<PAGE>
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

(Mark One)

|X|     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996


                                       OR

|_|     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 1-9138


                       FIRST CENTRAL FINANCIAL CORPORATION

             (Exact name of registrant as specified in its charter)


            NEW YORK                                      11-2648222

State or other jurisdiction of           (I.R.S. Employer Identification Number)
incorporation or organization)



                   266 MERRICK ROAD, LYNBROOK, NEW YORK 11563

                    (Address of principal executive offices)
                                   (Zip Code)



                                 (516) 593-7070

              (Registrant's telephone number, including area code)


        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  the  number  of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

                                          Shares Outstanding at October 31, 1996
            Title of Class                  (excluding 602,404 treasury shares)
--------------------------------------    --------------------------------------
Common Stock, Par Value $.10 Per Share                    5,986,608





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                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                    PAGE NO.


<S>                                                                                     <C>
ITEM I       FINANCIAL STATEMENTS..............................................         1

              Consolidated Balance Sheets......................................         1

              Consolidated Statements of Income................................         3

              Consolidated Statements of Changes in Shareholders' Equity.......         4

              Consolidated Statements of Cash Flows............................         5

              Notes to Financial Statements....................................         6

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS..............................         7


                                 PART II - OTHER INFORMATION

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K..................................        11

             SIGNATURES........................................................        16

</TABLE>



<PAGE>
<PAGE>



                                     PART I

                              FINANCIAL INFORMATION


ITEM 1.        FINANCIAL STATEMENTS

FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,       DECEMBER 31,
                                                                  1996                1995
                                                            -----------------   -----------------

                                                               (UNAUDITED)              *


<S>                                                          <C>                <C>             
ASSETS
Investments
  Securities available-for-sale, at market value:
      Fixed maturities (amortized cost 1996 - $33,260,242;
      1995 - $35,181,479)                                    $   32,908,914     $     35,640,019
      Equity securities, (cost: 1996 - $22,198,562;
      1995 - $28,011,278)                                        23,118,222           28,704,546
  Securities held-to-maturity at amortized cost (market:
      1996 - $44,547,503; 1995 - $33,693,837)                    45,402,269           33,415,757
  Short-term investments, at cost, which approximates
    market                                                        3,715,958            2,918,369
                                                            -----------------  ------------------

      Total Investments                                          105,145,363         100,678,691

  Cash                                                             4,367,861           1,499,829
  Accrued investment income                                        1,278,004             835,720
  Agents' balances, less allowance for doubtful accounts
   (1996 - $1,672,756; 1995 - $1,554,074)                         17,851,688          17,871,850
  Reinsurance receivables on unpaid losses                        20,293,027          19,541,811
  Reinsurance receivables on paid losses                             620,895             817,681
  Prepaid reinsurance premiums                                     5,724,197           8,206,455
  Federal income taxes recoverable                                   481,225           2,467,225
  Other receivables                                                  699,565             333,234
  Deferred policy acquisition costs                                7,004,838           6,351,976
  Deferred debenture costs                                           296,444             438,603
  Deferred income taxes                                            5,417,000           4,465,000
  Property, plant and equipment less accumulated depreciation
   (1996 - $1,274,157; 1995 - $1,639,866)                          4,435,323           4,523,949
  Other Assets                                                       421,198             428,325
                                                            -----------------  ------------------

                                                             $   174,036,628    $    168,460,349
                                                            =================  ==================
</TABLE>


* The  balance  sheet  at  December  31,  1995  has been  derived  from  audited
consolidated financial statements at that date.

The accompanying notes are an integral part of these statements.

                                        1


<PAGE>
<PAGE>



FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,           DECEMBER 31,
                                                         1996                   1995
                                                  ------------------       -----------------
                                                      (UNAUDITED)                  *
<S>                                                <C>                      <C>           
LIABILITIES AND STOCKHOLDERS' EQUITY
Policy Liabilities
 Unpaid losses                                     $    87,458,013          $   78,887,340
 Unpaid loss adjustment expenses                         8,417,663               7,749,141
 Unearned premiums                                      34,427,641              36,295,661
                                                  ------------------       -----------------
   Total Policy Liabilities                             130,303,317            122,932,142
Funds held for reinsurance treaty                         2,926,383              3,704,947
Reinsurance payable                                       1,094,164              1,393,663
Convertible subordinated debentures                       4,900,000              6,330,000
Other liabilities                                         1,103,653                761,988
                                                  ------------------       -----------------
   Total Liabilities                                   140,327,517             135,122,740
                                                  ------------------       -----------------
Commitments and Contingencies
Shareholders' Equity
 Common Stock, par value $.10 per share;
  authorized - 20,000,000 shares; issued (1996 -
  6,589,012 shares; 1995 - 6,589,012 shares)                658,902                658,902
 Additional paid-in capital                              13,209,395             13,209,395
 Net unrealized appreciation on securities available
  for sale, net of deferred taxes of (1996 -
  $193,000;1995 - $392,000)                                 375,328                759,806
 Retained earnings                                       23,596,628             22,826,898
                                                  ------------------       -----------------
                                                         37,840,253             37,455,001
Less treasury stock, at cost (1996 - 602,404
 shares; 1995 - 600,404 shares)                         (4,131,142)             (4,117,392)
                                                  ------------------       -----------------
   Total Shareholders' Equity                           33,709,111              33,337,609
                                                  ------------------       -----------------
                                                   $   174,036,628          $  168,460,349
                                                  ==================       =================
</TABLE>


* The  balance  sheet  at  December  31,  1995  has been  derived  from  audited
consolidated financial statements at that date.

The accompanying notes are an integral part of these statements.

                                        2


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<PAGE>



FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                         NINE MONTHS ENDED SEPTEMBER 30,   THREE MONTHS ENDED SEPTEMBER 30,
                                             1996             1995              1996             1995
                                       ----------------  ---------------  ----------------  ---------------
                                          (UNAUDITED)      (UNAUDITED)       (UNAUDITED)      (UNAUDITED)
<S>                                     <C>              <C>              <C>                <C>
Revenues
Premiums Written - Direct               $  46,638,875     $ 55,166,749     $  14,664,729     $ 16,783,755
Reinsurance ceded                          (7,447,887)     (17,322,170)         (904,827)      (4,332,798)
                                       ----------------  ---------------  ----------------  ---------------
     Net Premiums Written                   39,190,988       37,844,579        13,759,902       12,450,957
(Increase) Decrease in unearned premiums     (614,238)        2,168,647         (788,863)        1,400,471
                                       ----------------  ---------------  ----------------  ---------------
     Net Premiums Earned                    38,576,750       40,013,226        12,971,039       13,851,428
Net investment income                        3,883,099        3,734,116         1,344,836        1,176,534
Realized gain (loss) on investments            951,896          974,122          (84,135)          429,262
Claims adjusting revenues                      763,683          469,880           282,590          165,950
Rental and Miscellaneous income                182,549          153,568            63,129        (133,370)
                                       ----------------  ---------------  ----------------  ---------------
          Total Revenues                    44,357,977       45,344,912        14,577,459       15,489,804
                                       ----------------  ---------------  ----------------  ---------------
Expenses
Losses                                      21,786,229       19,248,378         7,664,501        6,872,285
Loss adjustment expense                      6,616,211        5,889,709         1,888,736        2,155,516
Policy acquisition costs                     9,139,831        9,908,330         3,229,764        3,461,747
Interest expense                               403,016          451,698           120,609          147,248
Doubtful accounts                              498,459          618,122            33,762              693
Other operating expenses                     4,146,219        2,828,180         1,243,173          735,960
                                       ----------------  ---------------  ----------------  ---------------
          Total Expenses                    42,589,965       38,944,417       14,180,545       13,373,449
                                       ----------------  ---------------  ----------------  ---------------
Income Before Income Taxes                   1,768,012        6,400,495          396,914        2,116,355
Federal and State Income Taxes                 455,000        1,597,000          100,600          597,500
                                       ----------------  ---------------  ----------------  ---------------
          Net Income                    $    1,313,012    $  4,803,495     $     296,314     $  1,518,855
                                       ================  ===============  ================  ===============
Per Share Data:
  Net Income:
   Primary                                   $0.22            $0.80             $0.05           $0.25
                                             =====            =====             =====           =====
   Fully Diluted                             $0.22            $0.74             $0.05           $0.24
                                             =====            =====             =====           =====
  Cash Dividends Paid                        $0.09            $0.09             $0.03           $0.03
                                             =====            =====             =====           =====
</TABLE>


The accompanying notes are an integral part of these statements.

                                        3


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<PAGE>



              FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      NINE MONTHS ENDED SEPTEMBER 30, 1996
                                   (UNAUDITED)




<TABLE>
<CAPTION>
                                                                   NET UNREALIZED
                                                                   DEPRECIATION ON
                                                      ADDITIONAL     SECURITIES
                                   COMMON STOCK         PAID-IN       AVAILABLE     RETAINED       TREASURY STOCK
                                 SHARES      AMOUNT      CAPITAL       FOR SALE      EARNINGS     SHARES      AMOUNT       TOTAL
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>       <C>         <C>                <C>        <C>          <C>       <C>           <C>        
Balances at December 31,
   1995*                       6,589,012 $  658,902  $  13,209,395      $ 759,806  $22,826,898  600,404   $(4,117,392)  $33,337,609
Add (deduct):
 Net income                                                                          1,313,012                            1,313,012
 Cash dividends declared
   (0.12 per share)                                                                   (543,282)                            (543,282)
 Purchase shares of treasury
   stock                                                                                         2,000       (13,750)       (13,750)
 Decrease in unrealized
   appreciation                                                          (384,478)                                         (384,478)
-----------------------------------------------------------------------------------------------------------------------------------
Balance September 30, 1996     6,589,012 $  658,902  $  13,209,395      $ 375,328   23,596,628  602,404   $(4,131,142)  $33,709,111
===================================================================================================================================
</TABLE>


* The  balance  sheet  at  December  31,  1995  has been  derived  from  audited
consolidated financial statements at that date.

The accompanying notes are an integral part of these statements.

                                        4


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<PAGE>



FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                                      1996                    1995
                                                                -----------------       -----------------
                                                                   (UNAUDITED)             (UNAUDITED)
<S>                                                              <C>                     <C>           
OPERATING ACTIVITIES
Net Income                                                       $    1,313,012          $    4,803,495
Adjustments to reconcile net income to net cash provided
 by operating activities:
  Amortization of deferred policy acquisition costs                   6,351,976               7,339,084
  Provision for depreciation and amortization                           309,032                 451,020
  Provision for losses on uncollectible agents' balances                498,459                 618,123
  Net realized investment gains                                        (951,896)               (974,122)
  Provision for deferred federal income taxes                          (753,000)               (650,000)
  Changes in operating assets and liabilities
    Increase in accrued investment income                              (442,284)               (115,638)
    Change in agents' balances and unearned premiums                   (642,623)             (3,852,049)
    Change in unpaid losses, unpaid loss adjustment
     expenses, and reinsurance recoverables                           8,684,765               6,618,966
    Deferred policy acquisition costs                                (7,004,838)             (6,976,014)
    Other items, net                                                  1,682,564               4,027,057
                                                                -----------------       -----------------
  NET CASH PROVIDED BY OPERATING ACTIVITIES                           9,045,167              11,289,922
                                                                -----------------       -----------------
INVESTING ACTIVITIES
Purchases of fixed maturities                                       (51,897,834)            (38,823,055)
Sales and maturities of fixed maturities                              41,267,938              22,708,657
Purchases of equity securities                                       (7,433,633)            (13,373,837)
Sales of equity securities                                            14,731,248              24,442,226
Net (purchases) sales of short-term investments                        (797,589)                 892,927
Purchases of property, plant and equipment                              (60,238)             (3,685,963)
                                                                -----------------       -----------------
  NET CASH USED IN INVESTING ACTIVITIES                              (4,190,108)             (7,839,045)
                                                                -----------------       -----------------
FINANCING ACTIVITIES
Principal payments on convertible subordinated debentures            (1,430,000)               (250,000)
Proceeds from issuance of shares of common stock                        -                         71,094
Principal payments on capital lease obligations                         -                       (84,744)
Cash dividend paid                                                     (543,279)               (542,708)
Purchases of shares of common stock for the treasury                    (13,750)               (163,875)
                                                                -----------------       -----------------
 NET CASH USED IN FINANCING ACTIVITIES                               (1,987,029)               (970,233)
                                                                -----------------       -----------------
INCREASE IN CASH                                                      2,868,030               2,480,644
CASH AT BEGINNING OF YEAR                                             1,499,829                 409,612
                                                                -----------------       -----------------
CASH AT END OF THIRD QUARTER                                     $    4,367,861          $    2,890,256
                                                                =================       =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
    Cash payments for:
     Interest                                                    $      566,000          $      609,000
                                                                =================       =================
     Income Taxes:
       Paid                                                      $       935,000         $    2,237,000
       Refunded                                                  $     1,700,000                -
                                                                =================       =================
</TABLE>

The accompanying notes are an integral part of these statements.

                                        5


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<PAGE>



FIRST CENTRAL FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1996


1. BASIS OF PRESENTATION

        The financial  information included herein is unaudited;  however,  such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are,  in the  opinion of  management,  necessary  for a fair
presentation of results for the interim  periods.  The financial  statements for
the periods reported should be read in conjunction with the financial statements
and related notes  contained in First  Central's  Annual Report on Form 10-K for
the year ended December 31, 1995.

2. PER SHARE DATA

        Income per common  share is based upon the  weighted  average  number of
shares  outstanding for the periods  reported.  Such weighted  average number of
shares outstanding were as follows:

        For the nine-month periods ended September 30,


<TABLE>
<CAPTION>
                                 Basic            Primary          Fully Diluted
               <S>             <C>               <C>                 <C>      
               1996.........   5,987,685         5,995,491           6,641,018
               1995.........   5,990,098         6,045,006           6,894,821
</TABLE>


3. PROPERTY, PLANT AND EQUIPMENT

        Property, plant and equipment consists of the following:


<TABLE>
<S>                                     <C>          
         Land                           $   1,000,000
         Building                           3,039,313
         Equipment                          1,670,167
                                       ---------------
         Sub-total                          5,709,480
         Less accumulated depreciation      1,274,157
                                       ---------------
         Total                          $   4,435,323
                                       ===============
</TABLE>


                                        6


<PAGE>
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ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS

GENERAL INFORMATION

        First Central Financial  Corporation  ("First Central") was incorporated
on May 18,  1983  under  the laws of the  State of New  York.  It is the  parent
corporation of First Central Insurance  Company ("First Central  Insurance") and
Mercury Adjustment Bureau,  Inc.  ("Mercury").  First Central Insurance is a New
York licensed  property and casualty  insurance  company which  underwrites  the
following  types of  insurance  primarily  in the State of New York:  Commercial
Multiple Peril, Workers' Compensation,  General Liability,  Automobile Liability
and Automobile Physical Damage,  Products Liability,  Fire, Allied Lines, Boiler
and Machinery,  Glass,  Burglary and Theft,  Umbrella and Inland  Marine.  First
Central Insurance is licensed to underwrite insurance in the states of New York,
Pennsylvania and Connecticut. First Central Insurance is rated B++ by A.M. Best.
Mercury,  a claims adjustment and investigation  company,  was acquired by First
Central in September 1988.

NET INCOME - EARNINGS

        First Central  reported net income for the three and nine-month  periods
ended  September  30, 1996 of $296,314 or $0.05 per share  primary and $0.05 per
share fully diluted,  and  $1,313,012,  or $0.22 per share primary and $0.22 per
share fully diluted,  respectively.  The decrease in net income of 80.5% for the
three month period ended  September 30, 1996 in comparison to the  corresponding
period  ended  September  30,  1995,  is due  primarily  to a decrease in earned
premiums and realized gains and increases in losses incurred and other operating
expenses offset in part by increases in claims adjusting revenue, net investment
income, rental income and decreased policy acquisition costs and loss adjustment
expenses incurred. The decrease in net income of 72.7% for the nine month period
ended  September 30, 1996 when  compared to the same period ended  September 30,
1995 was  primarily due to decreases in earned  premiums,  and increases in loss
and loss  adjustment  expenses and other  operating  expenses  offset in part by
increases in claims adjusting  revenue,  net investment income and a decrease in
policy acquisition costs.


PREMIUMS WRITTEN AND EARNED

        Direct written  premiums of  $14,664,729,  and $46,638,875 for the three
and nine-month periods ended September 30, 1996,  respectively,  decreased 12.6%
and 15.5%, when compared to the  corresponding  periods of 1995. The decrease in
premium writing was a result of intense competition in the property and casualty
industry and by First Central Insurance's  institution of a lead paint exclusion
as of October 1995 for new business and January 1996 for renewal  business.  The
decrease was also a result of First  Central  Insurance not renewing two general
liability  policies  accounting  annually  for  approximately  $4.0  million  in
premiums. Under new underwriting guidelines,  as of September 1996 First Central
Insurance removed the lead paint exclusion.

        In January 1996, an endorsement to First Central Insurance's reinsurance
treaty increased First Central  Insurance's  retention per loss from $200,000 to
$250,000 and decreased its ceded premium rate on property and casualty writings.
An April 1995  endorsement to the reinsurance  treaty changed the calculation of
reinsurance  premium from a  percentage  of earned  premiums to a percentage  of
written  premiums  (although  reinsurance  premiums  continue  to be  paid  when
earned).  These changes are the primary  reasons that ceded  premiums  decreased
$3,427,971  (79.1%) and $9,874,283  (57.0%) for the three and nine month periods
ended September 30, 1996, respectively, and net written premiums

                                        7


<PAGE>
<PAGE>



increased $1,308,945 (10.5%) and $1,346,409 (3.6%), respectively, over the same
periods when compared to the corresponding periods in 1995.

        Net premiums earned decreased $880,389 (6.4%) and $1,436,476 (3.6%), for
the three and nine-month  periods ended September 30, 1996,  respectively,  when
compared to the same periods in 1995.  The decrease for the three and nine-month
periods is attributable to the decrease in direct written premiums.

NET INVESTMENT INCOME; REALIZED GAINS

        First  Central's net investment  income of $1,344,836 and $3,883,099 for
the three  and  nine-month  periods  ended  September  30,  1996,  respectively,
represent an increase of 14.3% and 4.0% over the net investment  income from the
corresponding  periods of 1995. Changes in First Central Insurance's  investment
portfolio from holdings of 61.3% in fixed maturities, 30.5% in equity securities
and 8.2% in  short-term  investments  as of September 30, 1995 to 74.5% in fixed
maturities,  22.0% in equity securities and 3.5% in short-term investments as of
September 30, 1996 produced increased interest income which offset a decrease in
dividend  income for the three and nine-month  periods ended September 30, 1996.
First Central  reported a net realized loss on investments  for the  three-month
period ended September 30, 1996 of $84,135 which includes a $205,480  write-down
of equity securities  (described below) and a net realized gain of $121,345 from
sales of securities.  First  Central's net realized gain on investments  for the
nine-month period ended September 30, 1996 declined $22,226 (2.3%) over the same
period  ended  September  30,  1995.  The  decrease  in net  realized  gains  on
investments  resulted  primarily from write-downs on two corporate notes and two
common stock  securities  which have  experienced a decline in market value that
the  Company  has  determined  to be other  than  temporary  as  stated in Staff
Accounting Bulletin No. 75.

        At September 30, 1996 First Central held 31.3% of its invested assets in
fixed maturities available-for-sale, 43.2% in fixed maturities held-to-maturity,
22.0% in equity securities  (common and preferred stocks) available for sale and
3.5% in short-term  investments  (principally  money  markets).  At December 31,
1995,  First  Central  held  35.4% of its  invested  assets in fixed  maturities
available-for-sale,  33.2% in fixed maturities held-to-maturity, 28.5% in equity
securities  (common  and  preferred  stocks)  available  for  sale  and  2.9% in
short-term investments.

        At September 30, 1996, the total net unrealized gain applicable to First
Central's available-for-sale securities amounted  to  $375,328.  The  unrealized
gain is net of  deferred  taxes of  $193,000.  At  December  31,  1995 the total
net unrealized gain applicable to First Central's available-for-sale  securities
was $759,806 net of deferred taxes of $392,000.

        In  accordance  with  FASB  Statement  No.  115,  the  following  is the
investment  classifications  at September  30, 1996.  Under  Statement  No. 115,
unrealized  loss or gains on  available-for-sale  investments  are reported as a
reduction or increase in shareholders equity.


                                        8


<PAGE>
<PAGE>





<TABLE>
<CAPTION>
                                                                                    CHARGE TO
               SEPTEMBER 30, 1996              COST              MARKET              SURPLUS
            -------------------------------------------------------------------------------------
             <S>                              <C>                <C>                          <C>
             Debt Securities:
              Held to Maturity                45,402,269         44,547,503                   0
              Available for Sale              33,260,246         32,908,914            (351,332)
                                          -------------------------------------------------------
             Equity Securities:
              Available for Sale              22,198,562         23,118,222             919,660
                                                                                -----------------
              Less deferred taxes                                                      (193,000)
                                                                                -----------------
             Reduction of Shareholder's Equity & Investments                    $       375,328
                                                                                =================
</TABLE>


LOSS AND LOSS ADJUSTMENT EXPENSE

        It has been First Central  Insurance's  practice to maintain reserves at
or near the middle range of an actuarial reasonableness range established by its
independent  actuary  to  evaluate  the  adequacy  of  reserves.  First  Central
Insurance's  reserves are analyzed on a quarterly basis by an outside  actuarial
firm.  As of  September  30,  1996,  the  actuary's  report  indicates  that the
mid-point of the actuarial  reasonableness  range is $77,595,000.  First Central
Insurance's  carried net reserves on a statutory basis were $76,128,313 which is
$1,466,687 below mid-point. First Central Insurance intends that at December 31,
1996,  its  reserves  will be at or  near  the  middle  range  of the  actuarial
reasonableness  range.  First  Central  Insurance  anticipates  that this may be
accomplished  by a continuing  increase in incurred  but not  reported  ("IBNR")
reserves and improved loss experience, and to the extent remaining necessary, by
a  supplemental  increase in reserves (and a related  charge to earnings) in the
final quarter of this year.

        During  the three and  nine-month  periods  ended  September  30,  1996,
incurred losses net of reinsurance  increased by 11.5% and 13.2%,  respectively,
when compared to the  corresponding  periods in 1995.  Such  increases  were due
primarily to increases in IBNR reserves and net paid losses.

        During  the three and  nine-month  periods  ended  September  30,  1996,
incurred loss adjustment  expenses,  net of reinsurance,  decreased by 12.4% and
increased by 12.3%, respectively,  when compared to the corresponding periods in
1995.  The decrease of 12.4% for the  three-month  period was primarily due to a
decrease  in  loss  adjustment  expense  case  reserves.  The  increase  in loss
adjustment expenses for the nine-month period is primarily due to an increase in
costs  associated  with claims and  litigation  resulting  from the  increase of
policies written over the last several years.

UNDERWRITING EXPENSES

        Underwriting  expenses are a combination of policy acquisition costs and
other operating  expenses as shown on the income statement.  Policy  acquisition
costs decreased by 6.7% and 7.8% for the three and  nine-months  ended September
30, 1996, respectively,  as compared to the corresponding periods in 1995. Other
operating  expenses  increased  by 68.9% and 46.6% for the three and  nine-month
periods  ended  September 30, 1996 as compared to the  corresponding  periods in
1995.  The  decrease in policy  acquisition  costs and the increase in operating
expenses was effected by a reclassification  of expenses from policy acquisition
costs in 1995 to operating expenses in 1996 amounting to approximately $600,000.
The   decrease   in  policy   acquisition   costs  after   accounting   for  the
reclassification, were

                                        9


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primarily due to the decrease in commission and premium tax expenses  associated
with the reduced premium volume. On a ceded basis, commissions were reduced as a
result  of the  January  1996 and April  1995  reinsurance  treaty  endorsements
described  in  "Premiums  Written  and  Earned"  above.  The  increase  in other
operating expenses after accounting for the  reclassification  was primarily due
to statutory  assessments on workers'  compensation  lines.  Total  underwriting
expenses after accounting for the  reclassification  increased 6.6% and 4.3% for
the three and  nine-month  period ended  September  30, 1996,  respectively,  as
compared to the corresponding period in 1995.

PROVISION FOR DOUBTFUL ACCOUNTS

        Provision  for  doubtful  accounts  increased by $33,069 and decrease by
$119,663, respectfully, for the three and nine-month periods ended September 30,
1996  compared  to the  corresponding  periods  in 1995.  The  decrease  for the
nine-month  period  was  primarily  the result of a  reduction  in the amount of
uncollectible premiums identified in workers' compensation policy audits.

INTEREST EXPENSE

        Interest expense  decreased 18.1% and 10.8% for the three and nine-month
periods ended September 30, 1996 when compared to corresponding periods in 1995.
This decrease is due to the  reduction of  $1,605,000  in the  principal  amount
outstanding  of  First  Central's  Convertible   Subordinated   Debentures  (the
"Debentures")  from  $6,505,000 at September 30, 1995 to $4,900,000 at September
30, 1996.

FINANCING ACTIVITIES

        For the  nine-month  period ended  September 30, 1996,  net cash used in
First Central's investing activities was approximately $4,190,108 as compared to
approximately  $7,839,045  from the nine-month  period ended September 30, 1995.
The decrease in cash used for investing  activities was due primarily to changes
in  First  Central  Insurance's  investment  portfolio  and from  First  Central
Insurance purchasing its home office in the first quarter of 1995 for $4,000,000
cash.

LIQUIDITY AND CAPITAL RESOURCES

        First Central  Insurance's  operations  generated funds adequate to meet
the business needs of First Central and the First Central  Insurance  during the
nine months ended September 30, 1996.

        Management is unaware of any trend which is reasonably  likely to result
in an increase or decrease in First Central's liquidity or its capital resources
except  that as the  First  Central  Insurance's  assets  and  investments  have
increased,  the  availability  of  investable  funds have  resulted in increased
investment income and improved cash flow, and hence some increased  liquidity of
the First Central  Insurance.  The liquidity of the  investment  portfolio of an
insurance  company is  important  to its ability to maximize  investment  return
which is a significant component of overall profitability.

        First Central  funded its February 1, 1996 interest  payment of $284,850
and August 1, 1996 interest payment of $262,350 under its outstanding Debentures
from the  dividends it received  from First  Central  Insurance in the amount of
$2,000,000.

CAPITAL COMMITMENTS

        Neither the Company nor its  subsidiaries  made any material  commitment
for capital expenditures.

                                       10


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                                     PART II

                                OTHER INFORMATION

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

A.      Exhibits

<TABLE>
<CAPTION>
Exhibit
  No.                                        Description
<S>      <C>                        
  3.1    Certificate of  Incorporation  of First Central  Financial  Corporation
         ("First  Central")  a copy of which was filed  with the  Commission  on
         December  6,  1984  as  Exhibit  3.1 to  First  Central's  Registration
         Statement on Form S-18 (Reg. No. 2-94804-NY) and is hereby incorporated
         herein by this reference).

  3.2    Certificate  of  Amendment of  Certificate  of  Incorporation  of First
         Central  dated the 30th day of November 1984 (a copy of which was filed
         with the  Commission  on  December  10,  1984 as  Exhibit  3.2 to First
         Central's Registration Statement on Form S-18 (Reg. No. 2-94804-NY) and
         is hereby incorporated herein by this reference).

  3.3    Certificate  of  Amendment of  Certificate  of  Incorporation  of First
         Central  dated  July  23,  1993 (a copy of  which  was  filed  with the
         Commission  on  August  15,  1994 as  Exhibit  3.1 to  First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  3.4    Amended and Restated By-Laws of First Central, dated as of May 18, 1994
         (a copy of which was filed with the  Commission  on August 15,  1994 as
         Exhibit  3.2 to First  Central's  Quarterly  Report on Form 10-Q and is
         hereby incorporated by this reference).

  4.1    Specimen copy of First  Central's  common stock  certificate (a copy of
         which was filed with the Commission on December 10, 1984 as Exhibit 4.1
         to  First  Central's  Registration  Statement  on Form  S-1  (Reg.  No.
         2-94804-NY), and is hereby incorporated herein by this reference).

  4.2    Specimen copy of First Central's 9% Convertible  Subordinated Debenture
         Due 2000 (a copy of which  was  filed as  Exhibit  4.2 to  Registrant's
         Amendment  No. 1 to its  Registration  Statement on Form S-1,  Reg. No.
         33-25264, and is hereby incorporated herein by this reference).

  4.3    Indenture  dated as of  September  1, 1988  between  First  Central and
         United States Trust Company of New York as Trustee (a copy of which was
         filed with the  Commission  on October 31, 1988 as Exhibit 4.3 to First
         Central's Registration  Statement on Form S-1 (Reg. No. 33-25264),  and
         is hereby incorporated herein by this reference).

  4.4    Form of Common Stock  Purchase  Warrant (a copy of which was filed with
         the  Commission  on August 15, 1994 as Exhibit  4.4 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  4.5    Form of First  Central's 1990 Stock Incentive Plan Stock Option (a copy
         of which was filed with the  Commission  on August 15,  1994 as Exhibit
         4.5 to First  Central's  Quarterly  Report  on Form  10-Q and is hereby
         incorporated by this reference).
</TABLE>


                                       11


<PAGE>
<PAGE>


<TABLE>

<S>      <C>   
  10.1   Facultative  Reinsurance  Agreement  dated  September  25, 1987 between
         Munich American Reinsurance Company and First Central Insurance (a copy
         of which was filed with the  Commission  on August 15,  1994 as Exhibit
         10.8 to First  Central's  Quarterly  Report  on Form 10-Q and is hereby
         incorporated by this reference).

  10.2   Addendum  No. 1 to the  Reinsurance  Agreement  between  First  Central
         Insurance and Munich American Reinsurance Company,  dated July 28, 1988
         (a copy of which was filed with the  Commission  on August 15,  1994 as
         Exhibit 10.9 to First  Central's  Quarterly  Report on Form 10-Q and is
         hereby incorporated by this reference).

  10.3   Addendum  No. 2 to the  Reinsurance  Agreement  between  First  Central
         Insurance and Munich  American  Reinsurance  Company,  dated January 1,
         1989 (a copy of which was filed with the  Commission on August 15, 1994
         as Exhibit 10.10 to First Central's  Quarterly  Report on Form 10-Q and
         is hereby incorporated by this reference).

  10.4   Addendum  No. 3 to the  Reinsurance  Agreement  between  First  Central
         Insurance and Munich  American  Reinsurance  Company,  dated January 1,
         1992 (a copy of which was filed with the  Commission on August 15, 1994
         as Exhibit 10.11 to First Central's  Quarterly  Report on Form 10-Q and
         is hereby incorporated by this reference).

  10.5   Addendum  No. 4 to the  Reinsurance  Agreement  between  First  Central
         Insurance and Munich American Reinsurance Company,  dated June 18, 1993
         (a copy of which was filed with the  Commission  on August 15,  1994 as
         Exhibit 10.12 to First Central's  Quarterly  Report on Form 10-Q and is
         hereby incorporated by this reference).

  10.6   Addendum  No. 5 to the  Reinsurance  Agreement  between  First  Central
         Insurance and Munich American Reinsurance Company, dated August 9, 1994
         (a copy of which was filed  with the  Commission  on March 31,  1995 as
         Exhibit  10.6 to First  Central's  Annual  Report  on Form  10-K and is
         hereby incorporated by this reference).

  10.7   Automobile  Physical Damage Automatic  Binding  Agreement between First
         Central Insurance and National Reinsurance Corporation,  dated December
         6,  1994 (a copy of which was filed  with the  Commission  on March 31,
         1995 as Exhibit 10.7 to First Central's  Annual Report on Form 10-K and
         is hereby incorporated by this reference).

  10.8   License  Agreement dated September 30, 1989,  between Policy Management
         Systems  Corporation  and First Central (a copy of which was filed with
         the  Commission on August 15, 1994 as Exhibit 10.15 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.9   Sublease  Agreement  dated  December  15, 1988  between  First  Central
         Insurance  and  Simon  General  (incorporated  herein by  reference  to
         Exhibit 10.9 in First  Central's  Amendment  No. 1 to its  Registration
         Statement on Form S-1, Reg. No. 33-25264).

  10.10  Addendum  to  Sublease  dated  October 1, 1993  between  First  Central
         Insurance  and  Simon  General  (a copy of  which  was  filed  with the
         Commission  on August  15,  1994 as  Exhibit  10.17 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).
</TABLE>



                                       12


<PAGE>
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<TABLE>
<S>      <C>   
  10.11  Form of  Indemnity  Agreement  (a copy of  which  was  filed  with  the
         Commission  on August  15,  1994 as  Exhibit  10.20 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.12  Agreement of Tax  Allocation  between  First  Central and First Central
         Insurance (a copy of which was filed with the  Commission on August 15,
         1994 as Exhibit 10.21 to First Central's  Quarterly Report on Form 10-Q
         and is hereby incorporated by this reference).

  10.13  Property  Facultative  Automatic  Reinsurance  Agreement  between First
         Central  Insurance  and North  American  Reinsurance  Corp.,  effective
         January  1,  1993 (a copy of which  was filed  with the  Commission  on
         August 15, 1994 as Exhibit 10.22 to First Central's Quarterly Report on
         Form 10-Q and is hereby incorporated by this reference).

  10.14  Subscription  Agreement  between  First  Central  and The  Trustees  of
         General Electric  Pension Trust ("G.E."),  dated March 19, 1993 (a copy
         of which was filed with the  Commission  on August 15,  1994 as Exhibit
         10.23 to First  Central's  Quarterly  Report on Form 10-Q and is hereby
         incorporated by this reference).

  10.15  Common Stock  Purchase  Warrant  (Series B) issued by First  Central to
         G.E.,  dated  March  19,  1993 (a copy of  which  was  filed  with  the
         Commission  on August  15,  1994 as  Exhibit  10.25 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.16  Subscription Agreement,  dated April 16, 1993 between First Central and
         SBSF  Funds,  Inc.  (a copy of which was filed with the  Commission  on
         August 15, 1994 as Exhibit 10.26 to First Central's Quarterly Report on
         Form 10-Q and is hereby incorporated by this reference).

  10.17  Common Stock  Purchase  Warrant  (Series B) issued by First  Central to
         Atwell  dated  April  16,  1993 (a copy of  which  was  filed  with the
         Commission  on August  15,  1994 as  Exhibit  10.28 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.18  Subscription  Agreement,  dated  December 3, 1993 between First Central
         and GE (a copy of which was filed  with the  Commission  on August  15,
         1994 as Exhibit 10.29 to First Central's  Quarterly Report on Form 10-Q
         and is hereby incorporated by this reference).

  10.19  Common Stock Purchase Warrant (Series B) issued by First Central to GE,
         dated  December 3, 1993 (a copy of which was filed with the  Commission
         on August 15, 1994 as Exhibit 10.30 to First Central's Quarterly Report
         on Form 10-Q and is hereby incorporated by this reference).

  10.20  Stock Option,  dated September 10, 1993,  granted to Martin J. Simon by
         First Central (a copy of which was filed with the  Commission on August
         15, 1994 as Exhibit 10.31 to First Central's  Quarterly  Report on Form
         10-Q and is hereby incorporated by this reference).

  10.21  Employment Agreement,  dated as of March 18, 1994, by and between First
         Central  and  Martin  J.  Simon (a copy of  which  was  filed  with the
         Commission  on August  15,  1994 as  Exhibit  10.32 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.22  Software  License  Agreement,  dated May 4, 1994,  between the Wheatley
         Group, Ltd. and First Central Insurance (a copy of which was filed with
         the  Commission on August 15, 1994 as Exhibit 10.33 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).
</TABLE>

                                       13


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<TABLE>
<S>      <C>   
  10.23  Multiple  Line  Excess  of Loss  Reinsurance  Agreement  between  First
         Central Insurance and National Reinsurance  Corporation,  dated January
         1, 1994 (a copy of which was filed  with the  Commission  on August 15,
         1994 as Exhibit 10.34 to First Central's  Quarterly Report on Form 10-Q
         and is hereby incorporated by this reference).

  10.24  Endorsement No. 1 of Agreement No.  3522-01002  Multiple Line Excess of
         Loss Reinsurance Agreement between First Central Insurance and National
         Reinsurance  Corporation,  dated  January  1, 1994 (a copy of which was
         filed with the  Commission on August 15, 1994 as Exhibit 10.35 to First
         Central's  Quarterly Report on Form 10-Q and is hereby  incorporated by
         this reference).

  10.25  Investment  Advisory  Agreement,  dated  June 30,  1994  between  First
         Central Insurance and Cramer Rosenthal  McGlynn,  Inc. (a copy of which
         was filed with the  Commission  on August 15, 1994 as Exhibit  10.36 to
         First   Central's   Quarterly   Report  on  Form  10-Q  and  is  hereby
         incorporated by this reference).

  10.26  Contract  of Sale,  dated  October  18,  1994  between  Lynbrook  Court
         Associates and First Central  Insurance (a copy of which was filed with
         the  Commission on March 31, 1994 as Exhibit  10.37 to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.27  Subscription  Agreement,  dated August 19, 1994,  between First Central
         and CRM Retirement  Partners,  L.P.  ("CRM") (a copy of which was filed
         with  the  Commission  on  March  31,  1994 as  Exhibit  10.38 to First
         Central's  Quarterly Report on Form 10-Q and is hereby  incorporated by
         this reference).

  10.28  Common Stock  Purchase  Warrant  (Series C) issued by First  Central to
         CRM,  dated  August  19,  1994 (a copy of  which  was  filed  with  the
         Commission  on March  31,  1994 as  Exhibit  10.39  to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.29  Subscription  Agreement,  dated August 19, 1994,  between First Central
         and CRM (a copy of which was  filed  with the  Commission  on March 31,
         1994 as Exhibit 10.40 to First Central's  Quarterly Report on Form 10-Q
         and is hereby incorporated by this reference).

  10.30  Common Stock  Purchase  Warrant  (Series C) issued by First  Central to
         CRM,  dated  August  19,  1994 (a copy of  which  was  filed  with  the
         Commission  on March  31,  1994 as  Exhibit  10.41  to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.31  Subscription Agreement,  dated September 2, 1994, between First Central
         and  National  Reinsurance  Corp.  (a copy of which was filed  with the
         Commission  on March  31,  1994 as  Exhibit  10.42  to First  Central's
         Quarterly  Report  on Form  10-Q  and is  hereby  incorporated  by this
         reference).

  10.32  Common Stock  Purchase  Warrant  (Series C) issued by First  Central to
         National  Reinsurance  Corp,  dated August 2, 1994 (a copy of which was
         filed with the  Commission  on March 31, 1994 as Exhibit 10.43 to First
         Central's  Quarterly Report on Form 10-Q and is hereby  incorporated by
         this reference).

  10.33  Employment  Agreement,  dated as of July 1, 1994 by and  between  First
         Central  and Joan M.  Locascio  (a copy of  which  was  filed  with the
         Commission on March 31, 1995 as Exhibit 10.37 to First Central's Annual
         Report on Form 10-K and is hereby incorporated by this reference).
</TABLE>

                                       14


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<PAGE>




<TABLE>
<S>      <C>   
  10.34  Employment  Agreement,  dated as of July 1, 1994 by and  between  First
         Central and Harvey Mass (a copy of which was filed with the  Commission
         on March 31, 1995 as Exhibit 10.38 to First Central's  Annual Report on
         Form 10-K and is hereby incorporated by this reference).

  10.35  Employment  Agreement,  dated as of July 1, 1994 by and  between  First
         Central and Raymond F.  Brancaccio  (a copy of which was filed with the
         Commission on March 31, 1995 as Exhibit 10.39 to First Central's Annual
         Report on Form 10-K and is hereby incorporated by this reference).

  10.36  Employment  Agreement,  dated as of July 1, 1994 by and  between  First
         Central  and Joel I.  Dollinger  (a copy of which  was  filed  with the
         Commission on March 31, 1995 as Exhibit 10.40 to First Central's Annual
         Report on Form 10-K and is hereby incorporated by this reference).

  10.37  Employment  Agreement,  dated as of July 1, 1994 by and  between  First
         Central  and  Allan R.  Goodman  (a copy of which  was  filed  with the
         Commission on March 31, 1995 as Exhibit 10.41 to First Central's Annual
         Report on Form 10-K and is hereby incorporated by this reference).

  10.38  Employment  Agreement,  dated as of July 1, 1994 by and between Mercury
         and Joseph P.  Ciorciari (a copy of which was filed with the Commission
         on March 31, 1995 as Exhibit 10.42 to First Central's  Annual Report on
         Form 10-K and is hereby incorporated by this reference).

 *11     Computation of Per Share Earnings.

  21     List of  Subsidiaries  (incorporated  by reference to Exhibit 22 to the
         Registrant's  Amendment No. 1 to its Registration Statement on Form S-1
         Reg. No. 33-25264).

  27     Financial Data Schedule (filed only with the electronic EDGAR filing of
         this document).
</TABLE>

-------------------------
*  filed herewith

   B.    Reports on Form 8-K.

         There were no reports filed on Form 8-K during the nine-month period
         ended September 30, 1996.

                                       15


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                                   SIGNATURES



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
         Registrant  has duly  caused  this report to be signed on its behalf by
         the undersigned thereunto duly authorized.



                                            FIRST CENTRAL FINANCIAL CORPORATION


DATED:     November 5, 1996                 BY:     /s/ Martin J. Simon
          ------------------------                  ---------------------------

                                                    Martin J. Simon, President
                                                    (Chief Executive Officer)






DATED:     November 5, 1996                 BY:     /s/ Joan M. Locascio
          ------------------------                  ---------------------------

                                                    Joan M. Locascio, Treasurer,
                                                    Vice President
                                                    (Chief Financial and
                                                    Accounting Officer)




                                       16

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