Dime Bancorp earned $54.8 million in the first quarter, down 4.2% from a year earlier. Earnings per share were flat, at 49 cents.

Operating earnings grew 17.8%. Net income was dragged down by a $4.13 million premium the thrift had to pay to call $100 million of senior bonds in January, a spokesman said.

The thrift originated $7.1 billion of residential mortgages in the first quarter, down 26% from the fourth quarter.

Kevin T. Timmons, an analyst at First Albany Corp., said the thrift was "moving away from its reliance on residential mortgages." Its portfolio of home loans declined 4% from the end of 1998, to $8.5 billion, but its holdings of commercial real estate, consumer, and business loans increased 6%, to $4.1 billion.

Dime's stock closed at $24 a share, off 1.8%.

The company appears to be capitalizing its mortgage servicing rights at a very high rate, analysts said. At the end of the first quarter, it serviced $32.5 billion of residential loans for other investors, of which it capitalized $891 million, or 2.74%.

"It's clearly large relative to (Dime's) portfolio," Mr. Timmons said. By comparison, at the end of last year, Washington Mutual Inc. serviced $52 billion for others but capitalized only $461 million, or 0.89%.

Though many believe that interest rates are more likely to go up than down, fears that if rates were to fall Dime would have to write down its servicing assets may be one reason why the stock fell Thursday, Mr. Timmons said.

The company also stressed its Internet banking efforts in its earnings release, and its stock may have felt the "backlash" against the recent run- up in Internet-related stocks, he suggested.

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