DEEPENING OUR RELATIONSHIPS REPORT FROM THE CFO Dear Fellow Shareholder: Once again, during the six months ended December 31, 2002, DCOM achieved record financial results, maintained superior credit quality and continued to have a sound financial structure.  Our results for the six months ended December 31, 2002 included several notable items: First,  as a result of the historic low interest rate environment, we experienced record levels of loan  originations and loan prepayments. During the six months ended December 31, 2002, loan  originations totaled $426.5 million, up 61% from the six months ended December 31, 2001. While origination levels grew during the period, we also experienced increased loan amortization and prepayment levels during the period. Loan amortization totaled $299.4 million during the six months ended December 31, 2002, up 79% from the six months ended December 31, 2001. During the six months ended December 31, 2002, we received $4.2 million in prepayment  fee income, up from $1.4 million during the six months ended December 31, 2001. Second, we continued our strategy of emphasizing growth in deposit funding. Deposits increased by 17% on an annualized basis during the six months ended December 31, 2002, while borrowed funds decreased by over 10% on an annualized basis during the period. As we have mentioned previously, our successful retail banking strategy has resulted in less dependence upon borrowings for funding our asset growth. In addition, we also continued our strategy of extending the maturities on our borrowings. During the six months ended December 31, 2002, we prepaid or restructured $152.5 million in Federal Home Loan Bank of New York advances that had an average interest cost of 6.6% and an average term to next repricing of less than six months and replaced them with $132.5 million of new  borrowings with an average cost of 3.3% and an average term to next repricing of 5.2 years. Finally, the Fannie Mae seller/servicer pact which we entered into during December 2002 provides additional flexibility in our overall asset/liability management strategy. Finally, DCOM continues to rank as one of the most efficient companies nationally among its peer group. During the six months ended December 31, 2002, DCOM’s efficiency ratio approximated 36%. Our emphasis on origination of multi-family residential loans that 5 2002 Financial Highlights  •Earnings growth of 43% and EPS growth of 42%. •Growth in core (non-certificate)  deposits of 25%. •Loan originations of $717 million. •Growth in tangible equity to approxi- mately 7.1% at December 31, 2002 from 6.7% at December 31, 2001. •A decline in the loan-to-deposit ratio from 129% to 113%. •50% stock dividend paid to our  shareholders. •26% increase in cash dividend  payments over 2001. •23rd consecutive quarterly cash  dividend paid in January 2003. Other 2002 Highlights As a result of both our ongoing shift toward deposit funding and our restructuring of borrowings, our net interest margin, excluding borrowing prepayment costs, increased from January 2002 through December 2002. During the six months ended December 31, 2002, the net interest  margin, excluding $3.6 million of non-recurring borrowing prepayment costs recorded as interest expense, expanded to 3.68 percent, an increase of 56 basis points from 3.12 percent during the six months ended December 31, 2001. OUR  Kenneth J. Mahon discusses the sound financial fundamentals and future outlook of the Company.