required regulatory approvals; and (iv) the rights
under the Stockholder Protection Rights Plan, dated as of October 20, 1995,
between the Holding Company and The First National Bank of Boston, as rights
agent, not being applicable. On March 20, 2000, the Board formally recommended
that Dime Stockholders reject the Exchange Offer by not tendering Common Stock
to North Fork. On that date, the Holding Company and Hudson postponed their
respective special stockholders meetings to May 17, 2000 and May 18, 2000,
respectively. On March 23, 2000, North Fork extended the expiration date of the
Exchange Offer from April 14, 2000 to midnight on May 31, 2000.

For a discussion of various litigation by and against the Company in
connection with the Exchange Offer and the Merger, see Item 3, "Legal
Proceedings."

RESULTS OF OPERATIONS

General

The Company reported net income for 1999 of $239.8 million, as compared
with $237.1 million for 1998 and $121.7 million for 1997. Diluted earnings per
common share increased to $2.13 for 1999 from $2.06 for 1998 and $1.12 for 1997.
The Company's returns on average stockholders' equity and average assets for
1999 were 16.46% and 1.09%, respectively, as compared with 17.84% and 1.11%,
respectively, for 1998 and 11.04% and 0.60%, respectively, for 1997.

Net income in 1999, as compared with 1998, benefited from growth in
revenues (net interest income plus non-interest income) of $94.5 million, or
9.0%, principally due to higher net interest income and fee income, and a $2.5
million reduction in the provision for loan losses. The level of net income in
1999, as compared with 1998, was unfavorably affected by a $65.1 million
increase in non-interest expense and an increase in the Company's effective
income tax rate from 32.0% for 1998, which reflected certain tax planning
strategies, to 36.9% for 1999. The overall improvement in net income reflects
the benefits of acquisitions completed during 1999. Net income in each of 1999
and 1998 was reduced by $4.1 million as a result of after-tax extraordinary
losses on the early extinguishment of debt.

The $115.4 million, or 94.8%, increase in net income in 1998, as compared
with 1997, was fueled by revenue growth of $423.9 million, or 67.5%. The growth
in net income also reflected a $17.0 million decrease in the provision for loan
losses and a reduction in the effective income tax rate of approximately 590
basis points. The impact of these factors was partially offset by an increase of
$284.5 million in non-interest expense. The significant increases in
non-interest income and non-interest expense were principally due to the
Company's expansion of its mortgage banking operations, largely as a result of
the NAMC Acquisition.

Operating earnings, which represent net income adjusted for the effects of
certain non-recurring or unusual items, amounted to $243.9 million for 1999, up
12.4% from $217.1 million for 1998, which had increased 38.2% from $157.1
million for 1997. Diluted operating earnings per common share increased to $2.17
for 1999 from $1.89 for 1998 and $1.45 for 1997. On an operating earnings basis,
the returns on average stockholders' equity and average assets rose to 16.74%
and 1.11%, respectively, for 1999 from 16.34% and 1.02%, respectively, for 1998
and 14.25% and 0.78%, respectively, for 1997.

21
<PAGE> 24

The following table presents reconcilements of operating earnings to
reported net income for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Operating earnings................................. $243,940 $217,081 $157,083
Items not included in operating earnings:
Net losses related to balance sheet
restructurings................................ -- (635) (25,247)
Net charges and adjustments related to
acquisitions.................................. -- -- (21,431)
Gain on sale of branch........................... -- 9,512 --
Other, net....................................... -- 1,172 (8,014)
Income tax effect on above items................. -- (3,717) 20,783
Adjustment to conform internal tax expense to
corporate tax expense......................... -- 17,730 --
Extraordinary losses on early extinguishment of
debt, net of tax benefits..................... (4,127) (4,057) (1,460)
-------- -------- --------
Net adjustments after tax..................... (4,127) 20,005 (35,369)
-------- -------- --------
Reported net income................................ $239,813 $237,086 $121,714
======== ======== ========
</TABLE>

Cash operating earnings, which represent operating earnings after the
exclusion of the after-tax effect of amortization of goodwill, totaled $260.2
million for 1999, up 14.0% from 1998. Cash operating earnings for 1998 were
$228.2 million, or 41.5% higher than the $161.3 million for 1997. Diluted cash
operating earnings per common share were $2.31 for 1999, as compared with $1.98
for 1998 and $1.48 for 1997. On a cash operating earnings basis, the returns on
average stockholders' equity and average assets increased to 22.88% and 1.20%,
respectively, for 1999 from 20.76% and 1.08%, respectively, for 1998 and 15.60%
and 0.80%, respectively, for 1997.

The Company believes that operating earnings and cash operating earnings
basis information, when taken in conjunction with reported results, provide
useful information in evaluating performance on a comparable basis, although
neither operating earnings nor cash operating earnings is currently a required
basis for reporting financial results under generally accepted accounting
principles.

Net Interest Income

Net interest income amounted to $578.5 million for 1999, up 9.7% from
$527.2 million for 1998, which had increased 9.1% from $483.1 million for 1997.
Contributing significantly to these increases was growth in the net interest
margin. During 1999, the net interest margin was 2.91%, as compared with 2.68%
for 1998 and 2.51% for 1997. The year-to-year increases in net interest income
also reflect, to a lesser extent, growth in average interest-earning assets of
$193.4 million in 1999 and $399.1 million in 1998, as compared with the
respective prior years.

The 23 basis point increase in the net interest margin in 1999, as compared
with 1998, was driven by a sharp reduction in the cost of average
interest-bearing liabilities, but also reflects a steepening of the interest
rate yield curve and, despite an overall decline in the yield on average
interest-earning assets, beneficial shifts in the mix of average
interest-earning assets. The cost of average interest-bearing liabilities for
1999 was 4.18%, down 36 basis points from 1998, primarily reflecting a generally
lower short-term interest rate environment as well as the Company's deposit
pricing strategy, particularly with respect to its time deposits. Also
contributing to the lower cost of funds was the affect of an increase in the
percentage of core deposits to total deposits. The Company's core deposits
consist of demand, savings and money market deposits and are generally less
costly than the Company's time deposits and borrowed funds. During 1999, core
deposits represented 52.6% of average total deposits, up from 45.6% for 1998.
The yield on average interest-earning assets of 7.15% for 1999 was down 7 basis
points from 1998. The reduction in the yield on average interest-earning assets
was mitigated by the effects of the Company's strategy during 1999 to increase
the aggregate percentage of its commercial real estate, consumer and business
loans receivable (which generally have higher

22
<PAGE> 25

yields than the Company's residential real estate loans receivable) to total
loans receivable. The aggregate average balance of commercial real estate,
consumer and business loans increased $1.7 billion, or 49.8%, in 1999, as
compared with 1998, and represented 37.7% of average total loans receivable for
1999, up from 26.1% for 1998. These increases reflect the effects of
acquisitions during 1999 as well as internal growth.

The improvement in the net interest margin in 1998 from 1997 of 17 basis
points, which occurred despite the unfavorable interest rate yield curve during
1998, was principally attributable to a reduction of 22 basis points in the cost
of average interest-bearing liabilities due, in large part, to lower deposit
costs. The higher net interest margin also reflected growth in the yield on
average interest-earning assets to 7.22% for 1998 from 7.18% for 1997.
Contributing to the increase in the yield were favorable changes in the
interest-earning asset mix and higher yields on securities, partially offset by
a 28 basis point reduction in the yield on average loans. The favorable changes
in the interest-earning asset mix included a shift to loans from MBS, which have
historically provided lower yields than the Company's loans. Average loans
increased $3.7 billion year-to-year and represented 80.8% of average total
interest-earning assets for 1998, up from 63.0% for 1997. Average MBS declined
$3.0 billion year-to-year and represented 15.9% of average total
interest-earning assets for 1998, down from 32.1% for 1997. The reduction in the
yield on average loans for 1998, as compared with 1997, was principally due to
the lower long-term interest rate environment during 1998, partially offset by
sales of certain relatively lower-yielding portfolio loans during that year.

23
<PAGE> 26

The following table sets forth, for the years indicated, the Company's
consolidated average statement of financial condition, net interest income,
interest rate spread and net interest margin. Average balances are computed on a
daily basis. Non-accrual loans are included in average balances in the table
below.
<TABLE>
<CAPTION>
1999 1998
---------------------------------- ----------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
----------- ---------- ------- ----------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INTEREST-EARNING ASSETS:
Loans:
Loans held for sale............. $ 2,342,293 $ 163,992 7.00% $ 2,898,297 $ 210,083 7.25%
Loans receivable:
Residential real estate....... 8,391,769 580,390 6.92 9,597,357 664,319 6.92
Commercial real estate........ 2,967,934 228,571 7.70 2,359,295 200,015 8.48
Consumer...................... 1,617,255 132,213 8.18 861,247 71,003 8.24
Business...................... 489,232 39,740 8.12 166,061 13,944 8.40
----------- ---------- ----------- ----------
Total loans receivable.... 13,466,190 980,914 7.28 12,983,960 949,281 7.31
----------- ---------- ----------- ----------
Total loans............... 15,808,483 1,144,906 7.24 15,882,257 1,159,364 7.30
----------- ---------- ----------- ----------
Securities:
MBS............................. 3,328,408 222,385 6.68 3,127,022 214,922 6.87
Other........................... 696,144 50,296 7.22 553,822 40,797 7.37
----------- ---------- ----------- ----------
Total securities.......... 4,024,552 272,681 6.78 3,680,844 255,719 6.95
----------- ---------- ----------- ----------
Money market investments.......... 28,212 1,511 5.36 104,744 5,802 5.54
----------- ---------- ----------- ----------
Total interest-earning
assets.................. 19,861,247 1,419,098 7.15 19,667,845 1,420,885 7.22
----------- ---------- ----------- ----------
Other assets...................... 2,101,711 1,715,973
----------- -----------
Total assets...................... $21,962,958 $21,383,818
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
INTEREST-BEARING LIABILITIES:
Deposits:
Core:
Demand........................ $ 1,887,867 7,253 0.38 $ 1,824,434 8,797 0.48
Savings....................... 2,351,428 51,498 2.19 2,322,103 49,537 2.13
Money market.................. 2,874,486 109,080 3.79 2,163,046 83,420 3.86
----------- ---------- ----------- ----------
Total core................ 7,113,781 167,831 2.36 6,309,583 141,754 2.25
----------- ---------- ----------- ----------
Time............................ 6,409,747 314,175 4.90 7,528,081 404,073 5.37
----------- ---------- ----------- ----------
Total deposits............ 13,523,528 482,006 3.56 13,837,664 545,827 3.94
----------- ---------- ----------- ----------
Borrowed funds:
Federal funds purchased and
securities sold under
agreements to repurchase...... 3,175,249 163,682 5.15 1,803,181 99,851 5.54
Other short-term borrowings..... 2,278,970 120,112 5.27 3,099,978 175,878 5.67
Other........................... 1,133,427 74,813 6.60 964,398 72,096 7.48
----------- ---------- ----------- ----------
Total borrowed funds...... 6,587,646 358,607 5.44 5,867,557 347,825 5.93
----------- ---------- ----------- ----------
Total interest-bearing
liabilities............. 20,111,174 840,613 4.18 19,705,221 893,652 4.54
----------- ---------- ----------- ----------
Other liabilities................. 394,846 349,691
Stockholders' equity.............. 1,456,938 1,328,906
----------- -----------
Total liabilities and
stockholders' equity............ $21,962,958 $21,383,818
=========== ===========
Net interest income............... $ 578,485 $ 527,233
========== ==========
Interest rate spread.............. 2.97 2.68
Net interest margin............... 2.91 2.68

<CAPTION>
1997
----------------------------------
AVERAGE
AVERAGE YIELD/
BALANCE INTEREST COST
----------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
INTEREST-EARNING ASSETS:
Loans:
Loans held for sale............. $ 582,364 $ 43,919 7.54%
Loans receivable:
Residential real estate....... 8,583,301 616,586 7.18
Commercial real estate........ 2,193,661 191,111 8.71
Consumer...................... 730,106 63,222 8.66
Business...................... 54,050 5,052 9.35
----------- ----------
Total loans receivable.... 11,561,118 875,971 7.58
----------- ----------
Total loans............... 12,143,482 919,890 7.58
----------- ----------
Securities:
MBS............................. 6,176,259 406,781 6.59
Other........................... 362,538 23,774 6.56
----------- ----------
Total securities.......... 6,538,797 430,555 6.58
----------- ----------
Money market investments.......... 586,500 32,370 5.52
----------- ----------
Total interest-earning
assets.................. 19,268,779 1,382,815 7.18
----------- ----------
Other assets...................... 923,409
-----------
Total assets...................... $20,192,188
===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
INTEREST-BEARING LIABILITIES:
Deposits:
Core:
Demand........................ $ 1,267,547 8,012 0.63
Savings....................... 2,468,652 60,689 2.46
Money market.................. 1,953,931 72,723 3.72
----------- ----------
Total core................ 5,690,130 141,424 2.49
----------- ----------
Time............................ 7,556,076 417,935 5.53
----------- ----------
Total deposits............ 13,246,206 559,359 4.22
----------- ----------
Borrowed funds:
Federal funds purchased and
securities sold under
agreements to repurchase...... 3,628,681 206,822 5.70
Other short-term borrowings..... 919,635 53,238 5.79
Other........................... 1,102,646 80,334 7.29
----------- ----------
Total borrowed funds...... 5,650,962 340,394 6.02
----------- ----------
Total interest-bearing
liabilities............. 18,897,168 899,753 4.76
----------- ----------
Other liabilities................. 192,941
Stockholders' equity.............. 1,102,079
-----------
Total liabilities and
stockholders' equity............ $20,192,188
===========
Net interest income............... $ 483,062
==========
Interest rate spread.............. 2.42
Net interest margin............... 2.51
</TABLE>

24
<PAGE> 27

The following table sets forth, for the years indicated, the changes in
interest income and interest expense for each major component of
interest-earning assets and interest-bearing liabilities and the amounts
attributable to changes in average balances (volume) and average interest rates
(rate). The changes in interest income and interest expense attributable to
changes in both volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
1999 VERSUS 1998 1998 VERSUS 1997
------------------------------- ---------------------------------
INCREASE (DECREASE) INCREASE (DECREASE)
------------------------------- ---------------------------------
DUE TO DUE TO DUE TO DUE TO
VOLUME RATE TOTAL VOLUME RATE TOTAL
-------- ------- -------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans:
Loans held for sale............. $(39,135) $(6,956) $(46,091) $167,936 $ (1,772) $ 166,164
Loans receivable:
Residential real estate....... (83,381) (548) (83,929) 70,817 (23,084) 47,733
Commercial real estate........ 48,111 (19,555) 28,556 14,144 (5,240) 8,904
Consumer...................... 61,810 (600) 61,210 10,926 (3,145) 7,781
Business...................... 26,266 (470) 25,796 9,455 (563) 8,892
-------- ------- -------- -------- -------- ---------
Total loans receivable... 52,806 (21,173) 31,633 105,342 (32,032) 73,310
-------- ------- -------- -------- -------- ---------
Total loans.............. 13,671 (28,129) (14,458) 273,278 (33,804) 239,474
-------- ------- -------- -------- -------- ---------
Securities:
MBS............................. 13,572 (6,109) 7,463 (208,867) 17,008 (191,859)
Other securities................ 10,297 (798) 9,499 13,798 3,225 17,023
-------- ------- -------- -------- -------- ---------
Total securities......... 23,869 (6,907) 16,962 (195,069) 20,233 (174,836)
-------- ------- -------- -------- -------- ---------
Money market investments.......... (4,105) (186) (4,291) (26,685) 117 (26,568)
-------- ------- -------- -------- -------- ---------
Total interest income.... 33,435 (35,222) (1,787) 51,524 (13,454) 38,070
-------- ------- -------- -------- -------- ---------
INTEREST EXPENSE
Deposits:
Core:
Demand........................ 297 (1,841) (1,544) 2,978 (2,193) 785
Savings....................... 631 1,330 1,961 (3,455) (7,697) (11,152)
Money market.................. 27,018 (1,358) 25,660 7,994 2,703 10,697
-------- ------- -------- -------- -------- ---------
Total core............... 27,946 (1,869) 26,077 7,517 (7,187) 330
-------- ------- -------- -------- -------- ---------
Time.......................... (56,738) (33,160) (89,898) (1,543) (12,319) (13,862)
-------- ------- -------- -------- -------- ---------
Total deposits........... (28,792) (35,029) (63,821) 5,974 (19,506) (13,532)
-------- ------- -------- -------- -------- ---------
Borrowed funds:
Federal funds purchased and
securities sold under
agreements to repurchase...... 71,166 (7,335) 63,831 (101,245) (5,726) (106,971)
Other short-term borrowings..... (43,971) (11,795) (55,766) 123,723 (1,083) 122,640
Other........................... 11,749 (9,032) 2,717 (10,290) 2,052 (8,238)
-------- ------- -------- -------- -------- ---------
Total borrowed funds..... 38,944 (28,162) 10,782 12,188 (4,757) 7,431
-------- ------- -------- -------- -------- ---------
Total interest expense... 10,152 (63,191) (53,039) 18,162 (24,263) (6,101)
-------- ------- -------- -------- -------- ---------
Net interest income............... $ 23,283 $27,969 $ 51,252 $ 33,362 $ 10,809 $ 44,171
======== ======= ======== ======== ======== =========
</TABLE>

Provision for Loan Losses

The provision for loan losses, which is predicated upon the Company's
assessment of the adequacy of its allowance for loan losses (see "Management of
Credit Risk -- Allowance for Loan Losses"), amounted to $29.5 million for 1999.
This compares with $32.0 million for 1998 and $49.0 million for 1997, which
included

25
<PAGE> 28

a $14.0 million special provision associated with the sales of approximately
$126 million of non-performing residential real estate assets in May 1997 (the
"NPA Sales").

Net loan charge-offs amounted to $13.6 million in 1999, down from $31.6
million in 1998 and $64.0 million in 1997. Net loan charge-offs for 1998
included charge-offs of $9.1 million associated with a bulk sale during December
1998 of approximately $53 million of non-performing loans (the "NPL Sale"),
substantially all of which were residential real estate loans. Net loan
charge-offs during 1997 included charge-offs of $35.8 million associated with
the NPA Sales.

Non-Interest Income

General. Non-interest income amounted to $568.2 million for 1999, up 8.2%
from $525.0 million for 1998, which followed a 261% increase from $145.3 million
for 1997. Although net gains on sales activities declined $44.0 million in 1999
from 1998, non-interest income rose $43.2 million year-to-year as growth was
experienced in all other non-interest income categories. The significant
increase in non-interest income in 1998, as compared with 1997, was
predominantly due to the full year effect of the NAMC Acquisition. For 1999,
non-interest income represented 49.6% of total revenues. This compares with
49.9% for 1998 and 23.1% for 1997.

Loan Servicing and Production Fees. Loan servicing and production fees
amounted to $267.5 million for 1999, an increase of $68.0 million, or 34.1%,
from 1998. Such fees were $199.5 million for 1998, representing growth of $125.5
million, or 169%, from the prior year. Loan servicing fees increased to $189.1
million for 1999 from $111.9 million for 1998 and $60.8 million for 1997 as a
result of growth in the mortgage loan servicing portfolio, as well as changes in
its characteristics. Loan production fees amounted to $78.4 million for 1999, as
compared with $87.6 million for 1998 and $13.3 million for 1997. The decline in
loan production fees in 1999, as compared with 1998, was due to the unfavorable
effect on residential real estate loan production, particularly loan refinancing
activity, of the relatively higher long-term interest rate environment during
1999. The increase in loan production fees in 1998 from 1997 was attributable to
a higher level of residential real estate loan production resulting from the
relatively lower long-term interest rate environment that existed during 1998
and the Company's expansion of its residential real estate loan production
capabilities.

The Company's portfolio of mortgage loans serviced for others (excluding
loans being subserviced by the Company) amounted to $37.1 billion at year-end
1999, as compared with $27.0 billion one-year earlier and $22.0 billion at the
end of 1997. This portfolio consists substantially of residential real estate
loans, the underlying weighted average coupon rates of which were 7.25%, 7.37%
and 7.88% at December 31, 1999, 1998 and 1997, respectively. The year-to-year
increases in the loan servicing portfolio occurred despite sales of mortgage
servicing rights (see "Net Gains on Sales Activities"). In connection with its
sales of mortgage servicing rights, the Company was subservicing $1.3 billion of
loans at December 31, 1999, as compared with $7.9 billion at the end of 1998 and
$3.0 billion at the end of 1997. The Company receives fees for subservicing
loans until the transfer of the servicing responsibility to the purchasers of
the mortgage servicing rights.

Banking Service Fees. Banking service fees totaled $51.8 million for 1999,
up 25.0% from $41.4 million for 1998, which had increased 30.3% from $31.8
million for 1997. These increases were reflective of higher transaction volumes,
changes in the Company's fee structure and the introduction of certain fee-based
services. Contributing to the growth in the level of transactions in 1999, as
compared with 1998, was the impact of certain of the Company's acquisitions
during 1999. The higher volume of transactions in 1998, as compared with 1997,
was partially due to an expanded network of automated teller machines.

Securities and Insurance Brokerage Fees. Securities and insurance
brokerage fees were $36.7 million for 1999, 12.1% higher than the level in the
previous year. This increase was primarily associated with sales of annuity and
insurance products. For 1998, securities and insurance brokerage fees amounted
to $32.7 million, up 37.9% from $23.7 million for 1997. This growth was largely
driven by an $8.5 million increase in insurance fees, principally due to the
expansion of the Company's insurance product line and the number of states in
which the products are sold as a result of the NAMC Acquisition (pursuant to
which the Company also acquired NAMC's insurance subsidiaries).

26
<PAGE> 29

Net Gains on Sales Activities. Net gains on sales activities amounted to
$200.4 million for 1999. In comparison, net gains on sales activities were
$244.5 million for 1998 and $12.0 million for 1997.

Net gains on sales of loans held for sale totaled $186.1 million for 1999,
down from $217.3 million for 1998, which had increased from $23.2 million for
1997. The net gains during 1998 were reduced by losses of approximately $11
million associated with certain relatively lower-yielding loans that were
transferred from loans receivable to loans held for sale in connection with a
balance sheet restructuring initiative. Sales of loans held for sale amounted to
$22.5 billion during 1999, down $4.3 billion from 1998, primarily due to the
effect on loans held for sale production of the relatively higher long-term
interest rate environment during 1999. During 1998, sales of loans held for sale
amounted to $26.8 billion, up from $4.7 billion during 1997. This increase,
while largely attributable to the Company's expanded mortgage banking
operations, also reflected the significant loan refinancing activity that
resulted, in large part, from the relatively lower long-term interest rate
environment during 1998.

Securities-related net gains (losses) were $2.1 million for 1999, as
compared with $21.9 million for 1998 and $(17.8) million for 1997. The net gains
during 1998 were substantially associated with sales of $1.9 billion of
securities, including virtually all of the $1.4 billion of MBS that had been
designated for sale in connection with the transfer of the Company's entire
securities held to maturity portfolio to its securities available for sale
portfolio as part of a balance sheet restructuring initiative implemented in
December 1997. At that time, the Company recognized a loss of $25.2 million
associated with the write-down to estimated fair value of those MBS designated
for sale with unrealized losses (which contributed substantially to the
securities-related net losses recognized in 1997), but subsequent movements in
interest rates resulted in higher than initially anticipated sales prices.

Net gains on sales of mortgage servicing rights totaled $12.1 million for
1999, as compared with $2.0 million for 1998 and $6.9 million for 1997. During
1999, the Company sold $7.0 billion of mortgage servicing rights, including $4.7
billion in a bulk sale in connection with its overall risk-management program.
During 1998 and 1997, mortgage servicing rights sales amounted to $13.3 billion
and $3.0 billion, respectively, all of which were consummated in connection with
this program.

Net gains on sales activities for 1998 included a gain of $9.5 million on
the sale, in August 1998, of Dime FSB's sole remaining Florida branch. At the
time of sale, this branch had deposits of $207.2 million.

All other net gains (losses) amounted to $0.1 million for 1999, $(6.2)
million for 1998 and $(0.3) million for 1997. The net losses during 1998 were
largely associated with the termination of certain derivative financial
instrument agreements.

Other. Other non-interest income was $11.8 million in 1999, as compared
with $6.9 million in 1998 and $3.7 million in 1997. The year-to-year increases
were largely associated with income derived from a bank-owned life insurance
program, in connection with which the Company made investments of $50.0 million
during the fourth quarter of 1999 and $150.0 million during the third quarter of
1997. In general, under this program, the Company purchases, owns, and is the
beneficiary of insurance policies on the lives of certain employees who consent
to being covered under the program in order to help defray certain costs
associated with the Company's employee benefit plans.

Non-Interest Expense

General. Non-interest expense amounted to $730.8 million for 1999, an
increase of $65.1 million, or 9.8%, from 1998. The expense growth reflects
increases in amortization of mortgage servicing assets and goodwill, together
with higher general and administrative ("G&A") expense, primarily associated
with the Company's mortgage banking operations and acquisitions completed during
1999. During 1998, non-interest expense was $665.6 million, up $284.5 million,
or 74.6%, from 1997. This increase was largely the result of the full year
effect of the NAMC Acquisition, coupled with the Company's expansion of its
mortgage banking operations during 1998 in furtherance of its strategy in this
area at that time and in response to the relatively high level of loan demand
during that year.

27
<PAGE> 30

G&A Expense. G&A expense amounted to $589.5 million for 1999. This
compares with $561.9 million in 1998 and $337.0 million in 1997.

Compensation and employee benefits expense totaled $303.8 million for 1999,
an increase of $33.7 million, or 12.5%, from the prior year, which was primarily
due to a higher average number of full-time equivalent employees ("FTEs"). The
growth in average FTEs was largely associated with the Company's mortgage
banking operations, as well as acquisitions consummated during 1999. Average
FTEs associated with the Company's mortgage banking operations increased during
1999, as compared with the prior year, due to a higher level of FTEs during the
first half of 1999. During the second half of 1999, in response to the slowing
of residential real estate loan production, the average number of mortgage
banking FTEs was decreased significantly. Compensation and employee benefits
expense increased to $270.1 million for 1998 from $157.9 million for 1997,
largely reflective of the Company's expansion of its mortgage banking
operations, primarily due to the NAMC Acquisition, and to a much lesser extent,
higher levels of commissions and incentives and normal merit increases.

The Company's complement of FTEs numbered 6,928 at the end of 1999, down
from 7,123 one-year earlier, which had increased from 6,000 at the end of 1997.
The decline during 1999 was substantially attributable to a reduction in the
mortgage banking-related FTEs of approximately 660, or 13%, the impact of which
was partially offset by staff additions attributable to acquisitions during
1999. The growth in 1998, as compared with 1997, was largely associated with the
Company's expansion of its mortgage banking operations.

Occupancy and equipment expense was $103.7 million for 1999, up $11.2
million, or 12.1%, from 1998. This increase was largely due to a rise in rent
expense as a result of a higher average level of residential real estate loan
production facilities, acquisitions consummated during 1999 and normal rental
increases. The overall increase in rent expense was mitigated, to a limited
degree, by the reduction in the Company's residential real estate loan
production operations during the second half of 1999. As a result of the KeyBank
Branch Acquisition and the Lakeview Acquisition, the Company's banking branch
network grew 41.1% during 1999 and totaled 127 branches at the end of 1999. Also
contributing to the year-to-year increase in occupancy and equipment expense,
although to a lesser extent, was higher depreciation and amortization expense
associated with, among other factors, technology-related initiatives and
acquisitions consummated during 1999. Occupancy and equipment expense totaled
$92.5 million for 1998, up $28.9 million, or 45.4%, as compared with 1997. This
increase was largely associated with the Company's expanded mortgage banking
operations, particularly as a result of the NAMC Acquisition, but also reflects,
among other factors, the effects of technology-related initiatives.

Other G&A expense declined $17.3 million, or 8.7%, in 1999, as compared
with 1998. Contributing significantly to the decline, which occurred despite the
effect of acquisitions during 1999, was a reduction in the expense associated
with the Company's plan to prepare its computer systems, software, applications,
hardware and facility systems to properly process dates beyond December 31, 1999
(the "Year 2000 Plan"), which is further described under the heading "Year 2000
Issue" below. Other G&A expense rose $83.8 million, or 72.6%, in 1998, as
compared with 1997, largely due to the Company's business expansion efforts. The
following table provides details of other G&A expense for the year ended
December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Data processing and communications................. $ 48,555 $ 43,782 $ 27,292
Professional services.............................. 18,318 22,107 13,179
Postage and messenger services..................... 17,257 16,846 8,781
Marketing and promotional.......................... 16,475 20,785 15,831
Stationery, printing and supplies.................. 12,738 13,366 7,881
Year 2000 plan..................................... 5,491 16,197 1,286
Other.............................................. 63,225 66,266 41,279
-------- -------- --------
Total other G&A expense............................ $182,059 $199,349 $115,529
======== ======== ========
</TABLE>

28
<PAGE> 31

Amortization of Mortgage Servicing Assets. Amortization of mortgage
servicing assets amounted to $122.8 million for 1999, an increase of $30.5
million from 1998. This increase was largely reflective of growth in the average
balance of mortgage servicing assets, the effect of which was partially offset
by a slowing of prepayment activity of the loans underlying the mortgage
servicing assets portfolio in response to the comparatively higher long-term
interest rate environment during 1999. Amortization of mortgage servicing assets
increased to $92.3 million for 1998 from $29.8 million for 1997. This increase
was also largely due to growth in the average balance of mortgage servicing
assets, but, to a lesser extent, also reflected the impact of accelerated
prepayments of the underlying loans that resulted from the relatively lower
long-term interest rate environment in 1998. The Company was not required to
recognize impairment of its mortgage servicing assets during 1999, 1998 or 1997.

At December 31, 1999, the Company's mortgage servicing assets (including
related derivative financial instruments hedging such assets) had a carrying
value of $980.9 million and an estimated fair value of $1,027.4 million.

In a declining long-term interest rate environment, actual or expected
prepayments of the loans underlying the Company's mortgage servicing assets
portfolio may increase, which could have an adverse impact on the value of such
assets. In connection therewith, the Company uses certain derivative financial
instruments to hedge its mortgage servicing assets (see "Asset/Liability
Management -- Derivative Financial Instruments").

In addition, the Company has periodically consummated bulk sales of
mortgage servicing rights in an effort to reduce the prepayment risk associated
with its mortgage servicing assets portfolio. The amount of mortgage servicing
rights sold in such sales amounted to $4.7 billion in 1999, $13.3 billion in
1998 and $3.0 billion in 1997.

Amortization of Goodwill. Amortization of goodwill was $18.5 million in
1999, up $7.0 million from the prior year as a result of acquisitions
consummated during 1999. Amortization of goodwill increased to $11.5 million in
1998 from $4.5 million in 1997, primarily due to the NAMC Acquisition.

Restructuring and Related Expense. In connection with the NAMC
Acquisition, the Company incurred restructuring and related expense of $9.9
million during 1997. No such expense was incurred during 1999 or 1998.

Income Tax Expense

Income tax expense for 1999 was $142.5 million, up $29.0 million from 1998
as a result of an increase in the effective income tax rate, coupled with higher
pre-tax income. Income tax expense rose to $113.5 million in 1998 from $75.0
million in 1997 due to growth in pre-tax income, the effect of which was
partially offset by a decline in the effective income tax rate. The Company's
effective income tax rate was 36.9% in 1999, as compared with 32.0% in 1998 and
37.9% in 1997. The effective income tax rate in 1998 was favorably affected by a
restructuring of assets within the legal entities that comprise the Company's
affiliated group.

Extraordinary Items

During 1999, 1998 and 1997, the Company recognized after-tax extraordinary
losses of $4.1 million, $4.1 million and $1.5 million, respectively, on the
early extinguishment of certain relatively higher-costing long-term debt. On a
pre-tax basis, these losses amounted to $7.2 million in 1999, $7.1 million in
1998 and $2.4 million in 1997.

YEAR 2000 ISSUE

During 1999, the Company successfully completed the implementation, testing
and validation of year 2000-capable versions of all of its mission-critical
systems and experienced no significant operational problems during the rollover
to the year 2000. To date, the Company has not experienced any significant
issues relating to the inability of its computer systems, or the computer
systems of its significant third-party contractors, to properly process dates
beyond December 31, 1999. The Company will continue to monitor its
mission-critical

29
<PAGE> 32

systems throughout the year 2000. Management, however, does not expect that any
significant problem related to the year 2000 issue will occur.

Cumulatively, since commencing its year 2000 efforts in 1997, the Company
has incurred approximately $23 million of pre-tax expense in connection with its
Year 2000 Plan. The Company currently anticipates that it will not incur
significant additional expense relating to the Year 2000 Plan. The total expense
substantially reflects consulting fees associated with software remediation,
project management and programming, as well as ancillary items, but does not
include such items as the cost of Company personnel involved in the Year 2000
Plan or capital expenditures that would have been made regardless of the issues
associated with the impending year 2000.

ASSET/LIABILITY MANAGEMENT

General

The Company's asset/liability management is governed by policies that are
reviewed and approved annually by the Boards of Directors of the Holding Company
and Dime FSB, which oversee the development and execution of risk management
strategies in furtherance of these policies. The Asset/Liability Management
Committee, which is comprised of members of the Company's senior management,
monitors the Company's interest rate risk position and related strategies.

Market Risk

In general, market risk is the sensitivity of income to variations in
interest rates, foreign currency exchange rates, commodity prices, and other
relevant market rates or prices, such as prices of equities. The Company's
market rate sensitive instruments include interest-earning assets,
interest-bearing liabilities and derivative financial instruments.

The Company enters into market rate sensitive instruments in connection
with its various business operations, particularly its mortgage banking
activities. Loans originated, and the related commitments to originate loans
that will be sold, represent market risk that is realized in a short period of
time, generally two to three months.

The Company's primary source of market risk exposure arises from changes in
United States interest rates and the effects thereof on mortgage prepayment and
closing behavior, as well as depositors' choices ("interest rate risk"). Changes
in these interest rates will result in changes in the Company's earnings and the
market value of its assets and liabilities. The Company does not have any
material exposure to foreign exchange rate risk or commodity price risk.
Movements in equity prices may have an indirect, but limited, effect on certain
of the Company's business activities or the value of credit sensitive loans and
securities.

Interest Rate Risk Management

The Company manages its interest rate risk through strategies designed to
maintain acceptable levels of interest rate exposure throughout a range of
interest rate environments. These strategies are intended not only to protect
the Company from significant long-term declines in net interest income as a
result of certain changes in the interest rate environment, but also to mitigate
the negative effect of certain interest rate changes upon the Company's mortgage
banking operating results. The Company seeks to contain its interest rate risk
within a band that it believes is manageable and prudent given its capital and
income generating capacity. As a component of its interest rate risk management
process, the Company employs various derivative financial instruments.

The Company's sensitivity to interest rates is driven primarily by the
mismatch between the term to maturity or repricing of its interest-earning
assets and that of its interest-bearing liabilities. Historically, the Company's
interest-bearing liabilities have repriced or matured, on average, sooner than
its interest-earning assets.

30
<PAGE> 33

The Company is also exposed to interest rate risk arising from the "option
risk" embedded in many of the Company's interest-earning assets. For example,
mortgages and the mortgages underlying MBS may contain prepayment options,
interim and lifetime interest rate caps and other such features affected by
changes in interest rates. Prepayment option risk affects mortgage-related
assets in both rising and falling interest rate environments as the financial
incentive to refinance a mortgage loan is directly related to the level of the
existing interest rate on the loan relative to current market interest rates.

Extension risk on mortgage-related assets is the risk that the duration of
such assets may increase as a result of declining prepayments due to rising
interest rates. Certain mortgage-related assets are more sensitive to changes in
interest rates than others, resulting in a higher risk profile. Because the
Company's interest-bearing liabilities are not similarly affected, the gap
between the duration of the Company's interest-earning assets and
interest-bearing liabilities generally increases as interest rates rise. In
addition, in a rising interest rate environment, adjustable-rate assets may
reach interim or lifetime interest rate caps, thereby limiting the amount of
their upward adjustment, which effectively lengthens the duration of such
assets.

Lower interest rate environments may also present interest rate risk
exposure. In general, lower interest rate environments tend to accelerate loan
prepayment rates, thus reducing the duration of mortgage-related assets and
accelerating the amortization of any premiums paid in the acquisition of these
assets. The amortization of any premiums over a shorter than expected term
causes yields on the related assets to decline from anticipated levels. In
addition, unanticipated accelerated prepayment rates increase the likelihood of
potential losses of net future servicing revenues associated with the Company's
mortgage servicing assets.

The Company is also exposed to interest rate risk resulting from certain
changes in the shape of the yield curve (particularly a flattening or
inversion -- also called "yield curve twist risk" -- of the yield curve) and to
differing indices upon which the yield on the Company's interest-earning assets
and the cost of its interest-bearing liabilities are based ("basis risk").

As further described below, in evaluating and managing its interest rate
risk, the Company employs simulation models to help assess its interest rate
risk exposure and the impact of alternate interest rate scenarios, which
consider the effects of adjustable-rate loan indices, periodic and lifetime
interest rate adjustment caps, estimated loan prepayments, anticipated deposit
retention rates and other dynamics of the Company's portfolios of
interest-earning assets and interest-bearing liabilities.

Derivative Financial Instruments

The Company currently uses a variety of derivative financial instruments to
assist in managing its interest rate risk exposures. While the Company's use of
derivative financial instruments in managing its interest rate exposures has
served to mitigate the unfavorable effects that changes in interest rates may
have on its results of operations, the Company continues to be subject to
interest rate risk.

Interest Rate Risk-Management Instruments. The Company's assets have
historically repriced or matured at a longer term than the liabilities used to
fund those assets. At December 31, 1999, the Company used the following
derivative financial instruments in its efforts to reduce its repricing risk:
(i) interest rate swaps, where, based on the notional amount of the related
agreement, the Company makes fixed-rate payments and receives variable-rate
payments, all of which are tied to the one- or three-month London Interbank
Offered Rate ("LIBOR"); (ii) interest rate cap corridors, where, in exchange for
the payment of a premium to the counterparty, the Company receives the amount by
which one-month LIBOR exceeds a specified strike rate up to a maximum rate, as
applied to the notional amount of the related agreement; and (iii) interest rate
futures, where the Company pays any increase, or receives any decrease, in the
market value of the underlying financial instrument.

31
<PAGE> 34

The following table sets forth the derivative financial instruments used by
the Company at December 31, 1999 for interest rate risk-management purposes,
segregated by the activities that they hedge (dollars in thousands):

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
ESTIMATED ---------------------------
NOTIONAL FAIR FIXED-RATE VARIABLE-RATE
AMOUNT VALUE PAYABLE RECEIVABLE
---------- --------- ---------- -------------
<S> <C> <C> <C> <C>
Interest rate swaps hedging:
Securities available for sale(1)... $ 578,253 $ 6,270 6.09% 6.32%
Loans receivable(1)................ 1,682,125 39,157 6.34 6.42
Short-term borrowings(1)........... 875,000 5,510 5.88 6.33
Interest rate cap corridors hedging:
Securities available for sale(2)... 45,810 2,354 -- --
Loans receivable(3)................ 234,894 11,845 -- --
Interest rate futures hedging:
Securities available for sale...... 360,000 -- -- --
Loans receivable................... 175,900 -- -- --
---------- -------
Total................................ $3,951,982 $65,136
========== =======
</TABLE>

- ---------------
(1) Variable rates receivable are presented on the basis of rates in effect at
December 31, 1999; however, actual repricings of the interest rate swaps
will be based on the applicable interest rates in effect at the actual
repricing dates.

(2) The weighted average strike rate was 4.92% and the weighted average maximum
rate was 5.92%.

(3) The weighted average strike rate was 4.93% and the weighted average maximum
rate was 5.93%.

Activity in derivative financial instruments used for interest rate
risk-management purposes is summarized in the following table for the years
shown (in thousands):

<TABLE>
<CAPTION>
INTEREST INTEREST INTEREST INTEREST INTEREST
RATE RATE RATE RATE SHORT RATE CAP
SWAPS CAPS SWAPTIONS FUTURES SALES CORRIDORS TOTAL
---------- ---------- --------- ----------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1996..................... $1,110,216 $1,234,424 $ -- $ -- $ -- $ -- $ 2,344,640
Additions.................. 904,837 -- 40,000 275,400 -- -- 1,220,237
Amortization and
maturities............... (502,698) (225,033) -- -- -- -- (727,731)
Terminations............... -- -- -- (275,400) -- -- (275,400)
---------- ---------- -------- ----------- -------- -------- -----------
Balance at December 31,
1997................. 1,512,355 1,009,391 40,000 -- -- -- 2,561,746
Additions.................. 993,937 -- -- 704,100 85,000 -- 1,783,037
Amortization and
maturities............... (297,649) (439,399) -- (250,000) -- -- (987,048)
Terminations............... (243,855) -- -- (154,100) (85,000) -- (482,955)
Reclassification to trading
assets................... -- (361,000) -- -- -- -- (361,000)
---------- ---------- -------- ----------- -------- -------- -----------
Balance at December 31,
1998................. 1,964,788 208,992 40,000 300,000 -- -- 2,513,780
Additions.................. 1,660,228 -- -- 1,729,100 -- 280,704 3,670,032
Amortization and
maturities............... (262,846) (208,992) (40,000) (300,000) -- -- (811,838)
Terminations............... (226,792) -- -- (1,193,200) -- -- (1,419,992)
---------- ---------- -------- ----------- -------- -------- -----------
Balance at December 31,
1999..................... $3,135,378 $ -- $ -- $ 535,900 $ -- $280,704 $ 3,951,982
========== ========== ======== =========== ======== ======== ===========
</TABLE>

Mortgage Banking Risk-Management Instruments. At December 31, 1999, the
Company used the following derivative financial instruments to protect against
the adverse impact on the value of the Company's

32
<PAGE> 35

mortgage servicing assets of substantial declines in long-term interest rates
and the consequent increase in mortgage prepayment rates: (i) interest rate
floors, where, in exchange for the payment of a premium to the counterparty, the
Company receives the excess of a specified strike rate over a designated market
interest rate (generally constant maturity Treasury or swap indices), as applied
to the notional amount of the related agreement; (ii) interest rate swaps, where
the Company receives a fixed rate and pays a variable rate tied to one- or
three-month LIBOR; (iii) interest rate swaptions, where, in exchange for the
payment of a premium to the counterparty, the Company, at a future date, has the
right to enter into interest rate swap agreements; and (iv) principal-only
swaps, where the Company: (a) receives the discount realized on the underlying
principal-only security and pays a variable rate based on one-month LIBOR as
applied to the notional amount of the agreement; and (b) pays or receives
changes in the market value of the underlying principal-only security.

Two major classes of derivative financial instruments were used by the
Company at December 31, 1999 to hedge the risk in its loans held for sale and
related commitment pipeline. To the extent that the Company estimates that it
will have loans to sell, the Company sells loans into the forward MBS market.
Such short sales are similar in composition as to term and coupon with the loans
held in, or expected to be funded into, the loans held for sale portfolio. In
addition, because the amount of loans that the Company will fund, as compared
with the total amount of loans that it has committed to fund, is uncertain, the
Company purchased put options on MBS and interest rate futures.

The following table sets forth the derivative financial instruments used by
the Company at December 31, 1999 in connection with its mortgage banking
activities, segregated by the activities that they hedge (dollars in thousands):

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
ESTIMATED ---------------------------
NOTIONAL FAIR VARIABLE-RATE FIXED-RATE
AMOUNT VALUE PAYABLE RECEIVABLE
---------- --------- ------------- ----------
<S> <C> <C> <C> <C>
Interest rate floors hedging
mortgage servicing assets(1)...... $2,885,000 $ 13,912 --% --%
Interest rate swaps hedging mortgage
servicing assets(2)............... 1,452,000 (68,235) 6.39 6.06
Interest rate swaptions hedging
mortgage servicing assets(3)...... 1,445,000 53,446 -- --
Principal-only swaps hedging
mortgage servicing assets(2)...... 51,085 173 6.64 --
Forward contracts hedging loans held
for sale.......................... 1,960,407 24,168 -- --
Put options purchased hedging loans
held for sale..................... 74,000 488 -- --
---------- --------
Total............................... $7,867,492 $ 23,952
========== ========
</TABLE>

- ---------------
(1) The weighted average strike rate was 5.80%.

(2) Variable rates payable are presented on the basis of rates in effect at
December 31 1999; however, actual repricings will be based on the applicable
interest rates in effect at the actual repricing dates.

(3) The weighted average strike rate was 6.93%.

33
<PAGE> 36

Activity in derivative financial instruments used to hedge mortgage
servicing assets is summarized in the following table for the years shown (in
thousands):

<TABLE>
<CAPTION>
INTEREST INTEREST INTEREST INTEREST PRINCIPAL
RATE RATE RATE RATE ONLY FORWARD
FLOORS SWAPS CAPS SWAPTIONS SWAPS CONTRACTS TOTAL
----------- ---------- --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1996................. $ 996,498 $ -- $ -- $ -- $ -- $ -- $ 996,498
Additions.............. 1,585,000 400,000 -- -- -- -- 1,985,000
Amortization........... (196,984) -- -- -- -- -- (196,984)
----------- ---------- --------- ----------- ------- ----------- -----------
Balance at December 31,
1997................. 2,384,514 400,000 -- -- -- -- 2,784,514
Additions.............. 2,025,000 400,000 400,000 -- -- -- 2,825,000
Amortization and
maturities........... (421,746) -- -- -- -- -- (421,746)
Terminations........... (1,585,000) -- -- -- -- -- (1,585,000)
----------- ---------- --------- ----------- ------- ----------- -----------
Balance at December 31,
1998................. 2,402,768 800,000 400,000 -- -- -- 3,602,768
Additions.............. 2,285,000 752,000 -- 2,745,000 53,222 2,540,000 8,375,222
Amortization and
maturities........... (377,768) -- -- -- (2,137) -- (379,905)
Terminations........... (1,425,000) (100,000) (400,000) (1,300,000) -- (2,540,000) (5,765,000)
----------- ---------- --------- ----------- ------- ----------- -----------
Balance at December 31,
1999................. $ 2,885,000 $1,452,000 $ -- $ 1,445,000 $51,085 $ -- $ 5,833,085
=========== ========== ========= =========== ======= =========== ===========
</TABLE>

For additional information concerning the Company's derivative financial
instruments, see Notes 1 and 22 of Notes to Consolidated Financial Statements in
Item 8, "Financial Statements and Supplementary Data."

Asset/Liability Repricing

The measurement of differences (or "gaps") between the Company's
interest-earning assets and interest-bearing liabilities that mature or reprice
within a period of time is one indication of the Company's sensitivity to
changes in interest rates. A negative gap generally indicates that, in a period
of rising interest rates, deposit and borrowing costs will increase more rapidly
than the yield on loans and securities and, therefore, reduce the Company's net
interest margin and net interest income. The opposite effect will generally
occur in a declining interest rate environment. Although the Company has a large
portfolio of adjustable-rate assets, the protection afforded by such assets in
the event of substantial rises in interest rates for extended time periods is
limited due to interest rate reset delays, periodic and lifetime interest rate
caps, payment caps and the fact that indices used to reprice a portion of the
Company's adjustable-rate assets lag changes in market rates. Moreover, in
declining interest rate environments or certain shifts in the shape of the yield
curve, these assets may prepay at significantly faster rates than otherwise
anticipated. It should also be noted that the Company's gap measurement reflects
broad judgmental assumptions with regard to repricing intervals for certain
assets and liabilities.

The following table reflects the repricing of the Company's
interest-earning assets, interest-bearing liabilities and related derivative
financial instruments at December 31, 1999. The amount of each asset, liability
or derivative financial instrument is included in the table at the earlier of
the next repricing date or maturity. Prepayment assumptions for loans and MBS
used in preparing the table are based upon industry standards as well as the
Company's experience and estimates. Non-accrual loans have been included in the

34
<PAGE> 37

"Over One Through Three Years" category. Demand deposits, money market deposits
and savings accounts are allocated to the various repricing intervals in the
table based on the Company's experience and estimates.

<TABLE>
<CAPTION>
PROJECTED REPRICING
---------------------------------
OVER ONE
THROUGH OVER
ONE YEAR THREE THREE
OR LESS YEARS YEARS TOTAL
-------- -------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans held for sale.............................. $ 1,734 $ -- $ -- $ 1,734
Loans receivable................................. 5,749 3,648 5,810 15,207
MBS.............................................. 1,148 677 1,870 3,695
Other............................................ 17 2 659 678
------- ------- ------- -------
Total interest-earning assets............ 8,648 4,327 8,339 21,314
------- ------- ------- -------
Interest-bearing liabilities:
Deposits......................................... 6,888 3,412 3,961 14,261
Borrowed funds................................... 6,990 383 373 7,746
------- ------- ------- -------
Total interest-bearing liabilities....... 13,878 3,795 4,334 22,007
------- ------- ------- -------
Periodic gap before impact of derivative financial
instruments...................................... (5,230) 532 4,005 (693)
Impact of derivative financial instruments......... 3,017 (1,357) (1,660) --
------- ------- ------- -------
Periodic gap....................................... $(2,213) $ (825) $ 2,345 $ (693)
======= ======= ======= =======
Cumulative gap..................................... $(2,213) $(3,038) $ (693)
======= ======= =======
Cumulative gap as a percentage of total assets..... (9.3)% (12.7)% (2.9)%
</TABLE>

The Company also utilizes complex simulation models to perform a
sensitivity analysis by which it estimates the potential change in its net
interest income over selected time periods resulting from hypothetical changes
in interest rates. This analysis evaluates the interest rate sensitivity of all
of the Company's interest-earning assets, interest-bearing liabilities and
derivative financial instruments by measuring the impact of changing rates on
12-month projected interest income and interest expense. The Company estimates
that, over a 12-month period, its net interest income would decrease by
approximately 4.0% and increase by approximately 3.8% in the event of an
instantaneous and sustained 100 basis point increase and decrease in interest
rates, respectively.

This analysis requires the Company to make certain assumptions regarding
prepayments of loans and securities, reinvestment of cash flow, deposit
retention, availability of external funding, and the spread between market rates
on interest-earning assets and interest-bearing liabilities. The Company relies
upon industry data, as well as its own experience, in developing the estimates
required for this interest rate sensitivity analysis.

The Company has developed policies addressing limits on changes in 12-month
projected net interest income for specific instantaneous and sustained shocks in
interest rates. The Company also utilizes market value of portfolio equity and
duration of equity analyses in the management of its interest rate risk.

MANAGEMENT OF CREDIT RISK

General

The Company's credit risk arises from the possibility that borrowers,
issuers, or counterparties will not perform in accordance with contractual
terms. The Company has a process of credit risk controls and management
procedures by which it monitors and manages its level of credit risk.

35
<PAGE> 38

Non-Performing Assets

The Company's non-performing assets, which consist of non-accrual loans and
other real estate owned ("ORE"), net, amounted to $86.1 million at December 31,
1999, up $2.7 million, or 3.3%, from the end of 1998. Non-accrual loans are all
loans 90 days or more delinquent, as well as loans less than 90 days past due
for which the full collectability of contractual principal or interest payments
is doubtful. When a loan is placed on non-accrual status, any accrued but unpaid
interest income on the loan is reversed and future interest income on the loan
is recognized only if actually received by the Company and full collection of
principal is not in doubt. Loans are generally returned to accrual status when
principal and interest payments are current, full collectability of principal
and interest is reasonably assured, and a consistent record of performance has
been demonstrated. Loans modified in a troubled debt restructuring ("TDR") that
have demonstrated a sufficient payment history to warrant return to performing
status are not included within non-accrual loans (see "Loans Modified in a
TDR").

The Company generally has pursued a loan-by-loan/property-by-property
disposition strategy with respect to its non-performing assets, while also
considering the appropriateness of alternate disposition strategies, including
bulk sales of non-performing assets such as the NPL Sale and the NPA Sales.

The following table presents the components of the Company's non-performing
assets at December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Non-accrual loans:
Residential real estate:
Permanent................ $50,991 $37,261 $ 90,488 $163,156 $206,230
Construction............. 302 510 510 635 840
------- ------- -------- -------- --------
Total residential
real estate....... 51,293 37,771 90,998 163,791 207,070
------- ------- -------- -------- --------
Commercial real estate:
Permanent................ 5,049 11,833 21,601 17,375 34,618
Construction............. 159 159 159 3,672 4,427
------- ------- -------- -------- --------
Total commercial
real estate....... 5,208 11,992 21,760 21,047 39,045
------- ------- -------- -------- --------
Consumer.................... 10,424 5,292 5,719 6,645 8,263
Business.................... 2,437 56 511 107 741
------- ------- -------- -------- --------
Total non-accrual
loans............. 69,362 55,111 118,988 191,590 255,119
------- ------- -------- -------- --------
ORE, net:
Residential real estate..... 9,978 15,170 20,228 36,182 38,799
Commercial real estate...... 6,963 14,505 9,255 20,367 24,952
Allowance for losses........ (250) (1,443) (1,722) (3,294) (3,070)
------- ------- -------- -------- --------
Total ORE, net...... 16,691 28,232 27,761 53,255 60,681
------- ------- -------- -------- --------
Total non-performing assets... $86,053 $83,343 $146,749 $244,845 $315,800
======= ======= ======== ======== ========
Non-performing assets to total
assets...................... 0.36% 0.37% 0.67% 1.30% 1.55%
Non-accrual loans to loans
receivable.................. 0.46 0.43 0.92 1.78 2.60
</TABLE>

The Company continues to expand its lending activities and product mix. The
Company intends to continue to monitor closely the effects of these efforts on
the overall risk profile of its loans receivable portfolio, which the Company
expects will continue to change over time.

36
<PAGE> 39

The level of loans delinquent less than 90 days may, to some degree, be an
indicator of future levels of non-performing assets. The following table sets
forth, at December 31, 1999, such delinquent loans of the Company, net of those
already in non-performing status (in thousands):

<TABLE>
<CAPTION>
DELINQUENCY PERIOD
-----------------------------
30-59 60-89
DAYS DAYS TOTAL
------- ------- -------
<S> <C> <C> <C>
Residential real estate............................... $26,494 $ 8,819 $35,313
Commercial real estate................................ 658 5,210 5,868
Consumer.............................................. 18,298 5,698 23,996
Business.............................................. 5,944 2,077 8,021
------- ------- -------
Total................................................. $51,394 $21,804 $73,198
======= ======= =======
</TABLE>

Loans Modified in a TDR

When borrowers encounter financial hardship but are able to demonstrate to
the Company's satisfaction an ability and willingness to resume regular monthly
payments, the Company may provide them with an opportunity to restructure the
terms of their loans. These arrangements, which are negotiated individually,
generally provide for interest rates that are lower than those initially
contracted for, but which may be higher or lower than current market interest
rates for loans with comparable risk, and may, in some instances, include a
reduction in the principal amount of the loan. The Company evaluates the costs
associated with any particular restructuring arrangement and may enter into such
an arrangement if it believes it is economically beneficial for the Company to
do so.

The following table sets forth the Company's loans that have been modified
in a TDR, excluding those classified as non-accrual loans, at December 31 (in
thousands):

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Residential real estate........ $ 5,520 $ 6,159 $37,532 $ 42,684 $ 43,090
Commercial real estate......... 5,800 6,039 46,677 170,323 159,097
------- ------- ------- -------- --------
Total loans modified in a
TDR.......................... $11,320 $12,198 $84,209 $213,007 $202,187
======= ======= ======= ======== ========
</TABLE>

Allowance for Loan Losses

The Company's allowance for loan losses is intended to be maintained at a
level sufficient to absorb all estimable and probable losses inherent in the
loans receivable portfolio. In determining the appropriate level of the
allowance for loan losses and, accordingly, the level of the provision for loan
losses, the Company reviews its loans receivable portfolio on at least a
quarterly basis, taking into account its impaired loans, the size, composition
and risk profile of the portfolio, delinquency levels, historical loss
experience, cure rates on delinquent loans, economic conditions and other
pertinent factors, such as assumptions and projections of future conditions.
While the Company believes that the allowance for loan losses is adequate,
additions to the allowance for loan losses may be necessary in the event of
future adverse changes in economic and other conditions that the Company is
unable to predict.

The Company's allowance for loan losses amounted to $140.3 million at
December 31, 1999, an increase of $35.2 million, or 33.5%, from the level
one-year earlier. This increase was primarily reflective of overall growth in
the loans receivable portfolio and changes in its risk characteristics.

37
<PAGE> 40

The following table sets forth the activity in the Company's allowance for
loan losses for the year ended December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance at beginning of year.......... $105,081 $104,718 $106,495 $128,295 $170,383
Provision for loan losses(1).......... 29,500 32,000 49,000 41,000 39,650
Additions due to acquisitions......... 19,277 -- 13,249 -- --
Loan charge-offs:
Residential real estate(2).......... (14,681) (34,175) (61,235) (52,191) (46,131)
Commercial real estate.............. (1,329) (2,956) (5,984) (13,244) (37,759)
Consumer............................ (5,892) (2,891) (4,161) (5,371) (8,172)
Business............................ (82) (45) (228) (490) (26)
-------- -------- -------- -------- --------
Total loan charge-offs.......... (21,984) (40,067) (71,608) (71,296) (92,088)
-------- -------- -------- -------- --------
Loan recoveries:
Residential real estate............. 2,517 3,465 3,652 5,093 5,220
Commercial real estate.............. 3,707 3,292 2,006 977 1,552
Consumer............................ 2,171 1,629 1,833 2,292 2,482
Business............................ 27 44 91 134 1,096
-------- -------- -------- -------- --------
Total loan recoveries........... 8,422 8,430 7,582 8,496 10,350
-------- -------- -------- -------- --------
Net loan charge-offs......... (13,562) (31,637) (64,026) (62,800) (81,738)
-------- -------- -------- -------- --------
Balance at end of year................ $140,296 $105,081 $104,718 $106,495 $128,295
======== ======== ======== ======== ========
Net loan charge-offs during the year
to average loans receivable
outstanding during the year......... 0.10% 0.24% 0.55% 0.61% 0.86%
Allowance for loan losses to loans
receivable at year end.............. 0.92 0.82 0.81 0.99 1.31
Allowance for loan losses to
non-accrual loans at year end....... 202.27 190.67 88.01 55.58 50.29
</TABLE>

- ---------------

(1) The provision for loan losses for 1997 included $14.0 million associated
with the NPA Sales.

(2) Loan charge-offs for 1998 and 1997 included $9.1 million associated with the
NPL Sale and $35.8 million associated with the NPA Sales, respectively.

38
<PAGE> 41

The following table sets forth, at December 31 for the years indicated, the
Company's allocation of the allowance for loan losses by category of loans
receivable and the percentage of each category of loans receivable to total
loans receivable (dollars in thousands).

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Allocation of allowance for loan losses(1):
Residential real estate........... $ 62,625 $ 47,509 $ 49,494 $ 59,228 $ 68,177
Commercial real estate............ 43,360 42,430 47,394 39,872 51,138
Consumer.......................... 22,836 5,262 4,724 5,652 6,881
Business.......................... 11,475 3,880 1,606 1,743 2,099
Unallocated....................... -- 6,000 1,500 -- --
-------- -------- -------- -------- --------
Total allowance for loan losses..... $140,296 $105,081 $104,718 $106,495 $128,295
======== ======== ======== ======== ========
Loans receivable category to total
loans receivable:
Residential real estate........... 53.9% 70.0% 75.8% 75.2% 73.0%
Commercial real estate............ 22.9 20.1 17.4 17.6 18.9
Consumer.......................... 16.4 7.6 6.0 6.8 7.7
Business.......................... 6.8 2.3 0.8 0.4 0.4
-------- -------- -------- -------- --------
Total............................... 100.0% 100.0% 100.0% 100.0% 100.0%
======== ======== ======== ======== ========
</TABLE>

- ---------------

(1) The portions of the allowance for loan losses allocated to the listed loan
categories, as well as any unallocated portion, are available to absorb
losses for any of the listed loan categories.

The Company has developed models and other analytic tools to assist in the
assessment of estimable and probable losses inherent in both the non-performing
and performing residential real estate loan and consumer loan portfolios. The
Company periodically reviews and refines these models, analyzing the continuing
validity of the assumptions used, comparing actual experience to that projected
in the models and modifying those assumptions as may, in the Company's judgment,
be appropriate. The Company also regularly analyzes economic trends and
underlying portfolio trends, such as changes in geographic and property type mix
and loan seasoning. The results of these reviews and analyses, which may yield a
range of values, are evaluated in determining the need during any period for
additions to the allowance for loan losses for residential real estate loans and
consumer loans. However, it should be noted that these various models and
analyses depend upon a large number of estimates and assumptions, especially
with respect to future economic and market conditions and borrower behavior,
that are subject to change, and it is entirely likely that future events will
vary in some respects from those predicted by any particular model or analysis.

The adequacy of the allowance for loan losses for the Company's commercial
real estate loan and business loan portfolios is based in part on a loan-by-loan
analysis that includes a risk-rating system. The Company's Asset Quality Review
Department ("AQRD") provides an independent review of the analyses performed by
management with respect to commercial real estate loans and business loans,
including the respective risk ratings assigned to such loans. Pursuant to the
Company's policy, the AQRD conducts an annual review of all commercial real
estate loans and business loans that have been assigned certain risk ratings,
with the balance of these loan portfolios reviewed on a test basis.

MBS

Of the $3.5 billion carrying value of the Company's MBS portfolio at
December 31, 1999, $2.7 billion were issued by entities other than FHLMC, GNMA
and FNMA. These privately-issued MBS have generally been underwritten by large
investment banking firms, with the timely payment of principal and interest on
these securities supported ("credit enhanced") in varying degrees by either
insurance issued by a financial guarantee insurer, letters of credit or
subordination techniques. Privately-issued MBS are subject to certain
credit-related risks normally not associated with MBS issued by FHLMC, GNMA and
FNMA, including the

39
<PAGE> 42

limited loss protection generally provided by the various forms of credit
enhancements, as losses in excess of certain levels are not protected.
Furthermore, the credit enhancement itself is subject to the creditworthiness of
the provider. Thus, in the event that a provider of a credit enhancement does
not fulfill its obligations, the MBS holder could be subject to risk of loss
similar to a purchaser of a whole loan pool. While substantially all of the
privately-issued MBS held by the Company at December 31, 1999 were rated "AA" or
better by one or more of the nationally recognized securities rating agencies,
no assurance can be given that such ratings will be maintained.

The following table sets forth, by issuer, the aggregate estimated fair
value (which was equal to the carrying value) of the Company's privately-issued
MBS that exceeded 10% of stockholders' equity at December 31, 1999 (in
thousands):

<TABLE>
<CAPTION>
ESTIMATED
NAME OF ISSUER FAIR VALUE
- -------------- ----------
<S> <C>
Green Tree Financial Corporation............................ $283,119
Structured Asset Securities Corporation..................... 260,245
</TABLE>

Derivative Financial Instruments

The level of credit risk associated with derivative financial instruments
depends on a variety of factors, including the estimated fair value of the
instrument, the collateral maintained, the use of master netting arrangements
and the ability of the counterparty to comply with its contractual obligations.
In the event of default by a counterparty, the Company would be subject to an
economic loss that corresponds to the cost to replace the agreement. The
Company's credit risk associated with its use of derivative financial
instruments amounted to $73.9 million at December 31, 1999 and $40.8 million at
December 31, 1998. There were no past due amounts related to the Company's
derivative financial instruments at December 31, 1999 or 1998.

FINANCIAL CONDITION

General

The Company's total assets amounted to $23.9 billion at December 31, 1999,
an increase of $1.6 billion, or 7.2%, from $22.3 billion at the end of 1998.
This growth was fueled by increases in commercial real estate, consumer and
business loans receivable, reflecting both internal growth and acquisitions
completed during 1999, and, to a lesser extent, a higher level of securities
available for sale. Partially offsetting these factors were reductions in the
Company's residential real estate loans held for sale into the secondary market
and for portfolio.

Securities Available for Sale

Securities available for sale rose to $3.8 billion at December 31, 1999
from $3.3 billion at the end of 1998. This increase primarily reflects growth in
privately-issued MBS in connection with the Company's balance sheet management
strategy. During 1999, the Company purchased $2.3 billion of securities
available for sale. Sales of securities available for sale during 1999 totaled
$1.4 billion. These sales included substantially all of the MBS associated with
$698.6 million of loans receivable that were securitized during the year.

40
<PAGE> 43

The following table presents the carrying value of the Company's securities
available for sale at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
MBS:
Pass-through securities:
Privately-issued.......................... $2,245,491 $1,775,264 $2,851,007
U.S. government agencies.................. 845,159 1,008,921 598,711
Collateralized mortgage obligations:
Privately-issued.......................... 408,945 179,484 1,336,690
U.S. government agencies.................. 18,093 -- 115,356
Interest-only................................ 499 628 1,129
---------- ---------- ----------
Total MBS............................ 3,518,187 2,964,297 4,902,893
---------- ---------- ----------
Other debt securities:
U.S. government and federal agencies......... -- 3,525 8,638
State and municipal.......................... 15,112 12,834 36,291
Domestic corporate........................... 304,081 343,095 35,359
Foreign government........................... 500 500 500
---------- ---------- ----------
Total other debt securities.......... 319,693 359,954 80,788
---------- ---------- ----------
Equity securities.............................. 11,796 5,193 8,623
---------- ---------- ----------
Total securities available for sale............ $3,849,676 $3,329,444 $4,992,304
========== ========== ==========
</TABLE>

At December 31, 1999, the Company's securities available for sale portfolio
had gross unrealized gains of $15.4 million and gross unrealized losses of
$165.1 million. This compares with gross unrealized gains of $25.8 million and
gross unrealized losses of $31.5 million at the end of 1998 and gross unrealized
gains of $22.1 million and gross unrealized losses of $37.4 million at the end
of 1997. These gross unrealized gains and losses reflect normal market
conditions and vary, either positively or negatively, based primarily on changes
in general levels of market interest rates relative to the yields on the
securities in the portfolio.

Loans Held for Sale

Loans held for sale into the secondary market in connection with the
Company's mortgage banking activities declined to $1.7 billion at December 31,
1999 from $3.9 billion at December 31, 1998. Production of such loans totaled
$20.5 billion during 1999, a reduction of $7.3 billion, or 26.2% from the prior
year. The decline in loan production resulted, in large part, from the higher
interest rate environment during 1999.

Loans Receivable

The Company's loans receivable (exclusive of the allowance for loan losses)
totaled $15.2 billion at December 31, 1999, up 19.3% from $12.7 billion at
year-end 1998. Contributing significantly to this growth was the overall impact
of the Citibank Auto Business Acquisition, the KeyBank Branch Acquisition and
the Lakeview Acquisition. In connection with these acquisitions, the Company
acquired a total of $1.7 billion of loans receivable, of which 59.1% were
consumer loans, 29.3% were business loans, 6.6% were commercial real estate
loans and 5.0% were residential real estate loans. These acquisitions
accelerated the Company's strategy to increase the aggregate percentage of its
commercial real estate, consumer and business loans receivable to total loans
receivable. During 1999, commercial real estate, consumer and business loans
receivable increased, in total, by $3.2 billion, or 83.0%, while residential
real estate loans receivable decreased $719.7 million, or 8.1%. In total,
commercial real estate, consumer and business loans receivable represented 46.1%
of total loans receivable at December 31, 1999, up from 30.0% one-year earlier
and 24.2% at year-end 1997.

41
<PAGE> 44

Residential real estate loans receivable amounted to $8.2 billion at the
end of 1999, down from $8.9 billion at the end of 1998. This decline resulted
from runoff and the securitization of $698.6 million of loans, which more than
offset the $1.9 billion of loans produced for this portfolio and loans acquired
in acquisitions.

Commercial real estate loans receivable totaled $3.5 billion at year-end
1999, which was $915.1 million higher than the level one-year earlier. The 35.6%
increase in these loans was largely reflective of the fact that loan production
outpaced runoff. During 1999, production of commercial real estate loans totaled
$1.4 billion, an increase of $262.0 million, or 23.2%, from the level in 1998.
At December 31, 1999, the commercial real estate loan portfolio consisted
primarily of loans secured by multifamily properties (51%), office buildings
(21%), and shopping centers (18%).

During 1999, the most significant increase in loans receivable occurred in
the consumer loan portfolio. This portfolio grew $1.5 billion, or 156%, during
1999 and amounted to $2.5 billion at year-end 1999. Contributing significantly
to the higher balance was the impact of acquisitions during 1999, particularly
the Citibank Auto Business Acquisition. Substantially as a result of the effects
of this acquisition, automobile loans increased to $886.2 million, or 35.5% of
the consumer loan portfolio, at December 31, 1999 from $4.4 million, or less
than 1.0% of the consumer loan portfolio, one-year earlier. At the end of 1999,
home equity loans continued to represent the largest component of the consumer
loans receivable portfolio. Such loans totaled $1.5 billion at that date, or
59.7% of the consumer loans receivable portfolio, an increase of $633.3 million,
or 73.9%, from the end of 1998. Total consumer loan production during 1999 was
$1.3 billion, up 73.3% from $733.4 million during 1998. Of the total loan
production during 1999 and 1998, 70.7% and 78.2%, respectively, was associated
with home equity loans.

Business loans receivable totaled $1.0 billion at December 31, 1999, up
$741.5 million, or 258%, from the end of 1998. The higher level of these loans
was attributable to internally generated growth and the effects of the KeyBank
Branch Acquisition and the Citibank Auto Business Acquisition, in which a total
of approximately $500 million of business loans were acquired. As a result of
the Citibank Auto Business Acquisition, the array of business loan products
offered by the Company was expanded to include automobile dealer floor plan
loans, which, at the end of 1999, comprised approximately 12% of the business
loans receivable portfolio.

The following table summarizes the Company's loans receivable at December
31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Residential real estate:
Permanent.............. $ 8,198,653 $ 8,918,170 $ 9,846,140 $ 8,071,208 $7,184,864
Construction........... 1,467 1,647 2,453 3,697 1,948
----------- ----------- ----------- ----------- ----------
Total
residential
real
estate....... 8,200,120 8,919,817 9,848,593 8,074,905 7,186,812
----------- ----------- ----------- ----------- ----------
Commercial real estate:
Permanent.............. 3,285,734 2,475,462 2,206,255 1,852,904 1,808,355
Construction........... 197,123 92,288 56,768 32,829 42,543
----------- ----------- ----------- ----------- ----------
Total
commercial
real
estate....... 3,482,857 2,567,750 2,263,023 1,885,733 1,850,898
----------- ----------- ----------- ----------- ----------
Consumer:
Home equity............ 1,489,669 856,389 632,006 538,065 524,716
Automobile............. 886,176 4,443 6,298 43,661 53,947
Other.................. 119,476 112,398 135,513 152,555 178,751
----------- ----------- ----------- ----------- ----------
Total
consumer..... 2,495,321 973,230 773,817 734,281 757,414
----------- ----------- ----------- ----------- ----------
Business................. 1,028,756 287,271 99,074 43,138 35,189
----------- ----------- ----------- ----------- ----------
Total loans receivable... $15,207,054 $12,748,068 $12,984,507 $10,738,057 $9,830,313
=========== =========== =========== =========== ==========
</TABLE>

42
<PAGE> 45

The maturities of the principal balances of the Company's real estate
construction loans receivable and business loans receivable (excluding lease
financing receivables) at December 31, 1999 were as follows (in thousands):

<TABLE>
<CAPTION>
REMAINING CONTRACTUAL MATURITY
---------------------------------------------
ONE OVER ONE
YEAR OR THROUGH OVER
LESS FIVE YEARS FIVE YEARS TOTAL
-------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Residential real estate construction:
Fixed-rate.................................. $ 1,467 $ -- $ -- $ 1,467
Commercial real estate construction:
Adjustable-rate............................. $ 88,158 $107,158 -- $195,316
Fixed-rate.................................. 2,997 -- -- 2,997
-------- -------- -------- --------
Total commercial real estate construction..... $ 91,155 $107,158 $ -- $198,313
======== ======== ======== ========
Business:
Adjustable-rate............................. $318,868 $268,567 $ 36,049 $623,484
Fixed-rate.................................. 52,661 97,822 123,603 274,086
-------- -------- -------- --------
Total business................................ $371,529 $366,389 $159,652 $897,570
======== ======== ======== ========
</TABLE>

Deposits

Deposits amounted to $14.3 billion at year-end 1999, up 4.5% from $13.7
billion at the end of 1998. This increase was principally driven by acquisitions
completed during the year, in which the Company assumed $1.8 billion of
deposits, the effects of which were partially offset by runoff of deposits,
primarily time deposits.

Part of the Company's strategy with respect to its deposits is to increase
the percentage of core deposits to total deposits. During 1999, core deposits
increased $778.0 million, or 11.3%, while time deposits decreased $168.0
million, or 2.5%. At December 31, 1999, core deposits represented 53.8% of total
deposits, up from 50.6% at the end of 1998, which had increased from 43.2% at
the end of 1997.

The following table sets forth a summary of the Company's deposits at
December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
------------------------- -------------------------
PERCENTAGE PERCENTAGE
AMOUNT OF TOTAL AMOUNT OF TOTAL
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Core:
Demand........................... $ 2,071,419 14.5% $ 1,976,122 14.5%
Savings.......................... 2,407,528 16.9 2,291,782 16.8
Money market..................... 3,201,298 22.5 2,634,312 19.3
----------- ----- ----------- -----
Total core............... 7,680,245 53.9 6,902,216 50.6
----------- ----- ----------- -----
Time............................... 6,581,204 46.1 6,749,244 49.4
----------- ----- ----------- -----
Total deposits..................... $14,261,449 100.0% $13,651,460 100.0%
=========== ===== =========== =====
</TABLE>

Borrowed Funds

Total borrowed funds amounted to $7.7 billion at December 31, 1999, which
represents an increase of $973.1 million, or 14.4%, from the end of 1998. This
increase was substantially associated with the funding of asset growth during
1999.

43
<PAGE> 46

Presented in the table below is the composition of the Company's borrowed
funds at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Federal funds purchased and securities sold under agreements
to repurchase:
Federal funds purchased................................... $ 785,000 $ 474,980
Securities sold under agreements to repurchase............ 321,067 1,770,238
---------- ----------
Total federal funds purchased and securities sold
under agreements to repurchase.................. 1,106,067 2,245,218
---------- ----------
Other short-term borrowings:
FHLBNY advances........................................... 3,711,086 3,647,330
Treasury tax and loan notes............................... 1,598,154 9,474
Other..................................................... 12,598 99,929
---------- ----------
Total other short-term borrowings................. 5,321,838 3,756,733
---------- ----------
Long-term debt:
FHLBNY advances........................................... 751,600 429,785
Senior notes.............................................. 348,322 98,977
Medium-term notes......................................... 48,541 51,983
Bonds, preferred stock and loans transferred in put
transactions........................................... 17,405 20,182
Other..................................................... -- 7,965
---------- ----------
Total long-term debt.............................. 1,165,868 608,892
---------- ----------
Guaranteed preferred beneficial interests in Dime Bancorp,
Inc.'s junior subordinated deferrable interest
debentures................................................ 152,219 162,005
---------- ----------
Total borrowed funds........................................ $7,745,992 $6,772,848
========== ==========
</TABLE>

The Company's primary source of borrowed funds at December 31, 1999 and
1998 was FHLBNY advances. In the aggregate, short- and long-term FHLBNY advances
comprised 57.6% of total borrowed funds at year-end 1999, as compared with 60.2%
at year-end 1998.

The Holding Company, during 1999, issued $200.0 million of 6.375% senior
notes due 2001 and $150.0 million of 7.00% senior notes due 2001.

During 1999, the Company extinguished, prior to maturity, the following
long-term debt: (i) $100.0 million of the Holding Company's 10.50% senior notes
due 2005; (ii) $3.0 million of NAMC's 7.315% medium-term notes due 2003; and
(iii) $0.2 million of NAMC's 7.29% medium-term notes due 2003. Further, during
1999, the Holding Company purchased $10.0 million of the outstanding guaranteed
preferred beneficial interests in its 9.33% junior subordinated deferrable
interest debentures.

Stockholders' Equity

Stockholders' equity amounted to $1.5 billion at December 31, 1999, up
$130.4 million, or 9.4%, from the end of 1998. This increase was largely due to
net income of $239.8 million, coupled with the $69.2 million value assigned to
the 2,852,321 shares of Common Stock issued in connection with the Lakeview
Acquisition. Growth in stockholders' equity was limited by an increase of $84.0
million in the Company's accumulated other comprehensive loss, treasury stock
purchases totaling $76.3 million and cash dividends declared on the Common Stock
aggregating $25.6 million, or $0.23 per common share.

Stockholders' equity was 6.34% of total assets at the end of 1999, as
compared with 6.21% at the end of 1998. Book value per common share was $13.67
at December 31, 1999, up from $12.42 one-year earlier.

At and during the year ended December 31, 1999, the Holding Company had one
Common Stock repurchase program in effect. This program, which was announced in
September 1998 and rescinded in

44
<PAGE> 47

February 2000 in connection with the Merger, authorized the Holding Company to
repurchase up to approximately 5.6 million shares of its outstanding Common
Stock. Through December 31, 1999, the Holding Company repurchased 4.2 million
shares of its Common Stock under this program, including 3.9 million shares
during 1999. No shares of Common Stock were repurchased under this program
subsequent to the end of 1999.

LIQUIDITY

The Company's liquidity management process focuses on ensuring that
sufficient funds exist to meet withdrawals by depositors, loan funding
commitments, debt service requirements and other financial obligations and
expenditures, as well as ensuring Dime FSB's compliance with regulatory
liquidity requirements. The liquidity position of the Company, which is
monitored on a daily basis, is managed pursuant to established policies and
guidelines.

The Company's sources of liquidity include principal repayments on loans
and MBS, borrowings, deposits, sales of loans in connection with mortgage
banking activities, sales of securities available for sale and cash provided by
operations. The Company has access to the capital markets for issuing debt or
equity securities, as well as access to the discount window of the Federal
Reserve Bank of New York, if necessary, for the purpose of borrowing to meet
temporary liquidity needs.

Excluding funds raised through the capital markets, the primary source of
funds of the Holding Company, on an unconsolidated basis, has been dividends
from Dime FSB, whose ability to pay dividends is subject to regulations of the
OTS (see "Regulation and Supervision -- Restrictions on Capital Distributions"
in Item 1, "Business"). At December 31, 1999, the Holding Company had an
effective shelf registration with the Commission under which it could issue an
aggregate of $150.0 million of debentures, notes or other unsecured evidences of
indebtedness. These debt securities, which may be unsubordinated or subordinated
to certain other obligations of the Holding Company, may be offered separately
or together in one or more series.

Under existing OTS regulations, Dime FSB must maintain, for each calendar
quarter, an average daily balance of liquid assets (as defined) equal to at
least 4.0% of either (i) its liquidity base (Dime FSB's net withdrawable
accounts plus short-term borrowings) at the end of the preceding calendar
quarter or (ii) the average daily balance of its liquidity base during the
preceding quarter. For the fourth quarter of 1999, Dime FSB's liquidity ratio
was 7.49%.

REGULATORY CAPITAL

Pursuant to OTS regulations, Dime FSB is required to maintain tangible
capital of at least 1.5% of adjusted total assets, core ("tier 1") capital of at
least 3.0% of adjusted total assets and total risk-based capital of at least
8.0% of risk-weighted assets. Dime FSB exceeded these capital requirements at
December 31, 1999.

Under the PCA regulations adopted by the OTS pursuant to FDICIA, an
institution is considered well capitalized, the highest of five categories, if
its ratio of total risk-based capital to risk-weighted assets is 10.0% or more,
its ratio of tier 1 capital to risk-weighted assets is 6.0% or more, its ratio
of core capital to adjusted total assets is 5.0% or greater, and it is not
subject to any order or directive by the OTS to meet a specific capital level.
At December 31, 1999, Dime FSB met the published standards for a well
capitalized designation under these regulations.

The following table sets forth Dime FSB's regulatory capital position at
December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
AMOUNT RATIO AMOUNT RATIO
---------- ----- ---------- -----
<S> <C> <C> <C> <C>
Tangible and core capital.................. $1,383,046 5.90% $1,282,010 5.82%
Tier 1 risk-based capital.................. 1,383,046 8.80 1,282,010 9.58
Total risk-based capital................... 1,623,342 10.33 1,387,091 10.37
</TABLE>

45
<PAGE> 48

During November 1999, Dime FSB issued $100.0 million of 8.0% subordinated
notes due November 2006, all of which were purchased by the Holding Company.
Such notes, as permitted under OTS regulations, are included in Dime FSB's total
risk-based capital at December 31, 1999.

RECENT ACCOUNTING DEVELOPMENTS

Effective January 1, 1999, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 134, "Accounting for Mortgage-Backed
Securities Retained After the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise." SFAS No. 134, which amends SFAS No. 65,
"Accounting for Certain Mortgage Banking Activities," requires that, after the
securitization of a mortgage loan held for sale, any retained MBS should be
classified in accordance with the provisions of SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities." However, SFAS No. 134
requires that a mortgage banking enterprise classify as trading any retained MBS
that it commits to sell before or during the securitization process. The
adoption of SFAS No. 134 did not materially impact the Company's financial
condition or results of operations.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. SFAS No. 133 requires that an entity recognize all
derivative instruments as either assets or liabilities in statements of
financial position and measure those instruments at fair value. SFAS No. 133, as
amended in July 1999 by SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133,"
is effective for fiscal years beginning after June 15, 2000. The Company intends
to adopt SFAS No. 133 on January 1, 2001. The Company has not completed its
evaluation of the effect that the adoption of SFAS No. 133 will have upon its
financial condition and results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this Item is contained in Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Asset/Liability Management," incorporated herein by reference.

46
<PAGE> 49

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. F-1
Consolidated Statements of Financial Condition.............. F-2
Consolidated Statements of Income........................... F-3
Consolidated Statements of Changes in Stockholders'
Equity.................................................... F-4
Consolidated Statements of Cash Flows....................... F-5
Consolidated Statements of Comprehensive Income............. F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

BOARD OF DIRECTORS

Set forth below are the names, ages, and terms of, and principal
occupations and length of service on the Board for each current member of the
Board as of January 31, 2000. Periods of service as a member of the Board
includes service as a member of the Board of Directors of Anchor Bancorp and/or
the Board of Directors of Anchor FSB, and certain predecessor institutions,
prior to the formation of Anchor Bancorp in 1991, as well as service as a member
of the Board of Directors of Dime FSB prior to the formation of Dime Bancorp in
1994.

Derrick D. Cephas joined the Board in 1994. Mr. Cephas, 48, has been a
partner in the New York law firm of Cadwalader, Wickersham & Taft since 1994.
Since November 1996, Mr. Cephas has been a director of Merrill Lynch
International Bank, an Edge Act corporation and an indirect, wholly-owned
subsidiary of Merrill Lynch & Co., Inc. He has been a director of D.E. Shaw &
Co., which serves as the direct or indirect general partner or manager of
several privately-held securities and technology businesses (including
registered broker-dealers and registered commodity pool operators), since
February 1996.

Frederick C. Chen joined the Board in 1988. Mr. Chen, 72, is retired from
Peat Marwick Main & Co. (now KPMG LLP), a firm of certified public accountants,
where he was a senior banking partner from 1966 to 1987. He is a trustee of
Republic Funds, an investment company.

J. Barclay Collins II joined the Board in 1993. Mr. Collins, 55, has served
as Executive Vice President and General Counsel of Amerada Hess Corporation
since 1990 and as a director since 1986.

Richard W. Dalrymple joined the Board in 1990. Mr. Dalrymple, 56, has been
the President of Teamwork Management, Inc., an executive recruiting firm, since
its formation in 1997. Prior to the Anchor Merger in January 1995, Mr. Dalrymple
served as President, Chief Operating Officer, and a director of Anchor Bancorp
since its formation and as President, Chief Operating Officer, and a director of
Anchor FSB since 1990. Mr. Dalrymple has been a director of Waterhouse Investors
Family of Funds, Inc., a registered investment company, since 1996, and a
director of National Investors Cash Management Fund, Inc., a registered
investment company, since 1997.

James F. Fulton joined the Board in 1981. Mr. Fulton, 69, has been
President of Fulton + Partners, Inc. (planning and design consultants) since
1966 and Chairman of the Board of Pratt Institute (an educational institution)
since 1992.

47
<PAGE> 50

Fred B. Koons joined the Board in January 1999. Mr. Koons, 55, is currently
a Senior Executive Advisor of the Holding Company and Dime FSB, having served as
Chief Executive Officer, Mortgage Banking, of the Holding Company and Dime FSB
from December 1996 until July 1, 1999. From July 1996 until he joined the
Company, Mr. Koons was a consultant to the Company regarding its mortgage
banking strategy. From 1986 until 1995, Mr. Koons served as President, Chairman
and Chief Executive Officer of Chase Manhattan Mortgage Corporation, Chairman
and Chief Executive Officer of Chase Educational Finance Corp. and Executive
Vice President of Chase Manhattan Bank, N.A. (now Chase Bank).

Virginia M. Kopp joined the Board in 1981. Mrs. Kopp, 70, is active in
community affairs. From 1983 until her retirement in 1987, Ms. Kopp was co-owner
and operator of a retail business.

James M. Large, Jr. joined the Board in 1989. Mr. Large, 67, has been
Chairman Emeritus of the Holding Company since April 1998. Prior to that date,
Mr. Large served as Chairman of the Board of the Holding Company since January
1995 and as the Chief Executive Officer of the Holding Company and the Chairman
of the Board and Chief Executive Officer of Dime FSB from January 1995 until his
retirement at the end of 1996. Prior to the Anchor Merger, Mr. Large was
Chairman of the Board and Chief Executive Officer of Anchor Bancorp since its
formation and Chairman of the Board and Chief Executive Officer of Anchor FSB
since April 1989.

Margaret Osmer-McQuade joined the Board in 1980. Ms. Osmer-McQuade, 61, has
served as President of Qualitas International, an international consulting firm,
since 1993, and a director of Riverside Capital International LLC, an asset
management company, since 1997.

John Morning joined the Board in 1979. Mr. Morning, 68, has been President
of John Morning Design, Inc. (a graphic design firm) since 1960.

Sally Hernandez-Pinero joined the Board in 1994. Ms. Hernandez-Pinero, 46,
has served as Senior Vice President for Corporate Affairs of The Related
Companies, L.P. (a low income real estate syndicator and owner/manager of
multi-family residential property) since May 1999. From June 1998 until she
assumed her current position, Ms. Hernandez-Pinero served as a managing director
of the Fannie Mae American Communities Fund. From October 1994 until May 1998,
Ms. Hernandez-Pinero was of counsel to the law firm of Kalkines, Arky, Zall &
Bernstein. She is a director of Consolidated Edison, Inc. (a public utility) and
Accuhealth, Inc. (a health care firm).

Paul A. Qualben, M.D. joined the Board in 1965. Dr. Qualben, 75, is a
physician in Brooklyn, New York and serves as a psychiatric consultant to
Evangelical Lutheran Church in America, the Norwegian Christian Home and Health
Center, the Eger Health Care Center of Staten Island, and Wagner College. He is
the former Director of Psychiatry at Lutheran Medical Center.

Eugene G. Schulz, Jr. joined the Board in 1959. Mr. Schulz, 69, served as
Vice Chairman and General Counsel of Anchor FSB prior to his retirement in 1989.

Howard Smith joined the Board in 1965. Mr. Smith, 69, has been President of
Virginia Dare Extract Co., Inc., Brooklyn, New York, a manufacturer of flavors,
since 1960. He is the Chairman of Lutheran Medical Center and the Chairman of
Augustana Lutheran Home.

Norman R. Smith, Ed.D. joined the Board in 1993. Dr. Smith, 53, has served
as President of Wagner College, Staten Island, New York since 1988.

Lawrence J. Toal joined the Board in 1991. Mr. Toal, 62, became the
Chairman of the Board of the Holding Company in April 1998 and the Chief
Executive Officer of the Holding Company and the Chairman of the Board and Chief
Executive Officer of Dime FSB in January 1997. He has been the President and
Chief Operating Officer of the Holding Company since its formation and the
President and Chief Operating Officer of Dime FSB since 1991. Mr. Toal has been
a director of Waterhouse Investors Cash Management Fund, Inc., a registered
investment company, since December 1995, and a director of SBLI Mutual Life
Insurance Company, Inc., since January 2000.

48
<PAGE> 51

Ira T. Wender joined the Board in 1992. Mr. Wender, 73, is the sole owner
of Ira T. Wender, P.C., which has provided services as of counsel since 1994 to,
and which held a partnership interest from 1988 through 1993 in, the law firm of
Patterson, Belknap, Webb & Tyler LLP. He is a director of REFAC Technology,
Inc., United Investors Realty Trust and Deotexis, Inc.

EXECUTIVE OFFICERS

The following table sets forth the name, age, and position of each
executive officer of the Company as of January 31, 2000 and the year in which
such person joined the Company:

<TABLE>
<CAPTION>
WITH THE
COMPANY
NAME AGE POSITIONS AND OFFICES WITH THE COMPANY SINCE
- ---- --- -------------------------------------- --------
<S> <C> <C> <C>
Lawrence J. Toal...... 62 Chairman of the Board, Chief Executive 1991
Officer, President and Chief Operating
Officer
Gene C. Brooks........ 50 Director of the Office of the Secretary and 1995
Senior Legal Advisor
Anthony R. Chief Financial Officer 1997
Burriesci........... 52
D. James Daras........ 46 Treasurer and Asset/Liability Executive 1990
James E. Kelly........ 48 General Counsel 1987
Richard A. Mirro...... 48 Chief Executive Officer, Mortgage Banking 1996
Carlos R. Munoz....... 64 Chief Credit and Risk Management Officer 1995
Peyton R. Patterson... 43 General Manager, Consumer Financial Services 1996
</TABLE>

Mr. Daras has been employed by the Company in the positions stated above
for more than five years. The principal occupation for at least the last five
years of each other executive officer who is not a member of the Board is set
forth below:

Mr. Brooks, who joined Anchor FSB in July 1987, served as Vice President
and General Counsel of Anchor Bancorp from its formation until the Anchor Merger
and as Secretary of Anchor Bancorp from March 1993 until the Anchor Merger. He
was General Counsel of the Company from April 1995 to January 1998, at which
time he assumed his present position.

Mr. Burriesci joined the Company in July 1997 as Chief Financial Officer.
From 1990 until he joined the Company, he held various finance-related positions
with First Fidelity Bancorporation, the most recent of which was Executive Vice
President and Corporate Controller, until it was acquired by First Union
Corporation in 1996, where he served as Executive Vice President-Finance and
Administration and Chief Financial Officer-Northern Region.

Mr. Kelly has served in various legal and business positions with the
Company since joining Dime FSB in January 1987, including as assistant to the
President from February 1992 to March 1995 and thereafter as Deputy General
Counsel until he assumed his present position in January 1998.

Mr. Mirro joined the Company in 1996 as President and Chief Operating
Officer, Mortgage Banking and assumed his present position in July 1999. Prior
to joining the Company, he was Chairman and Chief Executive Officer of Fleet
Mortgage Group from July 1996 to September 1996. From 1986 until joining Fleet
Mortgage Group, Mr. Mirro held various positions with Chase Manhattan Mortgage
Corporation, the most recent of which was President.

Mr. Munoz joined the Company in April 1995 as Chief Credit Officer and
assumed his present position in January 1997. Prior to joining the Company, he
served in various positions with Citibank, where he was most recently Senior
Vice President and a member of the Credit Policy Committee. In that position, he
had been responsible at various times for credit management and oversight of
part or all of Citibank's worldwide consumer banking activities, as well as
Private Banking and Global Finance in Latin America.

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<PAGE> 52

Ms. Patterson joined the Company in May 1996 as General Manager, Consumer
Lending and assumed her present position in June 1997. From 1989 until she
joined the Company, Ms. Patterson held several positions with Chemical Bank,
including most recently as General Manager of its Consumer Asset Group, until
the merger of that institution with Chase Manhattan Bank, N.A. in 1996, when she
became the Director of Marketing for its National Consumer Services Division.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Dime
Bancorp's directors and specified officers to file reports of ownership and
changes in ownership of their equity securities of Dime Bancorp with the
Commission and the NYSE and to furnish Dime Bancorp with copies of all such
reports.

Based solely upon a review of the copies of these Form 3, 4, and 5 reports
and amendments thereto received by Dime Bancorp, and certain written
representations received from such persons, Dime Bancorp believes that all
applicable filing requirements were complied with for 1999, and Dime Bancorp
does not know of any such persons who may have failed to file on a timely basis
any required form, except as follows: John Morning, a director of Dime Bancorp,
did not timely file a Form 4 reflecting the sale of 2,500 shares of Common Stock
on August 5, 1999 and D. James Daras, an executive officer of Dime Bancorp, did
not timely file a Form 5 reporting the receipt of a gift of 300 shares of Common
Stock by a trust for the benefit of his minor son on September 3, 1998.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

During 1999, the primary responsibility for determining the compensation of
Dime's executive officers was held by the Compensation Committee, subject to
review and appropriate approval by the Board.

Principles. For 1999, the Compensation Committee's guiding principles for
its compensation program reflect the same objectives as had been set in prior
years: (1) to enable Dime to recruit and retain the highest quality executive
talent available to it; and (2) to motivate Dime's executives to achieve and
sustain a superior level of corporate performance, since consistently superior
performance will result in superior returns to stockholders. Recruitment and
retention objectives are addressed by providing total compensation opportunities
that are competitive relative to the market with which Dime competes for talent.
In that regard, Dime recognizes that its own growth in recent years and its
expanded emphasis on commercial banking activities, as well as the enormous
changes taking place within the banking industry and the increasing competition
from other segments of the financial services industry, have significantly
broadened the range of institutions with which it can -- and must -- compete for
talent. Thus, the Compensation Committee believes that an important component of
its guiding principles must also be frequent monitoring of competitive practices
and an openness to adapting Dime's compensation practices to meet changing
conditions within the broad financial services industry and to foster Dime's
objectives of increasing its commercial banking orientation.

While operating within a competitive framework, the Compensation Committee
pursues its motivational objectives by giving greater emphasis to those
components of the total compensation package that reward performance, in order
to reinforce the linkage of rewards with the achievement of business results
and, ultimately, with the financial interests of stockholders. Thus, while the
principal components of compensation (base salary, annual incentive and
long-term incentive), as well as benefits, are generally set at or near
competitive levels, emphasis is placed on variable pay, with the intention that
total actual pay be aligned with performance relative to Dime's short- and
long-term objectives. The effect of this pay-for-performance orientation should
be that truly superior performance will result in total compensation that
exceeds the median total compensation range of the comparative group, while
mediocre performance will result in total compensation that is less than the
median range of that group. In particular, as the ultimate measure of
performance is return to stockholders, the compensation program, particularly
for more senior executives, should be designed to ensure that management has a
substantial proprietary financial interest in the return realized by
stockholders.

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<PAGE> 53

Practices. Because of the scope and complexity of Dime's activities in a
rapidly changing financial services industry, it is imperative that Dime
attract, retain and motivate the most qualified and talented executives
available to it. Dime competes for executives with a variety of financial
services companies, including commercial banks and other institutional lenders,
large thrifts, mortgage banking companies and investment banking firms. The
Compensation Committee, based in part on a thorough analysis of Dime's executive
compensation levels by independent outside compensation consultants and assisted
by third-party data collection and analysis, annually reviews Dime's executive
compensation practices within the framework discussed above and compares them
with the executive compensation practices of other financial services companies
with which Dime competes for executive talent.

As discussed in last year's Compensation Committee Report, Dime, in late
1997, undertook a thorough review of its compensation practices following the
acquisition of NAMC, and the results of that review were reflected in executive
compensation for 1998. For 1999, Dime continued the practices it had followed in
the prior year. Thus, Dime's independent compensation consultants analyzed
publicly reported senior management compensation at a peer group of institutions
(both thrifts and banks) throughout the country, which for 1999 consisted of 13
institutions, with median assets of $24.9 billion. This data was then adjusted
upward to reflect the generally higher cash compensation levels in the New York
City Metropolitan Area. They then further assessed publicly reported
compensation at five New York-based money-center/superregional banks (adjusted
downward to reflect size and revenue differentials), in order to take into
account the fact that Dime now draws much of its executive talent from the large
commercial banks located in New York City, as evidenced by the significant
number of Dime's executive officers who have previously served in senior
positions at such institutions immediately prior to joining Dime. Finally, for
those senior officer positions where comparable publicly reported peer group and
money-center/superregional bank data was generally not readily available,
published survey data was analyzed, including information on financial services
companies comparable in asset size to the peer group and to the
money-center/superregional group (adjusted on the same basis described above). A
functional matching approach was used to compare each of the executive positions
at Dime to market-surveyed positions based on similarity of responsibilities,
with appropriate adjustments being made as necessary to reflect any differences
therein. All data analyzed was, if necessary, adjusted upward to take into
account any time differential from the periods for which the data was reported.
The information from these various analyses then provided the starting point for
the Compensation Committee's approach to fixing the principal components of
executive compensation for 1999.

With respect to base salaries, the foregoing analysis showed that the base
salaries of most of Dime's senior officers were below both peer group and
money-center/superregional bank medians. For 1999, salaries for executive
officers were adjusted upward by, on average, approximately 11%, but generally
remained below the average of the peer group and money-center/superregional bank
medians described above. For 1999, consistent with these increases, the annual
salary for Mr. Toal, the Chief Executive Officer, was increased by 10% to
$825,000, which was slightly above the average of the peer group and
money-center/superregional bank medians.

With respect to incentives, and as described above, a fundamental tenet of
Dime's incentive compensation philosophy is to reward performance based
primarily on objective standards. Short-term incentives, payable in cash, are
geared to the accomplishment of Dime's key annual business plan objectives.

For 1999, cash incentives were awarded to senior officers under Dime's
stockholder-approved Senior Officer Incentive Plan. Under this plan, for a given
performance period (usually a calendar year), the Compensation Committee at the
beginning of the performance period designates officers who are eligible to
participate and specifies one or more levels of performance goals. These
performance goals must be based upon one or more of earnings per share, return
on equity and return on assets. The Compensation Committee then establishes
individual target incentive opportunities for each participating officer, as
well as a preset formula for determining the range within which incentive levels
may vary with the level of the performance goals reached. The amounts that would
otherwise be payable under the plan based on the level of performance goals
reached may then be decreased, but not increased, in the discretion of the
Compensation Committee. This plan is intended to qualify awards payable
thereunder as "qualified performance-based compensation"

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<PAGE> 54

under Section 162(m) of the Internal Revenue Code, thereby ensuring full
deductibility of compensation payable under the plan to any executive officers
whose total compensation may exceed $1 million.

For 1999, all of the executive officers named in the Summary Compensation
Table below were designated as participants in the Senior Officer Incentive
Plan. Performance goals for 1999, as for 1998, were based on the greater of
Dime's earnings per share or adjusted earnings per share (such an adjustment
would generally eliminate any extraordinary items, as determined in accordance
with generally accepted accounting principles, certain restructuring charges and
charges relating to discontinued operations, any profit or loss attributable to
business operations of an entity acquired by Dime during the performance period,
and any goodwill expense attributable to such acquired entity, that would
otherwise be included in earnings per share). Depending on the level of
performance goal achieved, a participant's incentive award could range between 0
and 200% of his or her individual target incentive (subject to a maximum annual
individual award limit with respect to awards under the Senior Officer Incentive
Plan of $1,500,000). In order to assist the Compensation Committee in setting
individual target incentives, Dime's independent compensation consultants
analyzed the same sources as discussed above with respect to the determination
of annual salaries, using for comparison purposes a three year average of
publicly reported compensation (expressed as a percentage of base salary),
without adjustment, for the executive officers named in the Summary Compensation
Table. For 1999, individual targets for plan participants were on average close
to the median of the peer group, although generally well below the median of the
money-center/superregional bank group. For 1999, Mr. Toal's target incentive
under the plan remained at 100% of his annual salary. This percentage, which was
determined on a basis consistent with plan participant target incentive
opportunities generally, was well below the midpoint of the combined survey
analysis. For 1999, Dime reported record earnings per share, substantially
exceeding the performance targets under the plan, and therefore participants
qualified for award opportunities of 200% of target incentive amount (subject to
maximum award limits under the plan). In then considering whether and to what
extent to use its discretion to reduce the cash incentives for which the
participants in the Senior Officer Incentive Plan were otherwise eligible, the
Compensation Committee considered at length the extent to which the significant
drop in Dime's stock price during 1999 should weigh against not only
management's success in producing earnings per share in excess of the targets
set forth in the plan, but also Dime's other significant operating achievements
during the year. In particular, the Compensation Committee noted such factors
as:

-- attaining a 14% growth in annual operating earnings per share, and
continuing a streak of 14 consecutive quarters of rising operating
earnings, despite a difficult rate environment and sharply declining
mortgage banking activity;

-- significant increases for 1999 in nearly all major performance measures,
including return on equity and return on assets, from 1998, itself a
record year; and

-- the substantial expansion of Dime's commercial banking businesses during
1999, including a 73% increase in consumer loan originations and a 217%
increase in business loan originations, in part as a result of the
strategic acquisitions during the year of Citibank's auto finance
business and of Keybank's commercial banking franchise on Long Island,
resulting in an increase in non-residential loans from 30% to 46% of
loans outstanding during the course of the year.

The Compensation Committee further considered that the purposes of
short-term incentives, which drive accomplishment of annual business goals,
should not be conflated with those of long-term incentives, which assure that a
significant portion of an executive's potential compensation is conditioned upon
the achievement and maintenance -- over multi-year periods -- of returns to
stockholders.

After weighing all these factors, the Compensation Committee concluded that
it was important to maintain the link between the accomplishment of clearly
defined and pre-set business objectives and a specific component of annual
compensation. In this regard, it was clear that, for 1999, management had not
only met but substantially exceeded these annual operating targets. While this
in turn led the Compensation Committee to conclude that the payment of
incentives as provided for in the plan was warranted, the Compensation Committee
also concluded that maximum awards under the plan, even if otherwise earned,
should not be paid where the return to stockholders for the year had been below
par. Accordingly, awards to executive officers

52
<PAGE> 55

under the plan were reduced. In the case of Mr. Toal, the incentive awarded for
1999 was $1,125,000, as compared with a maximum award of $1,500,000 for which he
was eligible under the plan.

Long-term incentives are provided in the form of stock and stock-based
grants. As discussed in last year's Compensation Committee Report, the
Compensation Committee has adopted an equity stake approach, which seeks to
establish a desirable level of equity participation for senior executives,
expressed as a percentage of Common Stock outstanding that is to be subject to
annual option grants, with the appropriate percentage of Common Stock to be
subject to such grants being determined by reference to competitive practices.
For 1999, the Compensation Committee determined to maintain the same stock
option grant guidelines as for 1998 (with adjustments being made to individual
grants based on considerations including individual performance and experience).
For 1999, as for 1998, grants were made in the form of non-qualified options to
purchase Common Stock. These non-qualified options generally vest over a three
year period (subject to accelerated vesting in certain circumstances, including
a change in control), have expiration dates 11 years from the date of grant and
have exercise prices equal to the fair market value per share of Common Stock on
the date of grant, which was deemed to be the closing price of such stock on the
NYSE on that date. In January 1999, Mr. Toal received non-qualified options to
purchase 120,000 shares of Common Stock at fair market value on the date of
grant, an increase over the 94,800 non-qualified options awarded to Mr. Toal in
1998, but still substantially below the average of the peer group and
money-center/superregional bank medians described above. The Compensation
Committee believes that this increase in the number of stock options granted was
consistent with the Compensation Committee's preference for emphasizing
long-term incentive compensation, the value of which is tied to stockholder
return.

Also, although not an aspect of cash or incentive compensation, Dime seeks
to attract and retain executives by providing a variety of benefit plans and
programs generally designed to be competitive with those provided by other
financial services companies. See "Executive Compensation" below for a
description of these plans and programs as currently in effect.

The Compensation Committee's policy is to structure executive compensation
in a time and manner intended to limit the likelihood that current compensation
will exceed the limits for deductibility prescribed by Section 162(m) of the
Internal Revenue Code. In furtherance of this policy, Dime adopted, with
stockholder approval, the Senior Officer Incentive Plan, under which cash
incentive awards to senior officers are made in a manner intended to qualify
them for full deductibility under the Internal Revenue Code. This policy
continued to be operative for 1999; however, the Compensation Committee retains
discretion to make exceptions to this policy, and in determining whether to do
so the Compensation Committee may consider a number of factors, including the
tax position of Dime, the materiality of amounts likely to be involved and any
potential ramifications of the loss of flexibility to respond to unforeseeable
changes in circumstances.

Finally, in determining compensation levels and targets within the
framework discussed above, the Compensation Committee takes into full account
applicable regulatory restrictions on the compensation of executive officers.

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<PAGE> 56

Executive compensation is a constantly evolving field. The Compensation
Committee monitors trends in this area, as well as changes in law, regulation
and accounting practice, that may affect either its compensation philosophy or
its practices. Accordingly, the Compensation Committee at all times reserves the
right to alter its approach in response to changing conditions. In particular,
the Compensation Committee expects that for 2000, in the wake of Dime's merger
with Hudson, the past compensation practices of both Dime and Hudson will be
carefully re-evaluated with a view to determining the practices that will best
suit the combined institution, Dime United.

THE COMPENSATION COMMITTEE:

IRA T. WENDER, CHAIRMAN
DERRICK D. CEPHAS
J. BARCLAY COLLINS II
MARGARET OSMER-McQUADE
DR. PAUL A. QUALBEN
HOWARD SMITH
DR. NORMAN R. SMITH

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<PAGE> 57

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation for
services in all capacities to Dime for the fiscal years ended December 31, 1999,
1998 and 1997 of those persons who were, at December 31, 1999, (a) the Chief
Executive Officer of Dime Bancorp and (b) the other four most highly compensated
executive officers of Dime Bancorp (collectively with the Chief Executive
Officer, the "named executive officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------ -------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION AWARDS(2) OPTIONS/SARS COMPENSATION(3)
- --------------------------- ---- -------- ---------- ------------ ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Toal(4)...... 1999 $825,000 $1,125,000 $ 0 $ 0 120,000 $ 48,321
Chief Executive Officer 1998 750,000 1,204,810(5) 5,617 1,631,070 94,800 164,581
1997 650,000 800,000 0 0 78,000 39,000
Anthony R. Burriesci(6)... 1999 400,000 479,683 3,070 0 40,000 23,002
Chief Financial Officer 1998 375,000 401,620(7) 4,666 699,840 36,700 56,769
1997 166,923 385,000(8) 20,776 577,500 90,000 0
Richard A. Mirro......... 1999 400,000 400,000 2,087 0 40,000 25,375
Chief Executive Officer, 1998 375,000 502,310(9) 3,696 62,226 36,700 20,125
Mortgage Banking 1997 350,000 395,000(10) 8,349 0 54,500 0
Peyton R. Patterson...... 1999 325,000 303,747 3,070 0 30,000 18,869
General Manager, 1998 275,000 201,040(11) 4,876 441,180 24,600 49,312
Consumer Financial 1997 225,000 170,000 0 0 16,000 8,827
Services
Carlos R. Munoz.......... 1999 350,000 230,000 3,070 0 35,000 20,311
Chief Credit and Risk 1998 325,000 231,250(12) 4,302 522,450 33,400 55,086
Management Officer 1997 300,000 175,000 0 0 18,000 18,000
</TABLE>

- ---------------
(1) Bonuses are reported in the year that the named executive officer rendered
the services to which the bonus relates, even though the amounts shown may
actually be paid to the named executive officer in a subsequent year.

(2) Except as noted, restricted stock awards generally vest in three equal
installments on the third, fourth, and fifth anniversary of the date of
grant. At December 31, 1999, Mr. Toal held 58,807 shares of restricted
stock having a value of $830,649 (3,207 shares of which were scheduled to
vest in equal installments on January 30, 2000 and January 30, 2001); Mr.
Burriesci held 37,047 shares of restricted stock having a value of $523,289
(1,080 shares of which were scheduled to vest in equal installments on
January 30, 2000 and January 30, 2001 and 11,667 shares of which were
scheduled to vest on January 24, 2000); Mr. Mirro held 14,874 shares of
restricted stock having a value of $210,095 (1,540 shares of which were
scheduled to vest in equal installments on January 29, 2000 and January 29,
2001); Ms. Patterson held 19,328 shares of restricted stock having a value
of $273,008 (694 shares of which were scheduled to vest in equal
installments on January 30, 2000 and January 30, 2001); and Mr. Munoz held
21,601 shares of restricted stock having a value of $305,114 (834 shares of
which were scheduled to vest in equal installments on January 30, 2000 and
January 30, 2001). Dividends are paid, and other distributions made, on all
shares of restricted stock to the same extent that dividends are declared
and paid, or other distributions are made, on shares of Common Stock in
general, provided such shares of restricted stock are held on the record
date determined for the payment of dividends, or the making of other
distributions, if any, on the Common Stock.

(3) For the year ended December 31, 1999, the amounts set forth reflect
matching and supplemental allocations by Dime Bancorp on behalf of each of
the named executive officers under certain defined contribution plans and
arrangements.

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<PAGE> 58

(4) Mr. Toal became Chief Executive Officer of Dime Bancorp (and Chairman of
the Board and Chief Executive Officer of Dime FSB) on January 1, 1997 and
Chairman of the Board of Dime Bancorp on April 30, 1998.

(5) The amount shown represents an incentive bonus for 1998 of $1,200,000 and a
cash award equal to the purchase price of 4,810 shares of restricted stock.

(6) Mr. Burriesci joined Dime Bancorp in July 1997 at an annual rate of salary
of $350,000.

(7) The amount shown represents an incentive bonus for 1998 of $400,000 and a
cash award equal to the purchase price of 1,620 shares of restricted stock.

(8) The amount shown represents a $150,000 cash bonus paid to Mr. Burriesci
upon joining Dime Bancorp in July 1997, an incentive bonus for 1997 of
$200,000 and a cash award equal to the purchase price of 35,000 shares of
restricted stock.

(9) The amount shown represents an incentive bonus for 1998 of $500,000 and a
cash award equal to the purchase price of 2,310 shares of restricted stock.

(10) The amount shown represents an incentive bonus for 1997 of $375,000 and a
cash award equal to the purchase price of 20,000 shares of restricted
stock.

(11) The amount shown represents an incentive bonus for 1998 of $200,000 and a
cash award equal to the purchase price of 1,040 shares of restricted stock.

(12) The amount shown represents an incentive bonus for 1998 of $230,000 and a
cash award equal to the purchase price of 1,250 shares of restricted stock.

The following table contains information concerning the grant of options to
purchase Common Stock and limited tandem stock appreciation rights ("SARs") to
the named executive officers during the year ended December 31, 1999.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR(2) PRICE ($/SH) DATE VALUE($)(3)(4)
- ---- ------------ -------------- ------------ ---------- --------------
<S> <C> <C> <C> <C> <C>
Lawrence J. Toal.......... 120,000 4.35% $ 24.25 1/29/10 $1,990,440
Anthony R. Burriesci...... 40,000 1.45 24.25 1/29/10 663,480
Richard A. Mirro.......... 40,000 1.45 23.875 1/28/10 653,220
Peyton R. Patterson....... 30,000 1.09 24.25 1/29/10 497,610
Carlos R. Munoz........... 35,000 1.27 24.25 1/29/10 580,545
</TABLE>

- ---------------
(1) The options shown become exercisable at a rate of one-third per year
commencing one year from the date of the grant. All of the awards reflected
in the table consisted of options with limited tandem SARs. The tandem SARs
shown are only exercisable within the 60-day period following the occurrence
of certain specified changes in ownership or control of Dime Bancorp or
certain of its subsidiaries and are payable on the basis of the highest
price paid for the Common Stock during the 90-day period ending on the day
of the change in ownership or control.

(2) The percentage set forth in this column reflects the relationship between
the number of options (with limited tandem SARs) granted to the named
executive officer and the number of options (whether or not with limited
tandem SARs) granted to all employees in the fiscal year.

(3) The estimated value shown, which was determined by application of the
Black-Scholes option pricing model, was developed solely for purposes of
comparative disclosure in accordance with the regulations of the Commission
and does not necessarily reflect Dime Bancorp's view of the appropriate
value or methodology for purposes of financial reporting. Use of this model
should not be viewed in any way as a

56
<PAGE> 59

forecast of the future performance of the Common Stock, volatility or
dividend policy. No adjustments have been made for forfeitures or
non-transferability.

(4) The estimated present value of the options shown is based upon historical
experience and for the options granted to each of the named executive
officers, except Mr. Mirro, is $16.587 per share. The estimated present
value of the options shown for Mr. Mirro is $16.330 per share. Volatility
calculated over 180 trading days prior to the date of grant was: .59.

Risk-Free Rate of Return, representing the interest rate on a United States
Treasury security with a maturity date corresponding to the term of the
options: 5.11%.

Dividend Yield for each of the options granted is .786%.

Time of Exercise for all options shown: 11 years.

The following table sets forth information with respect to exercised
options during 1999, as well as the aggregate number of unexercised options to
purchase Common Stock granted in all years to the named executive officers and
held by them as of December 31, 1999 and the value of unexercised in-the-money
options (i.e., options that had a positive spread between the exercise price of
such option and the fair market value of the Common Stock) as of December 31,
1999. Dime has not granted any freestanding SARs to the named executive
officers.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
SHARES ----------------- -----------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
Lawrence J. Toal.................... 0 $ 0 448,658/209,200 $3,178,242/0
Anthony R. Burriesci................ 0 0 72,233/ 94,467 0/0
Richard A. Mirro.................... 0 0 66,733/ 64,467 0/0
Peyton R. Patterson................. 6,667 40,835 13,533/ 51,734 0/0
Carlos R. Munoz..................... 12,000 11,250 29,333/ 63,267 65,975/0
</TABLE>

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<PAGE> 60

The following table shows the estimated annual pension benefits payable to
a covered member at normal retirement age (age 65) under the Retirement Plan of
Dime Bancorp, Inc. and the Benefit Restoration Plan of The Dime Savings Bank of
New York, FSB based on compensation covered under the plans and years of
creditable service with Dime FSB or certain affiliates of Dime. The Benefit
Restoration Plan provides benefits that would otherwise be denied a member
because of certain limitations on benefits under the Retirement Plan imposed by
the Internal Revenue Code.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF CREDITABLE SERVICE
--------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 125,000........................... $ 32,813 $ 43,750 $ 54,688 $ 65,625 $ 75,000
150,000.......................... 39,375 52,500 65,625 78,750 90,000
175,000.......................... 45,938 61,250 76,563 91,875 105,000
200,000.......................... 52,500 70,000 87,500 105,000 120,000
225,000.......................... 59,063 78,750 98,438 118,125 135,000
250,000.......................... 65,625 87,500 109,375 131,250 150,000
300,000.......................... 78,750 105,000 131,250 157,500 180,000
350,000.......................... 91,875 122,500 153,125 183,750 210,000
400,000.......................... 105,000 140,000 175,000 210,000 240,000
450,000.......................... 118,125 157,500 196,875 236,250 270,000
500,000.......................... 131,250 175,000 218,750 262,500 300,000
600,000.......................... 157,500 210,000 262,500 315,000 360,000
700,000.......................... 183,750 245,000 306,250 367,500 420,000
800,000.......................... 210,000 280,000 350,000 420,000 480,000
900,000.......................... 236,250 315,000 393,750 472,500 540,000
1,000,000.......................... 262,500 350,000 437,500 525,000 600,000
</TABLE>

A member's compensation covered by the plans is the product of 12 times his
or her average monthly compensation for the 36 consecutive months of service
during which the member's compensation was the highest or, if the member's
service is less than 36 months, then for the entire period of service. For these
purposes, covered compensation for the named executive officers includes salary,
but not bonus and other annual compensation, reported in the "Annual
Compensation" columns of the Summary Compensation Table. The benefit levels set
forth in the Pension Plan Table are based on the years of creditable service
shown in the table, continued existence of the plans without material change,
and payment of benefits in the form of a single life annuity (rather than in
other available forms). The benefits listed in the Pension Plan Table are not
subject to any reduction for Social Security contributions or benefits or any
other offset (although certain minimum benefits provided under the plans with
respect to certain prior service are subject to a deduction measured by Social
Security benefits, or by an offset with respect to compensation earned that is
not in excess of Social Security covered compensation). However, such benefits
reflect the application of the maximum benefit limit under the plans of 60% of
covered compensation.

Dime also maintains the Dime Bancorp, Inc. Supplemental Executive
Retirement Plan ("SERP"). The SERP provides for an annual benefit equal to a
pension goal percentage (between 30% and 60%) multiplied by Average Compensation
(as defined) payable over the life of each SERP participant after the
participant's retirement at or after age 65 or, in certain instances, a reduced
50% or 100% joint and survivor annuity form of benefit. Additional forms of
benefit, including 5-,10-, or 15-year-certain life annuities, are available, and
the Compensation Committee can direct that an actuarially equivalent lump sum be
paid at termination of service in lieu of an annuity. For these purposes, unless
otherwise provided by the Compensation Committee within the SERP's parameters,
Average Compensation is the highest average annual base salary and certain other
taxable cash-based compensation (other than sign-on bonus or other amounts paid
in connection with grants of rights to purchase restricted stock) earned over
three consecutive years out of the participant's last ten years

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of employment (or such other period designated by the Compensation Committee),
with incentive compensation deemed allocated and paid over the period over which
it was earned. The SERP benefit is offset by other retirement benefits provided
under qualified defined benefit plans of Dime Bancorp and Dime FSB (such as the
Retirement Plan), as well as the Benefit Restoration Plan and other contractual
benefits to the extent they relate to the benefits under a Dime qualified
defined benefit plan. The SERP provides that benefits may commence, in a reduced
amount, if the participant terminates service before age 65 but, unless the
Compensation Committee directs otherwise, no earlier than age 55. The SERP also
provides for a death benefit to be paid to a participant's surviving spouse or
minor children in the event that the participant dies prior to the start of his
or her benefits under the SERP. Death benefits will not commence to be paid
until the month that the participant would have attained age 55 had he or she
lived. Benefits under the SERP generally vest based on the period of employment
by the participant, with partial vesting after five years, increasing to full
vesting after ten years. The SERP counts service both before and during SERP
participation for these purposes. Accelerated vesting applies in the event of
certain terminations of employment after a change in control (as defined) and
the Compensation Committee can alter the vesting schedule (but with limits on
such alteration rights upon a change in control). Except with respect to vesting
rights, and except to the extent that compensation considered under the SERP may
increase over a period of time, the SERP benefit does not increase based on
years of service.

Mr. Toal's SERP goal was set at 60% by amendment of his employment
agreement effective as of October 22, 1999. As of December 31, 1999, therefore,
Mr. Toal had accrued a SERP benefit (which will be offset by his Retirement Plan
and related Benefit Restoration Plan benefits), commencing at age 65 in the form
of a single life annuity, of approximately $1,070,000. Mr. Toal was then 80%
vested in that benefit.

Mr. Burriesci has a SERP goal that has been set at 50%. Under Mr.
Burriesci's employment agreement, he is also provided with a benefit based on a
doubling of Retirement Plan and related Benefit Restoration Plan accruals
(offset by actual Retirement Plan and related Benefit Restoration Plan benefits)
during the first ten years of his employment, with that benefit vesting after
three years. Those benefits (in which Mr. Burriesci is not yet vested) will act
as an offset of Mr. Burriesci's SERP benefit. Based on compensation earned
through December 31, 1999, Mr. Burriesci's SERP benefit, which will be offset by
Retirement Plan and related Benefit Restoration Plan benefits, as well as the
additional contractual benefit described above, commencing at age 65 in the form
of a single life annuity, is approximately $404,321. Mr. Burriesci has not yet
vested in that benefit.

Each of Messrs. Mirro and Munoz and Ms. Patterson has a SERP goal that has
been set at 50%. Based on compensation earned through December 31, 1999, the
SERP benefit (which will be offset by Retirement Plan and related Benefit
Restoration Plan benefits) accrued, commencing at age 65 in the form of a single
life annuity, by Mr. Mirro is approximately $400,000, by Mr. Munoz is
approximately $268,333 and by Ms. Patterson is approximately $249,791. As of
December 31, 1999, none of these officers was vested in their respective SERP
benefits.

The respective completed years of creditable service under the Retirement
Plan and, as appropriate, the Benefit Restoration Plan and the years of service
for vesting in SERP benefits as of December 31, 1999 for each of the named
executive officers is as follows: Lawrence J. Toal, eight years; Anthony R.
Burriesci, two years; Richard A. Mirro, three years; Peyton R. Patterson, three
years; and Carlos R. Munoz, four years.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Dime FSB has employment agreements with each of Messrs. Toal, Burriesci,
Mirro and Munoz, as well as with Ms. Patterson.

Agreement with Mr. Toal. Effective as of October 22, 1999, the employment
agreement, dated January 30, 1998, between Dime FSB and Mr. Toal was amended.
The current term of Mr. Toal's agreement extends to December 31, 2002. Dime
Bancorp is jointly and severally liable for the obligations of Dime FSB under
Mr. Toal's agreement.

Mr. Toal's agreement provides that he will serve, throughout its term, as
Chief Executive Officer and Chairman of the Board of each of Dime Bancorp and
Dime FSB. Under his agreement, Mr. Toal received a

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base salary of $825,000 in 1999, which may be subsequently increased (but not
decreased) by the Board of Directors. For 2000, Mr. Toal's base salary has been
increased to $900,000. (Mr. Toal also will be eligible to participate in an
annual cash bonus program (with a target bonus opportunity of at least 50% of
his base salary) and long-term incentive program and is provided with certain
perquisites such as financial planning benefits, club memberships and a car and
driver.

Under his agreement, Mr. Toal also participates in the SERP, with a pension
goal of not less than 60% based on average compensation and vesting over ten
years of service. (Mr. Toal's SERP benefit is described in more detail above.)
However, pursuant to the agreement, Mr. Toal will be fully vested in his SERP
benefit in the event of a termination of his employment (other than for cause)
in connection with a change in control (as described below) that otherwise would
trigger a right to change in control-related benefits. In the event of any other
involuntary termination of Mr. Toal's employment (other than for cause), Mr.
Toal will receive service credit for SERP vesting purposes as if he had remained
in employment until the end of the term of his agreement then in effect. In
addition, when applying the average compensation definition under the SERP, in
the event of any termination of Mr. Toal's employment that would trigger a right
to change in control-related benefits, or any other involuntary termination of
Mr. Toal's employment (other than for cause), average compensation will be
determined as if Mr. Toal had continued service throughout the then applicable
term of his agreement and earned an assumed annual bonus based upon a formula
set forth in that agreement. Mr. Toal's agreement also provides that if, at or
after age 65, the amounts payable to him under the SERP and other defined
benefit plans of Dime Bancorp and affiliates, when stated in the form of a
single life annuity, do not equal at least $1,235,000, he will be entitled, upon
retirement, to additional payments so that his total retirement benefit,
expressed as a single life annuity, at or after age 65, will not be less than
that amount.

In the event of Mr. Toal's disability, his agreement provides that Mr. Toal
will receive a sum equal to his annual salary in the first year of such
disability and a sum equal to 75% of his annual salary for each year thereafter
throughout the duration of the disability up to age 65, with continued life,
medical, and dental coverage for the same period.

If Mr. Toal's employment is terminated by Dime FSB (other than for cause),
Mr. Toal will receive a lump sum payment equal to two times his annual salary,
as well as continuation, until the later to occur of the 18-month anniversary of
the date of termination or the end of the remaining term of his agreement at the
effective date of termination, of life, medical and dental insurance coverage,
subject to certain conditions. If Mr. Toal voluntarily terminates his employment
(except as provided below), generally no additional benefits will be provided to
him. Similarly, in general, no continuing benefits are otherwise to be provided
to Mr. Toal upon the expiration of the term of his agreement on his 65th
birthday, other than the SERP, the Key Executive Life Insurance/Death Benefit
Plan described below, and other retiree benefits otherwise payable to him.

Mr. Toal's agreement also provides for specified benefits following a
"change in control." For these purposes, a "change in control" is generally
defined to include (1) the acquisition of more than 35% of the voting power of
Dime Bancorp by any person, entity or group; (2) if the individuals who were
members of the Board of Directors on July 24, 1997, and others whose appointment
or nomination was recommended by a vote of 2/3 of the directors in office on
July 24, 1997 (or by other directors who themselves previously satisfied this
requirement), cease to constitute a majority of the Board; (3) a merger or
consolidation of Dime Bancorp or any direct or indirect subsidiary of Dime
Bancorp unless Dime Bancorp voting securities outstanding before the event
continue to represent (in combination with securities held under an employee
benefit plan of Dime Bancorp or any subsidiary) at least 65% of the outstanding
voting securities of the surviving entity after the merger or consolidation, or
unless the merger or consolidation was effected solely to implement a
recapitalization of Dime Bancorp or Dime FSB where no person, entity or group
becomes the owner of 35% or more of the voting securities of Dime Bancorp or
Dime FSB; (4) the execution of a binding agreement for one of the events
described in (1) or (3) (unless abandoned); and (5) certain sales of
substantially all of Dime Bancorp's consolidated assets, as well as certain
other circumstances specified in Mr. Toal's agreement.

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If following a change in control Mr. Toal's employment is involuntarily
terminated (other than for cause) during the term of his agreement in effect at
the time of the change in control, or if Mr. Toal terminates his employment
during such term after (a) he has not been re-elected to the positions set forth
above (or, if Dime Bancorp or Dime FSB is not the surviving ultimate parent
entity in the transaction giving rise to the change in control, elected as chief
executive officer of the ultimate parent entity), (b) there has been a notice of
non-renewal of Mr. Toal's agreement other than for cause, or (c) there is a
material change in Mr. Toal's functions, duties, or responsibilities to a level
of lesser responsibility, importance, or scope, Mr. Toal will be entitled to the
SERP enhancement described above, as well as other benefits. These additional
benefits include a lump sum equal to three times his "Annual Compensation," as
well as (to the extent permissible under the underlying plan) continued
exercisability of all vested stock options as if there had not been a
termination of employment (including options that vest upon Mr. Toal's
retirement), and continued disability, medical, and dental insurance coverage
for Mr. Toal and his spouse for the remainder of their lives, subject to certain
conditions. For these purposes, "Annual Compensation" at any time means the sum
of his annual salary plus an assumed annual bonus based upon a formula set forth
in Mr. Toal's agreement.

Agreement with Mr. Burriesci. Effective as of January 30, 1998, Dime FSB
entered into an employment agreement with Mr. Burriesci, which also replaced a
previous agreement. The term of Mr. Burriesci's agreement extends to March 1,
2003, with automatic renewal applying each March 1st, absent earlier non-
renewal. Dime Bancorp is jointly and severally liable for the obligations of
Dime FSB under Mr. Burriesci's agreement.

Mr. Burriesci's agreement provides that he will serve as Chief Financial
Officer of Dime Bancorp and Dime FSB, and provides an annual salary during the
period of the agreement ending July 1, 2000, at the rate of $375,000. This
annual salary is subject to periodic review and possible increase, or up to a
25% decrease (but not below the level set forth above). Under an Agreement
Regarding Initial Employment Terms effective as of July 1, 1997, Mr. Burriesci
effectively had a minimum target cash incentive opportunity for 1999 of 50% of
base pay as in effect on December 31, 1999. Mr. Burriesci's initial terms
agreement also provides for a promise of long-term incentive awards in the form
of options with a value of at least 75% of base pay for each of 1999 and 2000,
to the extent approved by the Compensation Committee, and provides for certain
perquisites.

Pursuant to the terms of his employment agreement, Mr. Burriesci also
participates in the SERP, with a pension goal of not less than 50% of average
SERP-covered compensation (as more fully described above). Mr. Burriesci's
agreement also provides for a benefit based upon a doubling of Retirement Plan
and related Benefit Restoration Plan accruals (offset by actual Retirement Plan
accruals) during the first ten years of his employment, with vesting of that
benefit after three years. This benefit will act as an offset of Mr. Burriesci's
SERP benefit, if one is payable.

In the event of Mr. Burriesci's permanent disability, Dime FSB will pay Mr.
Burriesci his annual salary for up to one year, less the maximum benefit
available under Dime insurance coverage, and will generally continue to provide
certain benefits for the remaining term of Mr. Burriesci's agreement then in
effect. If Mr. Burriesci's employment is terminated without cause, Dime FSB will
continue to pay him his annual salary (as in effect at the termination date) for
18 months, as well as generally continue certain benefits for the same period.
Under Mr. Burriesci's Agreement Regarding Initial Employment Terms, Mr.
Burriesci will also have full vesting of the restricted stock and options
granted in connection with the commencement of his employment if his employment
is involuntarily terminated other than for cause.

Mr. Burriesci's agreement also provides for enhanced severance benefits (in
lieu of the termination benefits described above) following a change in control
(defined in the same manner as under Mr. Toal's agreement). If, after a covered
change in control, Mr. Burriesci's employment is terminated by Dime FSB (other
than for cause), or if Mr. Burriesci terminates his employment during the term
in effect at the time of the change in control after a decrease in his annual
salary (to a level below that which applied before the change in control) or a
material downgrading of his duties or responsibilities from those in effect
immediately prior to the change in control, the enhanced benefits will be
payable. In either of those events, Mr. Burriesci is to be entitled to (i)
payment equal to three times the sum of his annual salary and target cash
incentives for

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which Mr. Burriesci was eligible (for the year in question) immediately before
the termination, and (ii) continuation of all life, disability, medical and
dental insurance coverage for the remaining term of his agreement at the time of
the termination, subject to certain conditions. Mr. Burriesci's agreement also
includes a provision for continued exercisability of all vested options for the
remainder of their terms and continued vesting and exercisability of all
non-vested options as if there had not been a termination of service upon a
change in control (to the extent permitted by the relevant plan under which the
options were granted). In the event of a termination of service triggering
change in control benefits, Mr. Burriesci will also fully vest in his SERP
benefit and be eligible for a payment to make up any amount forfeited under any
qualified defined contribution plan of Dime Bancorp and the related provisions
of the Benefit Restoration Plan.

Agreement with Mr. Mirro. Effective as of December 21, 1998, Dime FSB
entered into an employment agreement with Mr. Mirro, which replaced a previous
agreement. The term of Mr. Mirro's agreement currently extends to March 1, 2003,
with automatic renewal applying each March 1st, absent earlier non-renewal.

Mr. Mirro's agreement provides that he will serve as Chief Executive
Officer of Dime Savings' mortgage banking subsidiary, NAMC, with his salary as
Chief Executive Officer of NAMC at a minimum rate of $375,000 subject to
periodic review and possible increase, or up to a 25% decrease.

Pursuant to the terms of his employment agreement, Mr. Mirro also
participates in the SERP, with a pension goal of not less than 50% of average
SERP-covered compensation (as more fully described above). In the event of Mr.
Mirro's permanent disability, Dime FSB will pay Mr. Mirro his annual salary for
up to one year, less the maximum benefit available under Dime insurance
coverage, and will generally continue to provide certain benefits for the
remaining term of Mr. Mirro's agreement then in effect.

If Mr. Mirro's employment is terminated without cause, Dime FSB will
continue to pay Mr. Mirro his annual salary (as in effect at the termination
date) plus his target bonus amount (as in effect for the year of the
termination) for two years, as well as generally continue certain benefits for
the same period. In such circumstance, Mr. Mirro's stock options and restricted
stock will also fully vest. If Mr. Mirro's principal place of employment is
moved more than 75 miles from Tampa, Florida, he has the right, for a 30-day
period, to treat such relocation as a termination by Dime FSB without cause,
entitling him to these termination benefits. He also has a right to these
termination benefits if his agreement is not renewed, if, within 30 days of his
receipt of notice of non-renewal, he elects to treat the non-renewal as an
involuntary termination.

Mr. Mirro's agreement also provides for enhanced severance benefits
(generally in lieu of the termination benefits described above) in certain
circumstances following a change in control (defined in the same manner as under
Mr. Toal's agreement). If, after a covered change in control, Mr. Mirro's
employment is terminated by Mr. Mirro during the term of his agreement in effect
at the time of the change in control after a decrease in his annual salary (to a
level below that which applied before the change in control) or a material
downgrading of his duties or responsibilities from those in effect immediately
prior to the change in control, the enhanced severance benefits will be payable.
The enhanced severance benefits will also be payable if Mr. Mirro terminates his
employment for any reason during the 90-day period starting six months after
certain change in control events, provided that Mr. Mirro gives notice of his
intent to so terminate within 30-days after the change in control. (The period
between Mr. Mirro's notice and the termination date is referred to as the notice
period.) If Dime FSB involuntarily terminates Mr. Mirro's employment within the
notice period described above (including the providing of a notice of
non-renewal of Mr. Mirro's agreement) by any means other than at the direction
of Mr. Toal in his capacity as Chairman of the Board of Directors, Chief
Executive Officer or President of Dime FSB (but other than for cause), or even
if by Mr. Toal in such capacity but for reasons other than Mr. Mirro's
performance (other than for cause), the enhanced severance benefits will be
payable. If Dime FSB involuntarily terminates Mr. Mirro's employment other than
during the notice period but during the remaining term of his agreement in
effect at the time of the change in control, for any reason (other than for
cause), and by any permitted means (including the providing of a notice of
non-renewal of Mr. Mirro's agreement), the enhanced severance benefits will be
payable.

Where the enhanced severance benefits are payable, they will include (i)
payment equal to three times the sum or Mr. Mirro's annual salary and target
cash incentives for which Mr. Mirro was eligible (for the year
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in question) immediately before the termination, and (ii) continuation of life,
disability, medical and dental insurance coverage for the remaining term of his
agreement at the time of the termination, subject to certain conditions. Mr.
Mirro's agreement also includes a provision for exercisability of all vested
options for the remainder of their terms and continued vesting (to the extent
not otherwise subject to accelerated vesting) and exercisability of all
non-vested options as if there had not been a termination of service upon a
change in control (to the extent permitted by the relevant plan under which the
options were granted). In the event of a termination of service triggering
change in control benefits, Mr. Mirro will be eligible for a payment to make up
any amount forfeited under Dime Bancorp's Retirement 401(k) Plan and the related
provisions of the Benefit Restoration Plan. If Mr. Mirro is involuntarily
terminated within the term in effect at the time of a change in control, or if
he terminates his employment after a material downgrading of his duties or
responsibilities from those in effect immediately prior to the change in control
or a reduction in his salary, he will fully vest in his SERP benefits. If he
otherwise voluntarily terminates his employment in a manner making him eligible
for the enhanced severance benefits, he will be entitled to a benefit calculated
as if he were fully vested in Dime FSB's defined benefit pension plan and the
related provisions of the Benefit Restoration Plan (but which benefit would
constitute an offset of any other SERP benefits that may be payable to him).

If Mr. Mirro provides notice of his intent to terminate his employment
within 30 days after a change in control, with that termination to take effect
during the 90-day period starting six months after the change in control (with
the period between Mr. Mirro's notice and his announced termination date
referred to again as the notice period), and Dime FSB terminates Mr. Mirro's
employment during the notice period by action of Mr. Toal in his capacity as
Chairman of the Board, Chief Executive Officer or President of Dime FSB, for
reasons of Mr. Mirro's performance (but not constituting termination for cause),
Mr. Mirro will be entitled to all of the enhanced severance benefits that
otherwise apply in the event of an involuntary termination after a change in
control as described above, except that instead of receiving a payment equal to
three times the sum of his annual salary and target cash incentives for which he
was eligible (for the year in question) immediately before the termination, the
payment will be equal to two times such sum.

Other Agreements. Mr. Munoz and Ms. Patterson are each party to an
employment agreement with Dime FSB, with a current term until March 1, 2003.
Each agreement was entered into as of January 30, 1998 and replaced an earlier
agreement. Each agreement provides for automatic renewal each March 1st, absent
earlier non-renewal.

Each of the employment agreements with Mr. Munoz and Ms. Patterson provides
for an annual salary that is subject to periodic review and possible increase or
up to a 25% decrease. If the individual becomes permanently disabled and his
employment agreement is terminated by Dime FSB for that reason, Dime FSB will
pay the individual his or her annual salary for up to one year, less the maximum
benefit available under Dime's disability insurance coverage and will generally
continue to provide certain benefits for the remaining term in effect.

Each of these employment agreements provides for SERP participation, with a
pension goal of not less than 50% of average SERP-covered compensation.
Additionally, these employment agreements provide that, if Dime FSB terminates
the individual's employment without cause, he or she is generally entitled to a
continuation of salary and certain benefits for a period of between six and 18
months, depending on his or her length of employment and his or her age at the
time of termination.

Each of the employment agreements with Mr. Munoz and Ms. Patterson provides
for certain severance payments and benefits following a change in control of
Dime FSB if the employment agreement is terminated by (a) Dime FSB without cause
or (b) the individual during the term in effect at the time of the change in
control after a decrease in his or her annual salary or a material downgrading
in duties or responsibilities. For these purposes, a change in control is
defined in the same manner as under Mr. Toal's agreement. The benefits to be
provided to each of these individuals in such events will be (i) payment equal
to three times the sum of his or her annual salary and target cash incentives
for which he or she was eligible immediately before the termination, and (ii)
continuation of all life, disability, medical, and dental insurance coverage for
the remaining term of the employment agreement at the time of the termination
(as long as continued

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contributions are made by the employee). These agreements also include a
provision for continued exercisability of all vested stock options for the
remainder of their terms and continued vesting and exercisability of all
non-vested stock options as if there had not been a termination of service upon
a change in control (to the extent permitted by the relevant plan under which
the options were granted). These agreements additionally include a provision for
full vesting of SERP benefits, and a payment to make up any amount forfeited
under any qualified defined contribution plan of Dime Bancorp and the related
provisions of the Benefit Restoration Plan, in the event of a termination of
service triggering change in control benefits.

Ms. Patterson is also party to an Agreement Regarding Initial Employment
Terms, dated June 11, 1996, that provides for a promise of long-term incentive
awards equal in value to 60% of base pay, to the extent approved by the
Compensation Committee, and provides for certain perquisites.

Miscellaneous. Each of the employment agreements for Messrs. Toal,
Burriesci, Mirro and Munoz, and for Ms, Patterson, provides that, if the amounts
become payable other than as a result of events following a change in control,
and if those amounts would be deemed to constitute parachute payments within the
meaning of Section 280G of the Internal Revenue Code that would, when added to
other similar amounts, result in an excise tax under Section 4999 of the
Internal Revenue Code, they will be reduced to avoid the imposition of such
excise tax. However, the SERP benefit described above will not be so reduced. In
the event of a change in control, or in the absence of a change in control, in
the event that the SERP benefit results in the imposition of such an excise tax
(but after the reduction of other benefits, as described above), Dime FSB will
make an additional payment or payments so as to provide the executive with the
benefits he or she would have received in the absence of such tax. Dime FSB will
not be entitled to a federal income tax deduction for any "excess parachute
payments," including any additional amounts paid pursuant to the "gross-up"
provisions of the respective employment agreements with regard to such taxes.

Each of the foregoing employment agreements includes provisions
conditioning payments thereunder on compliance with statutory and regulatory
restrictions.

Each of Messrs. Toal, Burriesci, Mirro, and Munoz and Ms. Patterson
participates in the Key Executive Life Insurance/Death Benefit Plan of Dime FSB
(the "Key Life Plan"), which provides life insurance coverage during their
employment generally up to six times the sum of the named executive officer's
base salary plus target incentive amounts for the preceding year, for which the
participant pays a scheduled premium. If the participant terminates employment
when eligible to "Retire" (for these purposes, when the participant retires
under the Retirement Plan or otherwise after attaining age 55 and completing 5
years of service), the life insurance coverage converts into the right to a
death benefit in the same amount for each of the named executive officers, with
no additional contributions required by the participant. If the participant
terminates employment before he or she is eligible to Retire, the participant
may continue life insurance coverage until age 65 by paying the required
premiums and, at that age, can convert to such death benefit, to the extent such
benefit has otherwise vested. Vesting in the death benefit depends on service
with Dime as a participant in the Key Life Plan, with graded vesting over ten
years and full vesting upon retirement under the Retirement Plan or otherwise
after attaining age 55 and completing 5 years of service. Full vesting in the
death benefit also applies for certain participants (including all of the named
executive officers) in the event of certain "change in control" events, as
defined in the Key Life Plan, with other change in control events resulting in
full vesting only if the participant's service terminates involuntarily or after
a reduction in salary or a material downgrading in duties or responsibilities.
For Mr. Toal, full vesting occurred in connection with the Anchor Merger.

In addition to the severance payments and benefits described above, awards
of stock options, restricted stock, and certain other stock-based awards to Dime
employees, including the named executive officers, will generally vest upon a
change in control of Dime.

DIRECTOR COMPENSATION

During 1999, outside directors were paid an annual retainer fee of $30,000.
Outside directors were entitled to receive a fee of $1,500 for each board
meeting of Dime FSB or Dime Bancorp attended in person, $1,200 for each
committee meeting attended in person and $1,000 for each board or committee
meeting
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attended by telephone conference. However, whenever concurrent or consecutive
meetings were held by both Dime Bancorp and Dime FSB, each director waived the
fees with respect to one of those entities. Additionally, the Chairperson of
each of Dime's standing committees receives an annual fee of $4,000.

Outside directors may choose to defer all or a portion of their cash
compensation pursuant to a Deferred Compensation Plan. If an outside director
defers his or her compensation, it will be payable at a later date (generally
not less than three years after the year in which it would otherwise have been
payable and not later than the later of the calendar quarter in which the
director attains age 75 or the fourth quarter after the termination of service
of the director) and, at that time, may be paid (pursuant to the director's
election) in a lump sum, in installments, or converted to an annuity form.
Payments may also be made in the event of certain changes in control or upon
certain circumstances of financial hardship. (Different payout rules apply with
respect to the payment of amounts deferred prior to August 1994.) During the
period of the deferral, amounts deferred are credited with earnings based upon
the director's election from among several different deemed investments, which
currently include phantom units of Common Stock.

In addition, Dime has maintained a Retainer Continuation Plan for its
outside directors since 1988. Under the Retainer Continuation Plan, a
participating outside director is entitled to receive an annual benefit, payable
for life commencing when the director ceases to serve on the Board, equal to the
basic annual retainer paid to outside directors for the last calendar year in
which he or she served on the Board. The amount of this benefit will be adjusted
actuarially if a payment option other than a single-life annuity is chosen, and
if the director's death were to occur before benefit payments have begun, his or
her beneficiary will be paid a benefit that is the actuarial equivalent of the
benefit that would have been payable to the director. The total benefit to be
payable to a director under the Retainer Continuation Plan will not be less, in
the aggregate, than the present value of the director's benefit based on the
amount accrued as of January 1, 1997 as described below. This plan was amended
in 1996 and, as a result, is no longer open to new directors. The only current
outside director participating in the Retainer Continuation Plan is Mrs. Kopp.

Each of the other then current outside directors, who elected, pursuant to
the 1996 amendment, to have a lump sum amount that was determined to reflect the
present value of their benefit under that plan accrued as of January 1, 1997, as
well as a 3.5% inflation factor, credited to, and payable as a fully vested
benefit under, the director Deferred Compensation Plan, will no longer receive
any benefits under the Retainer Continuation Plan. The amount credited to the
Deferred Compensation Plan for the outside director was required to be deemed
invested in phantom units of Dime's common stock until the earlier of the
director's attaining age 73 or the second anniversary of the transfer. For
purposes of the initial deemed investment in phantom stock, the value of the
stock was based on the average closing price of Dime's common stock during each
trading day in the 12-month period preceding the date of the initial phantom
stock investment. A similar average value based on closing prices of Dime's
common stock during the preceding 12-month period will apply when determining
the value of the phantom stock the first time a director directs that the
amounts that were credited as a result of this transfer from the Retainer
Continuation Plan are no longer to be deemed invested in phantom stock. A
special valuation will also apply in the event of a change in control of Dime.
Payment of the credited amounts (and earnings thereon) can be made in a lump
sum, in installments, or in the form of an annuity and will commence at the end
of the quarter following the director's termination of service, unless the
director elects a different commencement date. However, the benefit commencement
date could not be any earlier than the first date that the director was
otherwise permitted to direct the deemed investment of the transferred amount
out of phantom stock.

Under the Dime Bancorp, Inc. 1997 Stock Incentive Plan for Outside
Directors, awards of options to purchase shares of Common Stock, SARs, rights to
purchase shares of restricted stock, or deferred stock may be made to outside
directors of the board of directors of Dime Bancorp or an eligible subsidiary of
Dime Bancorp. As of January 31, 2000, there are 15 outside directors of Dime
Bancorp eligible to participate in this plan. During 1999, the outside directors
were each awarded the right to purchase 1,000 shares of restricted stock at a
price of $.01 per share under this plan.

During 1999, in connection with his services as Chairman Emeritus of Dime
Bancorp, Mr. Large received a retainer fee and meeting fees under the same terms
as other outside directors plus a consulting fee of $8,334

65
<PAGE> 68

per month. This consulting arrangement is reviewed periodically and may be
adjusted as warranted in light of the time commitment required of Mr. Large in
connection with the performance of the requested duties. Mr. Large's consulting
services as Chairman Emeritus include significant time related to the conduct of
Dime's "goodwill" litigation against the federal government (as described in
Item 3, "Legal Proceedings"), as well as such other tasks as may reasonably be
requested from time to time by the Chief Executive Officer of Dime Bancorp.

During 1999, in connection with his services as Chief Executive Officer of
NAMC through June 30, 1999, Mr. Koons received compensation in the amount of
$200,000. Thereafter, as Senior Executive Advisor to NAMC, Mr. Koons received
compensation in the amount of $125,000, pursuant to the terms of his employment
agreement, which was effective as of December 15, 1998. The term of Mr. Koons'
agreement extends until June 30, 2002.

Mr. Koons' agreement provides that he would serve as an Executive Vice
President of Dime Bancorp and Dime FSB and as Chief Executive Officer of NAMC
through at least June 30, 1999. His agreement also provides that he will
continue as an employee of Dime FSB after he ceases serving as Chief Executive
Officer of NAMC, through the end of the term of his agreement.

Under his agreement, Mr. Koons was required to devote substantially all of
his business time to his duties under the agreement through June 30, 1999. Since
that date, Mr. Koons has been required to devote a lesser amount of time to his
duties under the agreement and is permitted to engage in certain other
non-competitive activities. Mr. Koons' agreement provides for annualized salary
at a rate of $375,000 for the period ending June 30, 1999. For the period from
July 1, 1999 through June 30, 2000, Mr. Koons' agreement provides for a salary
at the rate of $250,000, and for each of the 12-month periods thereafter for a
salary at the rate of $175,000, in each case subject to increase on a per diem
basis if Mr. Koons works for more than an agreed upon minimum number of days in
each such period.

Pursuant to the terms of his agreement, Mr. Koons also participates in the
SERP, with a pension goal of not less than 50%, and other terms as specified in
his SERP grant (described above). Mr. Koons is also provided with supplemental
benefits to the extent he is otherwise unable, on account of his employment
status, to participate in the Retirement Plan and the Benefit Restoration Plan
(with such benefits acting as an offset of his SERP benefit) and a supplemental
payment to the extent he is otherwise unable, on account of such status, to
participate in Dime Bancorp's qualified defined contribution plan and the
related provisions of the Benefit Restoration Plan.

In the event of Mr. Koons' permanent disability, Dime FSB will pay Mr.
Koons his annual salary for up to one year, less the maximum benefit available
under the Dime FSB disability insurance coverage, and will generally continue to
provide certain benefits for the remaining term of the agreement. If Mr. Koons'
employment is terminated without cause, Dime FSB will pay him a lump sum equal
to his aggregate salary payable for the remaining term of Mr. Koons' agreement
(assuming he works the minimum number of agreed-upon days set forth in his
agreement), as well as generally continue certain benefits for such remaining
term. Mr. Koons has the right under the agreement to treat any relocation of his
principal place of business more than 75 miles from Tampa, Florida as a
termination without cause, if he makes an election to so treat it within 30 days
of the relocation. Under Mr. Koons' agreement, to the extent permitted by the
relevant plan, upon an involuntary termination of Mr. Koons' employment (other
than for cause), or a termination upon a relocation treated (by Mr. Koons'
election) as an involuntary termination without cause, grants of options and
restricted stock previously made to Mr. Koons generally will vest (and, with
respect to options, become exercisable). Upon an involuntary termination without
cause, to the extent permitted, options will remain exercisable by Mr. Koons for
their remaining terms. (An Agreement Regarding Initial Employment Terms with Mr.
Koons dated December 2, 1996 provides for exercisability for the full remaining
term, to the extent vested, of the options therein promised (with a value of 60%
of his base pay) for grant during the first two years of his employment in the
event of any termination of his employment other than for cause.)

Mr. Koons' agreement provides for enhanced severance benefits following a
change in control (defined in the same manner as under Mr. Toal's agreement).
Those benefits will be payable if, after a covered change in control, Mr. Koons'
employment is terminated by Dime FSB (other than for cause), or if Mr. Koons
66
<PAGE> 69

terminates his employment during the term in effect at the time of the change in
control after a decrease in his annual salary (not otherwise contemplated by his
agreement) or a material downgrading of his duties or responsibilities from
those contemplated under Mr. Koons' agreement. In either of those events, Mr.
Koons is to be entitled to payment equal to three times his annual salary
(assuming for these purposes that he works the minimum number of agreed upon
full-time equivalent days during any of the periods set forth in Mr. Koons'
agreement), and continuation of all life, disability, medical and dental
insurance coverage for the remaining term of his agreement, subject to certain
conditions. Mr. Koons' agreement also would then provide for continued
exercisability of all vested options for the remainder of their terms, and
immediate vesting and continued exercisability of all restricted stock and
non-vested options held by Mr. Koons, as if there had not been such a
termination of service upon the change in control (to the extent permitted by
the relevant plan under which the options were granted). In the event of a
termination of service triggering change in control benefits, Mr. Koons will
also fully vest in his SERP benefit and be eligible for a payment to make up any
amount forfeited under Dime's 401(k) plan or any other qualified defined
contribution plan of Dime Bancorp and the related provisions of the Benefit
Restoration Plan.

COMPARISON OF FIVE-YEAR RETURN TO STOCKHOLDERS

Set forth below is a line-graph presentation comparing, for the period
commencing on the market close on December 31, 1994 through and including
December 31, 1999, the yearly percentage change in Dime's cumulative total
stockholder return with the cumulative total return of the Standard & Poor's
("S&P") 500 Stock Index and the S&P Financial Index.(1)

[Total Return Performance Chart]

<TABLE>
<CAPTION>
DIME BANCORP, INC. S&P 500 S&P FINANCIAL INDEX
------------------ ------- -------------------
<S> <C> <C> <C>
Dec 94 100.00 100.00 100.00
Dec 95 150.00 137.58 143.72
Dec 96 190.32 169.03 189.49
Dec 97 392.69 225.44 275.49
Dec 98 343.09 289.79 301.88
Dec 99 199.89 350.78 308.49
</TABLE>

- ---------------

(1) Assumes $100 invested on December 31, 1994 in each of the Common Stock, the
S&P 500 Stock Index, and the S&P Financial Index. Total return assumes
reinvestment of dividends and other distributions.

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<PAGE> 70

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 20, 2000 (except as
noted below) as to Common Stock owned by (a) each of Dime Bancorp's current
directors, (b) each of the named executive officers, (c) all of Dime Bancorp's
directors and executive officers as a group, and (d) each person who, to Dime's
knowledge, beneficially owned more than 5% of the outstanding Common Stock at
December 31, 1999.

<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK OUTSTANDING
BENEFICIALLY COMMON
NAME OF BENEFICIAL OWNER (AND ADDRESS OF OWNERS OF MORE THAN 5%) OWNED(1) STOCK
- ---------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Lawrence J. Toal.............................................. 912,384(2) *
Derrick D. Cephas............................................. 11,000(3) *
Frederick C. Chen............................................. 21,860 *
J. Barclay Collins II......................................... 9,000 *
Richard W. Dalrymple.......................................... 18,549(4) *
James F. Fulton............................................... 13,162(5) *
Sally Hernandez-Pinero........................................ 6,100 *
Fred B. Koons................................................. 114,359(4) *
Virginia M. Kopp.............................................. 15,245(6) *
James M. Large, Jr............................................ 407,276 *
John Morning.................................................. 7,905 *
Margaret Osmer-McQuade........................................ 28,738(7) *
Paul A. Qualben............................................... 30,006 *
Eugene G. Schulz, Jr.......................................... 17,158 *
Howard Smith.................................................. 58,000 *
Norman R. Smith............................................... 9,000 *
Ira T. Wender................................................. 25,875 *
Anthony R. Burriesci.......................................... 218,786 *
Richard A. Mirro.............................................. 181,981(4) *
Carlos R. Munoz............................................... 106,482 *
Peyton R. Patterson........................................... 105,432 *
All directors and executive officers as a group (24 persons)... 2,823,225(4) 2.54%
J.P. Morgan & Co. Incorporated................................ 7,058,056(8) 6.37%
60 Wall Street
New York, NY 10260
Wellington Management Company, LLP............................ 6,951,800(9) 6.13%
75 State Street
Boston, MA 02109
Vanguard Windsor Funds........................................ 6,859,200(10) 6.04%
c/o Wellington Management Company, LLP
75 State Street
Boston, MA 02109
</TABLE>

- ---------------
* Less than 1%.

(1) The directors, executive officers, and group named in the table above have
sole or shared voting power or investment power with respect to the shares
listed in the table. Certain of such shares are restricted stock that may
be subject to repurchase by Dime Bancorp under certain circumstances. The
share amounts listed include shares of Common Stock that the following
persons have the right to acquire within 60 days from March 20, 2000:
Lawrence J. Toal, 546,258; each of Derrick D. Cephas, Frederick C. Chen,
James F. Fulton, Sally Hernandez-Pinero, Virginia M. Kopp, John Morning,
Margaret Osmer-McQuade, Paul A. Qualben, and Ira T. Wender, 1,000; each of
J. Barclay Collins II, Richard W. Dalrymple, Eugene G. Schulz, Jr., Howard
Smith, and Norman R. Smith, 4,000; James M.

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<PAGE> 71

Large, Jr., 256,334; Fred B. Koons, 62,799; Anthony R. Burriesci, 127,799;
Richard A. Mirro, 92,299; Carlos R. Munoz, 58,132; Peyton R. Patterson,
37,067; and all current directors and executive officers as a group,
1,495,587.

(2) Includes 334 shares held by Mr. Toal's spouse, as to which he disclaims
beneficial ownership.

(3) Includes an aggregate of 2,000 shares owned by or in trust for Mr. Cephas'
children, as to which he disclaims beneficial ownership.

(4) Includes shares held by the Trustee of Dime's 401(k) plan with respect to
the account of the individual or certain members of the group based on
reports dated as of December 31, 1999.

(5) Includes an aggregate of 832 shares owned by or in trust for Mr. Fulton's
spouse, as to which he disclaims beneficial ownership.

(6) Includes an aggregate of 3,000 shares owned by or in trust for Mrs. Kopp's
spouse, as to which she disclaims beneficial ownership.

(7) Includes 7,000 shares owned in trust for Ms. Osmer-McQuade's spouse, as to
which she disclaims beneficial ownership.

(8) The information as to J.P. Morgan & Co. Incorporated ("J.P. Morgan") is
derived from a Schedule 13G, filed by J.P. Morgan on February 10, 2000,
which states that, as of December 31, 1999, J.P. Morgan, directly or
through certain of its subsidiaries, including Morgan Guaranty Trust
Company of New York, J.P. Morgan Investment Management, Inc., J.P. Morgan
Florida Federal Savings Bank and Morgan Tokyo Bank, had sole voting power
with regard to 4,448,620 of the shares indicated above, shared voting power
with regard to none of such shares, sole dispositive power with regard to
6,901,456 of such shares, and shared dispositive power with regard to none
of such shares.

(9) The information as to Wellington Management Company, LLP ("Wellington") is
derived from a Schedule 13G, filed by Wellington on February 11, 2000,
which states that, as of December 31, 1999, Wellington, directly or through
its subsidiary, Wellington Trust Company, NA, had sole voting power with
regard to none of the shares indicated above, shared voting power with
regard to 2,600 of such shares, sole dispositive power with regard to none
of such shares, and shared dispositive power with regard to 6,951,800 of
such shares. The 6,951,800 shares beneficially held by Wellington includes
6,859,200 shares beneficially held by Vanguard Windsor Funds (see note (10)
below).

(10) The information as to Vanguard Windsor Funds ("Vanguard") is derived from a
Schedule 13G, filed by Vanguard on February 8, 2000, which states that, as
of December 31, 1999, Vanguard had sole voting power with regard to
6,859,200 of the shares indicated above, shared voting power with regard to
none of such shares, sole dispositive power with regard to none of such
shares, and shared dispositive power with regard to 6,859,200 of such
shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN TRANSACTIONS

Ira T. Wender, a director, is the sole owner of Ira T. Wender, P.C., which
has provided service as of counsel to the law firm of Patterson, Belknap, Webb &
Tyler LLP since January 1994. Patterson, Belknap, Webb & Tyler LLP provided
legal services to Dime in 1999 involving general corporate, commercial real
estate lending, litigation, executive compensation and employee benefit matters.
Dime has retained that firm to provide legal services during 2000 but cannot at
present reasonably estimate the amount of related legal fees to be incurred.

In January 1997, Dime FSB entered into an agreement with Teamwork
Management, Inc., a corporation wholly-owned by Richard W. Dalrymple, a director
of Dime, pursuant to which Teamwork Management provides Dime FSB with certain
executive recruiting services. It is currently contemplated that additional
recruiting assignments may be given by Dime FSB to Teamwork Management in the
future pursuant to this agreement as the need arises. However, because the
nature and amount of such additional assignments, if any, are not currently
known, Dime cannot at present reasonably estimate the amount of any payments
that may be made to Teamwork Management in consideration for such future
services.

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<PAGE> 72

LOANS TO MANAGEMENT

Directors and officers of Dime and its associates were customers of and had
transactions, including loans, with Dime FSB in the ordinary course of business
during 1999. All of such loans were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated persons (except that Dime FSB's policy
is to waive certain closing costs with respect to mortgage loans made to
employees), and none of such transactions involved more than the normal risk of
collectability or presented other unfavorable features.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) FINANCIAL STATEMENTS

See Item 8, "Financial Statements and Supplementary Data."

(a)(2) FINANCIAL STATEMENT SCHEDULES

All financial statement schedules for the Holding Company and its
subsidiaries have been included in the consolidated financial statements or the
related notes or they are either inapplicable or not required.

(a)(3) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of September 15,
1999, by and between Hudson and the Holding Company, as
amended and restated on December 27, 1999 (incorporated by
reference to Appendix A to the Proxy Statement/Prospectus
included in the Holding Company's Registration Statement on
Form S-4, filed with the Commission on February 8, 2000 (the
"Hudson S-4") (No. 333-96345)).
2.2 Dime Stock Option Agreement, dated as of September 16, 1999,
between the Holding Company and Hudson (included as Appendix
B to the Proxy Statement/Prospectus included in the Hudson
S-4).
2.3 Hudson Stock Option Agreement, dated as of September 16,
1999, between Hudson and the Holding Company (included as
Appendix C to the Proxy Statement/Prospectus included in the
Hudson S-4).
3(i) Amended and Restated Certificate of Incorporation of the
Holding Company (incorporated by reference to Exhibit 3.1 to
the Holding Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, filed with the Commission on
May 15, 1998 (Commission File No. 001-13094)).
3(ii) By-laws of the Holding Company (incorporated by reference to
Exhibit 3 to the Holding Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997, filed with the
Commission on August 14, 1997 (Commission File No.
001-13094)).
4.1 Stockholder Protection Rights Agreement, dated as of October
20, 1995, between the Holding Company and the First National
Bank of Boston, as Rights Agent (incorporated by reference
to Exhibit (1) of the Registration Statement on Form 8-A of
the Holding Company filed with the Commission on November 3,
1995 (Commission File No. 001-13094)).
4.2 None of the outstanding instruments defining the rights of
holders of long-term debt of the Holding Company represent
long-term debt in excess of 10% of the total assets of the
Holding Company. The Holding Company hereby agrees to
furnish to the Commission, upon request, a copy of any such
instrument.
</TABLE>

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<PAGE> 73

<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<C> <S>
10.1 * Employment Agreement, dated as of January 30, 1998, between
Dime FSB and Lawrence J. Toal (incorporated by reference to
Exhibit 10.1 to the Holding Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, filed with
the Commission on March 31, 1998 (the "1997 10-K")
(Commission File No. 001-13094)) as amended by an Amendment
to Employment Agreement, dated as of October 22, 1999, among
the Holding Company, Dime FSB and Lawrence J. Toal
(incorporated by reference to Exhibit 10.2 to the Hudson
S-4).
10.2 * Agreement providing for joint and several liability of the
Holding Company, dated as of January 30, 1998, between the
Holding Company and Lawrence J. Toal (incorporated by
reference to Exhibit 10.2 to the 1997 10-K).
10.3 * Employment Agreement, dated as of January 30, 1998, between
Dime FSB and Anthony R. Burriesci (incorporated by reference
to Exhibit 10.3 to the 1997 10-K).
10.4 * Agreement providing for joint and several liability of the
Holding Company, dated as of January 30, 1998, between the
Holding Company and Anthony R. Burriesci (incorporated by
reference to Exhibit 10.4 to the 1997 10-K).
10.5 * Letter Agreement regarding initial employment terms, dated
as of July 1, 1997 (the "Burriesci Letter Agreement"),
between Dime FSB and Anthony R. Burriesci (incorporated by
reference to Exhibit 10.5 to the 1997 10-K).
10.6 * Amendment of the Burriesci Letter Agreement, effective as of
July 24, 1997, between Dime FSB and Anthony R. Burriesci
(incorporated by reference to Exhibit 10.6 to the 1997
10-K).
10.7 * Employment Agreement, dated as of December 21, 1998, between
Dime FSB and Richard A. Mirro.
10.8 * Letter Agreement regarding initial employment terms, dated
as of December 19, 1996 (the "Mirro Letter Agreement"),
between Dime FSB and Richard A. Mirro.
10.9 * Amendment of the Mirro Letter Agreement, effective as of May
12, 1997, between Dime FSB and Richard A. Mirro.
10.10 * Employment Agreement, dated as of January 30, 1998, between
Dime FSB and Peyton R. Patterson.
10.11 * Letter Agreement regarding initial employment terms, dated
as of June 11, 1996, between Dime FSB and Peyton R.
Patterson.
10.12 * Employment Agreement, dated as of January 30, 1998, between
Dime FSB and Carlos R. Munoz (incorporated by reference to
Exhibit 10.12 to the 1997 10-K).
10.13 * Dime Bancorp, Inc. Stock Incentive Plan, as amended by an
amendment effective April 27, 1994 (the "Stock Incentive
Plan") (incorporated by reference to Exhibit 4.1 to the
Holding Company's Registration Statement on Form S-8, filed
with the Commission on January 18, 1995 (No. 33-88552)).
10.14 * Amendment, effective September 19, 1997, to the Stock
Incentive Plan (incorporated by reference to Exhibit 10.14
to the 1997 10-K).
10.15 * Dime Bancorp, Inc. 1991 Stock Incentive Plan, as amended and
restated effective February 29, 1996 (the "1991 Stock
Incentive Plan") (incorporated by reference to Exhibit 4.1
to the Holding Company's Registration Statement on Form S-8,
filed with the Commission on May 24, 1996 (No. 333-04477)).
10.16 * Amendment, effective as of March 27, 1998, to the 1991 Stock
Incentive Plan (incorporated by reference to Exhibit 10.18
to the Holding Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, filed with the
Commission on March 31, 1999 (the "1998 10-K") (Commission
File No. 001-13094)).
10.17 * Amendment, effective June 25, 1998, to the 1991 Stock
Incentive Plan (incorporated by reference to Exhibit 10.19
to the 1998 10-K).
</TABLE>

71
<PAGE> 74

<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<C> <S>
10.18 * Amendment, effective as of October 1, 1996, to the 1991
Stock Incentive Plan (incorporated by reference to Exhibit
10.9 to the 1996 10-K).
10.19 * Amendment, effective September 19, 1997, to the 1991 Stock
Incentive Plan (incorporated by reference to Exhibit 10.17
to the 1997 10-K).
10.20 * Dime Bancorp, Inc. Stock Incentive Plan for Outside
Directors (the "Outside Directors Plan"), as amended
effective April 27, 1994 (incorporated by reference to
Exhibit 4.1 to the Holding Company's Registration Statement
on Form S-8, filed with the Commission on January 18, 1995
(No. 33-88560)).
10.21 * Amendment, effective September 19, 1997, to the Outside
Directors Plan (incorporated by reference to Exhibit 10.19
to the 1997 10-K).
10.22 * The Dime Savings Bank of New York, FSB Deferred Compensation
Plan, as amended by the First Amendment through the Fourth
Amendment thereof (incorporated by reference to Exhibit
10.14 to the Holding Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, filed with the
Commission on March 31, 1995 (the "1994 10-K") (Commission
File No. 001-13094)).
10.23 * Deferred Compensation Plan for Board Members of The Dime
Savings Bank of New York, FSB, as amended and restated
effective as of July 24, 1997 (incorporated by reference to
Exhibit 10.21 to the 1997 10-K).
10.24 * Benefit Restoration Plan of The Dime Savings Bank of New
York, FSB, amended and restated effective as of October 1,
1996 (incorporated by reference to Exhibit 10.14 to the 1996
10-K).
10.25 * Retainer Continuation Plan for Independent Directors of The
Dime Savings Bank of New York, FSB (the "Retainer
Continuation Plan") (incorporated by reference to Exhibit
10.24 to Dime FSB's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, filed with the
Commission on September 16, 1994 as Exhibit A to the Holding
Company's Report on Form 8-K dated that date (Commission
File No. 001-13094)).
10.26 * Amendment, effective as of January 13, 1995, to the Retainer
Continuation Plan (incorporated by reference to Exhibit
10.13 to the 1995 10-K).
10.27 * Amendment, effective as of December 31, 1996, to the
Retainer Continuation Plan (incorporated by reference to
Exhibit 10.17 to the 1996 10-K).
10.28 * Amendment, effective March 1, 1997, to the Retainer
Continuation Plan (incorporated by reference to Exhibit
10.18 to the 1996 10-K).
10.29 * Amendment, effective July 24, 1997, to the Retainer
Continuation Plan (incorporated by reference to Exhibit
10.27 to the 1997 10-K).
10.30 * Key Executive Life Insurance/Death Benefit Plan of The Dime
Savings Bank of New York, FSB, amended and restated
effective as of April 1, 1999 as amended by an Amendment,
effective as of April 1, 1999.
10.31 * Dime Bancorp, Inc. 1990 Stock Option Plan (formerly Anchor
Bancorp, Inc. 1990 Stock Option Plan), as amended effective
as of January 13, 1995 (incorporated by reference to Exhibit
4.1 to the Holding Company's Registration Statement on Form
S-8, filed with the Commission on January 18, 1995 (No.
33-88554)).
10.32 * Dime Bancorp, Inc. 1992 Stock Option Plan (formerly Anchor
Bancorp, Inc. 1992 Stock Option Plan), as amended effective
as of January 13, 1995 (the "1992 Stock Option Plan")
(incorporated by reference to Exhibit 4.1 to the Holding
Company's Registration Statement on Form S-8, filed with the
Commission on January 18, 1995 (No. 33-88556)).
10.33 * Amendment, effective June 1, 1996, to the 1992 Stock Option
Plan (incorporated by reference to Exhibit 10.23 to the 1996
10-K).
</TABLE>

72
<PAGE> 75

<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<C> <S>
10.34 * Amendment, effective September 19, 1997, to the 1992 Stock
Option Plan (incorporated by reference to Exhibit 10.33 to
the 1997 10-K).
10.35 * Amendment, effective as of March 27, 1998, to the 1992 Stock
Option Plan (incorporated by reference to Exhibit 10.36 to
the 1998 10-K).
10.36 * Dime Bancorp, Inc. Supplemental Executive Retirement Plan
(the "SERP"), amended and restated effective as of December
2, 1997 (incorporated by reference to Exhibit 10.34 to the
1997 10-K).
10.37 * Amendment, effective January 29, 1998, to the SERP
(incorporated by reference to Exhibit 10.35 to the 1997
10-K).
10.38 * Amendment, effective June 24, 1999, to the SERP.
10.39 * Dime Bancorp, Inc. Voluntary Deferred Compensation Plan, as
amended and restated effective as of July 24, 1997
(incorporated by reference to Exhibit 10.36 to the 1997
10-K).
10.40 * Dime Bancorp, Inc. Voluntary Deferred Compensation Plan for
Directors (the "Director Deferred Compensation Plan"), as
amended and restated effective as of July 24, 1997
(incorporated by reference to Exhibit 10.37 to the 1997
10-K).
10.41 * Amendment, effective March 26, 1998, to the Director
Deferred Compensation Plan (incorporated by reference to
Exhibit 10.41 to the 1998 10-K).
10.42 * Amendment, effective October 1, 1999, to the Director
Deferred Compensation Plan.
10.43 * Dime Bancorp, Inc. Officer Incentive Plan (the "Officer
Incentive Plan"), as amended and restated effective as of
July 24, 1997 (incorporated by reference to Exhibit 10.38 to
the 1997 10-K).
10.44 * Amendment, effective as of January 1, 1998, to the Officer
Incentive Plan (incorporated by reference to Exhibit 10.43
to the 1998 10-K).
10.45 * Amendment, effective as of January 1, 2000, to the Officer
Incentive Plan.
10.46 * Dime Bancorp, Inc. Senior Officer Incentive Plan, effective
April 30, 1998 (incorporated by reference to Exhibit 10.44
to the 1998 10-K).
10.47 * Anchor Savings Bank FSB Supplemental Executive Retirement
Plan, assumed by Dime FSB (incorporated by reference to
Exhibit 10.11 to the Anchor Bancorp Annual Report on Form
10-K for the fiscal year ended June 30, 1992 (Commission
File No. 33-37720)).
10.48 * Dime Bancorp, Inc. 1997 Stock Incentive Plan for Outside
Directors, as amended and restated effective March 27, 1998
(incorporated by reference to Exhibit 10.46 to the 1998
10-K).
10.49 * Dime Bancorp, Inc. Incentive Stock Option Plan (formerly
North American Mortgage Company Incentive Stock Option
Plan), effective as of October 15, 1997 (incorporated by
reference to Exhibit 4.1 to the Holding Company's Amendment
No. 1 to the Registration Statement on Form S-4 on Form S-8,
filed with the Commission on October 15, 1997 (No.
333-35565)).
12 Ratio of Earnings to Fixed Charges.
21 List of Subsidiaries.
23 Consent of KPMG LLP.
</TABLE>

73
<PAGE> 76

<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<C> <S>
24 Powers of Attorney.
27 Financial Data Schedule (filed electronically).
</TABLE>

- ---------------
* Management Contract or Compensatory Plan or Arrangement.

(b) REPORTS ON FORM 8-K

During the three-month period ended December 31, 1999, the Holding Company
filed with the Commission one Current Report on Form 8-K, dated October 20,
1999, containing the press release announcing the Company's consolidated
financial results for the three- and nine-month periods ended September 30,
1999.

74
<PAGE> 77

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

DIME BANCORP, INC.

By: /s/ LAWRENCE J. TOAL
------------------------------------
Lawrence J. Toal
Chairman of the Board, Chief
Executive Officer,
President and Chief Operating
Officer

March 28, 2000
--------------
Date

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 28, 2000 by the following persons on
behalf of the registrant and in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ LAWRENCE J. TOAL Chairman of the Board, Chief Executive
- -------------------------------------------------------- Officer, President and Chief Operating
Lawrence J. Toal Officer (Principal Executive Officer)

* Director
- --------------------------------------------------------
Derrick D. Cepha

* Director
- --------------------------------------------------------
Frederick C. Chen

* Director
- --------------------------------------------------------
J. Barclay Collins II

* Director
- --------------------------------------------------------
Richard W. Dalrymple

* Director
- --------------------------------------------------------
James F. Fulton

* Director
- --------------------------------------------------------
Fred B. Koons

* Director
- --------------------------------------------------------
Virginia M. Kopp
</TABLE>

75
<PAGE> 78

<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
* Director
- --------------------------------------------------------
James M. Large, Jr.

* Director
- --------------------------------------------------------
John Morning

* Director
- --------------------------------------------------------
Margaret Osmer-McQuade

* Director
- --------------------------------------------------------
Sally Hernandez-Pinero

* Director
- --------------------------------------------------------
Dr. Paul A. Qualben

* Director
- --------------------------------------------------------
Eugene G. Schulz, Jr.

* Director
- --------------------------------------------------------
Howard Smith

* Director
- --------------------------------------------------------
Dr. Norman R. Smith

* Director
- --------------------------------------------------------
Ira T. Wender

/s/ ANTHONY R. BURRIESCI Chief Financial Officer (Principal Financial
- -------------------------------------------------------- Officer)
Anthony R. Burriesci

/s/ JOHN F. KENNEDY Controller (Principal Accounting Officer)
- --------------------------------------------------------
John F. Kennedy

*By: /s/ LAWRENCE J. TOAL
---------------------------------------------------
Lawrence J. Toal
Attorney-in-Fact
</TABLE>

76
<PAGE> 79

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Dime Bancorp, Inc.:

We have audited the accompanying consolidated statements of financial
condition of Dime Bancorp, Inc. and subsidiaries (Dime) as of December 31, 1999
and 1998, and the related consolidated statements of income, changes in
stockholders' equity, cash flows and comprehensive income for each of the years
in the three-year period ended December 31, 1999. These consolidated financial
statements are the responsibility of Dime's management. Our responsibility is to
express an opinion on these consolidated 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 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 Dime
Bancorp, Inc. and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

New York, New York
January 20, 2000

F-1
<PAGE> 80

DIME BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks..................................... $ 414,289 $ 279,490
Money market investments.................................... 18,166 78,287
Securities available for sale............................... 3,849,676 3,329,444
Federal Home Loan Bank of New York stock.................... 328,732 324,106
Loans held for sale......................................... 1,733,667 3,884,886
Loans receivable, net:
Residential real estate loans............................. 8,200,120 8,919,817
Commercial real estate loans.............................. 3,482,857 2,567,750
Consumer loans............................................ 2,495,321 973,230
Business loans............................................ 1,028,756 287,271
Allowance for loan losses................................. (140,296) (105,081)
----------- -----------
Total loans receivable, net....................... 15,066,758 12,642,987
----------- -----------
Premises and equipment, net................................. 207,373 170,879
Mortgage servicing assets................................... 980,934 692,473
Goodwill.................................................... 531,415 225,222
Other assets................................................ 790,315 693,076
----------- -----------
Total assets................................................ $23,921,325 $22,320,850
=========== ===========
LIABILITIES
Deposits.................................................... $14,261,449 $13,651,460
Federal funds purchased and securities sold under agreements
to repurchase............................................. 1,106,067 2,245,218
Other short-term borrowings................................. 5,321,838 3,756,733
Long-term debt.............................................. 1,165,868 608,892
Guaranteed preferred beneficial interests in Dime Bancorp,
Inc.'s junior subordinated deferrable interest
debentures................................................ 152,219 162,005
Other liabilities........................................... 397,779 510,877
----------- -----------
Total liabilities................................. 22,405,220 20,935,185
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share (350,000,000 shares
authorized and 120,252,459 shares issued)................. 1,203 1,203
Additional paid-in capital.................................. 1,166,530 1,165,251
Retained earnings........................................... 670,343 463,907
Treasury stock, at cost (9,357,589 shares in 1999 and
8,682,858 shares in 1998)................................. (230,035) (233,965)
Accumulated other comprehensive loss........................ (87,257) (3,285)
Unearned compensation....................................... (4,679) (7,446)
----------- -----------
Total stockholders' equity........................ 1,516,105 1,385,665
----------- -----------
Total liabilities and stockholders' equity.................. $23,921,325 $22,320,850
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-2
<PAGE> 81

DIME BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME
Residential real estate loans.............................. $ 744,382 $ 874,402 $ 660,505
Commercial real estate loans............................... 228,571 200,015 191,111
Consumer loans............................................. 132,213 71,003 63,222
Business loans............................................. 39,740 13,944 5,052
Mortgage-backed securities................................. 222,385 214,922 406,781
Other securities........................................... 50,296 40,797 23,774
Money market investments................................... 1,511 5,802 32,370
---------- ---------- ----------
Total interest income............................ 1,419,098 1,420,885 1,382,815
---------- ---------- ----------
INTEREST EXPENSE
Deposits................................................... 482,006 545,827 559,359
Borrowed funds............................................. 358,607 347,825 340,394
---------- ---------- ----------
Total interest expense........................... 840,613 893,652 899,753
---------- ---------- ----------
Net interest income.............................. 578,485 527,233 483,062
Provision for loan losses.................................. 29,500 32,000 49,000
---------- ---------- ----------
Net interest income after provision for loan
losses......................................... 548,985 495,233 434,062
---------- ---------- ----------
NON-INTEREST INCOME
Loan servicing and production fees......................... 267,520 199,504 74,038
Banking service fees....................................... 51,798 41,428 31,796
Securities and insurance brokerage fees.................... 36,710 32,736 23,737
Net gains on sales activities.............................. 200,427 244,451 12,036
Other...................................................... 11,788 6,911 3,684
---------- ---------- ----------
Total non-interest income........................ 568,243 525,030 145,291
---------- ---------- ----------
NON-INTEREST EXPENSE
General and administrative expense:
Compensation and employee benefits....................... 303,750 270,062 157,851
Occupancy and equipment.................................. 103,661 92,452 63,582
Other.................................................... 182,059 199,349 115,529
---------- ---------- ----------
Total general and administrative expense......... 589,470 561,863 336,962
Amortization of mortgage servicing assets.................. 122,786 92,291 29,751
Amortization of goodwill................................... 18,520 11,487 4,501
Restructuring and related expense.......................... -- -- 9,931
---------- ---------- ----------
Total non-interest expense....................... 730,776 665,641 381,145
---------- ---------- ----------
Income before income tax expense and extraordinary items... 386,452 354,622 198,208
Income tax expense......................................... 142,512 113,479 75,034
---------- ---------- ----------
Income before extraordinary items.......................... 243,940 241,143 123,174
Extraordinary items -- losses on early extinguishment of
debt, net of tax benefits of $3,044 in 1999, $2,993 in
1998 and $895 in 1997.................................... (4,127) (4,057) (1,460)
---------- ---------- ----------
Net income................................................. $ 239,813 $ 237,086 $ 121,714
========== ========== ==========
PER COMMON SHARE
Basic earnings:
Income before extraordinary items........................ $ 2.19 $ 2.13 $ 1.15
Extraordinary items...................................... (0.04) (0.04) (0.01)
---------- ---------- ----------
Net income............................................... $ 2.15 $ 2.09 $ 1.14
========== ========== ==========
Diluted earnings:
Income before extraordinary items........................ $ 2.17 $ 2.09 $ 1.13
Extraordinary items...................................... (0.04) (0.03) (0.01)
---------- ---------- ----------
Net income............................................... $ 2.13 $ 2.06 $ 1.12
========== ========== ==========
Cash dividends declared.................................... $ 0.23 $ 0.19 $ 0.12
</TABLE>

See accompanying notes to consolidated financial statements.
F-3
<PAGE> 82

DIME BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
COMMON STOCK
Balance at beginning of year........................... $ 1,203 $ 1,203 $ 1,083
Common stock issued in connection with acquisition..... -- -- 120
---------- ---------- ----------
Balance at end of year............................... 1,203 1,203 1,203
---------- ---------- ----------
ADDITIONAL PAID-IN CAPITAL
Balance at beginning of year........................... 1,165,251 1,158,221 914,386
Common and treasury stock issued under employee stock
plans, net........................................... -- (45) (4,235)
Common and treasury stock issued in connection with
acquisition.......................................... -- -- 220,659
Fair value adjustment on stock options issued in
connection with acquisition.......................... -- -- 21,389
Other.................................................. 1,279 7,075 6,022
---------- ---------- ----------
Balance at end of year............................... 1,166,530 1,165,251 1,158,221
---------- ---------- ----------
RETAINED EARNINGS
Balance at beginning of year........................... 463,907 261,201 158,956
Net income............................................. 239,813 237,086 121,714
Cash dividends declared on common stock................ (25,626) (21,550) (12,892)
Treasury stock issued under employee stock plans,
net.................................................. (3,495) (12,830) (6,577)
Treasury stock issued in connection with acquisition... (4,256) -- --
---------- ---------- ----------
Balance at end of year............................... 670,343 463,907 261,201
---------- ---------- ----------
TREASURY STOCK, AT COST
Balance at beginning of year........................... (233,965) (95,221) (51,498)
Treasury stock purchased............................... (76,346) (177,970) (200,354)
Treasury stock issued under employee stock plans,
net.................................................. 6,823 39,226 26,305
Treasury stock issued in connection with acquisition... 73,453 -- 130,326
---------- ---------- ----------
Balance at end of year............................... (230,035) (233,965) (95,221)
---------- ---------- ----------
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at beginning of year........................... (3,285) (9,534) 22
Other comprehensive (loss) income...................... (83,972) 6,249 (9,556)
---------- ---------- ----------
Balance at end of year............................... (87,257) (3,285) (9,534)
---------- ---------- ----------
UNEARNED COMPENSATION
Balance at beginning of year........................... (7,446) (1,012) (612)
Restricted stock activity, net......................... (168) (9,250) (1,126)
Amortization of unearned compensation.................. 2,935 2,816 726
---------- ---------- ----------
Balance at end of year............................... (4,679) (7,446) (1,012)
---------- ---------- ----------
Total stockholders' equity............................. $1,516,105 $1,385,665 $1,314,858
========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.
F-4
<PAGE> 83

DIME BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.............................................. $ 239,813 $ 237,086 $ 121,714
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Provision for loan losses............................. 29,500 32,000 49,000
Depreciation, amortization and accretion, net......... 203,290 177,680 85,967
Provision for deferred income tax expense............. 99,245 53,406 64,270
Net securities (gains) losses......................... (2,062) (21,855) 17,794
Losses on early extinguishment of debt................ 7,171 7,050 2,355
Gain on sale of branch................................ -- (9,512) --
Net decrease (increase) in loans held for sale........ 2,151,219 (2,343,136) (760,523)
Other, net............................................ (455,227) (384,202) (198)
----------- ----------- -----------
Net cash provided (used) by operating
activities.................................. 2,272,949 (2,251,483) (419,621)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale.............. (2,312,470) (1,723,719) (1,196,330)
Purchases of securities held to maturity................ -- -- (80,411)
Proceeds from sales of securities available for sale.... 1,377,601 1,922,949 1,720,817
Proceeds from maturities of securities available for
sale and held to maturity............................. 919,952 1,491,072 1,505,518
Net purchases of Federal Home Loan Bank of New York
stock................................................. -- (20,819) (31,111)
Loans receivable originated and purchased, net of
principal payments.................................... (1,493,645) (264,105) (1,843,796)
Proceeds from sales of loans............................ 64,507 702,253 82,369
Net cash paid in acquisitions........................... (309,206) -- (41,234)
Net cash paid upon divestiture of branch................ -- (197,662) --
Proceeds from sales of other real estate owned.......... 19,861 19,855 58,315
Net purchases of premises and equipment................. (48,770) (48,415) (29,011)
----------- ----------- -----------
Net cash (used) provided by investing
activities.................................. (1,782,170) 1,881,409 145,126
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits..................... (1,237,555) 11,125 292,887
Net increase in borrowings with original maturities of
three months or less.................................. 550,824 402,623 126,164
Proceeds from other borrowings.......................... 1,219,445 799,818 1,492,632
Repayments of other borrowings.......................... (850,003) (755,823) (1,174,045)
Proceeds from net issuances of common and treasury
stock................................................. 3,160 17,101 14,332
Purchases of treasury stock............................. (76,346) (177,970) (200,354)
Cash dividends paid on common stock..................... (25,626) (21,550) (12,892)
Other................................................... -- -- 3,781
----------- ----------- -----------
Net cash (used) provided by financing
activities.................................. (416,101) 275,324 542,505
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents.... 74,678 (94,750) 268,010
Cash and cash equivalents at beginning of year.......... 357,777 452,527 184,517
----------- ----------- -----------
Cash and cash equivalents at end of year................ $ 432,455 $ 357,777 $ 452,527
=========== =========== ===========
Supplemental cash flow information:
Interest payments on deposits and borrowed funds...... $ 838,798 $ 903,619 $ 883,423
Income tax payments (refunds), net.................... 2,130 22,869 (381)
Supplemental non-cash investing information:
Securities available for sale transferred to trading
securities......................................... 252,098 -- --
Securities held to maturity transferred to securities
available for sale................................. -- -- 3,587,063
Securitization of loans receivable.................... 698,554 -- --
Loans held for sale transferred to loans receivable... -- 779,719 --
Loans receivable transferred to other real estate
owned.............................................. 7,160 18,917 17,996
Loans receivable transferred to loans held for sale... -- 296,608 --
</TABLE>

See accompanying notes to consolidated financial statements.
F-5
<PAGE> 84

DIME BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net income................................................. $239,813 $237,086 $121,714
Other comprehensive (loss) income:
Net unrealized (loss) gain on securities available for
sale:
Unrealized holding (loss) gain arising during the
year, net of deferred income tax (benefit) expense
of $(59,167) in 1999, $12,699 in 1998 and $(12,629)
in 1997............................................. (82,770) 18,825 (20,600)
Reclassification adjustment for net (gains) losses
included in net income, net of income tax expense
(benefit) of $860 in 1999, $9,279 in 1998 and
$(6,769) in 1997.................................... (1,202) (12,576) 11,044
-------- -------- --------
Other comprehensive income (loss)................... (83,972) 6,249 (9,556)
-------- -------- --------
Comprehensive income....................................... $155,841 $243,335 $112,158
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.
F-6
<PAGE> 85

DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Dime Bancorp, Inc. (the "Holding Company") is a unitary savings and loan
holding company organized under the laws of the State of Delaware in 1994. The
principal subsidiary of the Holding Company is The Dime Savings Bank of New
York, FSB ("Dime FSB"). The accounting policies applied by the Holding Company
and its subsidiaries (collectively, the "Company") conform with generally
accepted accounting principles and prevailing practices within the financial
services industry.

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires the Company 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 consolidated
statement of financial condition and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

The Company provides a diversified range of financial services and products
to individuals and businesses. At December 31, 1999, the Company operated 127
banking branches located in the greater New York City metropolitan area and
conducted its mortgage banking operations nationwide through offices located in
41 states.

The following is a description of the Company's significant accounting
policies.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of
the Holding Company and its subsidiaries, all of which are wholly-owned, after
the elimination of all significant intercompany balances and transactions.
Certain amounts in prior years have been reclassified to conform with the
current year presentation.

Securities

Securities that the Company has the positive intent and ability to hold to
maturity are classified as held to maturity and are carried at amortized cost.
The Company did not maintain a securities held to maturity portfolio during 1999
or 1998. Securities purchased for the objective of selling them in the near term
and mortgage-backed securities ("MBS") held for sale in connection with mortgage
banking activities are classified as trading securities and are carried at
estimated fair value with unrealized gains and losses recognized in operations.
Securities not otherwise classified as held to maturity or trading are
classified as available for sale and are carried at estimated fair value with
unrealized gains and losses, net of the related income tax effect, reported in a
separate component of stockholders' equity.

The amortization of premiums and accretion of discounts on securities is
recognized in income using the interest method over the lives of the securities,
adjusted, in the case of MBS, for actual prepayments. Gains and losses on sales
of securities are recognized using the specific identification method.

The carrying value of a security is reduced through a write-down charged to
income in the event the Company determines that an other than temporary
impairment in value has occurred.

Loans

Loans held for sale are carried at the lower of cost or market value, as
determined on an aggregate basis. Net unrealized losses are recognized in a
valuation allowance by charges to income. Premiums, discounts and certain
origination fees and costs on loans held for sale are deferred and recognized as
a component of the gain or loss on sale. Gains and losses on sales of loans held
for sale are recognized at the settlement dates and are determined by the
difference between the sales proceeds and the carrying value of the loans.

F-7
<PAGE> 86
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Loans receivable are generally carried at unpaid principal balances
adjusted for unamortized premiums, unearned discounts and deferred loan
origination fees and costs, which are recognized as yield adjustments over the
lives of the loans using the interest method.

Loans are placed on non-accrual status upon becoming 90 days contractually
past due as to principal or interest, or at an earlier date if the full
collectability of principal or interest is doubtful. Interest income previously
accrued but not collected at the date a loan is placed on non-accrual status is
reversed against interest income. Cash receipts on a non-accrual loan are
applied to principal and interest in accordance with its contractual terms
unless full payment of principal is not expected, in which case cash receipts,
whether designated as principal or interest, are applied as a reduction of the
carrying value of the loan. A non-accrual loan is generally returned to accrual
status when principal and interest payments are current, full collectability of
principal and interest is reasonably assured and a consistent record of
performance has been demonstrated.

A loan is deemed a troubled debt restructuring ("TDR") by the Company when
modifications of a concessionary nature are made to the loan's original
contractual terms due to a deterioration in the borrower's financial condition.

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
114, "Accounting by Creditors for Impairment of a Loan," as amended, the Company
considers a loan falling within its scope impaired when, based upon current
information and events, it is probable that it will be unable to collect all
amounts due, both principal and interest, according to the contractual terms of
the loan agreement. SFAS No. 114 does not apply to loans held for sale or those
large groups of smaller-balance homogeneous loans that are collectively
evaluated for impairment. Loans reviewed by the Company for impairment are
limited to residential real estate loans receivable modified in a TDR since
January 1, 1995, business loans receivable and commercial real estate loans
receivable. Specific factors used in the impaired loan identification process
include, but are not limited to, delinquency status, loan-to-value ratio, the
condition of the underlying collateral, credit history, and debt coverage. At a
minimum, loans reviewed for impairment by the Company are classified as impaired
when delinquent more than six months. Impaired loans are principally measured
using the present value of expected future cash flows discounted at the loan's
effective interest rate or the fair value of the collateral for collateral
dependent loans. For impaired loans on non-accrual status, cash receipts are
applied, and interest income recognized, pursuant to the discussion above for
non-accrual loans. For all other impaired loans, cash receipts are applied to
principal and interest in accordance with the contractual terms of the loan and
interest income is recognized on the accrual basis.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level the Company believes
is sufficient to provide for losses inherent in its loans receivable portfolio.
The allowance for loan losses is increased by loss provisions charged to
operations and decreased by charge-offs (net of recoveries). In determining the
appropriate level of the allowance for loan losses, the Company reviews its
loans receivable portfolio on at least a quarterly basis, taking into account
its impaired loans, the size, composition and risk profile of the portfolio,
delinquency levels, historical loss experience, cure rates on delinquent loans,
economic conditions and other pertinent factors, such as assumptions and
projections of future conditions.

Premises and Equipment

Premises and equipment are carried at cost less accumulated depreciation
and amortization. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets. Leasehold improvements are amortized
using the straight-line method over the lesser of the terms of their respective
leases or estimated useful lives.

F-8
<PAGE> 87
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Mortgage Servicing Assets

The Company recognizes, as separate assets, the rights to service mortgage
loans, whether those rights are acquired through loan purchase or loan
origination activities. The initial recognition of originated mortgage servicing
assets is predicated upon an allocation of the total cost of the related loans
between the loans and the loan servicing rights based on their relative
estimated fair values. Purchased mortgage servicing assets are recorded at cost.
Mortgage servicing assets are amortized in proportion to and over the period of
estimated net servicing income. On a quarterly basis, mortgage servicing assets
are assessed for impairment based upon their estimated fair value. For purposes
of such assessments, the Company stratifies its mortgage servicing assets by
underlying loan type and interest rate. Impairment of mortgage servicing assets
is recognized through a valuation allowance for each impaired stratum with the
individual allowances adjusted in subsequent periods to reflect changes in the
measurement of impairment. The estimated fair value of each strata is determined
through a discounted cash flow analysis of future cash flows incorporating
numerous assumptions including servicing income, servicing costs, market
discount rates, prepayment speeds, and default rates.

Other Real Estate Owned ("ORE")

ORE, which consists of real estate acquired in satisfaction of loans, is
carried at the lower of cost or estimated fair value less estimated selling
costs. Write-downs required at the time of acquisition are charged to the
allowance for loan losses. Subsequent to acquisition, the Company maintains an
allowance for actual and potential future declines in value.

Goodwill

Goodwill is generally amortized using the straight-line method over periods
ranging from 10 to 25 years. Goodwill is reviewed for possible impairment when
events or changes in circumstances indicate that the carrying amount may not be
recoverable.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. If necessary, deferred tax assets are
reduced to the amount that, based on available evidence, will more than likely
be realized.

Earnings Per Common Share

Basic earnings per common share have been computed by dividing net income
by the weighted average number of shares of the Holding Company's common stock
("Common Stock") outstanding during the period. Diluted earnings per common
share have been computed by dividing net income by the sum of the weighted
average number of shares of Common Stock and dilutive Common Stock equivalents
outstanding (using the treasury stock method) during the period.

Consolidated Statements of Cash Flows

For purposes of the Consolidated Statements of Cash Flows, cash and cash
equivalents include cash and due from banks and money market investments.

F-9
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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Cash flows associated with derivative financial instruments used by the
Company for risk-management purposes are classified in the accompanying
Consolidated Statements of Cash Flows in the same category as the cash flows
from the asset or liability being hedged.

Derivative Financial Instruments

Risk-Management Instruments. The Company uses a variety of derivative
financial instruments as part of its interest rate risk-management strategy and
to manage certain risks associated with its mortgage banking activities.
Derivative financial instruments used for these purposes must be designated as a
hedge at their inception and must remain effective as a hedge throughout their
contractual terms. If the effectiveness of the derivative financial instrument
as a hedge is not maintained, the instrument is accounted for as a trading
instrument.

For those derivative financial instruments used to modify the interest rate
characteristics of designated interest-earning assets or interest-bearing
liabilities, net amounts payable or receivable on the instruments are accrued as
an adjustment to interest income or interest expense of the designated assets or
liabilities. The estimated fair values of such derivative financial instruments
are not reflected in the Company's consolidated financial statements unless
designated to securities available for sale, in which case the derivative
financial instruments are carried at estimated fair value with unrealized gains
and losses, net of related income taxes, reported in a separate component of
stockholders' equity.

For forward contracts and options used in connection with the Company's
mortgage banking activities, realized gains and losses are recognized in
operations in the period settlement occurs. Unrealized gains and losses on such
derivative financial instruments are included in the computation of the lower of
cost or market valuation of loans held for sale.

Unrealized gains and losses on derivative financial instruments used to
hedge mortgage servicing assets are considered in the determination of the
estimated fair value of such assets.

Premiums paid on derivative financial instruments used for risk-management
purposes are deferred as a component of the carrying value of the designated
assets or liabilities and amortized against income over the terms of the
contracts.

In the event of the early termination of a derivative financial instrument
contract used for risk-management purposes, any resulting gain or loss is
deferred, as an adjustment of the carrying value of the designated assets or
liabilities. Such gains or losses on terminated interest rate futures contracts
are recognized in operations over the remaining life of the designated assets or
liabilities. Gains and losses resulting from the early termination of other
derivative financial instruments are recognized in operations over the shorter
of the remaining life of the designated assets or liabilities or the derivative
financial instrument agreement. If the designated assets or liabilities are
subsequently sold or otherwise disposed of, any remaining deferred gains or
losses are recognized in operations.

If the balance of a hedged asset or liability declines below the notional
value of the related derivative financial instrument, the Company may
redesignate, at fair value, the derivative financial instrument to other assets
or liabilities or discontinue hedge accounting with respect to the portion of
the notional amount that exceeds the balance. When hedge accounting is
discontinued, derivative financial instruments are accounted for as trading
instruments.

Trading Instruments. Derivative financial instruments held for trading
purposes are carried at estimated fair value with realized and unrealized gains
and losses recognized in operations. The fair value of trading derivative
financial instruments in gain positions is reported in the Consolidated
Statements of Financial Condition in "Other assets," whereas the fair value of
such instruments in loss positions is reported in "Other liabilities."

F-10
<PAGE> 89
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Comprehensive Income

Effective as of January 1, 1998, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income," which establishes standards for reporting and
displaying comprehensive income and its components in a full set of general
purpose financial statements. Comprehensive income, which includes net income
and other comprehensive income, is defined as the change in equity during a
period from all transactions and other events and circumstances from non-owner
sources.

NOTE 2 -- BUSINESS COMBINATIONS

On September 15, 1999, the Holding Company entered into a definitive
agreement and plan of merger (as subsequently amended, the "Merger Agreement")
with Hudson United Bancorp ("Hudson"), a New Jersey corporation headquartered in
Mahwah, New Jersey and the holding company for Hudson United Bank, a New Jersey
state-chartered commercial bank. At December 31, 1999, Hudson, on a consolidated
basis, had assets of $9.7 billion, deposits of $6.5 billion and stockholders'
equity of $519.2 million. The Merger Agreement, among other things, provides
that: (i) Hudson is to merge with and into the Holding Company in a transaction
accounted for as a pooling of interests (the "Merger"); (ii) the combined
company is to change its name to Dime United Bancorp, Inc. ("Dime United");
(iii) each issued share of Common Stock is to be combined into 0.60255 of a
share of Dime United common stock; and (iv) each outstanding share of Hudson
common stock is to be converted into one share of Dime United common stock. In
connection with the Merger, Dime FSB is to merge with and into Hudson United
Bank, with the combined institution to operate as a New Jersey state-chartered
commercial bank under the name "DimeBank." The Merger remains subject to the
approval of various regulatory agencies and the respective stockholders of the
Holding Company and Hudson. Either the Holding Company or Hudson may terminate
the Merger Agreement if the Merger is not consummated by June 30, 2000.

For a discussion of recent developments regarding the Merger and certain
actions taken by North Fork Bancorporation, Inc. ("North Fork") related thereto,
see Note 23, "Commitments and Contingent Liabilities" and Note 28, "Subsequent
Events."

Presented below is a discussion of acquisitions consummated by the Company
during the three-year period ended December 31, 1999. Each of these acquisitions
was accounted for as a purchase. Accordingly, the results of these acquisitions
are reflected in the Company's financial statements for the periods subsequent
to their respective acquisition dates.

On October 18, 1999, the Company acquired KeyBank National Association's
Long Island banking franchise, which included 28 branches. In connection with
this acquisition, the Company acquired assets of $1.1 billion, including cash of
$614.4 million and loans receivable of $501.9 million, and assumed liabilities
of $1.3 billion, substantially all of which were deposits. Goodwill arising from
this acquisition amounted to $216.8 million, including $208.4 million associated
with the premium paid on the deposits assumed. This goodwill is being amortized
on a straight-line basis over 15 years.

On August 1, 1999, the Company acquired Citibank, N.A.'s indirect
automobile finance business for $906.7 million in cash. In connection therewith,
the Company acquired assets of $953.0 million, consisting substantially of loans
receivable, and assumed deposits of $51.1 million. Goodwill recorded in
connection with this acquisition was $25.0 million and is being amortized on a
straight-line basis over 10 years.

On May 21, 1999, Lakeview Financial Corp. ("Lakeview") was acquired by the
Company (the "Lakeview Acquisition"). Lakeview was the holding company for
Lakeview Savings Bank, which operated 11 branches in northern New Jersey. At the
date of acquisition, Lakeview had consolidated assets of $560.6 million,
including loans receivable of $286.9 million, and consolidated liabilities of
$515.9 million, including deposits of $461.9 million. Under the terms of the
related agreement, holders of Lakeview's common stock received either 0.9 of a
share of Common Stock or $24.26 in cash for each outstanding share of Lakeview
F-11
<PAGE> 90
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

common stock. In connection therewith, the Holding Company issued 2,852,321
shares of Common Stock from treasury at an assigned value of $69.2 million and
paid a total of $41.4 million in cash. Goodwill of $79.0 million was generated
by the Lakeview Acquisition and is being amortized over 18 years using the
straight-line method.

On February 16, 1999, the Company acquired certain assets, which were not
material, and the leases on all of the 15 residential real estate loan
production offices of T&N Mortgage, Inc., headquartered in Monroe, Louisiana,
for $5.1 million in cash. Goodwill arising from this acquisition totaled $3.9
million and is being amortized on a straight-line basis over 10 years.

On October 15, 1997, North American Mortgage Company ("NAMC"), a mortgage
banking company headquartered in Santa Rosa, California, was acquired by the
Company (the "NAMC Acquisition"). At the date of acquisition, NAMC operated in
30 states and had assets of $1.5 billion, liabilities of $1.3 billion and a
portfolio of loans serviced for others of approximately $12 billion. In
connection with the NAMC Acquisition, each outstanding share of NAMC's common
stock was converted into 1.37 shares of Common Stock (the "NAMC Exchange
Ratio"), and each outstanding option issued by NAMC to acquire NAMC's common
stock was converted, after giving effect to the NAMC Exchange Ratio, into an
option to purchase Common Stock. As a result, the Holding Company issued
19,437,741 shares of Common Stock (of which 7,479,664 were issued from treasury)
with an assigned value of $351.1 million and options to purchase 1,862,087
shares of Common Stock with an estimated fair value of $21.4 million. Goodwill
recorded in connection with the NAMC Acquisition amounted to $188.8 million and
is being amortized on a straight-line basis over 25 years.

In allocating the purchase price of NAMC, the Company recorded a $19.6
million restructuring liability. This liability included $10.0 million
associated with personnel-related costs for NAMC employees, primarily severance
benefits, and $9.6 million associated with transaction fees and other
acquisition-related costs. Cash payments and other reductions charged to this
restructuring liability totaled $0.9 million in 1999, $8.7 million in 1998 and
$9.8 million in 1997. The balance in this restructuring liability was $0.2
million at the end of 1999.

In connection with the NAMC Acquisition, the Company incurred expenses
during 1997 of $9.9 million associated with its employees and operations. Such
expenses are reflected in the accompanying Consolidated Statements of Income
under the caption "Restructuring and related expense."

On April 30, 1997, the Company acquired BFS Bankorp, Inc. ("BFS") for $93.3
million in cash. BFS was the holding company for Bankers Federal Savings FSB,
which operated five New York City branches. At the date of acquisition, BFS had
consolidated assets of $634.1 million, including loans receivable of $591.9
million, and consolidated liabilities of $579.2 million, including deposits of
$445.5 million. Goodwill arising from the acquisition of BFS amounted to $41.6
million and is being amortized over 15 years using the straight-line method.

NOTE 3 -- CASH AND CASH EQUIVALENTS

Cash and cash equivalents were comprised of the following at December 31
(in thousands):

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Cash and due from banks..................................... $414,289 $279,490
Money market investments:
Interest-earning deposits in banks........................ 11,255 5,937
Federal funds sold........................................ -- 45,000
Other..................................................... 6,911 27,350
-------- --------
Total money market investments.................... 18,166 78,287
-------- --------
Total cash and cash equivalents........................... $432,455 $357,777
======== ========
</TABLE>

F-12
<PAGE> 91
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- SECURITIES

The amortized cost and estimated fair value of securities available for
sale, as well as related gross unrealized gains and losses, were as follows at
December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
-------------------------------------------- -------------------------------------------
GROSS UNREALIZED GROSS UNREALIZED
AMORTIZED ------------------ ESTIMATED AMORTIZED ----------------- ESTIMATED
COST GAINS LOSSES FAIR VALUE COST GAINS LOSSES FAIR VALUE
---------- ------- -------- ---------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MBS:
Pass-through
securities:
Privately-issued... $2,296,046 $13,241 $ 63,796 $2,245,491 $1,795,369 $ 4,876 $24,981 $1,775,264
U.S. government
agencies......... 886,854 622 42,317 845,159 1,002,850 8,500 2,429 1,008,921
Collateralized
mortgage
obligations:
Privately-issued... 422,938 175 14,168 408,945 179,407 748 671 179,484
U.S. government
agencies......... 18,726 -- 633 18,093 -- -- -- --
Interest-only........ 940 -- 441 499 1,286 -- 658 628
---------- ------- -------- ---------- ---------- ------- ------- ----------
Total MBS..... 3,625,504 14,038 121,355 3,518,187 2,978,912 14,124 28,739 2,964,297
---------- ------- -------- ---------- ---------- ------- ------- ----------
Other debt securities:
U.S. government and
federal agencies... -- -- -- -- 3,492 33 -- 3,525
State and
municipal.......... 15,478 80 446 15,112 13,036 180 382 12,834
Domestic corporate... 345,410 1,119 42,448 304,081 333,683 11,279 1,867 343,095
Foreign government... 500 -- -- 500 500 -- -- 500
---------- ------- -------- ---------- ---------- ------- ------- ----------
Total other
debt
securities... 361,388 1,199 42,894 319,693 350,711 11,492 2,249 359,954
---------- ------- -------- ---------- ---------- ------- ------- ----------
Equity securities...... 12,490 198 892 11,796 5,529 219 555 5,193
---------- ------- -------- ---------- ---------- ------- ------- ----------
Total securities
available for sale... $3,999,382 $15,435 $165,141 $3,849,676 $3,335,152 $25,835 $31,543 $3,329,444
========== ======= ======== ========== ========== ======= ======= ==========
</TABLE>

At December 31, 1999, $3.5 billion of securities available for sale were
pledged as collateral for borrowed funds and other purposes.

F-13
<PAGE> 92
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth, at December 31, 1999, the amortized cost,
estimated fair value and weighted average yield of debt securities available for
sale by period to contractual maturity (dollars in thousands):

<TABLE>
<CAPTION>
WEIGHTED
AMORTIZED ESTIMATED AVERAGE
COST FAIR VALUE YIELD(1)
---------- ---------- --------
<S> <C> <C> <C>
MBS:
Due in one year or less........................ $ 2,802 $ 2,795 6.66%
Due after one through five years............... 2,872 2,846 6.72
Due after five through ten years............... 28,088 27,890 7.46
Due after ten years............................ 3,591,742 3,484,656 6.92
---------- ----------
Total MBS.............................. 3,625,504 3,518,187 6.92
---------- ----------
Other debt securities:
Due in one year or less........................ 1,450 1,450 8.11
Due after one through five years............... 13,571 13,573 8.92
Due after five through ten years............... 12,384 13,500 11.35
Due after ten years............................ 333,983 291,170 7.55
---------- ----------
Total other debt securities............ 361,388 319,693 7.74
---------- ----------
Total debt securities available for sale......... $3,986,892 $3,837,880 7.00
========== ==========
</TABLE>

- ---------------
(1) The weighted average yields are based on amortized cost.

Information concerning sales of securities available for sale is summarized
below for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Proceeds from sales............................ $1,377,601 $1,922,949 $1,720,817
Gross realized gains........................... 8,272 22,981 20,800
Gross realized losses.......................... 4,530 1,010 11,890
</TABLE>

During 1997, the Company, primarily as a result of a reassessment of its
asset/liability management strategy, transferred its entire portfolio of
securities held to maturity to its portfolio of securities available for sale.
At the date of transfer, the securities held to maturity portfolio had an
amortized cost of $3.6 billion and net unrealized pre-tax losses of
approximately $51 million. In connection with a decision made at the time of
transfer to sell $1.4 billion of the transferred securities, the Company, during
1997, wrote-down those securities with unrealized losses to estimated fair value
and recognized a pre-tax loss of $25.2 million. Substantially all of the
securities designated for sale have been sold.

During 1999, the Company transferred certain MBS from its securities
available for sale portfolio to its trading securities portfolio. At the date of
transfer, these MBS had an estimated fair value of $252.1 million and net
unrealized losses of $1.7 million. The net unrealized losses, which consisted of
gross unrealized losses of $1.8 million and gross unrealized gains of $0.1
million, were charged to operations at the date of transfer.

At December 31, 1999, the Company's trading securities portfolio had an
estimated fair value of $177.0 million. Such securities are included under the
caption "Other assets" in the accompanying Consolidated Statement of Financial
Condition. The Company did not maintain a trading securities portfolio at the
end of 1998.

F-14
<PAGE> 93
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- LOANS RECEIVABLE, NET

A summary of loans receivable, net, is as follows at December 31 (in
thousands):

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Loans receivable:
Residential real estate:
Permanent............................................ $ 8,198,653 $ 8,918,170
Construction......................................... 1,467 1,647
----------- -----------
Total residential real estate................... 8,200,120 8,919,817
----------- -----------
Commercial real estate:
Permanent............................................ 3,285,734 2,475,462
Construction......................................... 197,123 92,288
----------- -----------
Total commercial real estate.................... 3,482,857 2,567,750
----------- -----------
Consumer:
Home equity.......................................... 1,489,669 856,389
Automobile........................................... 886,176 4,443
Other................................................ 119,476 112,398
----------- -----------
Total consumer.................................. 2,495,321 973,230
----------- -----------
Business................................................ 1,028,756 287,271
----------- -----------
Total loans receivable(1)....................... 15,207,054 12,748,068
----------- -----------
Allowance for loan losses................................. (140,296) (105,081)
----------- -----------
Total loans receivable, net............................... $15,066,758 $12,642,987
=========== ===========
</TABLE>

- ---------------
(1) Loans receivable were increased by $67.9 and $64.0 million at December 31,
1999 and 1998, respectively, as a result of deferred net yield adjustments.

Loans receivable totaling $6.7 billion were pledged as collateral for
borrowed funds at December 31, 1999.

At December 31, 1999, the Company's residential real estate loans
receivable were principally secured by properties located in the states of New
York (28.8%), California (17.4%), New Jersey (7.4%), Connecticut (5.2%) and
Illinois (5.1%). At that date, the Company's commercial real estate loans
receivable were principally secured by properties in the states of New York
(63.9%), New Jersey (14.0%), Pennsylvania (5.2%) and Virginia (5.2%). Home
equity loans receivable at the end of 1999 were principally secured by
properties located in the states of New York (38.9%), California (15.8%) and New
Jersey (12.2%). Automobile loans receivable at December 31, 1999 were
principally concentrated in the states of New York (49.7%), New Jersey (29.8%)
and Connecticut (11.5%). Business loans receivable at year-end 1999 were
principally concentrated in the states of New York (68.6%) and New Jersey
(8.0%).

F-15
<PAGE> 94
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Activity in the allowance for loan losses is summarized as follows for the
year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year....................... $105,081 $104,718 $106,495
Provision for loan losses(1)....................... 29,500 32,000 49,000
Additions due to acquisitions...................... 19,277 -- 13,249
Loan charge-offs(1)(2)............................. (21,984) (40,067) (71,608)
Loan recoveries.................................... 8,422 8,430 7,582
-------- -------- --------
Net loan charge-offs............................. (13,562) (31,637) (64,026)
-------- -------- --------
Balance at end of year............................. $140,296 $105,081 $104,718
======== ======== ========
</TABLE>

- ---------------
(1) The provision for loan losses and loan charge-offs for 1997 included $14.0
million and $35.8 million, respectively, associated with bulk sales of
approximately $113 million of non-performing residential real estate loans
in May 1997.

(2) Loan charge-offs for 1998 included $9.1 million associated with a bulk sale
of approximately $53 million of non-performing loans in December 1998,
substantially all of which were residential real estate loans.

The following table sets forth non-accrual loans and loans modified in a
TDR (excluding those classified as non-accrual loans) at December 31 (in
thousands):

<TABLE>
<CAPTION>
NON-ACCRUAL LOANS LOANS MODIFIED IN A TDR
------------------ ------------------------
1999 1998 1999 1998
------- ------- --------- ---------
<S> <C> <C> <C> <C>
Residential real estate................... $51,293 $37,771 $ 5,520 $ 6,159
Commercial real estate.................... 5,208 11,992 5,800 6,039
Consumer.................................. 10,424 5,292 -- --
Business.................................. 2,437 56 -- --
------- ------- ------- -------
Total..................................... $69,362 $55,111 $11,320 $12,198
======= ======= ======= =======
</TABLE>

The amount of interest income that would have been recorded on non-accrual
loans and loans modified in a TDR, if such loans had been current in accordance
with their original terms, was $6.2 million, $5.9 million and $18.7 million for
1999, 1998 and 1997, respectively. The amount of interest income that was
recorded on these loans was $1.5 million, $2.9 million and $11.5 million for
1999, 1998 and 1997, respectively.

F-16
<PAGE> 95
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth information regarding the Company's impaired
loans at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
----------------------------------- -----------------------------------
RELATED RELATED
ALLOWANCE ALLOWANCE
RECORDED FOR LOAN NET RECORDED FOR LOAN NET
INVESTMENT LOSSES INVESTMENT INVESTMENT LOSSES INVESTMENT
---------- --------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Residential real estate:
With a related
allowance.............. $ 1,174 $ (73) $ 1,101 $ 619 $ (39) $ 580
Without a related
allowance.............. 4,741 -- 4,741 3,287 -- 3,287
------- ------- ------- ------- ------- -------
Total residential
real estate..... 5,915 (73) 5,842 3,906 (39) 3,867
------- ------- ------- ------- ------- -------
Commercial real estate:
With a related
allowance.............. 8,837 (1,777) 7,060 13,861 (1,437) 12,424
Business:
With a related
allowance.............. 2,437 (344) 2,093 56 (45) 11
------- ------- ------- ------- ------- -------
Total impaired loans........ $17,189 $(2,194) $14,995 $17,823 $(1,521) $16,302
======= ======= ======= ======= ======= =======
</TABLE>

The Company's average recorded investment in impaired loans for 1999, 1998
and 1997 was $17.1 million, $28.1 million and $46.7 million, respectively.
Interest income recognized on impaired loans for 1999, 1998 and 1997 amounted to
$0.8 million, $1.3 million and $4.2 million, respectively.

NOTE 6 -- PREMISES AND EQUIPMENT, NET

Premises and equipment, net, consisted of the following at December 31 (in
thousands):

<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Cost:
Land...................................................... $ 18,660 $ 12,263
Buildings................................................. 99,364 87,251
Leasehold improvements.................................... 76,472 66,153
Furniture, fixtures and equipment......................... 179,901 143,075
--------- ---------
Total cost........................................ 374,397 308,742
Accumulated depreciation and amortization................... (167,024) (137,863)
--------- ---------
Total premises and equipment, net........................... $ 207,373 $ 170,879
========= =========
</TABLE>

Depreciation and amortization of premises and equipment charged to expense
amounted to $31.2 million, $28.3 million and $20.2 million for 1999, 1998 and
1997, respectively.

NOTE 7 -- LOAN SERVICING

Mortgage loans serviced by the Company for others amounted to $38.4
billion, $34.9 billion and $25.0 billion at December 31, 1999, 1998 and 1997,
respectively. These amounts included loans of $1.3 billion, $7.9 billion and
$3.0 billion, respectively, that were being subserviced by the Company in
connection with sales of loan servicing rights.

F-17
<PAGE> 96
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Mortgage servicing assets activity is summarized in the table below for the
year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year....................... $692,473 $341,906 $127,745
Originations and purchases......................... 551,737 694,789 97,587
Acquired in the NAMC Acquisition................... -- 2,160 180,897
Sales.............................................. (162,890) (277,871) (56,539)
Amortization(1).................................... (122,786) (92,291) (29,751)
Hedging activities, net............................ 22,400 23,780 21,967
-------- -------- --------
Balance at end of year............................. $980,934 $692,473 $341,906
======== ======== ========
</TABLE>

- ---------------
(1) Includes amortization associated with derivative financial instruments
hedging mortgage servicing assets.

The estimated fair value of the Company's mortgage servicing assets at
December 31, 1999 was $1,027.4 million.

NOTE 8 -- ORE, NET

ORE, net, which is included under the caption "Other assets" in the
accompanying Consolidated Statements of Financial Condition, was comprised of
the following at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Residential real estate..................................... $ 9,978 $15,170
Commercial real estate...................................... 6,963 14,505
Allowance for losses........................................ (250) (1,443)
------- -------
Total ORE, net.............................................. $16,691 $28,232
======= =======
</TABLE>

Activity in the allowance for losses on ORE is summarized as follows for
the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Balance at beginning of year............................. $1,443 $1,722 $3,294
Provision for losses..................................... 548 665 1,514
Charge-offs.............................................. (1,861) (1,252) (4,272)
Recoveries............................................... 120 308 1,186
------ ------ ------
Net charge-offs........................................ (1,741) (944) (3,086)
------ ------ ------
Balance at end of year................................... $ 250 $1,443 $1,722
====== ====== ======
</TABLE>

F-18
<PAGE> 97
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- DEPOSITS

Deposits were comprised of the following at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Demand.................................................... $ 2,071,419 $ 1,976,122
Savings................................................... 2,407,528 2,291,782
Money market.............................................. 3,201,298 2,634,312
Time(1)................................................... 6,581,204 6,749,244
----------- -----------
Total deposits............................................ $14,261,449 $13,651,460
=========== ===========
</TABLE>

- ---------------
(1) Includes brokered deposits of $5.0 million at December 31, 1999 and $238.5
million at December 31, 1998.

Scheduled maturities of time deposits at December 31, 1999 are presented in
the table below (dollars in thousands):

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
INTEREST
AMOUNT RATE
---------- --------
<S> <C> <C>
Maturing in:
2000...................................................... $5,338,145 4.94%
2001...................................................... 1,050,523 5.49
2002...................................................... 68,211 5.05
2003...................................................... 79,195 5.41
2004...................................................... 34,229 4.48
Thereafter................................................ 10,901 5.48
----------
Total time deposits......................................... $6,581,204 5.03
==========
</TABLE>

The following table sets forth the scheduled maturities of time deposits
with balances of $100,000 or more at December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Maturing in:
Three months or less...................................... $139,342
Over three through six months............................. 260,619
Over six months through one year.......................... 280,404
Over one year............................................. 149,911
--------
Total....................................................... $830,276
========
</TABLE>

At December 31, 1998, time deposits with balances of $100,000 or more
amounted to $973.3 million.

F-19
<PAGE> 98
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10 -- FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO
REPURCHASE

Information concerning federal funds purchased and securities sold under
agreements to repurchase is summarized in the table below at or for the year
ended December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
--------------------- --------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
INTEREST INTEREST INTEREST
AMOUNT RATE AMOUNT RATE AMOUNT RATE
---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
At year end:
Federal funds purchased........ $ 785,000 5.13% $ 474,980 5.26% $ -- --%
Securities sold under
agreements to repurchase.... 321,067 5.78 1,770,238 5.35 2,975,774 5.85
---------- ---------- ----------
Total federal funds purchased and
securities sold under
agreements to repurchase....... $1,106,067 5.32 $2,245,218 5.33 $2,975,774 5.85
========== ========== ==========
Average during the year:
Federal funds purchased........ $1,816,260 5.17% $ 219,050 5.20% $ -- --%
Securities sold under
agreements to repurchase.... 1,358,989 5.14 1,584,131 5.58 3,628,681 5.70
---------- ---------- ----------
Total federal funds purchased and
securities sold under
agreements to repurchase....... $3,175,249 5.15 $1,803,181 5.54 $3,628,681 5.70
========== ========== ==========
Maximum month-end balance during
the year:
Federal funds purchased........ $2,280,613 $ 805,000 $ --
Securities sold under
agreements to repurchase.... 1,841,569 2,694,808 4,265,905
</TABLE>

Federal funds purchased and securities sold under agreements to repurchase
generally mature within thirty days of the transaction date.

Accrued interest payable on securities sold under agreements to repurchase,
which is included under the caption "Other liabilities" in the accompanying
Consolidated Statements of Financial Condition, amounted to $0.2 million, $4.8
million and $21.0 million at December 31, 1999, 1998 and 1997, respectively.

MBS pledged as collateral for securities sold under agreements to
repurchase were delivered to the counterparties to the transactions. The
counterparties may have loaned these MBS to other parties in the normal course
of their operations and agreed to resell to the Company the identical MBS sold.

F-20
<PAGE> 99
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11 -- OTHER SHORT-TERM BORROWINGS

Information concerning other short-term borrowings is summarized in the
table below at or for the year ended December 31 (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
--------------------- --------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
INTEREST INTEREST INTEREST
AMOUNT RATE AMOUNT RATE AMOUNT RATE
---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
At year end:
Federal Home Loan Bank of New
York ("FHLBNY") advances.... $3,711,086 5.12% $3,647,330 5.80% $2,136,675 5.96%
Treasury tax and loan notes.... 1,598,154 3.74 9,474 4.14 3,943 5.25
Other.......................... 12,598 3.99 99,929 6.49 -- --
---------- ---------- ----------
Total other short-term
borrowings..................... $5,321,838 4.70 $3,756,733 5.81 $2,140,618 5.96
========== ========== ==========
Average during the year:
FHLBNY advances................ $2,076,887 5.29% $3,004,269 5.67% $ 916,737 5.79%
Treasury tax and loan notes.... 170,692 4.83 64,798 5.25 2,898 5.35
Other.......................... 31,391 6.09 30,911 6.47 -- --
---------- ---------- ----------
Total other short-term
borrowings..................... $2,278,970 5.27 $3,099,978 5.67 $ 919,635 5.79
========== ========== ==========
Maximum month-end balance during
the year:
FHLBNY advances................ $3,711,086 $3,899,375 $2,187,527
Treasury tax and loan notes.... 1,598,154 620,000 6,063
Other.......................... 105,495 99,929 --
</TABLE>

Scheduled principal repayments of other short-term borrowings outstanding
at December 31, 1999 were $3.7 billion in January 2000, $1.2 billion in February
2000, $250.0 million in May 2000 and $125.0 million in June 2000.

At December 31, 1999, FHLBNY short-term advances, as well as long-term
FHLBNY advances discussed in Note 12, "Long-Term Debt," were collateralized by
Dime FSB's investment in FHLBNY stock and by certain MBS and residential real
estate loans.

F-21
<PAGE> 100
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 12 -- LONG-TERM DEBT

Long-term debt consisted of the following at December 31 (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998
---------- --------
<S> <C> <C>
FHLBNY advances:
Adjustable-rate; due 1999 to 2001; stated interest rates
of 6.004% to 6.146% (1999) and 5.211% to 5.605%
(1998)................................................. $ 477,000 $200,000
Fixed-rate; due 1999 to 2011; stated interest rates of
5.73% to 7.44%; par value of $274,575 (1999) and
$229,680 (1998)........................................ 274,600 229,785
---------- --------
Total FHLBNY advances............................. 751,600 429,785
---------- --------
Senior notes; due 2001 to 2005; stated fixed interest rates
of 6.375% to 7.00% (1999) and 10.50% (1998); par value of
$350,000 (1999) and $100,000 (1998)....................... 348,322 98,977
Medium-term notes; due 2000 to 2003; stated fixed interest
rates of 6.27% to 7.34%; par value of $47,800 (1999) and
$51,000 (1998)............................................ 48,541 51,983
Bonds, preferred stocks and loans transferred in put
transactions; due 2000 to 2016; stated fixed interest
rates of 4.08% to 8.125% (1999) and 4.08% to 8.40%
(1998).................................................... 17,405 20,182
Other....................................................... -- 7,965
---------- --------
Total long-term debt........................................ $1,165,868 $608,892
========== ========
</TABLE>

The weighted average effective interest rate on long-term debt was 6.44% at
December 31, 1999 and 6.75% at December 31, 1998. Scheduled principal repayments
of long-term debt for the five years subsequent to December 31, 1999 were $186.5
million in 2000, $737.9 million in 2001, $21.3 million in 2002, $33.7 million in
2003 and $71.5 million in 2004.

The senior notes are unsecured obligations of the Holding Company and are
not subordinated to any other indebtedness of the Holding Company. During 1999,
the Holding Company issued $200.0 million of 6.375% senior notes due January
2001 and $150.0 million of 7.00% senior notes due July 2001. These senior notes
are not redeemable prior to their scheduled maturity. During January 1999, the
Holding Company, at its option, redeemed all of its then outstanding $100.0
million of 10.50% senior notes that were due in November 2005. These senior
notes had been issued in 1994.

The medium-term notes, all of which were assumed in connection with the
NAMC Acquisition, are unsecured. The terms of these notes provide for a single
principal payment at maturity. During 1999, the Company purchased $3.0 million
of 7.315% medium-term notes due in August 2003 and $0.2 million of 7.29%
medium-term notes due in August 2003.

From 1983 to 1985, Dime FSB had entered into various borrowing agreements
under which it transferred certain tax-exempt bonds, preferred stocks and
tax-exempt loans to certain unit investment trusts and others, accompanied by
put options. During the terms of the agreements, the holders are entitled to
return the assets to Dime FSB under various circumstances at specified prices.
The underlying bonds, preferred stocks and loans transferred in the put
transactions had carrying values of $7.9 million, $1.5 million and $7.8 million,
respectively, at December 31, 1999 and $8.6 million, $3.3 million and $8.4
million, respectively, at December 31, 1998. At those dates, these borrowing
agreements were further collateralized by designated MBS.

At December 31, 1999, the Holding Company had an effective shelf
registration with the Securities and Exchange Commission under which it could
issue an aggregate of $150.0 million of debentures, notes or other unsecured
evidences of indebtedness. These debt securities, which may be unsubordinated or
subordinated to certain other obligations of the Holding Company, may be offered
separately or together in one or more series.

F-22
<PAGE> 101
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13 -- GUARANTEED PREFERRED BENEFICIAL INTERESTS IN DIME BANCORP, INC.'S
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES ("TRUST PREFERRED
SECURITIES")

On May 6, 1997, Dime Capital Trust I ("Dime Capital"), a Delaware statutory
business trust that was formed by the Holding Company, issued $200.0 million
aggregate liquidation amount of 9.33% Capital Securities, Series A (the "Series
A Capital Securities"), representing preferred beneficial interests in Dime
Capital, in an underwritten public offering and $6.2 million aggregate
liquidation amount of common beneficial interests represented by its common
securities to the Holding Company (the "Dime Capital Common Securities," and
together with the Series A Capital Securities, the "Dime Capital Securities").
In connection therewith, Dime Capital purchased $206.2 million aggregate
principal amount of 9.33% Junior Subordinated Deferrable Interest Debentures,
Series A, due May 6, 2027 (the "Series A Subordinated Debentures") issued by the
Holding Company, which amount is equal to the aggregate liquidation amount of
the Dime Capital Securities. Dime Capital is wholly-owned by the Holding Company
and exists for the sole purpose of issuing the Dime Capital Securities and
investing the proceeds thereof in the Series A Subordinated Debentures. The
Series A Subordinated Debentures, which are, and will be, the sole assets of
Dime Capital, are subordinate and junior in right of payment to all present and
future senior indebtedness of the Holding Company. The Holding Company, through:
(i) a guarantee agreement, between the Holding Company and The Chase Manhattan
Bank ("Chase"), as trustee; (ii) a trust agreement, among the Holding Company,
as depositor, Chase, as property trustee, Chase Manhattan Bank Delaware, as
Delaware trustee, certain employees or officers of the Holding Company, as
administrative trustees, and the holders from time to time of the Dime Capital
Securities; (iii) an expense agreement, between the Holding Company and Dime
Capital; (iv) the Series A Subordinated Debentures; and (v) an indenture
regarding the Series A Subordinated Debentures, between the Holding Company and
Chase, as trustee, when taken in the aggregate, has fully and unconditionally
guaranteed all of Dime Capital's obligations under the Series A Capital
Securities. The Series A Capital Securities are subject to mandatory redemption,
in whole or in part, upon the repayment of the Series A Subordinated Debentures
at their stated maturity or earlier redemption. Distributions on the Series A
Capital Securities are payable semi-annually and are reflected in the Company's
Consolidated Statements of Income under the caption "Interest expense on
borrowed funds."

The carrying value and outstanding principal amount of the Trust Preferred
Securities was $152.2 million and $155.2 million, respectively, at December 31,
1999 and $162.0 million and $165.2 million, respectively, at December 31, 1998.
During 1999 and 1998, the Holding Company purchased $10.0 million and $34.8
million, respectively, of the outstanding Series A Capital Securities. The Trust
Preferred Securities have an effective interest rate of 9.53%.

NOTE 14 -- STOCKHOLDERS' EQUITY

Preferred Stock

At December 31, 1999 and 1998, the Holding Company was authorized to issue,
in one or more series, 40 million shares of preferred stock with a par value of
$0.01 per share (the "Preferred Stock"). The powers, designations, preferences
and relative, participating, optional or other rights, if any, and the
qualifications, limitations or restrictions thereof, including, but not limited
to, the number of shares of any series of Preferred Stock, the dividend rights,
redemption rights, liquidation preferences, voting rights and conversion rights
of any series is determined by the board of directors of the Holding Company
(the "Board"). As of December 31, 1999, no shares of the Preferred Stock have
ever been issued.

F-23
<PAGE> 102
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Common and Treasury Stock

The following table sets forth the Holding Company's common share activity
during the years indicated.

<TABLE>
<CAPTION>
COMMON SHARES
-------------------------------------------
HELD IN
ISSUED TREASURY OUTSTANDING
----------- ------------- -----------
<S> <C> <C> <C>
Balance at December 31, 1996...................... 108,262,216 (3,518,297) 104,743,919
Purchased for treasury............................ -- (9,287,100) (9,287,100)
Issued in connection with the NAMC Acquisition.... 11,958,077 7,479,664 19,437,741
Issued in connection with employee stock plans,
net............................................. 36,166 1,427,601 1,463,767
----------- ---------- -----------
Balance at December 31, 1997.................... 120,256,459 (3,898,132) 116,358,327
Purchased for treasury............................ -- (6,371,800) (6,371,800)
(Repurchased) issued in connection with employee
stock plans, net................................ (4,000) 1,587,074 1,583,074
----------- ---------- -----------
Balance at December 31, 1998.................... 120,252,459 (8,682,858) 111,569,601
Purchased for treasury............................ -- (3,867,900) (3,867,900)
Issued in connection with the Lakeview
Acquisition..................................... -- 2,852,321 2,852,321
Issued in connection with employee stock plans,
net............................................. -- 340,848 340,848
----------- ---------- -----------
Balance at December 31, 1999...................... 120,252,459 (9,357,589) 110,894,870
=========== ========== ===========
</TABLE>

At December 31, 1999, 15.1 million shares of Common Stock were reserved for
future issuance under the Company's stock-based employee benefit plans.

At December 31, 1999, the Holding Company had one Common Stock repurchase
program in effect. This program, which was announced in September 1998,
authorized the Holding Company to repurchase up to approximately 5.6 million
shares of outstanding Common Stock. Through the end of 1999, 4.2 million shares
of Common Stock were repurchased under this program. This program was rescinded
in February 2000 in connection with the Merger. No shares of Common Stock were
repurchased under this program subsequent to December 31, 1999.

Stockholder Protection Rights Plan

In October 1995, the Board adopted a Stockholder Protection Rights Plan
(the "Rights Plan"). Under the Rights Plan, which expires in November 2005, the
Board declared a dividend of one right on each outstanding share of Common
Stock, which was paid on November 6, 1995 to stockholders of record on that date
(the "Rights"). Until it is announced that a person or group has acquired 20% or
more of the outstanding Common Stock (an "Acquiring Person") or has commenced a
tender offer that could result in their owning 20% or more of Common Stock, the
Rights will be evidenced solely by the Holding Company's common stock
certificates, will automatically trade with the Common Stock and will not be
exercisable. Following any such announcement, separate Rights would be
distributed, with each Right entitling its owner to purchase participating
preferred stock of the Holding Company having economic and voting terms similar
to those of one share of Common Stock for an exercise price of $50.

Upon announcement that any person or group has become an Acquiring Person
and unless the Board acts to redeem the Rights, then ten business days
thereafter (or such earlier or later date, not beyond 30 days, as the Board may
decide) (the "Flip-in Date"), each Right (other than Rights beneficially owned
by any Acquiring Person or transferee thereof, which become void) will entitle
the holder to purchase, for the $50 exercise price, a number of shares of Common
Stock having a market value of $100. In addition, if, after an Acquiring Person
gains control of the Board, the Holding Company is involved in a merger or sells
more than

F-24
<PAGE> 103
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

50% of its assets or assets generating more than 50% of its operating income or
cash flow, or has entered into an agreement to do any of the foregoing (or an
Acquiring Person is to receive different treatment than all other stockholders),
each Right will entitle its holder to purchase, for the $50 exercise price, a
number of shares of common stock of the Acquiring Person having a market value
of $100. If any person or group acquires between 20% and 50% of the outstanding
Common Stock the Board may, at its option, exchange one share of such Common
Stock for each Right. The Rights may also be redeemed by the Board for $0.01 per
Right prior to the Flip-in Date.

NOTE 15 -- REGULATORY MATTERS

Dime FSB 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 consolidated financial statements of Dime FSB and the
Company. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action ("PCA"), Dime FSB must meet specific capital guidelines
that involve quantitative measures of Dime FSB's assets, liabilities and certain
off-balance sheet items as calculated under regulatory accounting practices.
Dime FSB's regulatory capital amounts and classification are also subject to
qualitative judgments by regulators about components, risk weightings and other
factors.

Quantitative measures established by regulation by the Office of Thrift
Supervision ("OTS") to ensure capital adequacy (the "Capital Adequacy
Regulations") require Dime FSB to maintain, as set forth in the table below,
specified minimum amounts of and ratios of tangible and core ("tier 1") capital
to adjusted total assets and of total risk-based capital to total risk-weighted
assets. Management believes that, as of December 31, 1999, Dime FSB was in
compliance with the Capital Adequacy Regulations.

Pursuant to the Federal Deposit Insurance Corporation Improvement Act of
1991, the OTS adopted PCA regulations (the "PCA Regulations") which established
five capital categories: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To be categorized as well capitalized, Dime FSB must
maintain, as set forth in the table below, specified minimum amounts and ratios
of core capital to adjusted total assets and tier 1 and total risk-based capital
to total risk-weighted assets. As of December 31, 1999, Dime FSB was categorized
as well capitalized under the regulatory framework for PCA. There are no
conditions or events since that date that management believes have changed Dime
FSB's category.

F-25
<PAGE> 104
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes, at December 31 for the years shown, Dime
FSB's actual regulatory capital amounts and ratios, as well as its minimum
capital requirements under the Capital Adequacy Regulations and under the PCA
Regulations for it to be deemed well capitalized (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
AMOUNT RATIO AMOUNT RATIO
---------- ----- ---------- -----
<S> <C> <C> <C> <C>
Actual regulatory capital:
Tangible and core capital................ $1,383,046 5.90% $1,282,010 5.82%
Tier 1 risk-based capital................ 1,383,046 8.80 1,282,010 9.58
Total risk-based capital................. 1,623,342 10.33 1,387,091 10.37
Minimum capital requirements pursuant to
the:
Capital Adequacy Regulations:
Tangible capital...................... 351,459 1.50 330,622 1.50
Core capital.......................... 702,919 3.00 661,243 3.00
Total risk-based capital.............. 1,257,721 8.00 1,070,282 8.00
PCA Regulations to be deemed well
capitalized:
Core capital.......................... 1,171,531 5.00 1,102,072 5.00
Tier 1 risk-based capital............. 943,291 6.00 802,711 6.00
Total risk-based capital.............. 1,572,151 10.00 1,337,852 10.00
</TABLE>

Dime FSB's ability to pay cash dividends to the Holding Company and make
other capital distributions is limited by OTS regulations. As Dime FSB is a
subsidiary of a savings and loan holding company, it is required to file a
notice with the OTS at least 30 days prior to making a capital distribution. OTS
regulations require a savings association to file an application prior to making
a capital distribution if: (i) it is not eligible for expedited treatment under
the OTS application processing rules; (ii) the total amount of all capital
distributions, including the proposed capital distribution, for the applicable
calendar year would exceed an amount equal to the savings association's net
income for that year to date plus the savings association's retained net income
for the preceding two years; (iii) the savings association would not be at least
adequately capitalized under the PCA Regulations following the distribution; or
(iv) the capital distribution would violate a prohibition contained in any
statute, regulation or agreement with the OTS (or with the FDIC) or a condition
imposed in an OTS-approved application or notice. The OTS may, under certain
circumstances, disapprove a notice or deny an application.

Federal Reserve Board regulations require Dime FSB to maintain specified
minimum reserve balances against certain deposits. These reserves, which may
consist of vault cash and non-interest earning deposits at the Federal Reserve
Bank of New York, were $67.6 million and $39.1 million for the calculation
periods including December 31, 1999 and 1998, respectively.

F-26
<PAGE> 105
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 16 -- NET GAINS ON SALES ACTIVITIES

Net gains on sales activities were comprised of the following for the year
ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net gains (losses) on:
Sales of loans held for sale..................... $186,125 $217,271 $ 23,219
Sales of mortgage servicing rights............... 12,135 1,986 6,888
Securities activities............................ 2,062 21,855 (17,794)
Sale of branch................................... -- 9,512 --
Other............................................ 105 (6,173) (277)
-------- -------- --------
Total net gains on sales activities................ $200,427 $244,451 $ 12,036
======== ======== ========
</TABLE>

NOTE 17 -- EMPLOYEE BENEFIT PLANS

Pension and Postretirement Health Care and Life Insurance Plans

The Company currently maintains two non-contributory, qualified, defined
benefit pension plans (the "Qualified Pension Plans"), including a plan assumed
in connection with the Lakeview Acquisition. These plans cover, except as noted,
substantially all salaried employees of the Company who meet certain age and
length of service requirements. At December 31, 1999, the assets of the
Qualified Pension Plans primarily consisted of debt securities and equity
securities, including 730,364 shares of the Common Stock. NAMC personnel are
generally covered by a plan maintained by NAMC (see "Other Plans"). The Company
also maintains various non-contributory, non-qualified, defined benefit pension
plans (the "Non-Qualified Pension Plans"). Benefits under these plans have not
been prefunded by the Company.

In addition, the Company currently sponsors unfunded postretirement health
care and life insurance plans covering, except as noted, substantially all
salaried employees of the Company who meet certain age and length of service
requirements. Employees of NAMC, with certain exceptions, are not covered under
these plans. In general, the Company's postretirement health care plan requires
contributions from participants. Benefits under the Company's postretirement
life insurance plan are provided to participants on a non-contributory basis.

F-27
<PAGE> 106
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table provides details of the changes in the benefit
obligation and fair value of plan assets for the above plans for each of the
years shown and a reconciliation, at the end of each year shown, of the funded
status of the plans with the net amount recognized in the consolidated statement
of financial condition (in thousands):

<TABLE>
<CAPTION>
OTHER
PENSION BENEFITS POSTRETIREMENT BENEFITS
-------------------- ------------------------
1999 1998 1999 1998
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Change in benefit obligation during the
year:
Benefit obligation at beginning of
year............................... $175,811 $170,722 $ 54,701 $ 52,646
Service cost.......................... 7,423 5,989 641 653
Interest cost......................... 12,025 11,392 3,208 3,552
Plan participants' contributions...... -- -- 163 199
Acquisitions.......................... 1,048 -- 210 --
Actuarial (gain) loss................. (20,899) 923 (11,734) 341
Curtailment gain...................... -- -- (5,059) --
Settlement gain....................... -- -- (88) --
Benefits paid......................... (14,398) (13,215) (2,869) (2,690)
-------- -------- -------- --------
Benefit obligation at end of
year............................. 161,010 175,811 39,173 54,701
-------- -------- -------- --------
Change in fair value of plan assets
during the year:
Fair value of plan assets at beginning
of year............................ 157,236 154,117 -- --
Actual return on plan assets.......... 21,810 16,472 -- --
Acquisitions.......................... 481 -- -- --
Employer contributions................ 16,064 1,078 2,706 2,491
Plan participants' contributions...... -- -- 163 199
Benefits paid......................... (14,398) (13,215) (2,869) (2,690)
Administrative expenses paid.......... (1,144) (1,216) -- --
-------- -------- -------- --------
Fair value of plan assets at end of
year............................. 180,049 157,236 -- --
-------- -------- -------- --------
Funded status at end of year............ 19,039 (18,575) (39,173) (54,701)
Unrecognized actuarial (gain) loss...... (16,452) 11,117 (11,888) (346)
Unrecognized transition (asset)
obligation............................ (1,375) (2,220) 21,632 26,861
Unrecognized prior service cost......... 4,691 4,420 -- --
-------- -------- -------- --------
Net amount recognized at end of year.... $ 5,903 $ (5,258) $(29,429) $(28,186)
======== ======== ======== ========
</TABLE>

During 1999, the Company settled and curtailed a portion of its
postretirement life insurance-related benefit obligation by purchasing life
insurance contracts, which transferred the primary obligation for payment of
benefits from the Company to the insurance company.

F-28
<PAGE> 107
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The components of the net amounts recognized in the Company's Consolidated
Statements of Financial Condition in connection with its pension plans and
postretirement health care and life insurance plans were as follows at December
31 (in thousands):

<TABLE>
<CAPTION>
OTHER
PENSION BENEFITS POSTRETIREMENT BENEFITS
-------------------- ------------------------
1999 1998 1999 1998
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Prepaid benefit cost.................... $ 24,857 $ 10,626 $ -- $ --
Accrued benefit liability............... (22,590) (19,452) (29,429) (28,186)
Intangible asset........................ 3,636 3,568 -- --
-------- -------- -------- --------
Net amount recognized................... $ 5,903 $ (5,258) $(29,429) $(28,186)
======== ======== ======== ========
</TABLE>

Weighted average assumptions used by the Company in accounting for its
pension plans and postretirement health care and life insurance plans were as
follows at December 31:

<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
---------------- --------------
1999 1998 1999 1998
------ ------ ----- -----
<S> <C> <C> <C> <C>
Discount rate......................................... 8.00% 7.00% 8.00% 7.00%
Rate of compensation increase......................... 4.00 4.00 4.00 4.00
Expected return on plan assets........................ 10.00 10.00 -- --
</TABLE>

Net periodic expense associated with the Company's pension plans and
postretirement health care and life insurance plans included the following
components for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS
------------------------------ -------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Service cost.................... $ 7,423 $ 5,989 $ 4,785 $ 641 $ 653 $ 462
Interest cost................... 12,025 11,392 11,271 3,208 3,552 3,630
Expected return on plan
assets........................ (15,344) (14,521) (13,968) -- -- --
Amortization of transition
(asset) obligation............ (845) (845) (845) 1,910 1,910 1,910
Amortization of prior service
cost.......................... 858 857 910 -- -- --
Recognized actuarial loss
(gain)........................ 219 104 (728) (146) -- --
Curtailment gain................ -- -- -- (1,842) -- --
Settlement gain................. -- -- -- (33) -- --
-------- -------- -------- ------- ------ ------
Net periodic expense............ $ 4,336 $ 2,976 $ 1,425 $ 3,738 $6,115 $6,002
======== ======== ======== ======= ====== ======
</TABLE>

Pension plans with accumulated benefit obligations in excess of plan assets
at December 31, 1999 and 1998 consisted of the Non-Qualified Pension Plans. The
aggregate projected benefit obligation and accumulated benefit obligation of
these plans amounted to $24.3 million and $22.6 million, respectively, at
December 31, 1999 and $20.6 million and $19.5 million, respectively, at December
31, 1998.

As of December 31, 1999, the health care cost trend rate for participants
less than 65 years old was assumed to be 8.0% for 2000, declining gradually
until a floor of 5.0% was reached in 2003. For all other participants, as of
December 31, 1999, the health care cost trend rate for each future year was
assumed to be 5.0%. Increasing the assumed health care cost trend rates by 1.0%
in each year would increase the related accumulated benefit obligation at
December 31, 1999 by $639 thousand and the aggregate of the related service and
interest cost components by $49 thousand. A 1.0% decrease in the assumed health
care cost trend

F-29
<PAGE> 108
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

rates in each year would decrease the related accumulated benefit obligation by
$594 thousand and the aggregate of the related service and interest cost
components by $46 thousand.

Other Plans

The Company maintains a savings plan, the Retirement 401(k) Investment
Plan, which covers substantially all employees of the Company, other than those
eligible to participate in a defined contribution benefit plan assumed by the
Company in connection with the NAMC Acquisition. Under the Retirement 401(k)
Investment Plan, participants may contribute up to 15% of their base pay on a
before- or after-tax basis, up to legal limits. The Company currently makes
matching contributions equal to 100% of the first 6% of participant
contributions. Participants vest immediately in their own contributions and over
a period of five years for the Company's contributions. Each member's
contributions and matching contributions are invested, in accordance with the
member's directions, in one or any combination of available investment options.

In connection with the NAMC Acquisition, the Company assumed the NAMC
Retirement and 401(k) Savings Plan, which covers substantially all NAMC
personnel, except those employees of NAMC covered under the Qualified Pension
Plans or the Retirement 401(k) Investment Plan. Under the provisions of the
retirement benefit component of this plan, contributions are made by the Company
equal to 4% of the participant's eligible pay. Participants vest in such
contributions over a period of seven years. The provisions of the 401(k) savings
component of this plan provide for contributions by participants of up to 15% of
their total pay on a before-tax basis, up to legal limits, and matching
contributions by the Company of up to 1.5% of a participant's eligible
compensation. Participants vest immediately in their own contributions and over
a period of four years for the Company's contributions. Contributions to the
NAMC Retirement and 401(k) Savings Plan are invested, in accordance with the
participant's direction, in one or any combination of available investment
options.

The Company also maintains non-qualified arrangements under which
supplemental amounts in excess of those allocated under the Retirement 401(k)
Investment Plan are allocated with respect to certain employees and upon which
earnings are credited. These amounts include supplemental allocations based upon
the amounts that would otherwise be contributed as matching contributions under
the Retirement 401(k) Investment Plan on base pay that exceeds the amount for
which matching contributions are permitted to be made under the Retirement
401(k) Investment Plan.

The aggregate expense recognized by the Company in connection with the
above plans was $10.3 million, $8.7 million and $4.9 million for 1999, 1998 and
1997, respectively.

NOTE 18 -- STOCK PLANS

Stock Option and Stock Incentive Plans

As of December 31, 1999, the Company, as further discussed below, had in
effect three stock incentive plans under which shares of Common Stock were
available for future grants. All options to purchase Common Stock that have been
awarded under these plans have an exercise price equal to the grant-date market
price of the Common Stock, generally vest in three equal annual installments
beginning one year from the date of grant and expire eleven years from the date
of grant.

During 1991, the Company adopted a stock incentive plan (the "1991 SIP")
that provides for grants to all employees of stock options, stock appreciation
rights ("SARs"), restricted Common Stock, deferred Common Stock, certain loans
and tax offset payments. The 1991 SIP was amended during 1998 to, among other
things, extend its termination date to March 2008 from February 2004, increase
the number of shares of Common Stock reserved for issuance by 5,000,000 and
provide that the exercise price of options granted on or after the date of
amendment will not be less than the market price of the Common Stock at the date
of grant.

F-30
<PAGE> 109
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1999, 4,173,245 shares of Common Stock remained available for
future grants under the 1991 SIP.

The Company adopted a broad-based stock incentive plan during 1997 (the
"1997 SIP"), under which all employees, excluding certain officers, are eligible
to receive options to purchase Common Stock at an exercise price equal to the
market price of the Common Stock at the date of grant. An aggregate of 950,000
shares of Common Stock have been reserved for issuance under this plan
(including 350,000 shares reserved during 1999 and 300,000 shares reserved
during 1998), of which 90,783 shares remained available for future grants as of
December 31, 1999. The 1997 SIP does not have an established termination date,
but may be terminated at any time by the Board.

The Holding Company's stockholders approved a stock incentive plan for
outside directors during 1997 ("the 1997 SIP for Outside Directors"). As amended
during 1998, this plan provides for discretionary grants by the Board to outside
directors of the Holding Company and its eligible direct and indirect
subsidiaries of stock options, SARs, restricted Common Stock and deferred Common
Stock. The terms of such grants are established by the Board. Under the 1997 SIP
for Outside Directors, which terminates in 2007, 350,000 shares of Common Stock
have been reserved for issuance, of which 293,500 shares remained available for
future grants as of December 31, 1999.

At December 31, 1999, stock options remained outstanding under the
Company's Pride Shares Program, a three year broad-based stock option plan
adopted in 1997 and which terminated during 1999. Under the Pride Shares
Program, there was a grant in each of 1997 and 1998 of an option to each
eligible full-time employee and each eligible part-time employee to purchase 150
shares and 75 shares, respectively, of Common Stock. During 1999, there was a
final grant under the Pride Shares Program of an option to each eligible
full-time employee and each eligible part-time employee to purchase 200 shares
and 100 shares, respectively, of Common Stock. A total of 2,975,000 shares of
Common Stock were reserved for issuance under the Pride Shares Program,
including 975,000 shares during 1999. In total, options to purchase 2,818,025
shares of Common Stock were awarded under the Pride Shares Program. Such options
have an exercise price equal to the grant-date market price of the Common Stock
and expire eleven years from the date of grant. Vesting of stock options awarded
under the Pride Shares program generally occurs at the earlier of five years
after the date of grant or the date the Common Stock price reaches a specified
target price (as established at the date of grant) and its closing price stays
at, or rises above, that target price for five consecutive trading days. The
specified target prices for the stock options granted in 1999, 1998 and 1997
were $31.25, $36.00 and $20.00, respectively. As of December 31, 1999, the
target price vesting test has been achieved only for those stock options granted
in 1997.

In addition, at December 31, 1999, Common Stock-based awards remained
outstanding that were granted under various stock option and stock incentive
plans that terminated in years prior to 1999.

F-31
<PAGE> 110
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table provides a summary of the Company's stock option
activity for the years ended December 31, 1999, 1998 and 1997 and stock options
exercisable at the end of each of those years:

<TABLE>
<CAPTION>
1999 1998 1997
-------------------- --------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
NUMBER AVERAGE NUMBER AVERAGE NUMBER AVERAGE
OF EXERCISE OF EXERCISE OF EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
--------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year................. 6,207,021 $17.30 5,553,578 $12.53 3,934,258 $ 8.96
Exchanged in connection
with the NAMC
Acquisition............. -- -- -- -- 1,862,087 14.18
Granted................... 2,758,075 23.56 2,081,815 29.08 1,256,875 18.92
Exercised................. (328,282) 9.67 (1,165,912) 13.31 (1,331,525) 10.16
Expired or forfeited...... (698,406) 26.77 (262,460) 27.55 (168,117) 13.64
--------- ---------- ----------
Outstanding at end of
year.................... 7,938,408 18.96 6,207,021 17.30 5,553,578 12.53
========= ========== ==========
Exercisable at end of
year.................... 4,126,453 13.45 3,654,757 11.18 4,334,583 11.27
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------- --------------------
WEIGHTED WEIGHTED
NUMBER AVERAGE WEIGHTED AVERAGE NUMBER AVERAGE
OF EXERCISE REMAINING OF EXERCISE
RANGE OF EXERCISE PRICES OPTIONS PRICE CONTRACTUAL LIFE OPTIONS PRICE
- ------------------------ --------- -------- ---------------- --------- --------
<S> <C> <C> <C> <C> <C>
$ 1.13 - $ 4.91............. 477,369 $ 2.53 2.4 years 477,369 $ 2.53
5.61 - 9.75............. 1,089,747 8.14 4.7 1,089,747 8.14
10.09 - 14.81............. 1,294,589 12.87 7.6 965,164 12.20
15.13 - 18.89............. 1,135,275 17.24 7.0 947,903 17.45
20.00 - 24.63............. 1,020,100 23.71 9.9 75,338 22.37
25.25 - 29.94............. 2,337,478 26.47 9.6 552,191 26.86
30.13 - 31.06............. 583,850 31.04 9.2 18,741 30.85
--------- ---------
1.13 - 31.06............. 7,938,408 18.96 7.8 4,126,453 13.45
========= =========
</TABLE>

At December 31, 1999, a total of 2,520,771 limited SARs were outstanding,
all of which have been issued in tandem with stock options. These SARs are
exercisable only for a period of 60 days following the occurrence of certain
specified changes in ownership or control of the Company or certain of its
subsidiaries.

The number of shares of restricted Common Stock issued by the Company
during 1999, 1998 and 1997 amounted to 26,750, 341,500 and 95,640, respectively.
These shares had a weighted average grant price of $0.01 in 1999, $0.84 in 1998
and $1.00 in 1997 and a weighted average grant-date fair value of $19.98 in
1999, $28.05 in 1998 and $16.76 in 1997. Restrictions generally lapse in three
equal annual installments beginning either one year or three years from the date
of grant. At December 31, 1999, 371,965 shares of restricted Common Stock were
outstanding. Compensation expense recognized in operations in connection with
restricted Common Stock awards was $2.9 million in 1999, $2.8 million in 1998
and $0.7 million in 1997.

Employee Stock Purchase Plan

In 1993, the Company adopted an employee stock purchase plan (the "ESPP"),
reserving 1,000,000 shares of Common Stock for purchase by eligible employees of
the Company. In 1999, the Holding Company's stockholders approved an increase in
the number of shares of Common Stock reserved for purchase under the ESPP by
2,000,000. The ESPP permits a per share purchase price of between 85% and

F-32
<PAGE> 111
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

100%, as established by the Compensation Committee of the Board (the
"Compensation Committee"), of the Common Stock market price on the first date of
the relevant purchase period. The Compensation Committee also establishes the
purchase period, which may not exceed twelve months, and number of shares made
available to each eligible participant during a specified purchase period. As of
December 31, 1999, the Compensation Committee has set the per share purchase
price under the ESPP at less than 100% of the Common Stock market price at the
start of the purchase period only in 1994. Through December 31, 1999, a total of
364,559 shares of Common Stock have been purchased under the ESPP.

The following table summarizes purchase rights activity under the ESPP for
the year ended December 31:

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Outstanding at beginning of year............................ 366,431 81,108 63,447
Granted(1).................................................. 458,816 411,989 88,513
Exercised................................................... -- (79,812) (60,602)
Expired or forfeited........................................ (464,637) (46,854) (10,250)
-------- ------- -------
Outstanding at end of year.................................. 360,610 366,431 81,108
======== ======= =======
</TABLE>

- ---------------
(1) The purchase price was $23.00 in 1999, $30.13 in 1998 and $15.38 in 1997.

Pro Forma Data

The Company, as permitted under SFAS No. 123, "Accounting for Stock-Based
Compensation," accounts for its stock-based compensation awards using the
intrinsic value-based method prescribed by Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees." Under this method,
compensation cost is measured by the excess, if any, of the quoted market price
of the Common Stock at date of grant, or other measurement date, over the amount
an employee is required to pay to acquire the Common Stock. Had compensation
expense for the Company's stock-based compensation plans been recognized
consistent with the fair value-based method of SFAS No. 123, the Company's net
income and earnings per share would have been reduced to the pro forma amounts
indicated below for the year ended December 31 (in thousands, except per share
data):

<TABLE>
<CAPTION>
1999 1998 1997
------------------- ------------------- -------------------
AS PRO AS PRO AS PRO
REPORTED FORMA REPORTED FORMA REPORTED FORMA
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income................. $239,813 $231,282 $237,086 $230,522 $121,714 $117,914
Basic earnings per share... 2.15 2.08 2.09 2.03 1.14 1.11
Diluted earnings per
share.................... 2.13 2.05 2.06 2.00 1.12 1.09
</TABLE>

In preparing the pro forma information, the fair value of each stock option
granted and each purchase right granted under the ESPP was estimated on the date
of grant using the Black-Scholes option-pricing model. The following table
presents the weighted average grant-date fair value of each stock option and
each

F-33
<PAGE> 112
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ESPP purchase right granted, as well as the assumptions used in valuing such
grants, during the years ended December 31:

<TABLE>
<CAPTION>
STOCK OPTIONS ESPP PURCHASE RIGHTS
------------------------ ------------------------
1999 1998 1997 1999 1998 1997
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Weighted average grant-date fair
value................................ $ 9.38 $11.54 $ 7.09 $ 3.36 $ 4.34 $ 2.16
Weighted average assumptions:
Expected life (in years)............. 5.47 5.56 5.41 1.00 1.00 1.00
Risk-free interest rate.............. 5.25% 5.16% 6.30% 4.94% 5.54% 6.12%
Common Stock volatility.............. 36.51 36.94 32.07 32.98 31.00 30.00
Dividend yield....................... 1.14 0.69 0.83 1.22 0.66 1.04
</TABLE>

NOTE 19 -- OTHER GENERAL AND ADMINISTRATIVE EXPENSE

The following table provides details of other general and administrative
expense for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Data processing and communications................. $ 48,555 $ 43,782 $ 27,292
Professional services.............................. 18,318 22,107 13,179
Postage and messenger services..................... 17,257 16,846 8,781
Marketing and promotional.......................... 16,475 20,785 15,831
Stationery, printing and supplies.................. 12,738 13,366 7,881
Year 2000 plan..................................... 5,491 16,197 1,286
Other.............................................. 63,225 66,266 41,279
-------- -------- --------
Total other general and administrative expense..... $182,059 $199,349 $115,529
======== ======== ========
</TABLE>

NOTE 20 -- INCOME TAXES

Income tax expense attributable to income before extraordinary items
consisted of the following for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- -------
<S> <C> <C> <C>
Current:
Federal........................................... $ 32,347 $ 26,804 $ 4,432
State and local................................... 10,920 33,269 6,332
-------- -------- -------
Total current............................. 43,267 60,073 10,764
-------- -------- -------
Deferred:
Federal........................................... 96,692 54,687 62,494
State and local................................... 2,553 (1,281) 1,776
-------- -------- -------
Total deferred............................ 99,245 53,406 64,270
-------- -------- -------
Total income tax expense attributable to income
before extraordinary items........................ $142,512 $113,479 $75,034
======== ======== =======
</TABLE>

Excluded from the preceding table were income tax benefits of $3.0 million
in 1999, $3.0 million in 1998 and $0.9 million in 1997 associated with the
recognition of extraordinary losses on the early extinguishment of debt. The
preceding table also excludes the tax effects recorded directly to stockholders'
equity in connection with unrealized gains and losses on securities available
for sale and certain tax benefits associated with the

F-34
<PAGE> 113
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's stock-based compensation plans. In the aggregate, these tax effects
increased stockholders' equity by $61.3 million, $3.7 million and $8.1 million
in 1999, 1998 and 1997, respectively.

The following is a reconciliation of federal income tax expense
attributable to income before extraordinary items computed at the statutory rate
of 35.0% to the actual income tax expense attributable to income before
extraordinary items for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- -------
<S> <C> <C> <C>
Statutory federal income tax expense................ $135,258 $124,119 $69,373
Increase (decrease) in income tax expense resulting
from:
State and local income taxes, net of federal
income tax benefit............................. 8,758 20,793 5,270
Non-deductible amortization of goodwill........... 4,581 3,751 1,334
Restructuring of assets within corporate
entities....................................... -- (32,129) --
Other, net........................................ (6,085) (3,055) (943)
-------- -------- -------
Total income tax expense attributable to income
before extraordinary items........................ $142,512 $113,479 $75,034
======== ======== =======
</TABLE>

The Company's effective income tax rate on income before extraordinary
items was 36.9% for 1999, 32.0% for 1998 and 37.9% for 1997.

The combined federal, state and local income tax effects of temporary
differences that gave rise to significant portions of the Company's deferred tax
assets and deferred tax liabilities were as follows at December 31 (in
thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Deferred tax assets:
Excess tax basis and potential bad debt
deductions relating to non-performing
assets........................................ $ 62,845 $ 47,737 $ 54,029
Securities....................................... 68,080 9,419 18,192
Financial statement reserves not yet realized for
tax purposes.................................. 13,917 20,753 12,311
Postretirement benefits other than pensions...... 12,200 11,170 10,336
Federal alternative minimum tax and general
business tax credit carryforwards............. 4,676 11,810 9,855
Premises and equipment........................... 1,114 2,969 2,706
Net operating loss carryforward.................. -- 22,751 73,093
Other, net....................................... 16,995 -- 12,478
-------- -------- --------
Total deferred tax assets................ 179,827 126,609 193,000
-------- -------- --------
Deferred tax liabilities:
Mortgage servicing assets........................ 132,351 55,397 67,079
Loans receivable................................. 29,875 13,148 23,790
Other, net....................................... -- 6,278 --
-------- -------- --------
Total deferred tax liabilities........... 162,226 74,823 90,869
-------- -------- --------
Net deferred tax assets............................ $ 17,601 $ 51,786 $102,131
======== ======== ========
</TABLE>

At December 31, 1999, the Company no longer had net operating loss or
general business tax credit carryforwards for federal income tax purposes. The
Company, at December 31, 1999, had federal alternative

F-35
<PAGE> 114
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

minimum tax credit carryforwards of $4.7 million, which are available to reduce
future federal income taxes without expiration.

During 1996, federal legislation was enacted that generally eliminates the
potential recapture of federal income tax deductions arising from commonly used
methods of calculating bad debt reserves for periods prior to 1988 if an
institution with a thrift charter (such as Dime FSB) were to change to a
commercial bank charter. In addition, this legislation repealed the reserve
method of tax accounting for bad debts used by Dime FSB and other "large" thrift
institutions, effective for taxable years beginning after 1995. The legislation
also contains provisions that require the recapture in future periods of tax
reserves for periods after 1987, but such provisions have not and are not
expected to have a material impact on the Company's consolidated financial
statements. Further, New York State legislation was enacted during 1996, and New
York City legislation was enacted in March 1997, allowing thrift institutions to
continue to use the reserve method of tax accounting for bad debts and to
determine a deduction for bad debts in a manner similar to prior law.

At December 31, 1999, Dime FSB had approximately $170 million of bad debt
reserves for New York income tax purposes for which no provision for income tax
had been made. For federal income tax purposes, approximately $180 million of
Dime FSB's previously accumulated bad debt deductions are subject to recapture
upon its distribution to the Holding Company. It is not Dime FSB's intention to
make any distributions to the Holding Company, or use the reserve in any manner,
that would create income tax liabilities for Dime FSB.

In order for Dime FSB to be permitted to maintain a New York tax bad debt
reserve for thrifts, certain thrift definitional tests must be met, including
maintaining at least 60% of its assets in qualifying assets, as defined for tax
purposes, and maintaining a thrift charter. If Dime FSB failed to meet these
definitional tests, the transition to the reserve method permitted commercial
banks would result in an increase in the New York tax provision because a
deferred tax liability would be established to reflect the eventual recapture of
some or all of the New York bad debt reserve.

NOTE 21 -- EARNINGS PER COMMON SHARE

The following table sets forth the computations of basic and diluted
earnings per common share for the year ended December 31 (in thousands, except
per share data):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Basic earnings per common share:
Numerators:
Income before extraordinary items............. $243,940 $241,143 $123,174
Extraordinary items........................... (4,127) (4,057) (1,460)
-------- -------- --------
Net income.................................... $239,813 $237,086 $121,714
======== ======== ========
Denominator:
Weighted average number of common shares
outstanding................................. 111,355 113,452 106,585
Basic earnings per common share:
Income before extraordinary items............. $ 2.19 $ 2.13 $ 1.15
Extraordinary items........................... (0.04) (0.04) (0.01)
-------- -------- --------
Net income.................................... $ 2.15 $ 2.09 $ 1.14
======== ======== ========
</TABLE>

F-36
<PAGE> 115
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Diluted earnings per common share:
Numerators:
Income before extraordinary items............. $243,940 $241,143 $123,174
Extraordinary items........................... (4,127) (4,057) (1,460)
-------- -------- --------
Net income.................................... $239,813 $237,086 $121,714
======== ======== ========
Denominator:
Weighted average number of common shares
outstanding................................. 111,355 113,452 106,585
Weighted average number of common equivalent
shares due to stock options, restricted
stock and employee stock purchase rights.... 1,178 1,701 2,028
-------- -------- --------
Weighted average number of diluted common
shares outstanding.......................... 112,533 115,153 108,613
======== ======== ========
Diluted earnings per common share:
Income before extraordinary items............. $ 2.17 $ 2.09 $ 1.13
Extraordinary items........................... (0.04) (0.03) (0.01)
-------- -------- --------
Net income.................................... $ 2.13 $ 2.06 $ 1.12
======== ======== ========
</TABLE>

NOTE 22 -- DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses various derivative financial instruments as part of its
overall interest rate risk-management strategy and to manage certain risks
associated with its mortgage banking activities. For a further discussion of the
Company's objectives and strategies relating to its use of derivative financial
instruments for risk-management purposes, reference is made to Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Asset/Liability Management -- Derivative Financial Instruments."

The Company, to a very limited extent, has also used derivative financial
instruments for trading purposes.

Certain of the derivative financial instruments used by the Company for
risk-management purposes at December 31, 1999 require that the Company or its
counterparty, to the extent that the market value of the position for that party
is negative, maintain collateral, subject to a minimum call, with the other
party. If the Company is subject to an initial collateral requirement, the
amount of the initial collateral modifies the collateral maintenance level.

F-37
<PAGE> 116
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Risk-Management Instruments

The following table presents the notional amount and estimated fair value
of derivative financial instruments used by the Company for risk-management
purposes at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
----------------------- -----------------------
ESTIMATED ESTIMATED
NOTIONAL FAIR NOTIONAL FAIR
AMOUNT VALUE AMOUNT VALUE
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Interest rate risk-management instruments:
Interest rate swaps hedging:
Securities available for sale.................. $ 578,253 $ 6,270 $ 239,370 $ (2,416)
Loans receivable............................... 1,682,125 39,157 1,475,418 (53,469)
Short-term borrowings.......................... 875,000 5,510 250,000 (1,222)
----------- -------- ----------- --------
Total interest rate swaps................. 3,135,378 50,937 1,964,788 (57,107)
----------- -------- ----------- --------
Interest rate cap corridors hedging:
Securities available for sale.................. 45,810 2,354 -- --
Loans receivable............................... 234,894 11,845 -- --
----------- -------- ----------- --------
Total interest rate cap corridors......... 280,704 14,199 -- --
----------- -------- ----------- --------
Interest rate futures hedging:
Securities available for sale.................. 360,000 -- -- --
Loans receivable............................... 175,900 -- -- --
Short-term borrowings.......................... -- -- 300,000 --
----------- -------- ----------- --------
Total interest rate futures............... 535,900 -- 300,000 --
----------- -------- ----------- --------
Interest rate caps hedging:
Securities available for sale.................. -- -- 107,422 --
Loans receivable............................... -- -- 101,570 --
----------- -------- ----------- --------
Total interest rate caps.................. -- -- 208,992 --
----------- -------- ----------- --------
Interest rate swaptions hedging loans
receivable..................................... -- -- 40,000 --
----------- -------- ----------- --------
Total interest rate risk-management
instruments............................. 3,951,982 65,136 2,513,780 (57,107)
----------- -------- ----------- --------
Mortgage banking risk-management instruments:
Forward contracts hedging loans held for sale.... 1,960,407 24,168 4,426,940 (9,976)
Put options purchased hedging loans held for
sale........................................... 74,000 488 143,000 211
Interest rate floors hedging mortgage servicing
assets......................................... 2,885,000 13,912 2,402,768 49,054
Interest rate swaps hedging mortgage servicing
assets......................................... 1,452,000 (68,235) 800,000 32,577
Interest rate swaptions hedging mortgage
servicing assets............................... 1,445,000 53,446 -- --
Principal-only swaps hedging mortgage servicing
assets......................................... 51,085 173 -- --
Interest rate caps hedging mortgage servicing
assets......................................... -- -- 400,000 16,411
----------- -------- ----------- --------
Total mortgage banking risk-management
instruments............................. 7,867,492 23,952 8,172,708 88,277
----------- -------- ----------- --------
Total risk-management instruments.................. $11,819,474 $ 89,088 $10,686,488 $ 31,170
=========== ======== =========== ========
</TABLE>

Interest rate swaps used by the Company at December 31, 1999 involve the
exchange of fixed- and variable-rate interest payments based upon the specified
notional amount. Variable-rates on these agreements were all tied to the one-or
three-month London Interbank Offered Rate ("LIBOR"). The notional amount of

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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

an interest rate swap agreement is not indicative of principal to be exchanged
either at its inception or maturity.

The following table sets forth the contractual maturities of interest rate
swap agreements outstanding at December 31, 1999, as well as the related
weighted average interest rates payable and receivable at that date (dollars in
thousands):

<TABLE>
<CAPTION>
INTEREST RATE RISK MANAGEMENT MORTGAGE BANKING RISK MANAGEMENT
--------------------------------------- ---------------------------------------
NOTIONAL FIXED-RATE VARIABLE-RATE NOTIONAL VARIABLE-RATE FIXED-RATE
AMOUNT PAYABLE RECEIVABLE(1) AMOUNT PAYABLE(1) RECEIVABLE
---------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Maturing in:
2000............... $ 760,400 5.69% 6.36% $ -- --% --%
2001............... 650,609 6.14 6.32 -- -- --
2002............... 262,444 6.56 6.29 200,000 6.48 6.08
2003............... 58,200 6.67 6.38 -- -- --
2004............... 138,520 6.43 6.34 275,000 6.10 6.10
2005............... 130,696 6.58 6.23 -- -- --
2006............... 245,032 6.60 6.39 -- -- --
2007............... 250,578 6.31 6.48 100,000 6.49 6.32
2008............... 455,053 5.98 6.48 400,000 6.46 5.92
2009............... 183,846 6.64 6.47 187,000 6.47 5.81
2011............... -- -- -- 290,000 6.39 6.28
---------- ----------
Total interest rate
swaps.............. $3,135,378 6.16 6.38 $1,452,000 6.39 6.06
========== ==========
</TABLE>

- ---------------
(1) Variable-rates are presented on the basis of rates in effect at December 31,
1999; however, actual repricings of the interest rate swaps will be based on
the applicable interest rates in effect at the actual repricing dates.

Interest rate futures and forward contracts represent contracts for the
delayed delivery of securities or money market instruments in which the seller
agrees to make delivery of a specified instrument at a specified future date, at
a specified price or yield. The interest rate futures and forward contracts
outstanding at year-end 1999 mature during the first quarter of 2000.

Under each of its interest rate cap corridor agreements outstanding at the
end of 1999, the Company, in exchange for the payment of a premium to the
counterparty, receives the amount by which a designated market interest rate
exceeds a specified strike rate up to a maximum rate, as applied to the notional
amount of the agreement. These agreements had designated market rates equal to
one-month LIBOR, a weighted average strike rate of 4.93% and a weighted average
maximum rate of 5.93%. The maturities of the interest rate cap corridors
outstanding at December 31, 1999 were $153.5 million in 2008 and $127.2 million
in 2011.

The Company's interest rate floors outstanding at December 31, 1999
represent agreements where, in exchange for the payment of a premium to the
counterparty, the Company receives the excess of a specified strike rate over a
designated market interest rate (generally constant maturity Treasury of swap
indices), as applied to the specified notional amount. These agreements had a
weighted average strike rate of 5.80% and expected maturities of $1.2 billion in
2003, $0.8 billion in 2004, $0.3 billion in 2005 and $0.6 billion in 2009.

Under each of its interest rate swaption agreements outstanding at the end
of 1999, the Company, in exchange for the payment of a premium to the
counterparty, has the right, but not the obligation, to enter into an interest
rate swap agreement at a future date. The weighted average strike rate of these
agreements was

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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6.93%. The maturities of the notional amounts of the interest rate swaptions
outstanding at year-end 1999 were $580.0 million in 2000, $165.0 million in 2002
and $700.0 million in 2008.

The Company's put options purchased outstanding at December 31, 1999, all
of which mature during the first quarter of 2000, give it the right, but not the
obligation, to sell to the counterparty a designated financial instrument at a
specified price during an agreed upon period of time or on a specific date. The
Company pays a premium to the counterparty for this right.

The principal-only swaps used by the Company at the end of 1999, all of
which mature in 2000, represent agreements where the Company: (i) receives the
discount realized on the underlying principal-only security and pays a variable
rate based on one-month LIBOR as applied to the notional amount of the
agreement; and (ii) pays or receives changes in the market value of the
underlying principal-only security. Subsequent month discount amounts are based
on the previous month's market value. The weighted average interest rate payable
on the principal-only swaps outstanding at December 31, 1999 was 6.64%.

Trading Instruments

The Company did not hold any derivative financial instruments for trading
purposes at the end of 1999. At December 31, 1998, the Company held interest
rate caps with a notional amount of $165.0 million for trading purposes. The
estimated fair value of these interest rate caps at that date was not material.
The average estimated fair values of derivative financial instruments held for
trading purposes during 1999 and 1998 were not material.

NOTE 23 -- COMMITMENTS AND CONTINGENT LIABILITIES

The Company has entered into non-cancelable lease agreements with respect
to Company premises and equipment that expire at various dates through the year
2022. Certain leases contain escalation clauses, which correspond with increased
real estate taxes and other operating expenses, and renewal options calling for
increased rents. Net rent expense was $46.7 million, $39.2 million, and $23.7
million for 1999, 1998 and 1997, respectively. At December 31, 1999, the
projected minimum future rental payments required under the terms of
non-cancelable leases with terms of more than one year were $34.9 million in
2000, $32.8 million in 2001, $29.0 million in 2002, $24.8 million in 2003, $20.3
million in 2004, and $77.4 million in years thereafter. The projected minimum
future rental payments have not been reduced by projected sublease rentals of
$14.8 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company had the following commitments to extend credit and purchase
loans at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Commitments to extend credit:
Residential real estate loans............................. $ 585,363 $1,289,734
Commercial real estate loans.............................. 321,220 223,486
Consumer loans:
Unused revolving lines of credit....................... 822,779 491,055
Other.................................................. 11,801 14,208
---------- ----------
Total consumer loans.............................. 834,580 505,263
---------- ----------
Business loans:
Unused revolving lines of credit....................... 436,591 136,868
Other.................................................. 6,544 22,247
---------- ----------
Total business loans.............................. 443,135 159,115
---------- ----------
Total commitments to extend credit................ 2,184,298 2,177,598
---------- ----------
Commitments to purchase residential real estate loans....... 873,216 1,488,493
---------- ----------
Total commitments to extend credit and purchase loans....... $3,057,514 $3,666,091
========== ==========
</TABLE>

Commitments to extend credit are agreements to lend to a customer provided
there is no violation of any condition established in the contract. Such
commitments generally have fixed expiration dates or termination clauses and may
require payment of a fee. Since certain of the commitments are expected to
expire without being drawn upon, the total commitment amounts may not represent
future cash requirements. The Company evaluates the creditworthiness of these
transactions through its lending policies. The amount of collateral obtained, if
deemed necessary by the Company upon extension of credit, is based on the
Company's credit evaluation of the borrower. The Company's maximum exposure to
credit loss for commitments to extend credit as a result of non-performance by
the counterparty is the contractual notional amount.

The Company had letters of credit outstanding at December 31, 1999 and 1998
of $173.0 million and $62.0 million, respectively. Letters of credit represent
agreements whereby the Company guarantees the performance of a customer to a
third party. The Company requires collateral to support such agreements based on
the Company's evaluation of the creditworthiness of the customer. The credit
risk associated with letters of credit is similar to that incurred by the
Company in its lending activities.

The Company is obligated under various limited recourse provisions
associated with certain residential and commercial real estate loans sold in
past years. The principal balance of loans sold with limited recourse amounted
to approximately $409 million and $523 million at December 31, 1999 and 1998,
respectively. The Company's exposure to credit loss on loans sold with recourse
is similar to the credit risk associated with the Company's on-balance sheet
loans receivable.

On March 6, 2000, North Fork filed a lawsuit in the Delaware Court of
Chancery against the Holding Company, members of the Board and Hudson,
challenging a number of the provisions in the Merger Agreement and alleging,
among other things, breaches of fiduciary duties by the Board. The complaint
seeks, among other things, an order invalidating certain provisions of the
Merger Agreement, including: (i) the Holding Company's agreement not to engage
in any discussions with, or provide confidential information to, any person
making an offer to merge with or acquire the Holding Company, until the
completion of the Merger; (ii) the Board's agreement to recommend that the
Holding Company's stockholders ("Dime

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<PAGE> 120
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Stockholders") adopt the Merger Agreement; and (iii) the Holding Company's
agreement not to terminate the Merger Agreement prior to June 30, 2000 if Dime
Stockholders fail to adopt its terms.

The Holding Company believes that the various claims made against the
Holding Company and the Board are without merit. However, it is not possible to
predict the outcome of these claims at this time.

For a discussion of various claims made against North Fork by the Holding
Company, see Note 28, Subsequent Events.

NOTE 24 -- BUSINESS SEGMENTS

The Company manages its operations in a manner to focus on two strategic
goals: fulfilling its role as a banking institution for both individuals and
businesses and as a national provider of residential mortgage products and
services. Accordingly, the Company aligns its various business objectives in
support of these goals. For internal management purposes, the Company has four
business segments: Retail Banking; Commercial Banking; Mortgage Banking; and
Investment Portfolio.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The financial information provided below has been derived from the internal
profitability system used by management to monitor and manage the financial
performance of the Company. The accounting policies employed by each of the
Company's business segments are largely the same as those described in Note 1,
"Summary of Significant Accounting Policies," in all material respects, and as
such, numerous intersegment transactions are recorded to appropriately reflect
each segment's performance. The Company reflects its internal results on
interest-earning assets and interest-bearing liabilities on a matched funded
basis and accounts for intersegment revenue and transfer costs and credits based
upon estimated fair market values at the time of the transaction. Certain
indirect or overhead costs are allocated to the segments based on total assets
and other appropriate criteria. The Company views its segments' performance on
an operating earnings basis, which represent net income adjusted for the effects
of certain non-recurring or unusual items.

The following table presents certain information regarding the Company's
business segments for the year ended December 31 (dollars in thousands):

<TABLE>
<CAPTION>
TOTAL TOTAL
RETAIL COMMERCIAL MORTGAGE INVESTMENT REPORTABLE INTERSEGMENT OPERATING
BANKING BANKING BANKING PORTFOLIO SEGMENTS ELIMINATIONS EARNINGS
----------- ---------- ---------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999:
Segment revenues..... $ 451,568 $ 113,683 $ 541,451 $ 40,855 $ 1,147,557 $(30,329) $ 1,117,228
Segment profit....... 139,269 49,863 50,692 22,327 262,151 (18,211) 243,940
Percentage of segment
profit to total
profit of
reportable
segments........... 53.1% 19.0% 19.4% 8.5% 100.0%
Segment assets at
year-end........... $10,902,442 $4,588,273 $3,362,991 $4,440,909 $23,294,615 $626,710 $23,921,325
1998:
Segment revenues..... $ 413,148 $ 85,322 $ 531,996 $ 37,602 $ 1,068,068 $(57,854) $ 1,010,214
Segment profit....... 120,244 37,373 79,417 19,238 256,272 (39,191) 217,081
Percentage of segment
profit to total
profit of
reportable
segments........... 46.9% 14.6% 31.0% 7.5% 100.0%
Segment assets at
year-end........... $ 9,833,981 $2,852,929 $5,464,037 $3,790,691 $21,941,638 $379,212 $22,320,850
1997:
Segment revenues..... $ 371,341 $ 74,504 $ 172,941 $ 39,389 $ 658,175 $(34,061) $ 624,114
Segment profit....... 106,968 32,973 17,854 19,849 177,644 (20,561) 157,083
Percentage of segment
profit to total
profit of
reportable
segments........... 60.2% 18.6% 10.0% 11.2% 100.0%
Segment assets at
year-end........... $10,478,447 $2,330,137 $2,619,872 $5,946,568 $21,375,024 $472,976 $21,848,000
</TABLE>

For purposes of above presentation, segment revenues reflect net interest
income after provision for loan losses plus non-interest income. Segment profit
reflects tax-effected operating results. The segment revenues and profit above
incorporate certain intersegment transactions that the Company views as
appropriate for purposes of reflecting the performance of certain segments,
which are eliminated in the preparation of the consolidated financial statements
in accordance with generally accepted accounting principles.

The Company's management views each of its business segments as if they
were stand-alone operations. As such, the results of operations for each segment
reflect entries that would be recorded for an independent enterprise, such as
charges for services rendered on their behalf by other segments or support
units, and entries

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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

relating to the allocation of capital and to the purchase or sale of funds as
needed. The capital allocated to the segment generates intersegment net interest
income. Funds sold or purchased are distributed via the Company's funding center
and are provided on a matched maturity basis. These intersegment entries are
subsequently eliminated in consolidation.

The other primary adjustments between the internal management reports and
the consolidated operating earnings relate to the production and servicing of
loans in the Company's portfolio. Loans produced that are placed in the
residential real estate loans receivable portfolio are sold to the Retail
Banking segment with an imputed market gain or loss recognized by the Mortgage
Banking segment. As a result, the impact of these transactions, and resultant
ongoing adjustments from prior periods, must be reversed as an intersegment
elimination. Mortgage Banking also receives revenue for servicing the loan
portfolio and Retail Banking is charged for this function as a reduction of its
net yield. There are no other material intersegment adjustments.

The following table sets forth reconciliations of reportable segment
revenues and profit to the Company's consolidated totals for the year ended
December 31 (in thousands):

<TABLE>
<CAPTION>
OPERATING
OPERATING EARNINGS REPORTED
EARNINGS ADJUSTMENTS TOTALS
---------- ----------- ----------
<S> <C> <C> <C>
1999:
Segment revenues............................... $1,117,228 $ -- $1,117,228
Segment profit................................. 243,940 (4,127) 239,813
1998:
Segment revenues............................... 1,010,214 10,049 1,020,263
Segment profit................................. 217,081 20,005 237,086
1997:
Segment revenues............................... 624,114 (44,761) 579,353
Segment profit................................. 157,083 (35,369) 121,714
</TABLE>

Reconcilements of operating earnings to reported net income is provided
below for the year ended December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Operating earnings................................. $243,940 $217,081 $157,083
Items not included in operating earnings:
Net losses related to balance sheet
restructurings................................ -- (635) (25,247)
Net charges and adjustments related to
acquisitions.................................. -- -- (21,431)
Gain on sale of branch........................... -- 9,512 --
Other, net....................................... -- 1,172 (8,014)
Income tax effect on above items................. -- (3,717) 20,783
Adjustment to conform internal tax expense to
corporate tax expense......................... -- 17,730 --
Extraordinary losses on early extinguishment of
debt, net of tax benefits..................... (4,127) (4,057) (1,460)
-------- -------- --------
Net adjustments after tax................ (4,127) 20,005 (35,369)
-------- -------- --------
Reported net income................................ $239,813 $237,086 $121,714
======== ======== ========
</TABLE>

Additional information regarding the Company's business segments, including
a description of the products and services from which each business segment
derives its revenues, is disclosed in Item 1, "Business."

F-44
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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 25 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires the disclosure, where practicable, of the fair value of on- and
off-balance sheet financial instruments. The fair value of a financial
instrument is the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates do not reflect any possible tax ramifications, estimated transaction
costs, or any premium or discount that could result from offering for sale at
any one time the Company's entire holdings of a particular financial instrument.
Because no active market exists for a certain portion of the Company's financial
instruments, the fair value estimates for such financial instruments are based
on judgments regarding, among other factors, future cash flows, future loss
experience, current economic conditions and risk characteristics. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect these estimates. The Company
has not included certain material items in its disclosure as such items, which
the Company believes have significant value, are not considered financial
instruments under SFAS No. 107.

The following table sets forth the carrying values and estimated fair
values of the Company's on-balance sheet financial instruments at December 31,
1999 and 1998. For purposes of this presentation, the estimated fair values of
off-balance sheet derivative financial instruments used for risk-management
purposes have not been considered in determining the estimated fair values of
on-balance sheet financial instruments.

<TABLE>
<CAPTION>
1999 1998
-------------------------- --------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Financial assets:
Cash and cash equivalents... $ 432,455 $ 432,455 $ 357,777 $ 357,777
Securities available for
sale..................... 3,849,676 3,849,676 3,329,444 3,329,444
FHLBNY stock................ 328,732 328,732 324,106 324,106
Loans held for sale......... 1,733,667 1,720,278 3,884,886 3,893,985
Loans receivable, net(1).... 14,933,642 14,690,751 12,580,325 12,813,048
Accrued interest
receivable............... 104,923 104,923 97,124 97,124
Trading securities.......... 177,021 177,021 -- --
Trading derivative financial
instruments.............. -- -- 3 3
Financial liabilities:
Deposits.................... 14,261,449 14,213,200 13,651,460 13,653,013
Federal funds purchased and
securities sold under
agreements to
repurchase............... 1,106,067 1,106,067 2,245,218 2,245,238
Other short-term
borrowings............... 5,321,838 5,321,607 3,756,733 3,757,335
Long-term debt.............. 1,165,868 1,152,107 608,892 615,331
Trust Preferred
Securities............... 152,219 151,109 162,005 176,423
Accrued interest payable.... 51,577 51,577 41,014 41,014
</TABLE>

- ---------------
(1) Excludes the net book value of business lease financing receivables which
are not considered financial instruments under SFAS No. 107.

F-45
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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the carrying values and estimated fair
values of the derivative financial instruments used by the Company for
risk-management purposes at December 31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Interest rate swaps....................... $ 901 $(17,298) $ 3,309 $(24,530)
Interest rate swaptions................... 33,965 53,446 46 --
Principal-only swaps...................... 2,550 173 -- --
Interest rate floors...................... 31,458 13,912 33,874 49,054
Interest rate cap corridors............... 10,360 14,199 -- --
Interest rate futures..................... (2,058) -- 20 --
Forward contracts......................... -- 24,168 -- (9,976)
Put options purchased..................... 223 488 1,007 211
Interest rate caps........................ -- -- 16,585 16,411
</TABLE>

The methodologies and assumptions used by the Company in estimating the
fair values of its financial instruments are described below.

The carrying value of cash and cash equivalents was deemed to be a
reasonable estimate of their fair value due to the short-term nature of these
items and because they do not present significant credit concerns.

The estimated fair value of securities available for sale and trading
securities was determined by use of quoted market prices or dealer quotes.

The fair value of FHLBNY stock was estimated to be its carrying value,
which is indicative of its redemption price.

The estimated fair values of loans were calculated using an option-adjusted
cash flow valuation methodology. The key assumptions used in the option-adjusted
calculation were derived from quoted market prices, internal estimates and the
pricing of similar instruments.

The estimated fair values of accrued interest receivable and payable have
been determined to equal their carrying amounts as these amounts are generally
due or payable within 90 days.

The estimated fair value of deposits without a specified maturity, which
includes demand, savings and money market deposits, was the amount payable on
the valuation date. For fixed-maturity time deposits, fair value was estimated
based on the discounted value of contractual cash flows using current market
interest rates offered for deposits with similar remaining maturities.

The estimated fair values of borrowed funds maturing within 90 days were
deemed to be equal to their carrying values. The estimated fair values of all
other borrowed funds were based on quoted market prices or on the discounted
value of contractual cash flows using current market interest rates for
borrowings with similar terms and remaining maturities.

The estimated fair values of the Company's derivative financial instruments
were based upon quoted market prices, dealer quotes or pricing models.

The Company has reviewed its outstanding commitments to extend credit,
commitments to purchase loans, letters of credit and loans sold with recourse at
December 31, 1999 and 1998 and has determined that their estimated fair values
were not material.

F-46
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DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 26 -- FINANCIAL STATEMENTS OF THE PARENT COMPANY

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1999 1998
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Assets:
Cash and cash equivalents:
Cash and due from banks................................ $ 733 $ 537
Interest-earning deposits in Dime FSB.................. 25,266 84,573
---------- ----------
Total cash and cash equivalents................... 25,999 85,110
---------- ----------
Securities available for sale............................. 64,032 60,012
Subordinated notes issued by Dime FSB held to maturity.... 100,000 --
Investment in Dime FSB.................................... 1,832,688 1,535,304
Investment in non-banking subsidiaries.................... 5,075 6,274
Receivables from Dime FSB................................. -- 81,941
Other assets.............................................. 58,336 44,049
---------- ----------
Total assets................................................ $2,086,130 $1,812,690
========== ==========
Liabilities and stockholders' equity:
Liabilities:
Securities sold to Dime FSB under agreements to
repurchase............................................ $ -- $ 17,370
Short-term senior notes................................ -- 99,929
Long-term senior notes................................. 348,322 98,977
Series A Subordinated Debentures....................... 202,376 202,348
Payables to Dime FSB................................... 6,389 --
Other liabilities...................................... 13,206 6,245
---------- ----------
Total liabilities................................. 570,293 424,869
---------- ----------
Stockholders' equity...................................... 1,515,837 1,387,821
---------- ----------
Total liabilities and stockholders' equity.................. $2,086,130 $1,812,690
========== ==========
</TABLE>

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Income:
Dividends from Dime FSB.................................. $ 90,000 $185,000 $159,000
Dividends from non-banking subsidiaries.................. 577 577 289
Interest income.......................................... 12,960 6,546 6,987
Other.................................................... -- 230 23
-------- -------- --------
Total income..................................... 103,537 192,353 166,299
-------- -------- --------
Expense:
Interest expense......................................... 38,875 34,148 31,758
Other.................................................... 3,804 3,508 3,348
-------- -------- --------
Total expense.................................... 42,679 37,656 35,106
-------- -------- --------
Income before income tax benefit, equity in undistributed
(overdistributed) net income of subsidiaries and
extraordinary items...................................... 60,858 154,697 131,193
Income tax benefit......................................... 12,059 13,474 10,736
-------- -------- --------
Income before equity in undistributed (overdistributed) net
income of subsidiaries and extraordinary items........... 72,917 168,171 141,929
Equity in undistributed (overdistributed) net income of
subsidiaries............................................. 170,980 72,636 (18,755)
-------- -------- --------
Income before extraordinary items.......................... 243,897 240,807 123,174
Extraordinary items -- losses on early extinguishment of
debt, net of tax benefits of $2,555 (1999), $785 (1998)
and $895 (1997).......................................... (3,463) (1,065) (1,460)
-------- -------- --------
Net income................................................. $240,434 $239,742 $121,714
======== ======== ========
</TABLE>

F-48
<PAGE> 127
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................... $240,434 $239,742 $121,714
Adjustments to reconcile net income to net cash provided
by operating activities:
Equity in (undistributed) overdistributed net income
of subsidiaries..................................... (170,980) (72,636) 18,755
Gains on sales of securities.......................... -- (213) (23)
Losses on early extinguishment of debt................ 6,018 1,850 2,355
Other, net............................................ (10,575) 2,314 (5,808)
-------- -------- --------
Net cash provided by operating activities........ 64,897 171,057 136,993
-------- -------- --------
Cash flows from investing activities:
Purchases of securities available for sale............... (10,962) (103,111) (29,497)
Proceeds from sales of securities available for sale..... -- 70,573 1,597
Purchase of subordinated notes issued by Dime FSB held to
maturity.............................................. (100,000) -- --
Proceeds from maturities of securities available for sale
and held to maturity.................................. 145 292 181
Investments in subsidiaries.............................. -- -- (6,186)
Net cash paid in acquisition............................. (41,279) -- --
Other.................................................... 1,825 -- --
-------- -------- --------
Net cash used by investing activities............ (150,271) (32,246) (33,905)
-------- -------- --------
Cash flows from financing activities:
Net (decrease) increase in securities sold to Dime FSB
under agreements to repurchase........................ (17,370) 17,370 --
Proceeds from issuance of short-term senior notes........ -- 99,818 --
Repayment of short-term senior notes..................... (100,000) -- --
Proceeds from issuance of long-term senior notes......... 347,445 -- --
Repayments of long-term senior notes..................... (105,000) (45,501) (57,681)
Proceeds from issuance of the Series A Subordinated
Debentures............................................ -- -- 202,308
Proceeds from issuance of Common Stock and treasury
stock................................................. 3,160 17,101 14,332
Purchases of treasury stock.............................. (76,346) (177,970) (200,354)
Cash dividends paid on Common Stock...................... (25,626) (21,550) (12,892)
Other.................................................... -- -- 3,781
-------- -------- --------
Net cash provided (used) by financing
activities..................................... 26,263 (110,732) (50,506)
-------- -------- --------
Net (decrease) increase in cash and cash equivalents....... (59,111) 28,079 52,582
Cash and cash equivalents at beginning of year............. 85,110 57,031 4,449
-------- -------- --------
Cash and cash equivalents at end of year................... $ 25,999 $ 85,110 $ 57,031
======== ======== ========
</TABLE>

F-49
<PAGE> 128
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 27 -- CONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
1999 1998
----------------------------------------- -----------------------------------------
FOURTH THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income................... $385,713 $358,754 $335,018 $339,613 $346,986 $343,989 $357,111 $372,799
Interest expense.................. 231,859 209,511 195,128 204,115 213,822 216,668 226,274 236,888
-------- -------- -------- -------- -------- -------- -------- --------
Net interest income........... 153,854 149,243 139,890 135,498 133,164 127,321 130,837 135,911
Provision for loan losses......... 7,000 7,000 7,500 8,000 8,000 8,000 8,000 8,000
-------- -------- -------- -------- -------- -------- -------- --------
Net interest income after
provision for loan losses... 146,854 142,243 132,390 127,498 125,164 119,321 122,837 127,911
Non-interest income:
Loan servicing and production
fees.......................... 68,474 67,402 69,716 61,928 60,604 53,819 42,631 42,450
Banking service fees............ 14,884 13,060 12,587 11,267 11,172 11,088 10,168 9,000
Securities and insurance
brokerage fees................ 9,129 8,925 10,052 8,604 7,565 8,704 8,957 7,510
Net gains on sales activities... 36,310 42,114 57,696 64,307 63,941 71,519 63,743 45,248
Other........................... 3,821 2,391 2,452 3,124 1,343 751 2,491 2,326
-------- -------- -------- -------- -------- -------- -------- --------
Total non-interest income..... 132,618 133,892 152,503 149,230 144,625 145,881 127,990 106,534
-------- -------- -------- -------- -------- -------- -------- --------
Non-interest expense:
General and administrative
expense....................... 144,097 146,116 149,661 149,596 145,324 140,689 145,408 130,442
Amortization of mortgage
servicing assets.............. 28,989 27,940 35,200 30,657 30,826 27,633 16,897 16,935
Amortization of goodwill........ 7,917 4,230 3,497 2,876 2,933 2,839 2,836 2,879
-------- -------- -------- -------- -------- -------- -------- --------
Total non-interest expense.... 181,003 178,286 188,358 183,129 179,083 171,161 165,141 150,256
-------- -------- -------- -------- -------- -------- -------- --------
Income before income tax expense
and extraordinary items......... 98,469 97,849 96,535 93,599 90,706 94,041 85,686 84,189
Income tax expense................ 36,138 36,025 35,718 34,631 29,027 30,092 27,420 26,940
-------- -------- -------- -------- -------- -------- -------- --------
Income before extraordinary
items........................... 62,331 61,824 60,817 58,968 61,679 63,949 58,266 57,249
Extraordinary items -- losses on
early extinguishment of debt,
net of tax benefits............. -- -- -- (4,127) -- (4,057) -- --
-------- -------- -------- -------- -------- -------- -------- --------
Net income........................ $ 62,331 $ 61,824 $ 60,817 $ 54,841 $ 61,679 $ 59,892 $ 58,266 $ 57,249
======== ======== ======== ======== ======== ======== ======== ========
Per common share:
Basic earnings:
Income before extraordinary
items....................... $ 0.56 $ 0.55 $ 0.54 $ 0.53 $ 0.55 $ 0.57 $ 0.51 $ 0.50
Net income.................... 0.56 0.55 0.54 0.49 0.55 0.53 0.51 0.50
Diluted earnings:
Income before extraordinary
items....................... 0.56 0.55 0.54 0.52 0.55 0.56 0.50 0.49
Net income.................... 0.56 0.55 0.54 0.49 0.55 0.52 0.50 0.49
Cash dividends declared......... 0.06 0.06 0.06 0.05 0.05 0.05 0.05 0.04
</TABLE>

F-50
<PAGE> 129
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 28 -- SUBSEQUENT EVENTS (UNAUDITED)

On March 5, 2000, North Fork announced its intention to make a hostile bid
to acquire all of the outstanding shares of Common Stock and to terminate the
Merger. On March 6, 2000, North Fork filed preliminary proxy materials with the
Securities and Exchange Commission with which it proposed to solicit proxies to
vote against the Merger.

On March 13, 2000, North Fork mailed definitive proxy solicitation
materials to Dime Stockholders in order to solicit proxies against the Merger.
On March 15, 2000, North Fork formally commenced the Exchange Offer. Pursuant to
the terms of the Exchange Offer, Dime Stockholders would receive 0.9302 shares
of North Fork's common stock and $2.00 in cash for each share of Common Stock
tendered to North Fork. The Exchange Offer is conditioned on the satisfaction of
a number of factors, including, but not limited to: (i) termination of the
Merger Agreement; (ii) the Holding Company entering into a merger agreement with
North Fork; (iii) receipt of required regulatory approvals; and (iv) the rights
under the Stockholder Protection Rights Plan, dated as of October 20, 1995,
between the Holding Company and The First National Bank of Boston, as rights
agent, not being applicable. On March 20, 2000, the Board formally recommended
that Dime Stockholders reject the Exchange Offer by not tendering Common Stock
to North Fork. On that date, the Holding Company and Hudson postponed their
respective special stockholders meetings to May 17, 2000 and May 18, 2000,
respectively. On March 23, 2000, North Fork extended the expiration date of the
Exchange Offer from April 14, 2000 to midnight on May 31, 2000.

On March 10, 2000, the Holding Company filed suit in the Supreme Court of
the State of New York, County of New York, against North Fork and Fleet Boston
Corporation ("Fleet Boston"). The complaint alleges violations of New York's
antitrust laws, including a conspiracy between North Fork and Fleet Boston to:
(i) diminish competition in a variety of banking markets; (ii) diminish
competition for the purchase of banks and thrifts in some markets; and (iii)
eliminate a stronger competitor (i.e., the combined institution resulting from
the Merger). In addition, the complaint alleges that Fleet Boston's divestiture
of branches from the Fleet Financial-BankBoston Corporation merger to Sovereign
Bancorp, Inc. ("Sovereign") is part of the conspiracy, as Sovereign is not
capable of competing effectively in markets with Fleet Boston and Fleet Boston
may use monopoly profits gained in those markets to fund the Exchange Offer. The
suit asks the court to: (i) enjoin North Fork and Fleet Boston from acting in
concert to acquire the Holding Company or otherwise interfere with the Merger;
(ii) enjoin the proposed branch divestiture from Fleet Boston to Sovereign and
require divestiture to a banking organization with a reasonable opportunity to
improve competition in the markets served; and (iii) declare violations of the
New York antitrust laws.

F-51
<PAGE> 130
DIME BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For a discussion of various litigation against the Company in connection
with the Exchange Offer and the Merger, see Note 23, "Commitments and Contingent
Liabilities."

F-52

<PAGE> 1
Exhibit 10.7

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of December 21, 1998 between THE
DIME SAVINGS BANK OF NEW YORK, FSB (the "Bank"), a federal stock savings
bank having its principal executive offices at 589 Fifth Avenue, New York, New
York 10017, and Richard A. Mirro (the "Officer").

-----------

A. The Bank is desirous of employing the Officer upon the terms and
conditions set forth in this Agreement.

B. The Officer is desirous of being employed by the Bank upon the terms
and conditions set forth in this Agreement.

------------

Therefore, the Bank and the Officer, intending to be legally bound,
agree as follows:
1. Employment. Subject to the terms and conditions of this
Agreement, the Bank hereby employs the Officer, and the Officer hereby accepts
such employment.

2. Term of Employment. (a) The initial term of the Officer's
employment under this Agreement shall be deemed to have commenced on the date of
this Agreement and shall continue until March 1, 2001. This Agreement shall be
renewed automatically for one additional year on March 1, 1999, and on each
March 1 thereafter, unless (a) the
<PAGE> 2
Officer or the Bank gives contrary written notice to the other, at least 10 days
prior to any such renewal date, or (b) this Agreement has been otherwise
terminated in accordance with its provisions. During each calendar year of the
term of this Agreement beginning with 1999 (unless notice of non-renewal of this
Agreement shall have previously been given by the Bank or the Officer pursuant
to the immediately preceding sentence), the Board of Directors of the Bank
shall, no later than the last day in such year on which the Bank may give the
Officer notice of non-renewal pursuant to the immediately preceding sentence,
review and determine whether the Bank shall give the Officer notice of
non-renewal with respect to the March 1 renewal date in such year; provided,
however, that nothing in this sentence shall be construed as limiting the Bank's
ability to give notice of non-renewal pursuant to the immediately preceding
sentence at any other time. A determination by the Board of Directors of the
Bank in any year that the Bank shall not give notice of non-renewal with respect
to the March 1 renewal date in such year shall be deemed to be the Board's
approval of the renewal of this Agreement on such renewal date. Except as
otherwise provided in Sections 8(e) and 11(c)(v) of this Agreement, neither the
giving of notice of non-renewal pursuant to clause (a) of the second sentence of
this Section 2(a), nor the subsequent expiration of the Term of this Agreement
as a result of the giving of such notice, shall be deemed to be a termination of
the Officer's employment under this Agreement. (As used in this Agreement, (i)
"Term" shall mean the initial term and any renewal term of this Agreement and
(ii) "remaining Term" shall mean the balance of the Term in effect at a
specified time without regard to potential future renewals under

<PAGE> 3
the renewal provision of this Section 2(a); provided, however, that, solely for
purposes of Section 11(c)(ii), "remaining Term" shall mean the balance of the
Term in effect at the time of the Change in Control specified therein plus the
number of days, if any, by which the six month period plus the 90-day period
noted therein extends beyond the date upon which the expiration of the otherwise
remaining Term in effect at that time was to have occurred.)

(b) The Officer's employment may be terminated during the Term
of this Agreement by the Bank or the Officer in the manner specified in this
Agreement. Any such termination of employment shall result in a termination of
this Agreement on the Effective Date of Termination (as defined in Section 13);
provided that, notwithstanding anything to the contrary in the foregoing, any
right of the Officer to any payments or benefits as a result of a termination of
the Officer's employment (as provided in this Agreement) shall survive the
termination of this Agreement.

3. Offices. During the Term, the Officer shall serve as an
officer of the Bank. In addition, during the Term the Officer shall serve as an
officer of the Bank's mortgage banking subsidiary, North American Mortgage
Company, or its successor (the "Subsidiary"), and, for the period for which the
Officer may from time to time be elected, as an officer or director of other
subsidiaries or affiliates of the Bank.

4. Duties. (a) The Officer shall serve as the President and
Chief Operating Officer of the Subsidiary and shall perform such duties in
connection therewith as may be assigned to him from time to time by the Chief
Executive Officer of the Subsidiary.

3
<PAGE> 4
(b) If and from such time as approved by the Subsidiary's
Board of Directors, the Officer shall serve as Chief Executive Officer of the
Subsidiary. While President and Chief Operating Officer of the Subsidiary during
such period, the Officer shall continue to perform the duties in connection
therewith set forth in Section 4(a). In the event the Officer is named as Chief
Executive Officer of the Subsidiary, the Officer shall perform such duties in
connection therewith as may be assigned to him from time to time by the Chief
Executive Officer of the Bank.

(c) During the Term (except for periods of illness and
vacation), substantially all of the Officer's business time, attention, skill
and efforts shall be devoted to the performance of the Officer's duties under
this Agreement.

5. Compensation. (a) The annualized salary of the Officer
shall be at the rate of $375,000 during the portion of the Term that the Officer
is President and Chief Operating Officer of the Subsidiary, which shall, subject
to the provisions of Section 5(e), be payable in installments in accordance with
the prevailing general payroll practice of the Bank as it may exist from time to
time.

(b) If and when the Officer is named Chief Executive Officer
of the Subsidiary, the annual salary of the Officer shall be at a minimum rate
of $375,000 during the period (if any) that he serves in such position. Such
annual salary shall, subject to the provisions of Section 5(e), be payable in
installments in accordance with the prevailing general payroll practice of the
Bank as it may exist from time to time.

4
<PAGE> 5
(c) The Board of Directors of the Bank (or a duly authorized
committee of the Board) may increase or decrease (but not below the relevant
level described in Section 5(a) or (b)) the Officer's annual salary from time to
time; provided that, except for otherwise permitted decreases that are applied
generally to officers of comparable rank, such annual salary shall not be
decreased by more than 25% in any one calendar year. As used in this Agreement,
"annual salary" shall mean, at any time, the annual rate of salary then payable
to the Officer pursuant to this Section 5 (before deduction of any amounts
deferred under any deferred compensation plan of the Bank, any voluntary
contributions to the Retirement 401(k) Investment Plan of Dime Bancorp, Inc.
(the "Company"), or other similar qualified plan (collectively, the "401(k)
Plan"), or any other deductions from income) and shall be exclusive of bonuses,
incentive compensation or other compensation or benefits paid to or accrued for
the Officer other than pursuant to this Section 5.

(d) The Officer shall not have or acquire by virtue of this
Agreement any rights to participate in, or receive benefits with respect to, any
compensation or benefit plan or program of the Bank, except (i) that while
employed by the Bank the Officer may participate in such plans or programs to
the extent provided in such plans and programs and on the same basis as if the
Officer's employment were not subject to the terms and conditions of this
Agreement, or (ii) as otherwise specifically provided in this Agreement. The
Officer shall participate in the Company's Supplemental Executive Retirement
Plan (the "SERP") with a "Pension Goal" under such plan of not less than 50% of
"Average

5
<PAGE> 6
Compensation" (with each such term as defined in the SERP), subject to the
vesting provisions under the SERP or, solely as applicable, Section 11(g)(i).

(e) Notwithstanding anything to the contrary in the foregoing
provisions, the payment of any amounts that would otherwise be payable to the
Officer but which would be in excess of the amount which the Company, the Bank
or the Subsidiary could deduct for federal income tax purposes if then paid, on
account of the operation of Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"), shall be deferred to the extent such deferral is
required pursuant to a policy adopted by the Compensation Committee of the
Company or the Bank and, to the extent so deferred, shall be payable pursuant to
the relevant terms of the Dime Bancorp, Inc. Voluntary Deferred Compensation
Plan.

6. Disability. (a) The Bank may terminate the Officer's
employment under this Agreement for "permanent disability" if (i) the Officer
shall become physically or mentally disabled or incapacitated to the extent that
the Officer has been absent from the Officer's duties with the Bank on account
of such disabilities or incapacitation as determined in a manner consistent with
the policy which applies generally to employees of the Bank on a full-time basis
for a period of six consecutive months, and (ii) within 30 days after written
notice of proposed termination for permanent disability is given by the Bank to
the Officer, the Officer shall not have returned to full-time performance of the
Officer's duties.

6
<PAGE> 7
(b) In the event of termination for "permanent disability,"
the Bank shall continue to pay the Officer an amount equal to the Officer's then
annual salary pursuant to Section 5 (less any benefits that would have been
payable to the Officer had the Officer elected the maximum available amount of
disability insurance coverage available from the Bank) for a period commencing
on the Effective Date of Termination and ending on the first anniversary thereof
(or the end of the remaining Term in effect prior to the Effective Date of
Termination, if earlier). Notwithstanding the first sentence of this Section
6(b), any such payment shall terminate upon the earliest to occur of (A) the
date the Officer returns to full-time employment with the Bank; (B) the
Officer's full-time employment by another employer; or (C) the Officer's death.
In the event of termination for "permanent disability," the Bank also shall
continue to provide until the end of the remaining Term in effect prior to the
Effective Date of Termination (or the Officer's earlier death) all life, medical
and dental insurance coverage maintained by the Bank for full-time employees,
provided that the Officer shall continue to pay all amounts in respect of such
coverage that other employees receiving the same level of coverage are required
to pay. In the event of a termination of the Officer's employment for "permanent
disability" at any time during the remaining Term in effect at the time of a
Change in Control (as defined in Section 11(a)), the provisions of Section 11
shall apply in lieu of the provisions of this Section 6(b).

(c) There shall be no reduction in the compensation payable to
the Officer or the Officer's other rights under this Agreement during any period
when the Officer is

7
<PAGE> 8
incapable of performing some or all of the Officer's duties by reason of
temporary or partial disability.

7. Death. In the event of the Officer's death during the Term,
this Agreement and all of the Bank's obligations under this Agreement shall
terminate.

8. Termination by the Bank. (a) The Bank may terminate the
Officer's employment under this Agreement at any time by giving the Officer
written notice of such termination, provided that, except where termination is
for "cause" (as defined in Section 8(b)), such notice shall be provided at least
30 days prior to the Effective Date of Termination. In the event of a
termination of the Officer's employment by the Bank, other than a termination
for "cause" (as defined in Section 8(b)), the Bank shall (subject to the
provisions of Section 8(c)) continue, during each month from the Effective Date
of Termination for a 24-month period, to (1) pay to the Officer the sum of 1/12
of the Officer's annual salary in effect immediately prior to the Effective Date
of Termination plus 1/12 of the amount of the Officer's target bonus as in
effect for the year in which the termination occurs, and (2) maintain for the
Officer (and, during such period and prior to the Officer's death, for the
Officer's spouse and dependents, as applicable) the same level of life, medical
and dental insurance coverage as is maintained by the Bank for full-time
employees of the Bank, provided that the Officer shall continue to pay any
amounts in respect of such coverage that other employees receiving the same
level of coverage are required to pay. In the event of a termination of the
Officer's employment by the Bank at any time during the remaining Term in effect
at the time of a Change in Control, the

8
<PAGE> 9
provisions of Section 11 shall apply in lieu of the provisions of the
immediately preceding sentence of this Section 8(a).

(b) The Officer shall have no right to receive compensation or
other benefits under this Agreement for any period after the Effective Date of
Termination if the Officer's employment is terminated for cause. As used in this
Agreement, "cause" shall mean the Officer's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform assigned duties, willful violation of any law,
rule or regulation (other than traffic violations or similar offenses) or final
cease and desist order or material breach of any provision of this Agreement.

(c)(i) Notwithstanding any other provision of this Section 8
or of Section 11, if at the Effective Date of Termination any statute,
regulation, order, agreement, or regulatory interpretation thereof that is valid
and binding upon the Bank (a "Regulatory Restriction") shall restrict, prohibit
or limit the amount of any payment or the provision of any benefit that the Bank
would otherwise be liable for under this Section 8 or under Section 11, then the
amount that the Bank shall pay to the Officer hereunder shall not exceed the
maximum amount permissible under such Regulatory Restriction; provided, that if
such Regulatory Restriction shall subsequently be rescinded, superseded, amended
or otherwise determined not to restrict, limit or prohibit payment by the Bank
of amounts otherwise due the Officer hereunder, then the Bank shall promptly
thereafter pay to such

9
<PAGE> 10
Officer any amounts (or the value of any benefit) previously withheld from such
Officer as a result of such Regulatory Restriction.

(ii) Notwithstanding any other provision of this Section 8 or
of Section 11, in the event that any amount otherwise payable hereunder other
than on account of events described in Section 11(c)(i), 11(c)(ii) or 11(c)(iii)
following a Change in Control (as hereinafter defined) would be deemed to
constitute a parachute payment (a "Parachute Payment") within the meaning of
Section 280G of the Code, and if any such Parachute Payment, when added to any
other payments which are deemed to constitute Parachute Payments, would
otherwise result in the imposition of an excise tax under Section 4999 of the
Code, the amounts payable hereunder (other than amounts payable under the SERP
or otherwise payable on account of events described in Sections 11(c)(i),
11(c)(ii) or 11(c)(iii) following a Change in Control) shall be reduced by the
smallest amount necessary to avoid the imposition of such excise tax. Any such
limitation shall be applied to such compensation and benefit amounts, and in
such order, as the Bank shall determine in its sole discretion. References to
the Code in this Agreement shall be to the Code as presently in effect or to the
corresponding provisions of any succeeding law.

(d) As of the date hereof, the principal place of business at
which the Officer shall be based for the performance of his duties pursuant to
this Agreement is located in Tampa, Florida. If the Bank shall relocate the
principal place of business at which the Officer shall be based for the
performance of his duties pursuant to this Agreement to a location which is more
than 75 miles from Tampa, Florida, the Officer

10
<PAGE> 11
shall have the right, for a period of 30 days following such relocation, to
elect to treat such relocation as a termination of the Officer's employment by
the Bank without cause (as defined in Section 8(b)) by giving the Bank written
notice of such election. In the event that the Officer fails to give such notice
within such 30-day period, he shall be deemed to have waived his right to make
such an election with respect to such relocation. If the Bank shall relocate the
principal place of business at which the Officer shall be based for the
performance of his duties pursuant to this Agreement to a location which is more
than 75 miles from Tampa, Florida following a Change in Control and the Officer
elects to treat such relocation as a termination of the Officer's employment by
the Bank, the provisions of Section 11 shall apply in lieu of the provisions of
this Section 8.

(e) In the event that notice of non-renewal is given by the
Bank pursuant to Section 2(a), the Officer shall have the right for a period of
30 days following receipt of such notice to elect to treat it as a termination
of the Officer's employment by the Bank without cause (as defined in Section
8(b)) by giving the Bank written notice of such election. In the event that the
Officer fails to give such notice within such 30-day period, he shall be deemed
to have waived his right to make such an election with respect to such notice of
non-renewal.

(f) Upon the termination of the Officer's employment by the
Bank pursuant to the provisions of this Section 8, to the extent not otherwise
limited by Section 8(c) and except where termination is for "cause" (as defined
in Section 8(b)), each outstanding Non-Accelerated Stock Option (as defined in
Section 11(d)(ii)) and each share of

11
<PAGE> 12
restricted stock which has not previously vested held by the Officer shall (to
the extent permitted by the plan under which such Non-Accelerated Stock Option
or the right to purchase such restricted stock was granted), notwithstanding
anything to the contrary in the grant letter related to such Non-Accelerated
Stock Option or restricted stock and regardless of the actual Effective Date of
Termination, immediately vest and become exercisable, in the case of a
Non-Accelerated Stock Option, and immediately vest, in the case of restricted
stock.

9. Voluntary Termination by the Officer. The Officer shall
have the right to terminate the Officer's employment under this Agreement at any
time upon at least 30 but not more than 60 days' prior written notice to the
Bank. If this Agreement is terminated pursuant to the immediately preceding
sentence, all of the Bank's obligations under this Agreement shall terminate and
the Officer shall not be entitled to any compensation or benefits after the
Effective Date of Termination, except to the extent provided in Section 11.

10. Additional Termination and Suspension Provisions. (a) 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 (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the parties shall not be affected.

12
<PAGE> 13
(b) If the Bank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act), all obligations under this Agreement
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the parties.

(c) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank, (i) by the Director of Thrift
Supervision or his or her designee (the "Director"), at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act; or (ii) by the Director, at the time the Director
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

(d) If the Officer is suspended and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Bank may in its discretion (a) pay
the Officer all or part of the compensation withheld while its contract
obligations were suspended and (b) reinstate (in whole or in part) any of its
obligations which were suspended.

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(e) The provisions of paragraphs (a) through (d) of this
Section 10 are required to be set forth in this Agreement by regulations
applicable to the Bank on the date of this Agreement. If any such regulation
shall hereafter be amended or modified, or if any new regulation applicable to
the Bank and effective after the date of this Agreement shall require the
inclusion in this Agreement of a provision not presently included in this
Agreement, then the foregoing provisions of paragraphs (a) through (d) of this
Section 10 shall be deemed amended to the extent necessary to give effect in
this Agreement to any such amended, modified or new regulation.

11. Change in Control. (a) As used in this Agreement, a "Change in
Control" shall be deemed to have occurred if the event set forth in any one of
the following paragraphs shall have occurred:

(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 35% or more
of the combined voting power of the Company's then outstanding
securities; or

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<PAGE> 15
contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or
election by the Board of Directors of the Company or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on July 24, 1997 or whose appointment,
election or nomination for election was previously so approved or
recommended; or

(III) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any
other corporation or entity, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any Parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting power of
the securities of the Company, such surviving entity or any Parent
thereof outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected solely to implement a
recapitalization of the Company or the Bank (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company or the Bank (not including in
the securities beneficially owned by

15
<PAGE> 16
such Person any securities acquired directly from the Company or its
Affiliates) representing 35% or more of the combined voting power of
the Company's or the Bank's then outstanding securities; or

(IV) the stockholders of the Company or the Bank approve a
plan of complete liquidation or dissolution of the Company or the Bank,
respectively, or there is consummated a sale or disposition by the
Company or any of its subsidiaries of any assets which individually or
as part of a series of related transactions constitute all or
substantially all of the Company's consolidated assets (provided that,
for these purposes, a sale of all or substantially all of the voting
securities of the Bank or a Parent of the Bank shall be deemed to
constitute a sale of substantially all of the Company's consolidated
assets), other than any such sale or disposition to an entity at least
65% of the combined voting power of the voting securities of which are
owned by stockholders of the Company in substantially the same
proportions as their ownership of the voting securities of the Company
immediately prior to such sale or disposition; or

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<PAGE> 17
complete liquidation or dissolution of the Company or the Bank that, if
consummated, would result in a Change in Control of a type specified in
clause (IV) of this Section 11(a) (a "Plan of Liquidation"), provided
however, that a Change in Control of the type specified in this clause
(V) shall not be deemed to exist or have occurred as a result of the
execution of such Acquisition Agreement or Asset Sale Agreement, or the
adoption of such a Plan of Liquidation, from and after the Abandonment
Date if the Effective Date of Termination of the Officer's employment
has not occurred on or prior to the Abandonment Date. As used in this
Section, the term "Abandonment Date" shall mean the date on which (A)
an Acquisition Agreement, Asset Sale Agreement or Plan of Liquidation
is terminated (pursuant to its terms or otherwise) without having been
consummated, (B) the parties to an Acquisition Agreement or Asset Sale
Agreement abandon the transactions contemplated thereby, (C) the Bank
or the Company abandons a Plan of Liquidation or (D) a court or
regulatory body having competent jurisdiction enjoins or issues a cease
and desist or stop order with respect to or otherwise prevents the
consummation of, or a regulatory body notifies the Bank or the Company
that it will not approve, an Acquisition Agreement, Asset Sale
Agreement or Plan of Liquidation or the transactions contemplated
thereby and such injunction, order or notice has become final and not
subject to appeal.

As used in connection with the foregoing definition of Change
in Control, "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of

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<PAGE> 18
the Exchange Act; "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act; "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time; "Parent" shall mean any entity that
becomes the Beneficial Owner of at least 80% of the voting power of the
outstanding voting securities of the Company or of an entity that survives any
merger or consolidation of the Company or any direct or indirect subsidiary of
the Company; and "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation or entity owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company.

(b) If the Bank, the Company or the Subsidiary shall relocate
the principal place of business at which the Officer shall be based for the
performance of his duties pursuant to this Agreement to a location which is more
than 75 miles from Tampa, Florida after a Change in Control, and if the Officer
shall, as a result, be required and agree to change the Officer's principal
residence without availing himself of the benefit of Section 8(d), the Bank
shall (i) promptly pay (or reimburse the Officer for) all reasonable moving
expenses incurred by the Officer as a result of such change in the Officer's
principal residence, and (ii) indemnify the Officer against, and reimburse the
Officer for, any loss

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<PAGE> 19
incurred as the result of the sale of the Officer's principal residence (which
loss shall be computed for the purpose of this Agreement as the difference
between the actual sales price (net of closing costs and brokerage fees) of such
residence and the fair market value of such residence (computed as of the time
such principal place of business is relocated) as determined by an independent
real estate appraiser designated and paid by the Bank or the Company and
acceptable to the Officer), provided that such sale of the Officer's principal
residence occurs within six months after the Bank, the Company or the Subsidiary
relocates the principal place of business at which the Officer shall be based.

(c)(i) If a Change in Control shall occur, the Officer shall
be entitled to the compensation and benefits provided in paragraphs (d), (e),
(f) and (g) of this Section 11 upon the subsequent termination of the Officer's
employment, at any time during the remaining Term in effect at the time of the
Change in Control, by the Bank (including, without limitation, a termination for
permanent disability), other than a termination for cause, provided that the
rights to any such compensation and benefits shall be subject to the limitations
and provisions set forth in Section 8(c).

(ii) If a Change in Control described in any of clauses (I) -
(IV) of Section 11(a) shall occur, the Officer shall be entitled to the
compensation and benefits provided in paragraphs (d), (e), (f) and the
applicable provisions of paragraph (g) of this Section 11 (subject to the
limitations and provisions set forth in Section 8(c)) upon the subsequent
termination of the Officer's employment, at any time within the 90-day period
during the remaining Term (as defined in Section 2(a)) in effect at the time of
the Change in Control

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<PAGE> 20
commencing on the date that is six months after the occurrence of such Change in
Control, by the Officer, provided that the Officer has provided notice of his
intent to terminate his employment pursuant to this subsection to the Bank
within the 30-day period immediately following the Change in Control (a "Timely
11(c)(ii) Notice"), with such Timely 11(c)(ii) Notice setting forth the date of
such termination (which shall be at least six months after the date of the
Timely 11(c)(ii) Notice).

(iii) If (A) a Change in Control shall occur, and thereafter
the Bank (notwithstanding its right to do so under Section 4 or Section 5)
either (B) makes a material change in the Officer's functions, duties or
responsibilities, which change would cause the Officer's position with the Bank
or the Subsidiary to become one of lesser responsibility, importance or scope
from that in effect immediately prior to the time of the Change in Control or
(C) reduces the Officer's annual salary below that in effect immediately prior
to the time of the Change in Control (an event specified in clause (B) or (C) is
hereafter referred to as a "Material Change"), the Officer shall be entitled to
the compensation and benefits provided in paragraphs (d), (e), (f) and (g) of
this Section 11 (subject to the limitations and provisions set forth in Section
8(c)) upon the subsequent termination of the Officer's employment, at any time
during the remaining Term in effect at the time of the Change in Control, by the
Officer.

(iv) If the Officer's employment is terminated by the Bank or
by reason of the Officer's permanent disability during the Term but after the
expiration of the remaining Term in effect at the time of the Change in Control,
then the provisions of Section 6 or 8

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<PAGE> 21
(as the case may be) shall apply in lieu of the provisions of paragraphs (d),
(e), (f) and (g) of this Section 11. If the Officer's employment is terminated
by the Officer during the Term but after the expiration of the remaining Term in
effect at the time of the Change in Control (or if the Officer's employment is
terminated by the Officer, other than pursuant to Section 11(c)(ii), during the
remaining Term in effect at the time of the Change in Control and no Material
Change shall have occurred), then the provisions of Section 9 shall apply in
lieu of the provisions of paragraphs (d), (e), (f) and (g) of this Section 11.

(v) Only for purposes of determining whether there has been a
termination of the Officer's employment during the remaining Term in effect at
the time of a Change in Control or within the period described in Section
11(c)(ii) (as specified in paragraphs (c)(i), (c)(ii) and (c)(iii) of this
Section 11, as the case may be) so as to entitle the Officer to the compensation
and benefits provided in paragraphs (d), (e), (f) and (g) of this Section 11, a
termination of the Officer's employment following a Change in Control shall be
deemed to have occurred on such date during the remaining Term that: (A) notice
of termination is given by the Bank or the Officer to the other (regardless of
the Effective Date of Termination specified in such notice), except that, for
purposes of Section 11(c)(ii), notice must be provided by the Officer during the
30-day period set forth therein, and the actual termination of employment must
occur at the date specified in a proper Timely 11(c)(ii) Notice (unless another
date is otherwise agreed to by the Officer and the Bank); or (B) notice of
non-renewal pursuant to Section 2(a) is given by the Bank to the Officer
(regardless of when the Term expires). Notwithstanding the immediately

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<PAGE> 22
preceding sentence, the Officer shall continue to be employed by the Bank
pursuant to this Agreement until (1) the Effective Date of Termination specified
in the notice of termination or (2) the end of the remaining Term in effect when
notice of non-renewal is given pursuant to Section 2 of this Agreement.

(d)(i) Upon the occurrence of a Change in Control followed by
any termination of the Officer's employment pursuant to Section 11(c)(i),
(c)(ii) or (c)(iii), to the extent not otherwise limited pursuant to Section
8(c), the Bank shall pay the Officer, as a severance payment for services
previously rendered to the Bank, a lump sum equal to: (A) two times the
Officer's Annual Compensation, if the Officer's employment is so terminated by
the Bank within the period after a Timely 11(c)(ii) Notice has been received by
the Bank, and before the date properly set forth in that Notice for the
termination of the Officer's employment (the "11(c)(ii) Notice Period"),
provided that notice of such termination is provided by or at the direction of
Lawrence J. Toal, in his capacity as Chairman of the Board, Chief Executive
Officer, or President of the Bank, for reasons of the Officer's performance (but
not constituting a termination for cause); or, (B) three times the Officer's
Annual Compensation, if the Officer's employment is so terminated either: (1) by
the Bank within the 11(c)(ii) Notice Period in a manner other than as provided
for in clause (A) above or for any reason (except for a termination for cause)
other than the Officer's performance; (2) by the Bank at any time other than
during an effective 11(c)(ii) Notice Period, in any manner permitted by this
Agreement and otherwise described in Section 11(c)(i); (3) by the Officer
pursuant to Section 11(c)(iii)

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<PAGE> 23
rather than Section 11(c)(ii); or (4) by the Officer in the manner and within
the period specified in Section 11(c)(ii). In each instance described above,
"Annual Compensation" shall be as in effect immediately prior to the Effective
Date of Termination (without regard to any decrease in the Officer's Annual
Compensation made after the Change in Control). As used in this Section
11(d)(i), the term "Annual Compensation" shall mean, at any time, an amount
equal to the sum of (A) the Officer's annual salary (as defined in Section 5(c))
at such time, plus (B) 100% of the target bonus or other cash incentive that the
Officer is eligible to earn in such year pursuant to each plan or program
(whether or not such plan or program has been formalized or is in written form)
of the Bank in effect for such year that provides for bonuses or other cash
incentives, or if no such plan or program has been adopted with respect to such
year, 100% of the target bonus or other cash incentive that the Officer was
eligible to earn in the most recent year in which such a plan or program was in
effect.

(ii) Upon the occurrence of a Change in Control followed by
any termination of the Officer's employment pursuant to Section 11(c)(i),
(c)(ii) or (c)(iii), to the extent not otherwise limited pursuant to Section
8(c): (A) each Non-Accelerated Stock Option held by the Officer shall (to the
extent permitted by the plan under which such Non-Accelerated Stock Option was
granted), notwithstanding anything to the contrary in the grant letter related
to such Non-Accelerated Stock Option and regardless of the actual Effective Date
of Termination, vest and become exercisable in accordance with the provisions
of, and remain exercisable for the term specified in, such grant letter as

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<PAGE> 24
if there had been no termination of the Officer's employment and the Officer
remained in the employment of the Bank for the entire term of such
Non-Accelerated Stock Option and (B) each Vested Stock Option held by the
Officer shall (to the extent permitted by the plan under which such Vested Stock
Option was granted), notwithstanding anything to the contrary in the grant
letter related to such Vested Stock Option and regardless of the actual
Effective Date of Termination, remain exercisable for the term specified in such
grant letter as if there had been no termination of the Officer's employment and
the Officer remained in the employment of the Bank for the entire term of such
Vested Stock Option. As used in this Section 11(d)(ii), the term (I)
"Non-Accelerated Stock Option" shall mean any stock option (including any tandem
stock appreciation right) previously or hereafter granted to the Officer under a
stock incentive or stock option plan of the Company that has not, pursuant to
the provisions of such stock incentive or stock option plan or the grant letter
pursuant to which such stock option was granted to the Officer, vested and
become exercisable prior to the Effective Date of Termination and (II) "Vested
Stock Option" shall mean any stock option (including any tandem stock
appreciation right) previously or hereafter granted to the Officer under a stock
incentive or stock option plan of the Company that vests and becomes exercisable
prior to the Effective Date of Termination.

(e) Any payment pursuant to Section 11(d)(i) or 11(g)(ii)
shall be made to the Officer within 30 days after the Effective Date of
Termination.

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(f) Upon the occurrence of a Change in Control followed by any
termination of the Officer's employment pursuant to Section 11(c)(i), (c)(ii) or
(c)(iii), to the extent not otherwise limited pursuant to Section 8(c), the Bank
shall cause to be continued until the end of the remaining Term in effect prior
to the giving of notice of termination or non-renewal (or the Officer's earlier
death) the same level of life, disability, medical and dental insurance coverage
as is maintained by the Bank for full-time employees of the Bank, provided that
the Officer shall continue to pay all amounts in respect of such coverage that
other employees receiving the same level of coverage are required to pay.

(g)(i)(A) On and after any Change in Control, to the extent
not otherwise limited pursuant to Section 8(c), the Officer shall be eligible to
be paid, under the SERP, a SERP benefit, to the extent vested (and subject to
additional vesting in accordance with the terms of the SERP as such plan
provided immediately prior to the Change in Control, or if it results in a
greater vested percentage, with vesting determined otherwise pursuant to this
Section 11(g)(i)), that is not less than a benefit calculated based upon the
amount of the Officer's "Pension Goal" and "Average Compensation" and the
otherwise applicable terms of the SERP, each as determined immediately prior to
the Change in Control. The rights of the Officer and the obligations of the Bank
with respect to the benefits described under this Section 11(g)(i)(A) shall
survive the termination of this Agreement.

(B) In the event of termination of the Officer's employment
pursuant to Section 11(c)(i) or (c)(iii), to the extent not otherwise limited
pursuant to Section 8(c),

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<PAGE> 26
notwithstanding any vesting provisions that would in other circumstances require
further service under the SERP, the Officer shall be fully vested in the
Officer's SERP benefit, which shall otherwise be payable in accordance with the
terms of the SERP and, as applicable, Section 11(g)(i)(A).

(C) In the event of termination of the Officer's employment
pursuant to Section 11(c)(ii) that does not otherwise constitute a termination
of employment pursuant to Section 11(c)(iii), to the extent not otherwise
limited pursuant to Section 8(c), the Officer shall be entitled to receive a
benefit equal to the sum of the benefits calculated pursuant to the provisions
of the Bank's qualified defined benefit retirement plan and the Bank's Benefit
Restoration Plan (solely to the extent the Benefit Restoration Plan supplements
benefits under the qualified defined benefit retirement plan), each as in effect
immediately prior to the Change in Control (or, if more favorable to the
Officer, as in effect immediately prior to the Effective Date of Termination),
assuming that the Officer's service at the Effective Date of Termination was
sufficient to vest the Officer 100% in the benefits accrued under such plans.
The benefit provided for in the preceding sentence (stated in the form of a
single life annuity or such other normal form of benefit as may be provided on
an unreduced basis under the Bank's qualified defined benefit retirement plan)
shall be offset by the benefit payable to the Officer and the Officer's
beneficiaries (stated in the form of a single life annuity or such other normal
form of benefit as may be provided on an unreduced basis) under the Bank's
qualified defined benefit retirement plan (without regard to benefit reductions
in that plan on account of benefits payable under qualified defined contribution
plans, if any) and the Bank's Benefit Restoration Plan (solely to the

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<PAGE> 27
extent the Benefit Restoration Plan supplements benefits under the qualified
defined benefit retirement plan). The benefit provided pursuant to this Section
11(g)(i)(C) shall be payable at the same time and in the same form (and valued
in the same manner) as benefits are payable to the Officer and the Officer's
beneficiaries under the provisions of the Bank's Benefit Restoration Plan
supplementing benefits under the qualified defined benefit retirement plan;
provided, however, that in the event benefits are not otherwise payable to the
Officer or the Officer's beneficiaries under the Bank's Benefit Restoration Plan
supplementing benefits under the qualified defined benefit retirement plan,
benefits pursuant to this Section 11(g)(i)(C) shall be payable in the form of a
single lump sum as soon as practicable after the Effective Date of Termination,
with the amount of such lump sum payment determined in the same manner, and
reflecting the same level of reduction for early commencement as would apply
based on the Officer's attained age and period of service under the qualified
defined benefit retirement plan, that lump sum equivalent benefits are
determined with respect to a benefit of the same amount under the qualified
defined benefit retirement plan. Except for the offset contemplated in this
Section 11(g)(i)(C), the benefit provided for in this Section 11(g)(i)(C) shall
be in addition to any benefits payable under any qualified or non-qualified
pension plans or programs maintained by the Bank, provided, however, that if any
SERP benefit is payable to the Officer, it shall be offset by the benefit, if
any, provided pursuant to this Section 11(g)(i)(C), in accordance with the terms
of the SERP.

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(ii) In the event of termination of the Officer's employment
pursuant to Section 11(c)(i), (c)(ii) or (c)(iii), to the extent not otherwise
limited pursuant to Section 8(c), the Officer shall be entitled to receive in a
lump sum payment an amount equal to any amounts forfeited by the Officer under
the 401(k) Plan and under the Bank's Benefit Restoration Plan (solely to the
extent such Benefit Restoration Plan supplements benefits under a defined
contribution plan) as in effect immediately prior to the Change in Control (or,
if more favorable to the Officer, as in effect immediately prior to the
Effective Date of Termination).

(h)(i) If, on account of events described in Sections
11(c)(i), 11(c)(ii) or 11(c)(iii) following a Change in Control, any payment or
other benefit paid or to be paid or any property transferred or to be
transferred (collectively, a "Severance Payment") with respect to one or more
calendar years by or on behalf of the Bank (or any affiliate of the Bank) to the
Officer pursuant to this Agreement in connection with such Change in Control
shall constitute an "excess parachute payment" within the meaning of Section
280G(b) of the Code subject to the tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the Bank shall pay to the Officer an additional amount (the
"Gross Up Payment") such that the amount paid or transferred to the Officer,
after deduction of any Excise Tax on the Severance Payment, and any federal,
state and local income tax, employment tax and Excise Tax upon the Gross Up
Payment, shall be equal to the Severance Payment. In addition, if, absent a
Change in Control or in other circumstances following a Change in Control,
notwithstanding the reductions mandated by Section 8(c), if the SERP benefits
otherwise payable to the Officer shall constitute an "excess parachute

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<PAGE> 29
payment" within the meaning of Section 280G(b) of the Code subject to the Excise
Tax, then the Bank shall pay to the Officer one or more Gross Up Payments such
that the amount of such Gross Up Payments, when combined with such SERP
benefits, after deduction of any Excise Tax on the SERP benefits, and any
federal, state and local income tax, employment tax and Excise Tax upon the
Gross Up Payments, shall be equal to such SERP benefits.

(ii) For purposes of determining under Section 11(h)(i)
whether any portion of a Severance Payment or SERP benefit will be subject to
the Excise Tax and the amount of such Excise Tax, (A) the Severance Payment or
SERP benefit and payment provided for in Section 11(h)(i) shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
all "excess parachute payments" within the meaning of Section 280(G)(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless and to the extent
that tax counsel selected by the Bank's independent auditors and acceptable to
the Officer is of the opinion that the Severance Payment or SERP benefit (in
whole or in part) does not constitute a "parachute payment" or such "excess
parachute payment" (in whole or in part) represents reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the allocable base amount within the meaning of Section 280G(b)(3)
of the Code, or the Severance Payment or SERP benefit is otherwise not subject
to the Excise Tax, (B) the amount of the Severance Payment or SERP benefit that
is treated as subject to the Excise Tax shall be equal to the lesser of (X) the
total amount of the Severance Payment or SERP benefit, as applicable, and (Y)
the amount of "excess parachute payments" within

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<PAGE> 30
the meaning of Section 280G(b)(1) of the Code (after applying clause (A) above),
(C) any Gross Up Payment pursuant to Section 11(h)(i) shall be treated as
subject to the Excise Tax in its entirety and (D) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

(iii) If in circumstances described in Section 11(h)(i), by
reason of the filing by the Officer of an amended tax return, an audit by the
Internal Revenue Service or other taxing authority, or a final determination by
a court of competent jurisdiction, it is determined that "excess parachute
payments" exceeding those previously reported in his tax returns were received
by the Officer and as a result an additional Excise Tax (the "Additional Excise
Tax") shall become due, the Bank shall pay the Officer an additional amount (the
"Subsequent Gross Up Payment") such that the amount paid or transferred to the
Officer, after deduction of (A) any Additional Excise Tax and (B) on an after
tax basis, any interest, additions and penalties with respect to the Additional
Excise Tax and (C) any federal, state and local income tax, employment tax and
Excise Tax upon the Subsequent Gross up Payment and (D) the payments provided
for in Section 11(h)(i), shall be equal to the Severance Payment or SERP
benefits, as appropriate.

(iv) Any Gross Up Payment required hereunder shall be made at
least ten days prior to the due date (without regard to extensions) of the
Officer's federal income tax return for the year with respect to which the
"excess parachute payment" is deemed made under the Code. Any Subsequent Gross
Up Payment required hereunder shall be made to the Officer within 30 days after
the amount thereof is determined.

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Notwithstanding the two immediately preceding sentences, the Bank shall pay any
federal, state and local tax or taxes and employment taxes required to be
withheld from the Officer's wages (within the meaning of Section 3121 and 3402
of the Code) with respect to the "excess parachute payment" and any such tax or
taxes paid by the Company, the Bank or the Subsidiary to the Internal Revenue
Service or state or local taxing authority shall constitute payment to the
Officer.

(v) If the Excise Tax is finally determined (whether by the
filing of an amended tax return by the Officer by audit of the Internal Revenue
Service or other taxing authority, or by a final determination of a court of
competent jurisdiction) to be less than the amount paid to or on behalf of the
Officer under the provisions of Sections 11(h)(i)- (iv) and the overpayment is
refunded to the Officer, the Officer shall repay to the Bank, promptly following
the receipt of the refund, the portion of the Gross Up Payment (and/or
Subsequent Gross Up Payment) attributable to such reduction of the Excise Tax
(plus the portion attributable to federal, state and local income tax and
employment taxes imposed on the portion being repaid by the Officer but only to
the extent that the repayment may result in a tax benefit to the Officer under
Section 1341 of the Code and similar provisions of applicable state and local
law).

(vi) The provisions of this Section 11(h) shall inure to the
benefit of the Officer during the Term of this Agreement regardless of whether
or not his employment is terminated, and if the Officer's employment is
terminated, the rights and obligations of the Officer and the Bank under this
Section 11(h) shall survive the termination of this Agreement.

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12. Post-Termination Obligations of the Officer. (a) Upon any
termination of the Officer's employment during the Term of this Agreement or
upon termination of the Officer's employment after the expiration of the Term of
this Agreement or upon retirement, the Officer agrees (i) not to make any
disclosure in violation of Section 12(b), (ii) to return to the Bank all
material documents relating to the business of the Company, the Bank, the
Subsidiary and their affiliates that are in the Officer's possession or under
the Officer's control, and (iii) except if the termination or retirement occurs
after a Change in Control, not to solicit (directly or indirectly), for one year
following the Effective Date of Termination (or date of termination after the
expiration of the Term) or retirement, the employment of any person who is an
employee of the Company, the Bank, the Subsidiary or their affiliates on the
Effective Date of Termination (or date of termination after the expiration of
the Term) or retirement or who, within six months prior to the Effective Date of
Termination (or date of termination after the expiration of the Term) or
retirement, was an employee of the Company, the Bank or Subsidiary or their
affiliates unless the Officer receives written permission from the Bank to
engage in the activities proscribed by this Section 12(a) or by Section 12(b) or
to be relieved of any obligation under Section 12(a)(ii).

(b) The Officer recognizes and acknowledges that the
confidential business activities and plans for business activities of the Bank
and its subsidiaries and affiliates, as they may exist from time to time, are
valuable, special and unique assets of the Bank. The Officer shall not, during
or at any time after the Officer's employment, disclose any knowledge of the
past, present or planned business activities of the Bank or its subsidiaries

32
<PAGE> 33
or affiliates that are of a confidential nature (collectively, the "Bank's
Confidential Activities") to any person, firm, corporation, bank, thrift
institution or other entity for any reason or purposes whatsoever.
Notwithstanding anything in this Section 12(b) to the contrary, the Officer (i)
may disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas that are not derived from the Bank's Confidential Activities,
and (ii) shall not be precluded from disclosures respecting the Bank's
Confidential Activities that are (A) made pursuant to compulsory legal process
or when required by an appropriate governmental agency; (B) public knowledge or
become public without the Officer's breach of this Section 12(b); (C) already
known to the party to whom the Officer makes such disclosures; or (D) approved
by the Bank for disclosure.

(c) The parties, recognizing that irreparable injury will
result to the Bank, its business and property in the event of the Officer's
breach or threatened breach of Section 12(a) or (b), agree that in the event of
such breach or threatened breach by the Officer, the Bank will be entitled, in
addition to any other remedies and damages that may be available, to seek and
obtain an injunction to restrain the violation of Section 12(a) or (b) by the
Officer.

13. Notices. All notices under this Agreement shall be in
writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, (a) to the Bank, at its address set forth above
(to the attention of its Chief Executive Officer), and (b) to the Officer, at
the Officer's residence address as appearing in the records of the Bank, or to
such other address as either party may hereafter designate in writing in the
manner provided in this Section 13. All notices under this Agreement shall be
deemed

33
<PAGE> 34
given (i) upon receipt if delivered personally or (ii) two days after deposit in
a facility of the U.S. Postal Service with postage prepaid. As used in this
Agreement, the term "Effective Date of Termination" shall mean (A) the date
specified in a notice hereunder on which such Officer's employment is to
terminate, provided, however, that no such notice shall specify an Effective
Date of Termination that is prior to the date on which any such notice is given
or (B) for purposes of Section 11 only, the date on which the Term is to expire
as a result of a notice of non-renewal given by the Bank to the Officer pursuant
to Section 2 of this Agreement.

14. Complete Understanding. This Agreement, together with the
Agreement Regarding Initial Employment Terms attached hereto as Exhibit A,
constitute the complete understanding between the parties with respect to the
subject matter hereof and thereof and merge and supersede all prior oral and
written agreements and understandings and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof and thereof,
including, without limitation, any other employment agreement heretofore
executed by the Officer and the Bank or any of its subsidiaries or affiliates.
In the event of any conflict between the express provisions of this Agreement
and such Agreement Regarding Initial Employment Terms, the express provisions of
this Agreement shall be controlling. This Agreement may not be amended,
terminated or rescinded except in a writing signed by the party to be charged.

15. No Waiver. The failure of either party at any time to
require performance by the other party of a provision of this Agreement or to
resort to a remedy at law or in equity or otherwise shall in no way affect the
right of such party to require

34
<PAGE> 35
full performance or to resort to such remedy at any time thereafter nor shall a
waiver by either party of the breach of any provision of this Agreement be taken
or held to be a waiver of any subsequent breach of such provision unless
expressly so stated in writing. No waiver of any of the provisions of this
Agreement shall be effective unless in writing and signed by the party to be
charged.

16. Governing Law. This Agreement shall be governed by the
laws of the State of New York, without regard to conflict of laws principles
applied in the State of New York.

17. Headings. The headings to the Sections of this Agreement
are for convenience of reference only and shall not be given any effect in the
construction or interpretation of this Agreement.

18. Severability. If any provision of this Agreement is held
by a court or other authority having competent jurisdiction to be invalid, void
or otherwise unenforceable, in whole or in part, by reason of any applicable
law, statute or regulation or any interpretation thereof, then (a) the remainder
of the provisions of this Agreement shall remain in full force and effect and in
no way affected, impaired or invalidated and (b) the provision so held to be
invalid, void or otherwise unenforceable shall be deemed modified in amount,
duration, scope or otherwise to the minimum extent necessary so that such
provision shall not be invalid, void or otherwise unenforceable by reason of
such law, statute, regulation or interpretation and such provision, as so
modified, shall remain in full force and effect.

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<PAGE> 36
19. Payment of Legal Fees. If, following a Change in Control,
any legal action or proceeding is commenced to enforce or interpret the
provisions of this Agreement, or to recover damages for its breach, all
reasonable legal fees, disbursements and court costs paid or incurred by the
Officer arising out of or resulting from such action or proceeding shall be paid
or reimbursed to the Officer by the Bank, provided the Officer shall be the
prevailing party in such action or proceeding.

20. Assumption by the Company. This Agreement shall be
assumable by the Company at its election. Following any such election, the
obligations of the Bank under this Agreement shall become the obligations of the
Company.

21. Taxes. Any payments due to the Officer pursuant to this
Agreement shall be reduced by all applicable federal, state, city or other taxes
required by law to be withheld with respect to such payments.

22. Limitation on Payments. Any payments made to the Officer
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 USC Section 1828(k) and any regulations promulgated
thereunder.
THE DIME SAVINGS BANK
OF NEW YORK, FSB

By: ___________________________________

Name: __________________________

Title: _______________________

Dated: ___________________ _______________________________________
RICHARD A. MIRRO

<PAGE> 1
Exhibit 10.8

[Dime Letterhead]

December 19, 1996

Mr. Richard A. Mirro
1913 South Ardsley Street
Tampa, Florida 33629

Re: Agreement Regarding Initial Employment Terms

Dear Rich:

As we discussed, this Letter Agreement is intended to detail
several elements of your initial compensation arrangements with The Dime Savings
Bank of New York, FSB (the "Bank"). To the extent, however, that it describes
benefits requiring the approval of the Compensation Committee or the Board of
Directors of the Bank or of Dime Bancorp, Inc. (the "Company"), it is subject to
that approval, and to changes that may be determined by such Committee(s) or
such Board(s) from time to time, and participation in the various plans
described will be pursuant to the terms of those plans, as they may be revised
(and subject to their termination) from time to time by the Bank or the Company.
The benefits described herein are also subject to other limitations described in
further detail below.

1. Restricted Stock Award. As soon as possible following the
date hereof, subject to appropriate approvals, you will be awarded the right to
purchase 20,000 shares of restricted stock pursuant to the Dime Bancorp, Inc.
1991 Stock Incentive Plan (the "Plan"), with such restricted stock vesting on a
pro-rata basis on the third, fourth and fifth anniversaries of the date of
grant, subject to earlier vesting under the circumstances described in section
15.1 of the Plan. The purchase price for each share of restricted stock,
described in the preceding sentence, shall be equal to $1.00 per share. The
Company agrees to pay to you on the date of such award $30,000 for the purpose
of providing you with the aggregate purchase price for the restricted stock
awarded hereunder and the Federal, state and local income tax liability arising
from such payment.

2. Annual Incentive Opportunity. You will be eligible to
participate in the Bank's Officer Incentive Plan beginning with 1997, with a
minimum incentive payment amount of $250,000 for the first year, a target
incentive opportunity of $250,000 for the second year and a target incentive
opportunity of $290,000 for the third year. You will have an opportunity to earn
up to 150% of your minimum incentive or target incentive payment based on
extraordinary performance, with the final determination of the incentive paid to
you in the discretion of the Bank's Board of Directors.
<PAGE> 2
2

3. Sign-on-Bonus. You shall receive, within 30 days of the
execution and delivery of the Employment Agreement, dated as of December 19,
1996, between the Bank and you (the "Employment Agreement") an initial cash
bonus of $250,000. Subject to appropriate approvals, you will also receive, as
soon as possible following the date hereof, a grant of 28,000 non-qualified
stock options. Such options shall vest, pro rata upon the first, second and
third anniversaries of the date of grant.

4. Long-Term Incentive Opportunity. To the extent approved, as
appropriate, from time to time by the Compensation Committee or the Board of
Directors of the Bank or the Company, you will be eligible to participate in the
Company's Senior Management Incentive Plan, with a long-term incentive award of
26,500 non-qualified stock options in each of the first two years of your
employment by the Bank and a long-term incentive award equal in value (as
determined by the Bank) to 60% of your base annual salary during the third year
of your employment by the Bank if and after you assume the duties of Chief
Executive Officer of the Bank's mortgage unit.

5. Key Executive Life Insurance. To the extent approved by the
Compensation Committee of the Bank or the Company, you will be eligible to
participate in the Bank's Key Executive Life Insurance/Death Benefit Plan.

6. Deferred Compensation Plan. To the extent approved by the
Compensation Committee of the Bank or the Company, you will be eligible to
participate in the Dime Bancorp, Inc. Voluntary Deferred Compensation Plan.

7. Automobile Allowance. For purposes of enabling you to
travel to and from the Bank's offices and elsewhere for business purposes, the
Bank will provide you during the term of your Employment Agreement with the use
of a Bank-owned or Bank-leased automobile of a make and model commensurate with
that being provided under the Bank's policies as in effect on the date hereof to
officers of the Bank of comparable rank and responsibility, and will reimburse
you for all costs, including tolls and gasoline, incurred by you during such
period in connection with the business operation of the vehicle, subject to the
Bank's policies, as in effect from time to time, concerning personal use of the
automobile.

8. Dues Reimbursement. The Bank will reimburse you during the
term of your employment for the reasonable annual (or less frequent) membership
fees for two country, social, business, luncheon or fitness clubs.

superseded, amended or otherwise determined not to restrict, limit or prohibit
payment by the Bank of amounts otherwise due you hereunder, the Bank shall
promptly thereafter pay to you any amounts (or the value of any benefit)
previously withheld from you as a result of such Regulatory Restriction. The
provisions and limitations set forth in Section 10 of your Employment Agreement,
to the extent required by law, are hereby incorporated by reference herein.
Further, if any amount otherwise payable hereunder other than upon events
following a Hostile Change in Control (as defined in the Employment Agreement)
would be deemed to constitute a parachute payment (a "Parachute Payment") within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and if any such Parachute Payment, when added to any other
payments other than upon events following a Hostile Change in Control which are
deemed to constitute Parachute Payments, would otherwise result in the
imposition of an excise tax under Section 4999 of the Code, the amounts payable
hereunder shall be reduced by the smallest amount necessary to avoid the
imposition of such excise tax. Any such limitation shall be applied in a manner
that considers the benefits that are to be paid pursuant to the Employment
Agreement or otherwise, and such limitation shall be applied to such
compensation and benefit amounts, and in such order, as the Bank shall determine
in its sole discretion. References to the Code hereunder shall be to the Code as
presently in effect or to the corresponding provisions of any succeeding law.

This Letter Agreement is intended solely to detail certain of
your initial compensation arrangements with the Bank. Nothing in this Letter
Agreement (a) confers upon you the right to continue in the employment of the
Bank or the right to hold any particular office or position with the Bank, (b)
requires the Bank to pay you, or entitles you to receive, any specified annual
salary or interferes with or restricts in any way the right of the Bank to
decrease your annual salary at any time, (c) requires the Bank to continue to
provide any of the benefit plans or arrangements described above, or (d)
interferes with or restricts in any way the right of the Bank to terminate your
employment at any time, with or without cause. In the event of any conflict
between the express provisions of this Letter Agreement and the Employment
Agreement, the express provisions of the Employment Agreement shall be
controlling.

Any payments due you hereunder shall be reduced by all
applicable withholding and other taxes.

This Letter Agreement shall be governed by the laws of the
State of New York, without regard to conflict of laws principles applied in the
State of New York. If any provision of this Letter Agreement is held by a court
or other authority having competent jurisdiction to be invalid, void or
otherwise unenforceable, in whole or in part, by reason of any applicable law,
statute or regulation or any interpretation thereof, then the remainder of the
provision of this Letter Agreement shall remain in full force and effect and in
no way affected, impaired or invalidated. This Letter Agreement may be assumed
by the Company at its election. Following any such election, the obligations of
the Bank under this Letter Agreement shall become the obligations of the
Company. Except as otherwise provided above, this Letter Agreement may only be
amended in writing signed by both parties hereto.
<PAGE> 4
4

Please indicate your acceptance to the terms of this Letter
Agreement by signing below.

Very truly yours,

THE DIME SAVINGS BANK OF NEW YORK, FSB

By:_____________________________________________

AGREED AND ACCEPTED

_____________________________________
Richard A. Mirro
Date:

<PAGE> 1
Exhibit 10.9

AMENDMENT OF AGREEMENT

The Agreement Regarding Initial Employment Terms, dated December 19,
1996, between The Dime Savings Bank of New York, FSB and Richard A. Mirro, is
hereby amended, effective as of May 12, 1997, to replace the clause "Hostile
Change in Control" where it appears therein with the clause "Transfer of
Control."

AGREED AND ACCEPTED

THE DIME SAVINGS BANK OF
NEW YORK, FSB

By: _______________________________________

__________________________________________
RICHARD A. MIRRO

<PAGE> 1
Exhibit 10.10

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of January 30, 1998 between THE DIME
SAVINGS BANK OF NEW YORK, FSB (the "Bank"), a federal stock savings bank having
its principal executive offices at 589 Fifth Avenue, New York, New York 10017,
and Peyton R. Patterson (the "Officer").
-----------

A. The Bank is desirous of employing the Officer upon the terms and
conditions set forth in this Agreement.

B. The Officer is desirous of being employed by the Bank upon the terms
and conditions set forth in this Agreement.

------------

Therefore, the Bank and the Officer, intending to be legally bound,
agree as follows:

1. Employment. Subject to the terms and conditions of this
Agreement, the Bank hereby employs the Officer, and the Officer hereby accepts
such employment.

<PAGE> 2
this Agreement shall have previously been given by the Bank or the Officer
pursuant to the immediately preceding sentence), the Board of Directors of the
Bank (or a duly authorized committee of the Board or subcommittee of such
committee) shall, no later than the last day in each such year on which the Bank
may give the Officer notice of non-renewal pursuant to the immediately preceding
sentence, review and determine whether the Bank shall give the Officer such
notice of non-renewal with respect to the March 1 renewal date in such year;
provided, however, that nothing in this sentence shall be construed as limiting
the Bank's ability to give notice of non-renewal pursuant to the immediately
preceding sentence at any other time. A determination by the Board of Directors
of the Bank (or a duly authorized committee of the Board or subcommittee of such
committee) in any year that the Bank shall not give notice of non-renewal with
respect to the March 1 renewal date in such year shall be deemed to be the
Board's approval of the renewal of this Agreement on such renewal date. Except
as otherwise provided in Section 11(c)(iv) of this Agreement, neither the giving
of notice of non-renewal pursuant to clause (x) of the second sentence of this
Section 2(a), nor the subsequent expiration of the Term of this Agreement as a
result of the giving of such notice, shall be deemed to be a termination of the
Officer's employment under this Agreement. (As used in this Agreement, (i)
"Term" shall mean the initial term and any renewal term of this Agreement and
(ii) "remaining Term" shall mean the balance of the Term in effect at a
specified time without regard to potential future renewals under the renewal
provision of this Section 2(a).)

2
<PAGE> 3
Termination (as defined in Section 13); provided that, notwithstanding anything
to the contrary in the foregoing, any right of the Officer to any payments or
benefits as a result of a termination of the Officer's employment (as provided
in this Agreement) shall survive the termination of this Agreement.

3. Office. During the Term, the Officer shall serve as an
officer of the Bank. In addition, during the Term, the Officer shall serve, for
the period for which the Officer may from time to time be elected, as an officer
or director of any subsidiary or affiliate of the Bank.

4. Duties. The Officer initially shall serve as General
Manager, General Manager of Consumer Financial Services of the Bank; provided,
that the Officer shall hold comparable or additional positions, and perform
comparable or additional duties, as may from time to time be assigned to the
Officer. During the Term (except for periods of illness and vacation),
substantially all of the Officer's business time, attention, skill and efforts
shall be devoted to the performance of the Officer's duties under this
Agreement.

5. Compensation. (a) The annual salary of the Officer during
the Term shall be fixed by the Board of Directors of the Bank (or a duly
authorized committee of the Board or subcommittee of such committee) and shall
be payable in installments in accordance with the prevailing general payroll
practice of the Bank as it may exist from time to time. The initial annual
salary of the Officer during the Term shall be the Officer's annual salary on
the date of this Agreement. The Board of Directors of the Bank (or a duly
authorized committee of the Board or subcommittee of such committee) may
increase or decrease the Officer's annual salary from time to time; provided
that, except for decreases that are applied generally to officers of comparable
rank, such annual salary shall not be decreased by more than 25% in any one
calendar year. As

3
<PAGE> 4
used in this Agreement, "annual salary" shall mean, at any time, the annual rate
of salary then payable to the Officer pursuant to this Section 5(a) (before
deduction of any amounts deferred under any deferred compensation plan of the
Bank, any voluntary contributions to the Retirement 401(k) Investment Plan of
Dime Bancorp, Inc. (the "Company"), or any other similar qualified plan or any
other deductions from income) and shall be exclusive of bonuses, incentive
compensation or other compensation or benefits paid to or accrued for the
Officer other than pursuant to this Section 5(a).

(b) The Officer shall not have or acquire by virtue of this
Agreement any rights to participate in, or receive benefits with respect to, any
compensation or benefit plan or program of the Bank, except (i) that while
employed by the Bank the Officer may participate in such plans or programs to
the extent provided in such plans and programs and on the same basis as if the
Officer's employment were not subject to the terms and conditions of this
Agreement, or (ii) as otherwise specifically provided in this Agreement. The
Officer shall participate in the Company's Supplemental Executive Retirement
Plan (the "SERP") with a "Pension Goal" under such Plan of not less than 50% of
"Average Compensation" (with each such term as defined in the SERP), subject to
the vesting provisions under the SERP, or, solely as applicable, Section
11(g)(i).

(c) Notwithstanding anything to the contrary in the foregoing
provisions, the payment of any amounts that would otherwise be payable to the
Officer but which would be in excess of the amount which the Company or the Bank
could deduct for federal income tax purposes if then paid, on account of the
operation of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), shall be deferred to the extent such deferral is required pursuant
to a policy adopted by the Compensation Committee or the Board of Directors of
the

4
<PAGE> 5
Company or the Bank and, to the extent so deferred, shall be payable pursuant to
the relevant terms of the Dime Bancorp, Inc. Voluntary Deferred Compensation
Plan; provided, however, that, if a Change in Control (as defined in Section
11(a)) has occurred, deferral of amounts payable hereunder to the Officer on or
after the date of such Change in Control will only be required if and to the
extent such policy in effect immediately prior to the Change in Control (without
taking into consideration any changes therein made in contemplation of the
occurrence of the Change in Control) requires or would have required such
deferral.
6. Disability. (a) The Bank may terminate the Officer's
employment under this Agreement for "permanent disability" if (i) the Officer
shall become physically or mentally disabled or incapacitated to the extent that
the Officer has been absent from the Officer's duties with the Bank on account
of such disabilities or incapacitation as determined in a manner consistent with
the policy which applies generally to employees of the Bank on a full-time basis
for a period of six consecutive months, and (ii) within 30 days after written
notice of proposed termination for permanent disability is given by the Bank to
the Officer, the Officer shall not have returned to full-time performance of the
Officer's duties.
(b) In the event of termination for "permanent disability,"
the Bank shall continue to pay the Officer an amount equal to the Officer's then
annual salary pursuant to Section 5(a) (less any benefits that would have been
payable to the Officer had the Officer elected the maximum available amount of
disability insurance coverage available from the Bank) for a period commencing
on the Effective Date of Termination and ending on the first anniversary thereof
(or the end of the remaining Term in effect immediately prior to the Effective
Date of Termination, if earlier). Notwithstanding the first sentence of this
Section 6(b), any such payment shall terminate

5
<PAGE> 6
upon the earliest to occur of (A) the date the Officer returns to full-time
employment with the Bank; (B) the Officer's full-time employment by another
employer; or (C) the Officer's death. In the event of termination for "permanent
disability," the Bank also shall continue to provide until the end of the
remaining Term in effect immediately prior to the Effective Date of Termination
(or the Officer's earlier death) all life, medical and dental insurance coverage
as is otherwise maintained by the Bank for full-time employees, provided that
the Officer shall continue to pay all amounts in respect of such coverage that
an employee receiving the same level of coverage is or would be required to pay.
In the event of a termination of the Officer's employment for "permanent
disability" at any time during the remaining Term in effect at the time of a
Change in Control (as defined in Section 11(a)), the provisions of Section 11
shall apply in lieu of the provisions of this Section 6(b).

(c) There shall be no reduction in the compensation payable to
the Officer or the Officer's other rights under this Agreement during any period
when the Officer is incapable of performing some or all of the Officer's duties
by reason of temporary or partial disability.

7. Death. In the event of the Officer's death during the Term,
this Agreement and all of the Bank's obligations under this Agreement shall
terminate.

6
<PAGE> 7
continue from the Effective Date of Termination through the end of the Severance
Period (as defined in Section 8(b)(i)) to (1) pay the Officer's annual salary in
effect immediately prior to the Effective Date of Termination to the Officer and
(2) maintain (for the Officer, and, during such period but prior to the
Officer's death, for the Officer's spouse and dependents, as applicable) all
life, medical and dental insurance coverage as is otherwise maintained by the
Bank for full-time employees, provided that the Officer shall continue to pay
any amounts in respect of such coverage that an employee receiving the same
level of coverage is or would be required to pay. In the event of a termination
of the Officer's employment by the Bank at any time during the remaining Term in
effect at the time of a Change in Control, the provisions of Section 11 shall
apply in lieu of the provisions of the immediately preceding sentence of this
Section 8(a).

(b)(i) As used in Section 8(a) above, the term "Severance
Period" shall mean the period of time equal to the Length of Service Factor
multiplied by the Age Multiplier. The Length of Service Factor shall be (i) six
months if the Officer has been employed by the Bank for a total of two years or
less or (ii) 12 months if the Officer has been employed by the Bank for a total
of over two years. The Age Multiplier shall be (A) 1.0 if the Officer is under
age 50, (B) 1.25 if the Officer is age 50 or over but below age 55, (C) 1.375 if
the Officer is age 55 or over but below age 60 and (D) 1.5 if the Officer is age
60 or over. In calculating the Length of Service Factor and the Age Multiplier,
the length of the Officer's employment by the Bank and the Officer's age shall
be the Officer's length of employment and age (as the case may be) at the time
notice of termination of the Officer's employment is given by the Bank.

(ii) The Officer shall have no right to receive compensation or other
benefits under this Agreement for any period after the Effective Date of
Termination if the Officer's employment is

7
<PAGE> 8
terminated for cause. As used in this Agreement, "cause" shall mean the
Officer's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform
assigned duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order or
material breach of any provision of this Agreement.

(ii) Notwithstanding any other provision of this Section 8 or
of Section 11, in the event that any amount otherwise payable hereunder, other
than on account of events described in Sections 11(c)(i) or 11(c)(ii) following
a Change in Control (as hereinafter defined), would be deemed to constitute a
parachute payment (a "Parachute Payment") within the meaning of Section 280G of
the Code, and if any such Parachute Payment, when added to any other payments
which are deemed to constitute Parachute Payments, would otherwise result in the
imposition of an

8
<PAGE> 9
excise tax under Section 4999 of the Code, the amounts payable hereunder (other
than amounts payable under the SERP or otherwise payable on account of events
described in Sections 11(c)(i) or 11(c)(ii) following a Change in Control) shall
be reduced by the smallest amount necessary to avoid the imposition of such
excise tax. Any such limitation shall be applied to such compensation and
benefit amounts, and in such order, as the Bank shall determine in its sole
discretion. References to the Code in this Agreement shall be to the Code as
presently in effect or to the corresponding provisions of any succeeding law.

10. Additional Termination and Suspension Provisions. (a) 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)(3) or (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the parties shall not be affected.

(b) If the Bank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act), all obligations under this Agreement
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the parties.

9
<PAGE> 10
(c) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank, (i) by the Director of Thrift
Supervision or his or her designee (the "Director"), at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act; or (ii) by the Director, at the time the Director
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

(e) The provisions of paragraphs (a) through (d) of this
Section 10 are required to be set forth in this Agreement by regulations
applicable to the Bank on the date of this Agreement. If any such regulation
shall hereafter be amended or modified, or if any new regulation applicable to
the Bank and effective after the date of this Agreement shall require the
inclusion in this Agreement of a provision not presently included in this
Agreement, then the

10
<PAGE> 11
foregoing provisions of paragraphs (a) through (d) of this Section 10 shall be
deemed amended to the extent necessary to give effect in this Agreement to any
such amended, modified or new regulation.

11. Change in Control. (a) As used in this Agreement, a
"Change in Control" shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:

(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving as
directors of the Company: individuals who, on July 24, 1997, constitute
the Board of Directors of the Company and any new director (other than
a director whose initial assumption of office is in connection with the
settlement of an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board of
Directors of the Company or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on July 24, 1997 or whose appointment, election or nomination
for election was previously so approved or recommended; or

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<PAGE> 12
(III) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any
other corporation or entity, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any Parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting power of
the securities of the Company, such surviving entity or any Parent
thereof outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected solely to implement a
recapitalization of the Company or the Bank (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company or the Bank (not including in
the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates) representing 35%
or more of the combined voting power of the Company's or the Bank's
then outstanding securities; or

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<PAGE> 13
sale of all or substantially all of the voting securities of the Bank
or a Parent of the Bank shall be deemed to constitute a sale of
substantially all of the Company's consolidated assets), other than any
such sale or disposition to an entity at least 65% of the combined
voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as
their ownership of the voting securities of the Company immediately
prior to such sale or disposition; or

(V) the execution of a binding agreement that if consummated
would result in a Change in Control of a type specified in clause (I)
or (III) of this Section 11(a) (an "Acquisition Agreement") or of a
binding agreement for the sale or disposition of assets that, if
consummated, would result in a Change in Control of a type specified in
clause (IV) of this Section 11(a) (an "Asset Sale Agreement") or the
adoption by the Board of Directors of the Company or the Bank of a plan
of complete liquidation or dissolution of the Company or the Bank that,
if consummated, would result in a Change in Control of a type specified
in clause (IV) of this Section 11(a) (a "Plan of Liquidation"),
provided however, that a Change in Control of the type specified in
this clause (V) shall not be deemed to exist or have occurred as a
result of the execution of such Acquisition Agreement or Asset Sale
Agreement, or the adoption of such a Plan of Liquidation, from and
after the Abandonment Date if the Effective Date of Termination of the
Officer's employment has not occurred on or prior to the Abandonment
Date. As used in this Section, the term "Abandonment Date" shall mean
the date on which (A) an Acquisition Agreement, Asset Sale Agreement or
Plan of Liquidation is terminated (pursuant to its terms or otherwise)
without having been consummated, (B) the parties to an Acquisition

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<PAGE> 14
Agreement or Asset Sale Agreement abandon the transactions contemplated
thereby, (C) the Bank or the Company abandons a Plan of Liquidation or
(D) a court or regulatory body having competent jurisdiction enjoins or
issues a cease and desist or stop order with respect to or otherwise
prevents the consummation of, or a regulatory body notifies the Bank or
the Company that it will not approve, an Acquisition Agreement, Asset
Sale Agreement or Plan of Liquidation or the transactions contemplated
thereby and such injunction, order or notice has become final and not
subject to appeal.

As used in connection with the foregoing definition of Change
in Control, "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act; "Beneficial Owner" shall have
the meaning set forth in Rule 13d-3 under the Exchange Act; "Exchange Act" shall
mean the Securities Exchange Act of 1934, as amended from time to time; "Parent"
shall mean any entity that becomes the Beneficial Owner of at least 80% of the
voting power of the outstanding voting securities of the Company or of an entity
that survives any merger or consolidation of the Company or any direct or
indirect subsidiary of the Company; and "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the Company or any of
its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation or entity owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

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<PAGE> 15
(b) If the Bank or the Company shall relocate its principal
executive offices after a Change in Control, and if the Officer shall, as a
result, change the Officer's principal residence, the Bank shall (i) promptly
pay (or reimburse the Officer for) all reasonable moving expenses incurred by
the Officer as a result of such change in the Officer's principal residence, and
(ii) indemnify the Officer against, and reimburse the Officer for, any loss
incurred as the result of the sale of the Officer's principal residence (which
loss shall be computed for the purpose of this Agreement as the difference
between the actual sales price (net of closing costs and brokerage fees) of such
residence and the fair market value of such residence (computed as of the time
the Bank or the Company relocates its principal executive offices) as determined
by an independent real estate appraiser designated and paid by the Bank or the
Company and acceptable to the Officer), provided that such sale of the Officer's
principal residence occurs within six months after the Bank or the Company
relocates its principal executive offices.

(c) (i) If a Change in Control shall occur, the Officer shall
be entitled to the compensation and benefits provided in paragraphs (d), (e),
(f) and (g) of this Section 11 upon the subsequent termination of the Officer's
employment, at any time during the remaining Term in effect at the time of the
Change in Control, by the Bank (including, without limitation, a termination for
permanent disability), other than a termination for cause, provided that the
rights to any such compensation and benefits shall be subject to the limitations
and provisions set forth in Section 8(c).

(ii) If (A) a Change in Control shall occur, and thereafter
the Bank (notwithstanding its right to do so under Section 4 or Section 5)
either (B) makes a material change in the Officer's functions, duties or
responsibilities, which change would cause the Officer's

15
<PAGE> 16
position with the Bank to become one of lesser responsibility, importance or
scope from that in effect immediately prior to the time of the Change in
Control, or (C) reduces the Officer's annual salary to a level below that in
effect immediately prior to the Change in Control (an event specified in clause
(B) or (C) is hereafter referred to as a "Material Change"), the Officer shall
be entitled to the compensation and benefits provided in paragraphs (d), (e),
(f) and (g) of this Section 11 (subject to the limitations and provisions set
forth in Section 8(c)) upon the subsequent termination of the Officer's
employment, at any time during the remaining Term in effect at the time of the
Change in Control, by the Officer.

(iii) If the Officer's employment is terminated by the Bank or
by reason of the Officer's permanent disability during the Term but after the
expiration of the remaining Term in effect at the time of the Change in Control,
then the provisions of Section 6 or 8 (as the case may be) shall apply in lieu
of the provisions of paragraphs (d), (e), (f) and (g) of this Section 11. If the
Officer's employment is terminated by the Officer during the Term but after the
expiration of the remaining Term in effect at the time of the Change in Control
(or if the Officer's employment is terminated by the Officer during the
remaining Term in effect at the time of the Change in Control and no Material
Change shall have occurred), then the provisions of Section 9 shall apply in
lieu of the provisions of paragraphs (d), (e), (f) and (g) of this Section 11.

(iv) Only for purposes of determining whether there has been a
termination of the Officer's employment during the remaining Term in effect at
the time of a Change in Control (as specified in paragraphs (c)(i) and (c)(ii)
of this Section 11, as the case may be) so as to entitle the Officer to the
compensation and benefits provided in paragraphs (d), (e), (f) and (g) of this
Section 11, a termination of the Officer's employment following such a Change in
Control shall

16
<PAGE> 17
be deemed to have occurred on such date during the remaining Term that (A)
notice of termination is given by the Bank or the Officer to the other
(regardless of the Effective Date of Termination specified in such notice) or
(B) notice of non-renewal pursuant to Section 2(a) is given by the Bank to the
Officer (regardless of the date on which the Term expires). In the event that
notice of non-renewal pursuant to Section 2(a) is given by the Bank to the
Officer during the remaining Term in effect at the time of a Change in Control,
the termination of employment in connection with such notice of non-renewal
shall, for purposes of Sections 8(c) and 11(h), be treated as a termination of
employment described by paragraph (c)(i) of this Section 11. Notwithstanding the
immediately preceding sentences, the Officer shall continue to be employed by
the Bank pursuant to this Agreement until (1) the Effective Date of Termination
specified in the notice of termination or (2) the end of the remaining Term in
effect when notice of non-renewal is given pursuant to Section 2 of this
Agreement.

(d)(i) Upon the occurrence of a Change in Control followed by
any termination of the Officer's employment pursuant to Section 11(c)(i) or
(c)(ii), to the extent not otherwise limited pursuant to Section 8(c), the Bank
shall pay the Officer, as a severance payment for services previously rendered
to the Bank, a lump sum equal to three times the Officer's Annual Compensation,
as in effect immediately prior to the Effective Date of Termination (without
regard to any decrease in the Officer's Annual Compensation made after the
Change in Control). As used in this Section 11(d)(i), the term "Annual
Compensation" shall mean, at any time, an amount equal to the sum of (A) the
Officer's annual salary (as defined in Section 5(a)) at such time, plus (B) 100%
of the target bonus or other cash incentive that the Officer is eligible to earn
in such year pursuant to each plan or program (whether or not such plan or
program has been formalized

17
<PAGE> 18
or is in written form) of the Bank in effect for such year that provides for
bonuses or other cash incentives, or if no such plan or program has been adopted
with respect to such year, 100% of the target bonus or other cash incentive that
the Officer was eligible to earn in the most recent year in which such a plan or
program was in effect.

(ii) Upon the occurrence of a Change in Control followed by
any termination of the Officer's employment pursuant to Section 11(c)(i) or
(c)(ii), to the extent not otherwise limited pursuant to Section 8(c): (A) each
Non-Accelerated Stock Option held by the Officer shall (to the extent permitted
by the plan under which such Non-Accelerated Stock Option was granted),
notwithstanding anything to the contrary in the grant letter or option agreement
related to such Non-Accelerated Stock Option and regardless of the actual
Effective Date of Termination, vest and become exercisable in accordance with
the provisions of, and remain exercisable for the term specified in, such grant
letter or option agreement as if there had been no termination of the Officer's
employment and the Officer remained in the employment of the Bank for the entire
term of such Non-Accelerated Stock Option and (B) each Vested Stock Option held
by the Officer shall (to the extent permitted by the plan under which such
Vested Stock Option was granted), notwithstanding anything to the contrary in
the grant letter or option agreement related to such Vested Stock Option and
regardless of the actual Effective Date of Termination, remain exercisable for
the term specified in such grant letter or option agreement as if there had been
no termination of the Officer's employment and the Officer remained in the
employment of the Bank for the entire term of such Vested Stock Option. As used
in this Section 11(d)(ii), the term (I) "Non-Accelerated Stock Option" shall
mean any stock option (including any tandem stock appreciation right) previously
or hereafter granted to the Officer under a stock incentive or

18
<PAGE> 19
stock option plan of the Company that has not, pursuant to the provisions of
such stock incentive or stock option plan or the grant letter or option
agreement pursuant to which such stock option was granted to the Officer, vested
and become exercisable prior to the Effective Date of Termination and (II)
"Vested Stock Option" shall mean any stock option (including any tandem stock
appreciation right) previously or hereafter granted to the Officer under a stock
incentive or stock option plan of the Company that vests and becomes exercisable
prior to the Effective Date of Termination.

(e) Any payment pursuant to Section 11(d)(i) or 11(g)(ii)
shall be made to the Officer within 30 days after the Effective Date of
Termination.

(f) Upon the occurrence of a Change in Control followed by any
termination of the Officer's employment pursuant to Section 11(c)(i) or (c)(ii),
to the extent not otherwise limited pursuant to Section 8(c), the Bank shall
cause to be continued until the end of the remaining Term in effect immediately
prior to the giving of notice of termination or non-renewal (or the Officer's
earlier death) life, disability, medical and dental insurance coverage as is
otherwise maintained by the Bank for full-time employees, provided that the
Officer shall continue to pay all amounts in respect of such coverage that an
employee receiving the same level of coverage is or would be required to pay.

(g)(i)(A) On and after any Change in Control, to the extent
not otherwise limited pursuant to Section 8(c)(i), the Officer shall be eligible
to be paid, under the SERP, a SERP benefit, to the extent vested (and subject to
additional vesting in accordance with the terms of the SERP as such plan
provided immediately prior to the Change in Control, or if it results in a
greater vested percentage, with vesting determined otherwise pursuant to this
Section 11(g)(i)),

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<PAGE> 20
that is not less than a benefit calculated based upon the amount of the
Officer's "Pension Goal" and "Average Compensation" and the otherwise applicable
terms of the SERP, each as determined immediately prior to the Change in
Control. The rights of the Officer and the obligations of the Bank with respect
to the benefits described under this Section 11(g)(i)(A) shall survive the
termination of this Agreement.

(B) In the event of termination of the Officer's employment
pursuant to Section 11(c)(i) or (c)(ii), to the extent not otherwise limited
pursuant to Section 8(c), notwithstanding any vesting provisions that would in
other circumstances require further service under the SERP, the Officer shall be
fully vested in the Officer's SERP benefit, which shall otherwise be payable in
accordance with the terms of the SERP and, as applicable, Section 11(g)(i)(A).

(ii) In the event of termination of the Officer's employment
pursuant to Section 11(c)(i) or (c)(ii), to the extent not otherwise limited
pursuant to Section 8(c), the Officer shall be entitled to receive in a lump sum
payment an amount equal to any amounts forfeited by the Officer under the
Company's qualified defined contribution plan(s) and under the Bank's Benefit
Restoration Plan (solely to the extent such Benefit Restoration Plan supplements
benefits under a defined contribution plan) as in effect immediately prior to
the Change in Control (or, if more favorable to the Officer, as in effect
immediately prior to the Effective Date of Termination).

(h)(i) If, on account of events described in Sections 11(c)(i)
or 11(c)(ii) following a Change in Control, any payment or other benefit paid or
to be paid or any property transferred or to be transferred (collectively, a
"Severance Payment") with respect to one or more calendar years by or on behalf
of the Bank (or any affiliate of the Bank) to the Officer pursuant to this
Agreement in connection with such Change in Control shall constitute an "excess
parachute

20
<PAGE> 21
payment" within the meaning of Section 280G(b) of the Code subject to the tax
imposed by Section 4999 of the Code (the "Excise Tax"), then the Bank shall pay
to the Officer an additional amount (the "Gross Up Payment") such that the
amount paid or transferred to the Officer, after deduction of any Excise Tax on
the Severance Payment, and any federal, state and local income tax, employment
tax and Excise Tax upon the Gross Up Payment, shall be equal to the Severance
Payment. In addition, if, absent a Change in Control or in other circumstances
following a Change in Control, notwithstanding the reductions mandated by
Section 8(c), the SERP benefits otherwise payable to the Officer shall
constitute an "excess parachute payment" within the meaning of Section 280G(b)
of the Code subject to the Excise Tax, then the Bank shall pay to the Officer
one or more Gross Up Payments such that the amount of such Gross Up Payments,
when combined with such SERP benefits, after deduction of any Excise Tax on the
SERP benefits, and any federal, state and local income tax, employment tax and
Excise Tax upon the Gross Up Payments, shall be equal to such SERP benefits.

21
<PAGE> 22
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the allocable base amount within the meaning
of Section 280G(b)(3) of the Code, or the Severance Payment or SERP benefit is
otherwise not subject to the Excise Tax, (B) the amount of the Severance Payment
or SERP benefit that is treated as subject to the Excise Tax shall be equal to
the lesser of (X) the total amount of the Severance Payment or SERP benefit, as
applicable, and (Y) the amount of "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code (after applying clause (A) above), (C) any
Gross Up Payment pursuant to Section 11(h)(i) shall be treated as subject to the
Excise Tax in its entirety and (D) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Bank's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.

(iii) If in circumstances described in Section 11(h)(i), by
reason of the filing by the Officer of an amended tax return, an audit by the
Internal Revenue Service or other taxing authority, or a final determination by
a court of competent jurisdiction, it is determined that "excess parachute
payments" exceeding those previously reported in the Officer's tax returns were
received by the Officer and as a result an additional Excise Tax (the
"Additional Excise Tax") shall become due, the Bank shall pay the Officer an
additional amount (the "Subsequent Gross Up Payment") such that the amount paid
or transferred to the Officer, after deduction of (A) any Additional Excise Tax
and (B) on an after tax basis, any interest, additions and penalties with
respect to the Additional Excise Tax and (C) any federal, state and local income
tax, employment tax and Excise Tax upon the Subsequent Gross up Payment and (D)
the payments provided for in Section 11(h)(i), shall be equal to the Severance
Payment or SERP benefits, as appropriate.

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<PAGE> 23
(iv) Any Gross Up Payment required hereunder shall be made at
least ten days prior to the due date (without regard to extensions) of the
Officer's federal income tax return for the year with respect to which the
"excess parachute payment" is deemed made under the Code. Any Subsequent Gross
Up Payment required hereunder shall be made to the Officer within 30 days after
the amount thereof is determined. Notwithstanding the two immediately preceding
sentences, the Bank shall pay any federal, state and local tax or taxes and
employment taxes required to be withheld from the Officer's wages (within the
meaning of Section 3121 and 3402 of the Code) with respect to the "excess
parachute payment" and any such tax or taxes paid by the Company or the Bank to
the Internal Revenue Service or state or local taxing authority shall constitute
payment to the Officer.

(v) If the Excise Tax is finally determined (whether by the
filing of an amended tax return by the Officer by audit of the Internal Revenue
Service or other taxing authority, or by a final determination of a court of
competent jurisdiction) to be less than the amount paid to or on behalf of the
Officer under the provisions of Sections 11(h)(i)-(iv) and the overpayment is
refunded to the Officer, the Officer shall repay to the Bank, promptly following
the receipt of the refund, the portion of the Gross Up Payment (and/or
Subsequent Gross Up Payment) attributable to such reduction of the Excise Tax
(plus the portion attributable to federal, state and local income tax and
employment taxes imposed on the portion being repaid by the Officer but only to
the extent that the repayment may result in a tax benefit to the Officer under
Section 1341 of the Code and similar provisions of applicable state and local
law).

(vi) The provisions of this Section 11(h) shall inure to the
benefit of the Officer during the Term of this Agreement regardless of whether
or not the Officer's employment is

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<PAGE> 24
terminated, and if the Officer's employment is terminated, the rights and
obligations of the Officer and the Bank under this Section 11(h) shall survive
the termination of this Agreement.

12. Post-Termination Obligations of the Officer. (a) Upon any
termination of the Officer's employment during the Term of this Agreement or
upon termination of the Officer's employment after the expiration of the Term of
this Agreement or upon retirement, the Officer agrees (i) not to make any
disclosure in violation of Section 12(b), (ii) to return to the Bank all
material documents relating to the business of the Bank that are in the
Officer's possession or under the Officer's control, and (iii) except if the
termination or retirement occurs after a Change in Control, not to solicit
(directly or indirectly), for one year following the Effective Date of
Termination (or date of termination after the expiration of the Term) or
retirement, the employment of any person who is an employee of the Bank on the
Effective Date of Termination (or date of termination after the expiration of
the Term) or retirement or who, within six months prior to the Effective Date of
Termination (or date of termination after the expiration of the Term) or
retirement, was an employee of the Bank, unless the Officer receives written
permission from the Bank to engage in the activities proscribed by this Section
12(a) or by Section 12(b) or to be relieved of any obligation under Section
12(a)(ii).

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(b) The Officer recognizes and acknowledges that the
confidential business activities and plans for business activities of the Bank
and its subsidiaries and affiliates, as they may exist from time to time, are
valuable, special and unique assets of the Bank. The Officer shall not, during
or at any time after the Officer's employment, disclose any knowledge of the
past, present or planned business activities of the Bank or its subsidiaries or
affiliates that are of a confidential nature (collectively, the "Bank's
Confidential Activities") to any person, firm, corporation, bank, thrift
institution or other entity for any reason or purposes whatsoever.
Notwithstanding anything in this Section 12(b) to the contrary, the Officer (i)
may disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas that are not derived from the Bank's Confidential Activities,
and (ii) shall not be precluded from disclosures respecting the Bank's
Confidential Activities that are (A) made pursuant to compulsory legal process
or when required by an appropriate governmental agency; (B) public knowledge or
become public without the Officer's breach of this Section 12(b); (C) already
known to the party to whom the Officer makes such disclosures; or (D) approved
by the Bank for disclosure.

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Officer, at the Officer's residence address as appearing in the records of the
Bank, or to such other address as either party may hereafter designate in
writing in the manner provided in this Section 13. All notices under this
Agreement shall be deemed given (i) upon receipt if delivered personally or (ii)
two days after deposit in a facility of the U.S. Postal Service with postage
prepaid. As used in this Agreement, the term "Effective Date of Termination"
shall mean (A) the date specified in a notice hereunder on which such Officer's
employment is to terminate, provided, however, that no such notice shall specify
an Effective Date of Termination that is prior to the date on which any such
notice is given or (B) for purposes of Section 11 only, the date on which the
Term is to expire as a result of a notice of non-renewal given by the Bank to
the Officer pursuant to Section 2 of this Agreement.

14. Complete Understanding. On and after the date as of which
this Agreement is effective, this Agreement, together with the Agreement
Regarding Initial Employment Terms dated June 11, 1996 ("Initial Agreement")
attached hereto as Exhibit A, constitute the complete understanding between the
parties with respect to the subject matter hereof and thereof and merge and
supersede all prior oral and written agreements and understandings and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof and thereof, including without limitation any other employment
agreement heretofore executed by the Officer and the Bank or any of its
subsidiaries or affiliates; provided that all references in the Initial
Agreement to your prior Employment Agreement with the Bank, dated as of June 11,
1996, shall be deemed, on and after the date as of which this Agreement is
effective, to constitute references to this Agreement. In the event of any
conflict between the express provisions of this Agreement and the Initial
Agreement, the express provisions of this Agreement shall be controlling. This

26
<PAGE> 27
Agreement may not be amended, terminated or rescinded except in a writing signed
by the party to be charged.

15. No Duty to Mitigate. Except as otherwise expressly
provided herein, if the Officer shall continue to receive compensation or
benefits or severance pay pursuant to this Agreement after its termination, (a)
the Officer shall have no duty to mitigate such payments by seeking or obtaining
other employment or otherwise, and (b) in the event the Officer does obtain
other employment, such payments from the Bank shall not be reduced by
compensation received from such other employment.

16. No Waiver. The failure of either party at any time to
require performance by the other party of a provision of this Agreement or to
resort to a remedy at law or in equity or otherwise shall in no way affect the
right of such party to require full performance or to resort to such remedy at
any time thereafter nor shall a waiver by either party of the breach of any
provision of this Agreement be taken or held to be a waiver of any subsequent
breach of such provision unless expressly so stated in writing. No waiver of any
of the provisions of this Agreement shall be effective unless in writing and
signed by the party to be charged.

17. Governing Law. This Agreement shall be governed by the
laws of the State of New York, without regard to conflict of laws principles
applied in the State of New York.

18. Headings. The headings to the Sections of this Agreement
are for convenience of reference only and shall not be given any effect in the
construction or interpretation of this Agreement.

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<PAGE> 28
19. Severability. If any provision of this Agreement is held
by a court or other authority having competent jurisdiction to be invalid, void
or otherwise unenforceable, in whole or in part, by reason of any applicable
law, statute or regulation or any interpretation thereof, then (a) the remainder
of the provisions of this Agreement shall remain in full force and effect and in
no way be affected, impaired or invalidated and (b) the provision so held to be
invalid, void or otherwise unenforceable shall be deemed modified in amount,
duration, scope or otherwise to the minimum extent necessary so that such
provision shall not be invalid, void or otherwise unenforceable by reason of
such law, statute, regulation or interpretation and such provision, as so
modified, shall remain in full force and effect.

20. Payment of Legal Fees. If, following a Change in Control,
any legal action or proceeding is commenced to enforce or interpret the
provisions of this Agreement, or to recover damages for its breach, all
reasonable legal fees, disbursements and court costs paid or incurred by the
Officer arising out of or resulting from such action or proceeding shall be paid
or reimbursed to the Officer by the Bank, provided the Officer shall be the
prevailing party in such action or proceeding.

21. Assumption by Company. This Agreement shall be assumable
by the Company at its election. Following any such election, the obligations of
the Bank under this Agreement shall become the obligations of the Company.

22. Taxes. Any payments due to the Officer pursuant to this
Agreement shall be reduced by all applicable federal, state, city or other taxes
required by law to be withheld with respect to such payments.

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23. Limitation on Payments. Any payments made to the Officer
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 USC Section 1828(k) and any regulations promulgated
thereunder.

THE DIME SAVINGS BANK OF NEW YORK, FSB

By: ______________________________________
Lawrence J. Toal
Chief Executive Officer

Dated: ___________________ ______________________________________
Peyton R. Patterson

<PAGE> 1
Exhibit 10.11

[Dime Letterhead]

June 11, 1996

Ms. Peyton R. Patterson
300 East 59th Street, Apt. 3202
New York, New York 10022

Re: Agreement Regarding Initial Employment Terms

Dear Peyton:

1. Annual Incentive Opportunity: You will be eligible to
participate in the Bank's Officer Incentive Compensation Plan during 1996, with
a target incentive opportunity based on 50% of the base salary you earn in 1996,
and a minimum incentive payment amount of $75,000. You will have an opportunity
to earn up to 150% of your target incentive based on extraordinary performance,
with the final determination of the incentive to be paid to you in the
discretion of the Bank's Board of Directors. For 1997, your target incentive
opportunity will be equal to 50% of your base target annualized salary, with the
opportunity to earn up to 150% of your target incentive.

2. Long-Term Incentive Opportunity. To the extent approved
from time to time by the Compensation Committee of the Bank or the Company, you
will be eligible to participate in the Dime Bancorp, Inc. Senior Management
Incentive Plan, with a long-term incentive equal in value (as determined by the
Bank) to 60% of your base target annualized salary.

3. Key Executive Life Insurance. To the extent approved by the
Compensation Committee of the Bank or the Company, you will be eligible to
participate in the Bank's Key Executive Life Insurance/Death Benefit Plan.
<PAGE> 2
2

4. Deferred Compensation Plan. To the extent approved by the
Compensation Committee of the Bank or the Company, you will be eligible to
participate in the Dime Bancorp, Inc. Voluntary Deferred Compensation Plan.

5. Automobile Allowance. For purposes of enabling you to
travel to and from the Bank's offices in Islandia, New York and elsewhere for
business purposes, the Bank is currently providing you with the use of a
Bank-owned automobile, and will reimburse you for all costs, including tolls and
gasoline, incurred in connection with the business operation of the vehicle,
subject to the Bank's policies, as in effect from time to time, concerning
personal use of the automobile. Subsequent to the expiration of the lease of the
vehicle currently being provided to you, you will continue to be entitled to the
use of a Bank-owned automobile, or an allowance in lieu thereof, commensurate
with that being provided under the Bank's then-effective policies to officers of
the Bank of comparable rank and responsibility.

6. Advance Vacation. For 1996, you will be entitled to ten
days' vacation, which may be taken at any time during the year, notwithstanding
that under the Dime's current vacation policy such ten days would otherwise not
accrue until after six full months of service.

Notwithstanding the foregoing, if any statue, regulation,
order, agreement or regulatory interpretation thereof that is valid and binding
upon the Bank, including, without limitation, 12 USC Section1828(k) and
regulations thereunder (each a "Regulatory Restriction") restricts, prohibits or
limits the amount of any payment or the provision of any benefit that the Bank
would otherwise be liable for pursuant to this Letter Agreement, then the amount
that the Bank will pay to you will not exceed the maximum amount permissible
under such Regulatory Restriction; provided, that if such Regulatory Restriction
shall subsequently be rescinded, superceded, amended or otherwise determined not
to restrict, limit or prohibit payment by the Bank of amounts otherwise due you
hereunder, the Bank shall promptly thereafter pay to you any amounts (or the
value of any benefit) previously withheld from you as a result of such
Regulatory Restriction. The provisions and limitations set forth in Section 10
of your Employment Agreement with the Bank dated as of June 11, 1996 (the
"Employment Agreement"), to the extent required by law, are hereby incorporated
by reference herein. Further, if any amount otherwise payable hereunder would be
deemed to constitute a parachute payment (a "Parachute Payment") within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and if any such Parachute Payment, when added to any other payments
which are deemed to constitute Parachute Payments, would otherwise result in the
imposition of an excise tax under Section 4999 of the Code, the amounts payable
hereunder shall be reduced by the smallest amount necessary to avoid the
imposition of such excise tax. Any such limitation shall be applied in a manner
that considers the benefits that are to be paid pursuant to the Employment
Agreement with the Bank or otherwise, and such limitation shall be applied to
such compensation and benefit amounts, and in such order, as the Bank shall
determine in its sole
<PAGE> 3
3

discretion. References to the Code hereunder shall be to the Code as presently
in effect or to the corresponding provisions of any succeeding law.

This Letter Agreement is intended solely to detail certain of
your initial compensation arrangements with the Bank. Nothing in this Letter
Agreement (a) confers upon you the right to continue in the employment of the
Bank or the right to hold any particular office or position with the Bank, (b)
requires the Bank to pay you, or entitles you to receive, any specified annual
salary or interferes with or restricts in any way the right of the Bank to
decrease your annual salary at any time, (c) requires the Bank to continue to
provide any of the benefit plans or arrangements described above, or (d)
interferes with or restricts in any way the right of the Bank to terminate your
employment at any time, with or without cause. In the event of any conflict
between the express provisions of this Letter Agreement and the Employment
Agreement (other than the first sentence of Section 14 of the Employment
Agreement, which shall not apply to this Letter Agreement), the express
provisions of the Employment Agreement shall be controlling.

Any payments due you hereunder shall be reduced by all
applicable withholding and other taxes.

This Letter Agreement shall be governed by the laws of the
State of New York, without regard to conflict of laws principles applied in the
State of New York. If any provision of this Letter Agreement is held by a court
or other authority having competent jurisdiction to be invalid, void or
otherwise unenforceable, in whole or in part, by reason of any applicable law,
statute or regulation or any interpretation thereof, then the remainder of the
provision of this Letter Agreement shall remain in full force and effect and in
no way affected, impaired or invalidated. This Agreement may be assumed by the
Company at its election. Following any such election, the obligations of the
Bank under this Agreement shall become the obligations of the Company. Except as
otherwise provided above, this Letter Agreement may only be amended in writing
signed by both parties hereto.

Please indicate your acceptance to the terms of this Letter Agreement
by signing below.

Very truly yours,

THE DIME SAVINGS BANK OF NEW YORK, FSB

By:____________________________________

AGREED AND ACCEPTED

_____________________________
Peyton R. Patterson
Date:

<PAGE> 1

EXHIBIT 10.30

KEY EXECUTIVE LIFE INSURANCE/DEATH BENEFIT
PLAN OF THE DIME SAVINGS BANK OF NEW YORK, FSB
As Amended and Restated Effective as of April 1, 1999

ARTICLE I

Definitions

The following terms whenever used in the Plan shall have the
meanings set forth in this Article I.

1.1 "Annual Compensation" means the Participant's base salary
plus target incentive compensation.

1.2 "Bank" means The Dime Savings Bank of New York, FSB, and
any successor corporation. In the case of any reference to a person's
employment with or status as an executive of the Bank, the term "Bank"
shall include Dime Bancorp, Inc., The Dime Savings Bank of New York,
FSB and wholly-owned subsidiaries of either of them.

1.3 "Beneficiary" means the Participant's beneficiary under the
Plan, as designated in writing to the Committee by the Participant. A
Participant may change his/her designated Beneficiary from time to
time by written notice to the Committee. If a Participant fails to
designate a beneficiary in writing to the Committee, "Beneficiary"
shall mean (i) the beneficiary designated by the Participant under the
Retirement Plan, or (ii) if no beneficiary has been designated under
the Retirement Plan, the Participant's estate.

1.4 "Carrier" means the insurance company or companies selected
by the Bank to provide the life insurance policies under this Plan.

1.5 "Committee" means the committee consisting of at least
three persons, who need not be members of the Board of Directors of
the Bank, appointed by such Board of Directors to administer the Plan.

1.6 "Compensation Committee" means the Compensation Committee
of the Board of Directors of the Bank.

<PAGE> 2

1.7 "Flex Plan" means the Flexible Benefits Program of the Bank
as in effect from time to time.

1.8 "Life Insurance Trust" means an irrevocable trust to which
a Participant has transferred his or her actual and prospective
incidents of ownership in the life insurance benefits provided under
this Plan.

1.9 "Participant" means an eligible executive who has elected
to participate in this Plan and whose participation has not been
terminated.

1.10 "Participant Premium" means the portion of the insurance
premium for the life insurance benefit payable by the Participant or
his/her surviving spouse (or, as appropriate, by a transferee of the
incidents of ownership with respect to the life insurance coverage
hereunder) as a condition of participation in the Plan.

1.11 "Plan" means the Key Executive Life Insurance/Death
Benefit Plan of The Dime Savings Bank of New York, FSB, as initially
effective as of January 1, 1988, and as amended from time to time.

1.12 "Retirement" means (i) the date of the Participant's
termination of service with the Bank after his or her Early Retirement
Age (as defined in the Retirement Plan) or otherwise on or after both
attaining age 55 and after completing a Period of Service (as defined
in the Retirement Plan) of at least 5 years, whether or not otherwise
eligible for early or normal retirement under the Retirement Plan, and
(ii) for Participants whose termination of service is not described in
clause (i) above, the later of the date of the Participant's
termination of service with the Bank or the attaining of age 65.

1.13 "Retirement Plan" means the qualified defined benefit plan
of the Bank as in effect from time to time.

1.14 "Single Life Coverage" means a life insurance or death
benefit payable upon the death of the Participant.

1.15 "Survivor Joint Life Coverage" means a life insurance or
death benefit payable upon the death of the last survivor of the
Participant and his/her spouse.

<PAGE> 3

1.16 "Tier" means Tier 0, Tier I, Tier II, Tier III or Tier IV,
to which an executive is classified based on the Bank's system of
classifying executives.

ARTICLE II

Purpose

The purpose of the Plan is to enable the Bank to provide
life insurance and death benefits to its key executives in a cost
effective manner.

ARTICLE III

Participation

3.1 Eligibility. Subject to Section 3.2, any person who is an
executive of the Bank in Tiers I, II, III, or IV, as of December 1,
1987 may become a Participant in the Plan by making the election to
participate described in Section 3.3(a). In addition, subject to
Section 3.2, any person who becomes an executive of the Bank after
December 1, 1987 who is otherwise designated by the Compensation
Committee may become a Participant in the Plan by making the election
to participate described in Section 3.3(a).

3.2 Insurability

(a) If the Carrier determines that an executive is not
insurable, the executive shall not be eligible to participate in the
Plan. If the Carrier determines that the executive and his/her spouse
are not insurable, the executive shall not be entitled to elect
Survivor Joint Life Coverage.

(b) If the Carrier determines that an executive or his/her
spouse is insurable but is subject to a substandard rating, the
Bank, in its sole discretion, may (i) prohibit the executive from
participating in the Plan (if the executive is subject to the
substandard rating) or from electing Survivor Joint Life Coverage (if
the executive's spouse is subject to the substandard rating); (ii)
require the executive (and/or his/her surviving spouse, in the case of
Survivor Joint Life Coverage) to pay, in addition to the Participant
Premiums required by

<PAGE> 4

Section 4.2, all or part of the Bank's increased cost of providing the
coverage as a result of the substandard rating; (iii) reduce the
benefits otherwise payable to the Beneficiary to reflect the
substandard rating; or (iv) some combination of the foregoing.

3.3 Election to Participate.

(a) An executive's election to participate in the Plan
shall be effective only if the election (i) is made in writing on or
prior to January 15, 1988 if the executive was eligible to participate
as of that date, or within such period, if any, as determined by the
Committee, of initial eligibility if the executive was first chosen by
the Committee to be eligible to participate in the Plan after January
15, 1988, (ii) specifies the amount of Single Life Coverage (expressed
as a percentage of Annual Compensation), which the executive elects to
receive (within the limits permitted by Section 3.4) based on the
executive's Tier as of October 1, 1987 if the executive was first
eligible to participate in the Plan on or before January 15, 1988, or
as of the date of initial eligibility if first chosen by the Committee
to be eligible to participate after January 15, 1988, and, (iii)
contains such additional information and agreements as the Committee
may request. An election to participate in the Plan shall be deemed an
authorization by the executive of payroll deductions to pay the
Participant Premiums described in Section 4.2.

(b) Any executive who has elected to participate in the
Plan pursuant to Section 3.3(a) may, at any time prior to December 31,
1988 if the executive was first eligible to participate in the Plan on
or before January 15, 1988, or at any time prior to the first
anniversary of his/her eligibility to participate in the Plan if first
chosen by the Committee to be eligible to participate after January
15, 1988, and subject to Section 3.2, direct that a portion of his/her
Single Life Coverage elected pursuant to Section 3.3(a) (expressed as
a percentage of Annual Compensation) be converted to an equivalent
amount of Survivor Joint Life Coverage (determined pursuant to Section
3.4(b)).

3.4 Amount of Coverage.

(a) Single Life. A Participant may elect to receive Single
Life Coverage in an amount not to exceed the following:

<PAGE> 5

Maximum
Participant's Tier Participant's Tier Single Life
1/1/88 - 12/31/89 1/1/90 and after Coverage
- --------------------- ------------------- --------
<S> <C> <C>
I and II 0 and I 6 times Annual
Compensation
III I and III 3 times Annual
Compensation
IV IV 1.5 times Annual
Compensation

</TABLE>

The first $50,000 of Single Life Coverage elected by a Participant
shall be provided by the Bank under the Flex Plan rather than under
this Plan prior to the Participant's Retirement, but shall be provided
as a benefit under this Plan after the Participant's Retirement.

(b) Survivor Joint Life. A Participant who so elects shall
receive $1.67 of Survivor Joint Life Coverage in lieu of each $1.00 of
Single Life Coverage for which the Participant is eligible; provided,
however, that if the Participant's spouse is more than five years
older than the Participant, the amount of Survivor Joint Life Coverage
per $1.00 of Single Life Coverage shall be reduced to an amount whose
cost to the Bank (as determined by the Bank) is equal to the cost of
$1.67 of Survivor Joint Life Coverage for a Participant whose spouse
is five years older than the Participant.

3.5 Automatic Increases in Coverage.

(a) Increases in Annual Compensation. Each January 1 after
the effective date of the Plan, the amount of coverage to which a
Participant is entitled shall be (subject to Section 3.5(c))
automatically increased by applying the percentage of Annual
Compensation initially elected by the Participant to his/her Annual
Compensation (on an annualized basis) in effect the preceding October
1.

(b) Change of Tier. A Participant who has elected the
maximum coverage for which he/she is eligible and who is promoted
to a higher Tier as of any October 1 shall (subject to Section 3.5(c))
have such coverage automatically increased as of the following

<PAGE> 6

January 1 to the maximum coverage available for such higher Tier. A
Participant who elected less than the maximum coverage available for
his/her Tier shall not have his/her coverage automatically adjusted
for a change in Tier, but shall (subject to Section 3.5(c)) have the
right to elect, by written notice to the Committee prior to the first
December 31 that is at least 31 days after such Tier change, that
his/her coverage be increased as of the January 1 following such
December 31, based on his/her Tier the preceding October 1. The
coverage of a Participant described in the preceding sentence
(expressed as a percentage of the maximum available coverage for
his/her new Tier) shall in no event exceed the percentage of the
maximum available coverage (for the Participant's prior Tier) in
effect for the Participant immediately prior to his/her promotion.

(c) Any increase in the amount of a Participant's coverage
upon a change of Annual Compensation or Tier shall be subject to
insurability of the Participant and his/her spouse as provided in
Section 3.2 unless the insurance coverage being maintained for the
Participant by the Bank is sufficient to provide such increased
coverage.

(d) A Participant's insurance coverage shall not change
upon a reduction of the Participant's Annual Compensation or Tier
classification unless the Participant elects such reduction.

3.6 Amendment of Election to Participate.

(a) A Participant may not amend, cancel or otherwise modify
his/her election to participate except in the following
circumstances:

(i) A Participant may at any time reduce his/her
aggregate amount of coverage, or refuse any
automatic increase in such coverage. Such
reduction shall take effect as soon as
practicable following receipt by the Committee
of a written request for such reduction.

(ii) Upon a change in the marital status of a
Participant, the Participant may, subject to
Section 3.2, reallocate his/her total coverage
then in effect

<PAGE> 7

(expressed as a percentage of Annual
Compensation) between Single Life Coverage and
Survivor Joint Life Coverage.

3.7 Election by Surviving Spouse. Upon the death, prior to
his/her Retirement, of a Participant who has elected Survivor Joint
Life Coverage, the Participant's surviving spouse shall have the right
to elect (within such time period as the Committee may provide) one of
the following options:

(a) Option A: To continue the Survivor Joint Life Coverage
as a life insurance benefit until the spouse attains age 65, at which
time it shall convert to a death benefit. A spouse choosing this
option shall be required to pay Participant Premiums as provided in
Section 4.2(b) until he/she attains age 65; or

(b) Option B: To have the Survivor Joint Life Coverage
convert to a death benefit pursuant to Section 5.3 immediately upon
the death of the Participant, in which case the spouse shall not be
required to pay Participant Premiums.

3.8 Failure to Participate. No compensation or benefits in lieu
of this Plan shall be paid to an executive who elects not to
participate in the Plan.

ARTICLE IV

Contributions

4.1 Bank Payments.

(a) With respect to a Participant who has elected Single
Life Coverage, the Bank shall pay to the Carrier each year the
amount necessary to maintain in effect a life insurance policy on the
life of the Participant in an amount not less than the amount
sufficient to provide the life insurance coverage elected by the
Participant; provided that after the Retirement of a Participant the
Bank shall only be required to maintain in effect sufficient life
insurance to provide the life insurance benefit available to the
Participant pursuant to Section 5.4.

(b) In the case of a Participant who has elected Survivor
Joint Life Coverage, the Bank shall pay to the Carrier each year the
amount necessary to maintain in effect a life

<PAGE> 8

insurance policy on the Participant and his/her spouse in an amount
not less than the amount sufficient to provide the insurance coverage
elected by the Participant. Such policy shall be maintained until
whichever of the following applies:

(i) If the spouse pre-deceases the Participant, the
policy shall be maintained until the
Participant's Retirement and, after the date of
the Participant's Retirement, the Bank shall
only be required to maintain in effect
sufficient life insurance to provide the life
insurance available to the Participant pursuant
to Section 5.4.

(ii) If the Participant's pre-deceases the spouse and
the spouse has elected Option A pursuant to
Section 3.7, the policy shall be maintained
until the spouse attains age 65.

(iii) If the Participant pre-deceases the spouse and
the spouse has elected Option B pursuant to
Section 3.7, the policy shall be maintained
until the Participant's death.

Following the occurrence of whichever of the foregoing events applies,
the Bank, in its sole discretion, may (but is not required to)
maintain in effect the life insurance policies described in this
Section 4.1(c).

(c) The Bank's obligation to provide the death benefits
referred to in Section 5.3 shall continue (to the extent that they
apply, and are not the subject of an election to receive life
insurance benefits in lieu thereof) regardless of whether any life
insurance policy is maintained on a Participant or spouse.

(d) Notwithstanding the foregoing provisions of this
Section 4.1, the Bank shall not be required to maintain any insurance
policy with respect to a Participant whose participation in the Plan
has terminated.

4.2 Participant Premiums.

(a) Prior to the Participant's Retirement, each Participant
shall reimburse the Bank for Participant Premiums paid by the
Bank on his/her behalf, in an amount equal to the

<PAGE> 9

"P.S. 58 alternative rates," as determined by the Carrier from time to
time, for the amount and form of insurance coverage elected by the
Participant (in excess of the first $50,000 of Single Life Coverage);
provided, however, that following the death of his/her spouse, a
Participant who has elected Survivor Joint Life Coverage shall
reimburse the Bank based on the "P.S. 58 alternative rates" for Single
Life Coverage as determined by the Carrier from time to time. If the
Participant is an employee of the Bank, such payment shall be made by
payroll deductions pro rata over the portion of the calendar year in
which the Participant participates in the Plan, as determined by the
Committee. Upon a Participant's termination of employment with the
Bank, the Participant shall pay the balance of the Participant Premium
for that calendar year within 60 days of termination of employment.
Thereafter, the Participant shall pay to the Bank the annual
Participant Premium for each year in advance, not later than January
31 of that year. A Participant's (or spouse's) failure to pay
Participant Premiums as provided in this Section 4.2(a) or Section
4.2(b) shall result in a termination of his/her participation in the
Plan. Notwithstanding the foregoing, where a Participant has
transferred his or her incidents of ownership in life insurance
coverage provided hereunder, the premium obligation shall be an
obligation of the transferee (e.g. the Life Insurance Trust), which
shall be responsible for remitting the Participant Premiums (or
arranging for their payment) so that they are paid at the times set
forth above.

(b) Upon the death of a Participant who has elected
Survivor Joint Life Coverage, if the Participant's surviving spouse
has elected Option A pursuant to Section 3.7, such spouse shall reimburse
the Bank for Participant Premiums in an amount equal to the "P.S. 58
alternative rates" for Single Life Coverage, as determined by the
Carrier from time to time until such spouse attains age 65. Such
payment shall be made at the times set forth in Section 4.2(a) with
respect to a Participant who has terminated employment with the Bank.

(c) Upon the death of a Participant who has elected
Survivor Joint Life Coverage, if the Participant's surviving spouse
has elected Option B pursuant to Section 3.7, such

<PAGE> 10

spouse shall not be required to pay any Participant Premiums, and
shall maintain coverage under the Plan pursuant to Section 5.3(b).

ARTICLE V

Benefits

5.1 Prior to Death. No benefits shall be payable to a
Participant or Beneficiary under this Plan prior to the death of the
Participant.

5.2 Standard Life Insurance Benefits.

(a) With respect to a Participant who has elected Single
Life Coverage, upon the Participant's death prior to his/her
Retirement, the Participant's Beneficiary shall receive life insurance
proceeds in an amount equal to the amount of Single Life Coverage
elected by the Participant.

(b) With respect to a Participant who has elected Survivor
Joint Life Coverage, upon (i) the death of the Participant prior
to his/her Retirement but after the death of his/her spouse, or (ii)
the death of a Participant's surviving spouse who has elected Option A
pursuant to Section 3.7, the Participant's Beneficiary shall receive
life insurance proceeds, if any, in an amount equal to the amount of
Survivor Joint Life Coverage elected by the Participant.

5.3 Death Benefits.

(a) Upon the death, after his/her Retirement, of a
Participant who has elected Single Life Coverage, unless a valid
election is in effect for the life insurance benefits described in
Section 5.4, the Participant's Beneficiary shall receive a death
benefit payable by the Bank in an amount equal to (i) the amount of
Single Life Coverage in effect for the Participant at the time of
his/her Retirement, if the Participant was in Tier 0 or I (Tiers I or
II prior to January 1, 1990) on the October 1 before his/her
Retirement (or if the Participant, while participating, had been in
such Tier, but had not elected to reduce the level of his/her life
insurance coverage pursuant to Section 3.2(d) upon any prior Tier
reduction), or (ii) 67% of the amount of such coverage if the
Participant was in Tier II, III or IV (Tier III or IV prior to
January 1, 1990) on the October 1

<PAGE> 11

before his/her Retirement (except as otherwise provided in clause (i)
above), in each case to the extent such benefit has vested pursuant to
Article VI.

(b) With respect to a Participant who has elected Survivor
Joint Life Coverage, upon (i) the death of the Participant after
his/her Retirement and after the death of his/her spouse (unless a
valid election is in effect for the life insurance benefits described
in Section 5.4), (ii) the death of a Participant's surviving spouse
who has elected Option A pursuant to Section 3.7 after such spouse has
attained age 65, or (iii) the death (at any age) of a Participant's
surviving spouse who has elected Option B pursuant to Section 3.7, the
Participant's Beneficiary shall receive a death benefit payable by the
Bank in an amount equal to (i) the amount of Survivor Joint Life
Coverage in effect for the Participant at the earlier of the time of
his/her Retirement or death, if the Participant was in Tier 0 or I
(Tiers I or II prior to January 1, 1990) on the October 1 before such
Retirement or death (or if the Participant, while participating, had
been in such Tier, but had not elected to reduce the level of his/her
life insurance coverage pursuant to Section 3.2(d) upon any prior Tier
reduction), or (ii) 67% of the amount of such coverage if the
Participant was in Tier II, III or IV (Tiers III or IV prior to
January 1, 1990) on the October 1 before such Retirement or death
(except as otherwise provided in clause (i) above), in each case to
the extent such benefit has vested pursuant to Article VI.

(i) The net death benefit paid with respect to a
Participant, after payment of federal and
state income tax at the maximum rates in
effect for 1988, shall in no event be less
than the post-retirement life insurance
benefit which would have been paid with
respect to the Participant under the Flex Plan
(as in effect on December 31, 1987) on the
date of his/her death based on his/her Annual
Compensation and elected Flex Plan coverage as
of December 31, 1987; and

<PAGE> 12

(ii) No death benefit shall be payable with respect to a
Participant unless all Participant Premiums required by
Section 4.2 with respect to such Participant have been paid.

5.4 Election for Post-Retirement Life Insurance Benefits. A
Participant may elect that, in lieu of the death benefits payable upon
the death of a Participant after his/her Retirement pursuant to
Sections 5.3(a) and (b), the Participant's Beneficiary shall instead
receive life insurance proceeds in an amount equal to 60% of the
amount that would otherwise be payable as a vested death benefit under
Section 5.3(a) or (b) (as applicable). Any such elections may only be
made in accordance with the following provisions, and the life
insurance coverage shall be accompanied by such responsibilities as
are set forth in the following provisions:

(a) The election to provide a life insurance benefit,
rather than a Bank-paid death benefit must be made (and not revoked)
prior to the Participant's Retirement Date (to be effective upon the
Participant's Retirement Date), or if made or received by the
Committee after the Participant's Retirement Date shall only be
effective on the January 1 following the date the election is received
by the Committee; provided that with respect to any Participant whose
Retirement Date occurred before June 1, 1999, an election to provide a
life insurance benefit rather than a Bank-paid death benefit will be
effective as of the date it is received by the Committee if it is so
received on or prior to June 30, 1999.

(b) Any election under this Section 5.4 shall be in
writing, in a form acceptable to the Committee.

(c) An election to provide a life insurance benefit, rather
than a Bank-paid death benefit, that is effective at such time
that the incidents of ownership of the Participant's life insurance
benefits or death benefits are held by a transferee (such as a Life
Insurance Trust) may not be subsequently changed. An election pursuant
to this Section 5.4 may otherwise be revoked in writing before it
becomes effective, and if a Participant has not transferred the
incidents of ownership of the Participant's life insurance benefits or
death benefits to a transferee (such as a Life Insurance Trust), the
Participant may elect in writing in advance that, as of any subsequent

<PAGE> 13

January 1, a death benefit pursuant to Section 5.3 be payable upon the
death of the Participant, rather than the life insurance benefit
previously elected in accordance with this Section. Such a Participant
may in later years (effective as of January 1 by advance written
election) elect that a life insurance benefit pursuant to this Section
5.4 again be paid in lieu of a death benefit pursuant to Section 5.3,
provided, however, that no election pursuant to this sentence may be
made if the Participant has not been covered by a life insurance
benefit hereunder for a period of three or more consecutive years
prior to the date such election is to be effective.

(d) During the period that an election for life insurance
benefit coverage is in effect, the Participant shall be responsible
for the taxes on any imputed income in connection with such coverage
(and, to the extent the incidents of ownership of the Participant's
life insurance benefits have been transferred to a transferee (such as
a Life Insurance Trust), for any gift taxes related to the value of
such coverage). The Participant shall be responsible to pay to the
Bank in advance of their due date, any amounts required with respect
to tax withholding obligations related to such taxes, provided that
notice of such payment obligation is provided at least 30 days in
advance by the Bank to the Participant or applicable transferee; if
notice is not provided more than 30 days in advance of such due date,
payment must be made within 30 days after notice is provided. If any
payments of amounts required in connection with tax withholding on
imputed income are not timely made to the Bank, participation by the
Participant (and, as applicable, any transferee of the incidents of
ownership of the Participant's life insurance benefits) in the Plan
shall cease, and no benefit shall be payable to the Participant's
Beneficiary upon the Participant's death.

5.5 Limitation on Benefits. Notwithstanding the provisions of
Sections 5.2, 5.3 and 5.4, no benefits (other than the first $50,000
of Single Life Coverage to the extent such coverage is provided as a
life insurance benefit) shall be payable under this Plan with respect
to a Participant (i) if the Participant dies by suicide within the
first two years that a life insurance policy is in effect with respect
to such Participant, or (ii) if the carrier properly denies a claim
with respect to the Participant during the two-year "contestable
period" of a policy.

<PAGE> 14

ARTICLE VI

Vesting

6.1 A Participant shall be 100% vested in his or her death
benefits (pursuant to Section 5.3) upon the Participant's termination
of service described in clause (i) of the definition of Retirement. In
addition, a Participant in Tier 0, I or II at the time of a Change in
Control (as defined in Section 9.8) shall be 100% vested in his or her
death benefits (pursuant to Section 5.3) upon the occurrence of such
Change in Control, provided that in the case of a Change in Control of
the type described in clause (v) of Section 9.8, such Change in
Control shall result in full vesting only if (A) the Participant's
employment is terminated by his or her employer (other than for
"cause" (as defined below)) or (B) the Participant terminates his or
her employment with Dime Bancorp, Inc. (the "Company") and its
subsidiaries after the Participant's employer either (I) makes a
material change in the Participant's functions, duties or
responsibilities, which change would cause the Participant's position
with his or her employer to become one of lesser responsibility,
importance or scope from that in effect immediately prior to the
occurrence of such Change in Control or (II) reduces the Participant's
annual salary to a level below that in effect immediately prior to the
Change in Control, provided, further, that in case of subclauses (A)
and (B), such termination of employment occurs after the occurrence of
the Change in Control described in clause (v) of Section 9.8, but
during the remaining term of the applicable employment or change in
control agreement between the Participant and the Company or any of
its subsidiaries in effect at the time of the occurrence of such
Change in Control (or, if greater, or if there is no such agreement,
within one year after the occurrence of such Change in Control), and
otherwise on or before the earlier of the Abandonment Date (as defined
below) or the date the transaction contemplated by any event described
in clause (v) of Section 9.8 is consummated. As used in this Section
6.1, the term "Abandonment Date" shall mean the date on which (A) an
Acquisition Agreement, Asset Sale Agreement or Plan of Liquidation (as
such terms are defined in Section 9.8) is terminated (pursuant to its
terms or otherwise) without having been

<PAGE> 15

consummated, (B) the parties to an Acquisition Agreement or Asset Sale
Agreement abandon the transactions contemplated thereby, (C) the Bank
or the Company abandons a Plan of Liquidation or (D) a court or
regulatory body having competent jurisdiction enjoins or issues a
cease and desist or stop order with respect to or otherwise prevents
the consummation of, or a regulatory body notifies the Bank or the
Company that it will not approve, an Acquisition Agreement, Asset Sale
Agreement or Plan of Liquidation or the transactions contemplated
thereby and such injunction, order or notice has become final and not
subject to appeal. Notwithstanding anything in the Plan to the
contrary, a Participant may, in his or her discretion, waive all or
part of the additional vesting in his or her death benefits that
results following the occurrence of a Change in Control, as provided
in this Section 6.1. For purposes of the Plan, "cause" shall mean
(except as otherwise provided in a Participant's employment or change
in control agreement with the Company or any of its subsidiaries,
which definition of "cause" shall then apply), the Participant's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform assigned duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
final cease and desist order. If the Participant terminates employment
with the Bank where his termination of employment does not satisfy the
provisions of clause (i) of the definition of Retirement, and except
as otherwise provided in the second sentence of this Section 6.1, the
Participant's death benefit shall vest in accordance with the
following vesting schedule:

Years of Participation in the Vesting
Plan While Employed by the Bank Percentage
----------------------------------------------------------------------------------

<S> <C>
0-5 years 0%

at least 5 but less than 6 years 50%

at least 6 but less than 7 years 60%

at least 7 but less than 8 years 70%

at least 8 but less than 9 years 80%

at least 9 but less than 10 years 90%
</TABLE>

<PAGE> 16

<TABLE>

<S> <C>
10 or more years 100%
</TABLE>

Notwithstanding anything in this Plan to the contrary, on and after a
Change in Control (as defined in Section 9.8), a Participant's vested
percentage in the death benefits that he or she has elected as of the
date of the Change in Control shall be determined based on vesting
provisions that are no more restrictive than the vesting provisions in
effect under the Plan immediately prior to the Change in Control.

ARTICLE VII

Amendment and Termination

7.1 Termination by Participant. A Participant's participation
in the Plan shall terminate if the Participant (or his/her surviving
spouse in the case of Survivor Joint Life Coverage) elects to reduce
coverage to zero or if the Participant or any responsible transferee
fails to pay the required amount of Participant Premiums or amounts
required in connection with imputed income when due. No benefits under
the Plan shall be paid with respect to any Participant or surviving
spouse whose participation in the Plan is terminated.

7.2 Amendment or Termination by the Bank.

(a) The Board of Directors of the Bank shall have the right
to amend the Plan from time to time and to terminate the Plan at any
time; provided, however, that no such act shall decrease the dollar
amount of benefits payable with respect to a Participant from the
amount which would have been payable had the Participant died
immediately prior to such amendment or termination (without regard to
the tax treatment of such benefit). Without limiting the generality of
the foregoing and subject to the proviso in the preceding sentence,
the Bank shall have the right to change insurance carriers or to
change the form of benefit from life insurance to an equal amount of
death benefit and vice versa; provided that Participants and their
spouses shall not be required to pay Participant Premiums for benefits
not to be provided as a life

<PAGE> 17

insurance benefit. In the event of termination of the Plan, benefits
shall be paid at the time or times they would have been paid had the
Plan not been terminated.

(b) Notwithstanding the provisions of Section 7.2(a), in
the event the Board of Directors of the Bank determines that one
or more of the following has occurred: (i) there has been a
significant change in the tax treatment of corporate owned life
insurance or in the tax treatment to the Bank or Participants of the
benefits provided under the Plan from the situation in effect on
January 1, 1988, (ii) the effective marginal rate of federal income
tax payable by the Bank shall be significantly less than 34%, (iii)
the Bank is required by law to extend the benefits of the Plan to a
broader category of employees than those in Tiers 0, I, II, III and
IV, and (iv) there has been any other material change in circumstance,
as determined by the Board of Directors from time to time, that
affects the cost or benefit to the Bank of providing benefits under
the Plan, the Bank in its sole and absolute discretion, shall have the
right to amend or terminate the Plan or to require the Participants to
pay all or a portion of the added costs of maintaining the Plan.

(c) Subject to the limitations of Section 7.2(a), the
Committee shall have the right to amend the Plan from time to time,
provided that no such amendment shall materially increase the cost to
the Bank of maintaining the Plan.

ARTICLE VIII

Administration of the Plan

8.1 The Committee. The Committee shall administer the Plan and
for purposes of ERISA shall be the "named fiduciary" of the Plan. In
connection therewith, the Committee shall have full power and
authority, in its discretion, to determine a Beneficiary's entitlement
to benefits in accordance with the terms of the Plan (except that
entitlement to life insurance benefits shall be determined by the
Carrier), to construe and interpret the Plan, to establish rules and
regulations, to delegate responsibilities to others to assist it in
administering the Plan, to appoint a Plan Administrator who shall have
responsibility for the day to day administration of

<PAGE> 18

the Plan, and to perform all other acts it believes reasonable and
proper in connection with the administration of the Plan. The
Committee shall act by vote of a majority of its members and may also
effect such action without a meeting, by written consent of a majority
of its members. No member of the Committee may act with respect to any
action relating to or affecting that member's own benefit under the
Plan.

8.2 Indemnification. To the extent permitted by law, the Bank
shall indemnify the members of the Committee and the Plan
Administrator from all claims for liability, loss, or damage
(including payment of expenses in connection with defense against such
claims) arising from any act or failure to act in connection with the
Plan.

8.3 Claims Procedure.

(a) Life Insurance Benefits. Any claim relating to life
insurance benefits under the Plan shall be filed with the Plan
Administrator designated by the Committee, who within 30 days of
receipt shall forward the claim to the Carrier for processing in
accordance with the Carrier's claims procedure; provided that claims
with respect to the availability of elections or their validity under
Section 5.4 and with respect to the payment of Participant Premiums of
other payment obligations shall be filed and decided in accordance
with Section 8.3(b). The Carrier shall be a "fiduciary" under ERISA
for purposes of processing and reviewing any such claims.

(b) Death Benefits. Any claim relating to death benefits or
with respect to those items to which this claim procedure otherwise
applies shall be filed with the Plan Administrator designated by the
Committee. If a claim is denied in whole or in part, the claimant
shall be given written notice of such denial, which notice shall
specifically set forth (i) the specific reasons for the denial (ii)
the pertinent Plan provisions on which the denial was based (iii) 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 (iv) 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
90th day after such claim was filed, the

<PAGE> 19

claim shall be deemed to have been denied on that day for the purpose
of permitting the claimant to request review of the claim. Any person
whose claim for benefits has been denied in whole or in part by the
Plan Administrator may request review of the claim by the Committee.
The claimant shall file such request for review (including a statement
of issues raised and comments made by the claimant) with the Committee
no later than 90 days after the mailing or delivery of the written
notice of denial of the claim or, if such notice is not provided,
within 90 days after such claim is deemed denied. The claimant shall
be permitted to review pertinent documents. A decision shall be
rendered by the Committee and communicated to the claimant not later
than 60 days after receipt of the claimant's written request for
review. However, if the Committee finds it necessary due to special
circumstances 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 Committee's decision shall be in writing and shall specifically
set forth (i) the reasons for the decision and (ii) the pertinent Plan
provisions on which the decision is based. Any such decision of the
Committee shall be binding upon the claimant and the Bank.

ARTICLE IX

Miscellaneous

9.1 Life Insurance Obligations.

(a) Subject to subsection (c) of this Section 9.1, the Bank
shall purchase from the Carrier insurance policies sufficient to
provide the life insurance benefits under the Plan. Subject to
subsection (c) of this Section 9.1, the Bank shall be the owner of the
insurance policies, and shall have all rights of a policy owner
including the right to borrow from the policies and to receive
dividends, if any; however, each policy shall contain an endorsement
indicating that upon (i) the death of the Participant prior to
Retirement (in the case of Single Life Coverage) or (ii) the death of
the Participant prior to Retirement and after the death of his/her
spouse or (iii) the death of a Participant's surviving spouse who has
elected Option A pursuant to

<PAGE> 20

Section 3.7 prior to attaining age 65 (in the case of Survivor Joint
Life Coverage), or (iv) the death of the Participant at such time that
a life insurance benefit is payable pursuant to Section 5.4, proceeds
of the policy in an amount equal to the amount of coverage elected by
the Participant (to the extent applicable) or, in the amount otherwise
provided for in Section 5.4, shall be paid to the Beneficiary by the
Carrier. Any proceeds of the policy in excess of the amount described
above shall be paid to the Bank upon the occurrence of any of the
events described in the preceding sentence. All proceeds of any such
policy which may be maintained by the Bank shall be paid to the Bank
(i) upon the Participant's death after his/her Retirement (in the case
of Single Life Coverage) or, (ii) upon (A) the death, after his/her
Retirement, of a Participant who survives his/her spouse, or (B) the
death of a Participant's surviving spouse who has elected Option B
pursuant to Section 3.7 (in the case of Survivor Joint Life Coverage),
except to the extent they are payable to the Participant's Beneficiary
as provided above..

(b) The life insurance benefits shall be paid in accordance
with the terms and conditions of the life insurance policy on the
Participant's life (or, in the case of Survivor Joint Life Coverage,
the lives of the Participant and his/her spouse). No Participant or
Beneficiary shall have any rights against the Bank in the event of a
failure of the Carrier to pay a life insurance benefit.

(c) Notwithstanding anything in the Plan to the contrary,
the Bank may permit or authorize, but is not required or otherwise
obligated to permit or authorize, the holding of any insurance policy
purchased to provide the life insurance benefits under the Plan by a
trust, subject to such terms and conditions as the Bank may deem
appropriate.

9.2 Unfunded Death Benefit Obligation. All death benefits
payable under this Plan shall constitute an unfunded obligation of the
Bank. Payments shall be made, as due, from the general assets of the
Bank. The Bank may, in its sole and absolute discretion, establish one
or more accounts, funds, or trusts, to reflect its obligations to pay
death benefits under the Plan, and may make such investments as it may
deem desirable (including the purchase of insurance) to assist it in
meeting such obligations. Any assets held in such accounts, funds, or
trusts shall be

<PAGE> 21

subject to claims of the Bank's creditors, and no person eligible for
a death benefit under this Plan shall have any right, title or
interest in any such assets. This Plan shall constitute solely an
unsecured promise by the Bank to pay death benefits to the extent
provided herein.

9.3 Nonalienation of Benefits.

(a) Except as permitted by the life insurance policy with
respect to a Participant's life insurance benefits, no
Participant, Beneficiary or other person entitled to benefits under
this Plan shall have the power to transfer, assign, anticipate,
mortgage or otherwise encumber any rights or any amounts payable under
this Plan; nor shall any such rights or amounts payable under this
Plan be subject to seizure, attachment, execution, garnishment or
other legal or equitable process, or for the payment of any debts,
judgments, alimony, or separate maintenance, or be transferable by
operation of law in the event of bankruptcy, insolvency, or otherwise
of any Participant or Beneficiary. In the event a person who is
receiving or is entitled to receive benefits under the Plan attempts
to assign, transfer or dispose of such right (except as contemplated
by the preceding sentence), or if an attempt is made to subject said
right to such process, such assignment, transfer or disposition shall
be null and void.

(b) Notwithstanding the provisions of Section 9.3(a), a
Participant shall have the right to assign his/her right to name the
Beneficiary and other incidents of ownership to a Life Insurance Trust
or to another designee with respect to such Participant's life
insurance and death benefits under the Plan, provided that such
assignment is by gift, without consideration. Such assignment shall be
made by written notice to the Committee, accompanied by such forms or
affidavits that the Committee and any applicable insurance carrier may
require. Upon any such assignment, if valid, notwithstanding anything
to the contrary hereunder, to the extent permitted by law, all rights
of the Participant to make elections or directions hereunder shall be
exercisable by the Life Insurance Trust or other designee, rather than
by the Participant, and in making such assignment the Participant
shall be deemed to have consented to any elections or directions
subsequently made by the Life Insurance Trust or other designee. To
the extent permitted by applicable law and the rules of any Carrier,
an assignee shall have the right to

<PAGE> 22

further assign such right by gift (and without consideration). The
Participant shall be responsible for the payment of any taxes (and the
reporting thereof) with respect to any assignment made in accordance
with this provision.

9.4 No Guarantee of Status. Nothing in this Plan or any action
taken hereunder shall be deemed or construed to confer upon any
Participant the right to continued employment by the Bank.

9.5 Payments to Minors and Incompetents. If a Beneficiary
entitled to receive any benefits hereunder is a minor or is deemed by
the Committee or is adjudged to be legally incapable of giving valid
receipt and discharge for such benefits, the Committee may direct
payment of benefits be made to the duly appointed guardian or legal
representative of such minor or incompetent or to such other person as
the Committee may designate. Such payment shall, to the extent made,
be deemed a complete discharge of any liability for such payment under
the Plan.

9.6 Withholding. The Bank shall have the right to deduct from
any payments made under this Plan any taxes required to be withheld
with respect to such payments.

9.7 Protective Provisions. Each Participant (and, in the case
of Survivor Joint Life Coverage, his/her spouse) shall cooperate with
the Bank by furnishing any and all information requested by the Bank
in order to facilitate the payment of benefits hereunder, taking such
physical examinations as the Bank may deem necessary and taking such
other relevant action as may be requested by the Bank. If a
Participant (or spouse) refuses to so cooperate, the Bank shall have
no further obligation to the Participant (or spouse) under the Plan.

9.8 Change in Control.

A Change in Control shall mean the occurrence of any of
the following events:

(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person
any securities acquired directly from the Company or its

<PAGE> 23

Affiliates) representing 35% or more of the combined voting
power of the Company's then outstanding securities;

(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving
as directors of the Company: individuals who, on July 24, 1997,
constitute the Board of Directors of the Company and any new
director (other than a director whose initial assumption of
office is in connection with the settlement of an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board of
Directors of the Company or nomination for election by the
Company's stockholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors on July 24, 1997 or whose
appointment, election or nomination for election was previously
so approved or recommended;

(iii) there is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the Company
with any other corporation or entity, other than (A) a merger
or consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any Parent thereof), in combination with
the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting
power of the securities of the Company, such surviving entity
or any Parent thereof outstanding immediately after such merger
or consolidation or (B) a merger or consolidation effected
solely to implement a recapitalization of the Company or the
Bank (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or

<PAGE> 24

indirectly, of securities of the Company or the Bank
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its
Affiliates) representing 35% or more of the combined voting
power of the Company's or the Bank's then outstanding
securities;

(iv) the stockholders of the Company or the Bank approve
a plan of complete liquidation or dissolution of the Company or
the Bank, respectively, or there is consummated a sale or
disposition by the Company or any of its subsidiaries of any
assets which individually or as part of a series of related
transactions constitute all or substantially all of the
Company's consolidated assets (provided that, for these
purposes, a sale of all or substantially all of the voting
securities of the Bank or a Parent of the Bank shall be deemed
to constitute a sale of substantially all of the Company's
consolidated assets), other than any such sale or disposition
to an entity at least 65% of the combined voting power of the
voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their
ownership of the voting securities of the Company immediately
prior to such sale or disposition; or

(v) the execution of a binding agreement that, if
consummated, would result in a Change in Control of a type
specified in clause (i) or (iii) of this Section 9.8 (an
"Acquisition Agreement") or of a binding agreement for the sale
or disposition of assets that, if consummated, would result in
a Change in Control of a type specified in clause (iv) of this
Section 9.8 (an "Asset Sale Agreement") or the adoption by the
Board of Directors of the Company or the Bank of a plan of
complete liquidation or dissolution of the Company or the Bank
that, if consummated, would result in a Change in Control of a
type specified in clause (iv) of this Section 9.8 (a "Plan of
Liquidation").

As used in connection with the foregoing definition of Change
in Control, "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12

<PAGE> 25

of the Exchange Act; "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act; "Exchange Act"
shall mean the Securities Exchange Act of 1934, as amended from
time to time; "Parent" shall mean any entity that becomes the
Beneficial Owner of at least 80% of the voting power of the
outstanding voting securities of the Company or of an entity
that survives any merger or consolidation of the Company or any
direct or indirect subsidiary of the Company; and "Person"
shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any
of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any
of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv)
a corporation or entity owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

9.9 Validity. In the event any provision of this Plan is held
invalid, void, or unenforceable, the same shall not affect, in any
respect whatsoever, the validity of any other provision of this Plan.

9.10 Governing Law. Except to the extent preempted by federal
law, the provisions of the Plan will be construed according to the
laws of the State of New York.

<PAGE> 26

Amendment to the
Key Executive Life Insurance/Death Benefit Plan of
The Dime Savings Bank of New York, FSB

Effective as of April 1, 1999

Section 5.4(a) of the Key Executive Life Insurance/Death Benefit
Plan of The Dime Savings Bank of New York, FSB is amended to provide
as follows:

"(a) The election to provide a life insurance benefit,
rather than a Bank-paid death benefit must be made (and not
revoked) prior to the Participant's Retirement Date (to be
effective upon the Participant's Retirement Date), or if made or
received by the Committee after the Participant's Retirement
Date shall only be effective on the January 1 following the date
the election is received by the Committee; provided that with
respect to any Participant whose Retirement Date occurred before
June 1, 1999, an election to provide a life insurance benefit
rather than a Bank-paid death benefit will be effective as of
the date it is received by the Committee if it is so received on
or prior to September 30, 1999."

<PAGE> 1
EXHIBIT 10.38

Amendment to the Dime Bancorp, Inc.
Supplemental Executive Retirement Plan

Effective June 24, 1999

The Dime Bancorp, Inc. Supplemental Executive Retirement Plan (the
"Plan") is hereby amended in the following particulars.

1. Clause (ii) of the second paragraph of Section 5 of the Plan is
amended to read as follows:

"(ii) is, except as otherwise provided by the Committee, the
Participant's other taxable cash-based compensation payable
under the Dime Bancorp, Inc. Officer Incentive Plan or other
cash-based incentive plan or program or individual arrangement
providing for cash-based incentive compensation, in each case
with respect to the period for which the determination is made,
but excluding any amounts paid (A) to the Participant as a
sign-on bonus in connection with the initial commencement of
employment of the Participant with the Company or any Parent or
Subsidiary and (B) to the Participant with respect to the grant
of rights to purchase, and the related purchase of, restricted
common stock of the Company;"

<PAGE> 1
EXHIBIT 10.42

AMENDMENT TO THE DIME BANCORP, INC.
VOLUNTARY DEFERRED COMPENSATION PLAN FOR DIRECTORS

EFFECTIVE AS OF OCTOBER 1, 1999

The Dime Bancorp, Inc. Voluntary Deferred Compensation Plan for
Directors (the "Plan") is hereby amended effective as of the date set forth
above as follows:

1. Paragraph 8(d) of the Plan is amended in its entirety to read
as follows:

"(d) Securities Law Limitations. Notwithstanding anything in
the Plan to the contrary and except as otherwise provided below, if at
any time a Participant who is an Insider (as defined below) is
prohibited by the Section 16 Rules (as defined below) from directing
that his or her Account or Benefit Transfer Account be (i) deemed
invested in an investment fund that invests in common stock of the
Company (ii) deemed transferred to a deemed investment in common stock
of the Company or (iii) to the extent of any deemed investment in
common stock of the Company, deemed redeemed for whatever reason, any
such direction shall be disregarded and not given effect. For purposes
of this Paragraph 8, an Insider shall mean, with respect to the Company
or any of its subsidiaries, (i) any Participant who is subject to the
Section 16 Rules, determined in accordance with Rule 16a-2 thereof, and
(ii) solely with respect to certain trading restrictions with respect
to common stock of the Company imposed from time to time by the Company
or any of its subsidiaries, any Participant who is subject to such
trading restrictions. For purposes of this Paragraph 8, the Section 16
Rules mean those rules (as from time to time amended) promulgated by
the Securities and Exchange Commission ("SEC") under Section 16 of the
Act. For purposes of the Plan, an action shall be deemed to be
prohibited by the Section 16 Rules, if it could, if permitted or
occurring, result in a transaction not being exempt from the provisions
of Section 16(b) of the Act. An action in violation of certain trading
restrictions with respect to common stock of the Company imposed from
time to time by the Company or any of its subsidiaries shall be deemed
to be prohibited by the Section 16 Rules solely for purposes of the
Plan. Notwithstanding the foregoing in this Paragraph 8(d), and in
accordance with such rules, procedures and forms as may be prescribed
by the Committee, a direction by a Participant shall not be disregarded
to the extent that it provides for the proceeds of a redemption of a
deemed initial investment of the Participant's Benefit Transfer Account
in the phantom stock of the Company as described in Paragraph 7(b) (and
subject to such special valuation rules as may apply in this Paragraph
8) to be deemed to be reinvested in the phantom stock of the Company as
described in Paragraph 8(b)(ii)."

<PAGE> 1
Exhibit 10.45

Amendment to the
Dime Bancorp, Inc.
Senior Officer Incentive Plan

Effective as of January 1, 2000, the Dime Bancorp, Inc. Senior
Officer Incentive Plan (the "Plan") is amended in the following particulars:

Section 2(e) of the Plan is hereby amended by adding at the
end of the last paragraph thereof the following new sentence to read as follows:

"Notwithstanding anything in this Plan to the contrary, none
of the execution of the Agreement and Plan of Merger, dated
September 15, 1999 and as amended and restated on December 27,
1999, between Hudson United Bancorp and the Company (the
'Merger Agreement'), the consummation of the merger of Hudson
United Bancorp with and into the Company, or the consummation
of the other actions or transactions contemplated by the
Merger Agreement, shall constitute a Change in Control under
the Plan."
<PAGE> 2
Amendment to the
Dime Bancorp, Inc.
Middle Management Incentive Plan

Effective as of January 1, 2000, the Dime Bancorp, Inc. Middle
Management Incentive Plan (the "Plan") is amended in the following particulars:

Section 8(b) of the Plan is hereby amended by adding at the
end of the last paragraph thereof the following new sentence to read as follows:

"Notwithstanding anything in this Plan to the contrary, none
of the execution of the Agreement and Plan of Merger, dated
September 15, 1999 and as amended and restated on December 27,
1999, between Hudson United Bancorp and the Company (the
'Merger Agreement'), the consummation of the merger of Hudson
United Bancorp with and into the Company, or the consummation
of the other actions or transactions contemplated by the
Merger Agreement, shall constitute a Change in Control under
the Plan."
<PAGE> 3
Amendment to the
Dime Bancorp, Inc.
Senior Management Incentive Plan

Effective as of January 1, 2000, the Dime Bancorp, Inc. Senior
Management Incentive Plan (the "Plan") is amended in the following particulars:

Section 8(b) of the Plan is hereby amended by adding at the
end of the last paragraph thereof the following new sentence to read as follows:

<PAGE> 1

EXHIBIT 12

DIME BANCORP, INC. AND SUBSIDIARIES

RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
EXCLUDING INTEREST ON DEPOSITS FROM FIXED CHARGES
Earnings:
Income before income taxes and extraordinary items... $ 386,452 $ 354,622 $ 198,208
Fixed charges........................................ 374,186 360,903 348,297
---------- ---------- ----------
Total earnings as adjusted................... $ 760,638 $ 715,525 $ 546,505
========== ========== ==========
Fixed charges:
Interest expense on borrowed funds................... $ 358,607 $ 347,825 $ 340,394
Portion of rent expense deemed representative of the
interest factor(1)................................ 15,579 13,078 7,903
---------- ---------- ----------
Total fixed charges.......................... $ 374,186 $ 360,903 $ 348,297
========== ========== ==========
Ratio of earnings to fixed charges excluding interest
on deposits.......................................... 2.03x 1.98x 1.57x

INCLUDING INTEREST ON DEPOSITS IN FIXED CHARGES:
Earnings:
Income before income taxes and extraordinary items... $ 386,452 $ 354,622 $ 198,208
Fixed charges........................................ 856,192 906,730 907,656
---------- ---------- ----------
Total earnings as adjusted................... $1,242,644 $1,261,352 $1,105,864
========== ========== ==========
Fixed charges:
Interest expense on borrowed funds................... $ 358,607 $ 347,825 $ 340,394
Interest expense on deposits......................... 482,006 545,827 559,359
Portion of rent expense deemed representative of the
interest factor(1)................................ 15,579 13,078 7,903
---------- ---------- ----------
Total fixed charges.......................... $ 856,192 $ 906,730 $ 907,656
========== ========== ==========
Ratio of earnings to fixed charges including interest
on deposits.......................................... 1.45x 1.39x 1.22x
</TABLE>

- ---------------
(1) Represents one-third of total rent expense.

<PAGE> 1
Exhibit 21
Subsidiaries (as of 12/31/99)

Subsidiaries owned by Dime Bancorp, Inc.

Dime Capital Trust I
Dime Capital Trust II
The Dime Savings Bank of New York, FSB
Branchview, Inc.
Lakeview Mortgage Depot, Inc.
Namis Insurance Agency, Inc.

Subsidiaries owned by The Dime Savings Bank of New York, FSB

Accord Agency, Inc.
Accord Realty Management Corporation
Acorn Properties Inc.
Anchor Properties of New Jersey, Inc.
Anchor Property Corp.
Anchor Systems Corp.
ASB Agency, Inc.
69-30 Austin Holding Corp.
Beech Real Estate Management Inc.
BFED I Corp.
555 Biltmore, Inc.
200 Boston Post Inc.
Capitol View Inc.
Case Optics, Inc.
Cedar Real Estate Management Corp.
426 Central Inc.
Colonial Bristol Inc.
DFI Property I L.L.C.
The Dime Agency, Inc.
Dime Capital Partners, Inc.
Dime Commercial Corp.
Dime Consulting Group, Inc.
Dime Cre, Inc.
Dime Florida Consolidation Corp.
Dime Mortgage of New Jersey, Inc.
Dime NJ Agency, Inc.
Dime Securities, Inc.
DNJ Agency, Inc.
The E-F Battery Accord Corporation
Fairfield Financial Holdings Inc.
Fameslinc, Inc.
Fayette Properties of New Jersey, Inc.
F.C. Ltd.
Garden Management Co., Inc.
Garrett Park Estates, Inc.
Granny Road Land Corp.
Harmony Agency, Inc.
Heritage Community Service Corp.
Imco Capital Co., Inc.
Inservco, Inc.
Lakeview Land Corp.
Lakeview Investment Services, Inc.
Lawrence Avenue Corp.
Lincoln Barry Gardens Acquisition Corp.
Lincoln Realty Capital, Inc.
Lincoln RRE Corporation
Lincoln Tudor Court Acquisition Corp.
Lincoln Ventures Group Ltd.
L.V.S. Corporation
Maple Real Property Management Inc.
Medford Associates, Inc.
Mid Country Inc.
NAMCO Asset Management Inc.
NAMCO Securities Corp.
NAMIS Insurance Agency of Massachusetts, Inc.
NAMIS Insurance Services of Kentucky, Inc.
NAMIS Insurance Services of Nevada, Inc.
NAMIS Insurance Services of Texas, Inc.
78 New Linc Corporation
Nickel Purchasing Company, Inc.
North American Insurance Agency of Ohio, Inc.
North American Mortgage Company
North American Mortgage Insurance Services
North Properties, Inc.
Northeast Appraisals, Inc.
Northshore Consolidation Corp.
847218 Ontario Limited
847219 Ontario Limited
847220 Ontario Limited
847221 Ontario Limited
620-622 Pelhamdale Avenue Owners Corporation
Pembroke and Livingston, Inc.
Plainview Inn, Inc.
Reservoir Avenue Management, Inc.
65 Roosevelt Inc.
Sky Resort, Inc.
Somerset Consolidation Corporation
Sonoma Conveyancing Corporation
Standard of Georgia Insurance Agency, Inc.
Uniondale Holdings Inc.
Vanderventer Corp.
Vintage Reinsurance Company
Waccaboro Corp.
Wappingers Falls Development Corp.
Windy Ridge Corp.
Yellowstone Venture, Inc.

<PAGE> 1
Exhibit 23

Independent Auditors' Consent

The Board of Directors
Dime Bancorp, Inc.:

We consent to incorporation by reference in the Registration Statements (Nos.
33-88552, 33-88554, 33-88556, 33-88558, 33-88560, 33-88564, 33-88566, 333-04477,
333-26609, 333-26777, 333-35565, 333-48127, 333-51941, 333-64509, 333-75103,
333-77317, 333-88071 and 333-89901) on Form S-8 of Dime Bancorp, Inc. of our
report dated January 20, 2000 relating to the consolidated statements of
financial condition of Dime Bancorp, Inc. and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of income, changes in
stockholders' equity, cash flows and comprehensive income for each of the years
in the three-year period ended December 31, 1999, which report appears in the
December 31, 1999 Annual Report on Form 10-K of Dime Bancorp, Inc.

/s/ KPMG LLP

New York, New York
March 30, 2000

<PAGE> 1
Exhibit 24

POWER OF ATTORNEY

The undersigned hereby appoints Lawrence J. Toal and James E.
Kelly or either of the foregoing persons acting alone, each with the full power
of substitution, as his true and lawful attorney-in-fact and agent, for him and
in his name and place, to sign the name of the undersigned in the capacity or
capacities indicated below to the Annual Report of Dime Bancorp, Inc. on Form
10-K for the year ended December 31, 1999 and any and all amendments to such
Form 10-K and to file the same, with all exhibits thereto and other documents in
connection therewith, with all necessary or appropriate governmental or other
entities, including, but not limited to, the Securities and Exchange Commission
and the New York Stock Exchange, granting to such attorney-in-fact and agent
full power and authority to perform each act necessary to be done as fully to
all intents and purposes as he might do in person, hereby ratifying and
confirming all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, Chief
Executive Officer, President, Chief
/s/ Lawrence J. Toal Operating Officer and a Director
- ----------------------------------------------
Lawrence J. Toal (Principal Executive Officer) March 28, 2000

/s/ Derrick D. Cephas A Director March 28, 2000
- ----------------------------------------------
Derrick D. Cephas

/s/ Frederick C. Chen A Director March 28, 2000
- ----------------------------------------------
Frederick C. Chen

/s/ J. Barclay Collins II A Director March 28, 2000
- ----------------------------------------------
J. Barclay Collins II

/s/ Richard W. Dalrymple A Director March 28, 2000
- ----------------------------------------------
Richard W. Dalrymple

/s/ James F. Fulton A Director March 28, 2000
- ----------------------------------------------
James F. Fulton

/s/ Fred B. Koons A Director March 28, 2000
- ----------------------------------------------
Fred B. Koons

/s/ Virginia M. Kopp A Director March 28, 2000
- ----------------------------------------------
Virginia M. Kopp

/s/ James M. Large, Jr. A Director March 28, 2000
- ----------------------------------------------
James M. Large, Jr.
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John Morning A Director March 28, 2000
- ----------------------------------------------
John Morning

/s/ Margaret Osmer-MsQuade A Director March 28, 2000
- ----------------------------------------------
Margaret Osmer-McQuade

/s/ Sally Hernandez-Pinero A Director March 28, 2000
- ----------------------------------------------
Sally Hernandez-Pinero

/s/ Dr. Paul A. Qualben A Director March 28, 2000
- ----------------------------------------------
Dr. Paul A. Qualben

/s/ Eugene G. Schulz, Jr. A Director March 28, 2000
- ----------------------------------------------
Eugene G. Schulz, Jr.

/s/ Howard Smith A Director March 28, 2000
- ----------------------------------------------
Howard Smith

/s/ Dr. Norman R. Smith A Director March 28, 2000
- ----------------------------------------------
Dr. Norman R. Smith

/s/ Ira T. Wender A Director March 28, 2000
- ----------------------------------------------
Ira T. Wender

Chief Financial Officer March ___, 2000
(Principal Financial Officer)
- ----------------------------------------------
Anthony R. Burriesci
Controller March ___, 2000
(Principal Accounting Officer)
- ----------------------------------------------
John F. Kennedy

</TABLE>

<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) DIME
BANCORP, INC.'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL
INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 414,289
<INT-BEARING-DEPOSITS> 11,255
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 177,021
<INVESTMENTS-HELD-FOR-SALE> 3,849,676
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 16,940,721
<ALLOWANCE> 140,296
<TOTAL-ASSETS> 23,921,325
<DEPOSITS> 14,261,449
<SHORT-TERM> 6,427,905
<LIABILITIES-OTHER> 397,779
<LONG-TERM> 1,318,087
0
0
<COMMON> 1,203
<OTHER-SE> 1,514,902
<TOTAL-LIABILITIES-AND-EQUITY> 23,921,325
<INTEREST-LOAN> 1,144,906
<INTEREST-INVEST> 272,681
<INTEREST-OTHER> 1,511
<INTEREST-TOTAL> 1,419,098
<INTEREST-DEPOSIT> 482,006
<INTEREST-EXPENSE> 840,613
<INTEREST-INCOME-NET> 578,485
<LOAN-LOSSES> 29,500
<SECURITIES-GAINS> 2,062
<EXPENSE-OTHER> 730,776
<INCOME-PRETAX> 386,452
<INCOME-PRE-EXTRAORDINARY> 243,940
<EXTRAORDINARY> (4,127)
<CHANGES> 0
<NET-INCOME> 239,813
<EPS-BASIC> 2.15
<EPS-DILUTED> 2.13
<YIELD-ACTUAL> 2.91
<LOANS-NON> 69,362
<LOANS-PAST> 0
<LOANS-TROUBLED> 11,320
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 105,081
<CHARGE-OFFS> 21,984
<RECOVERIES> 8,422
<ALLOWANCE-CLOSE> 140,296
<ALLOWANCE-DOMESTIC> 140,296
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>