<PAGE> 1


                                  UNITED STATES
                       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 March 31, 1997
                               --------------

                        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: 0-18126
                        -------

                             FINANCIAL BANCORP, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)

       Delaware                                      06-1391814
       --------                                      ----------
(State or other jurisdiction of             (I.R.S. Employer identification No.)
incorporation or organization)

               42-25 Queens Boulevard, Long Island City, NY 11104
               --------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (718) 729-5002
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
  (Former name, former address and former fiscal year, if changed last report)

      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.  (1)  X   Yes      No
                                               ---      ---
                                           (2)  X   Yes      No
                                               ---      ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

      There were 1,717,486 shares of the Registrant's  common stock  outstanding
as of May 12, 1997.
      ------------

                                      -1-

<PAGE> 2



                             FINANCIAL BANCORP, INC.
                                    Form 10-Q
                                      Index

Part I - Financial Information                                          Page
------------------------------                                          ----

Item 1.     Financial Statements

            Consolidated Statements of Financial Condition
            as of March 31, 1997 (Unaudited) and September 
            30, 1996                                                     3

            Consolidated Statements of Income for the
            Three and Six Months ended March 31, 1997 
            and 1996 (Unaudited)                                         4

            Consolidated Statement of Changes in
            Stockholders' Equity for the Six Months
            ended March 31, 1997 (Unaudited)                             5

            Consolidated Statements of Cash Flows for the
            Six Months ended March 31, 1997 (Unaudited)                  6-7

            Notes to Consolidated Financial Statements                   8-11

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations                12-17

Part II - Other Information
---------------------------

Item 1.     Legal Proceedings                                            18

Item 2.     Changes in Securities
                Not applicable.                                          18

Item 3.     Defaults Upon Senior Securities
                Not applicable.                                          18

Item 4.     Submission of Matters to a Vote of Security
            Holders                                                      18

Item 5.     Other Information                                            19


Item 6.     Reports on Form 8-K                                          19


            Exhibits                                                     19
            Exhibit 11:  Computation of per share earnings               20

            Signature Page                                               21


                                      -2-

<PAGE> 3
<TABLE>
<CAPTION>

                                             FINANCIAL BANCORP, INC.
                                                 AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                                 (UNAUDITED)

                                                                                 MARCH 31,            SEPTEMBER 30,
                                                                                   1997                   1996
                                                                               --------------      -----------------
Assets
------
<S>                                                                              <C>                   <C>       
Cash and amounts due from depository institutions                                  $2,462,256            $2,917,223
Federal funds sold and securities purchased under agreements to resell              2,975,000             2,185,000
                                                                               --------------      -----------------
    Total cash and cash equivalents                                                 5,437,256             5,102,223

Investment securities available for sale   
                                                                                    5,604,250             3,608,125
Investment securities held to maturity, net; estimated fair value of 
  $42,264,000 and $49,903,000 at March 31, 1997 and September 30, 1996, 
  respectively                                                                     44,058,872            51,122,128
Mortgage-backed securities available for sale                                       9,703,791             5,016,112
Mortgage-backed securities held to maturity, net; estimated fair value 
  of $45,264,000 and $49,901,000 at March 31, 1997 and September 30, 
  1996, respectively                                                               45,206,529            49,836,734
Loans receivable, net                                                             147,217,588           140,314,158
Real estate owned, net                                                                      0               377,910
Investments in real estate, net                                                     3,492,565             3,493,153
Premises and equipment, net                                                         2,528,406             2,522,264
Federal Home Loan Bank of New York stock, at cost                                   1,770,900             1,675,800
Accrued interest receivable, net                                                    1,836,340             1,788,970
Other assets                                                                        2,340,636             1,904,945
                                                                               --------------      -----------------
    Total assets                                                                 $269,197,133          $266,762,522
                                                                               ==============      =================
Liabilities and stockholders' equity
------------------------------------

Deposits                                                                         $206,179,787          $202,883,766
Advance payments by borrowers for taxes and insurance                               1,282,000             1,063,036
Advances from Federal Home Loan Bank of New York                                    8,000,000             9,725,000
Securities sold under agreements to repurchase                                      5,000,000            14,046,000
Treasury tax and loan account and other short term borrowings                      20,000,000             9,880,970
Other liabilities                                                                   2,543,230             3,376,552
                                                                               --------------      -----------------
    Total liabilities                                                             243,005,017           240,975,324
                                                                               --------------      -----------------
Stockholders' equity
Preferred  stock,  $0.01 par value,  2,500,000  shares  authorized;  none issued
Common stock, $0.01 par value, 6,000,000 shares authorized; 2,185,000 shares
  issued, 1,747,686 and 1,790,622 shares outstanding at March 31, 1997
  and September 30, 1996, respectively                                                 21,850                21,850
Additional paid-in capital                                                         20,186,367            20,151,858
Retained earnings - substantially restricted                                       13,092,823            12,218,607
Common stock acquried by Employee Stock Ownership Plan (ESOP)                      (1,092,494)           (1,173,422)
Common stock acquired by Recognition & Retention Plan (RRP)                          (386,088)             (454,221)
Unrealized gain (loss) on securities available for sale, net of income taxes          (40,724)                 (488)
Treasury stock, at cost; 437,314 and 394,378 shares at March 31, 1997 and
     at September 30, 1996, respectively                                           (5,589,618)           (4,976,986)
                                                                               ---------------     -----------------
    Total stockholders' equity                                                     26,192,116            25,787,198
                                                                               ---------------     -----------------
    Total liabilities and stockholders' equity                                   $269,197,133          $266,762,522
                                                                               ===============     =================
</TABLE>
See accompanying notes to consolidated financial statements

                                                             -3-

<PAGE> 4

<TABLE>
<CAPTION>

                                  FINANCIAL BANCORP, INC.
                                    AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF INCOME
                                       (UNAUDITED)

                                                         THREE MONTHS ENDED              SIX MONTHS ENDED
                                                    ----------------------------  -------------------------------
                                                             MARCH 31,                       MARCH 31,
                                                    ----------------------------  -------------------------------
                                                       1997              1996        1997               1996
                                                    -----------    -------------  -----------       -------------
<S>                                                  <C>             <C>           <C>                <C>       
Interest income:
   Loans                                             $2,966,415      $2,500,456    $5,865,708         $4,839,087
   Mortgage-backed securities                           970,279       1,014,461     1,925,788          2,084,692
   Investments and other interest-earning assets        850,692         870,042     1,892,574          1,661,998
   Federal funds sold and securities purchased
        under agreements to resell                       21,389           8,232        37,178             19,235
                                                    -----------    -------------  -----------       -------------
               Total interest income                  4,808,775       4,393,191     9,721,248          8,605,012
                                                    -----------    -------------  -----------       -------------

Interest expense:
   Deposits                                           1,964,254       1,881,737     3,945,468          3,790,913
   Borrowings                                           365,570         288,199       842,335            449,852
                                                    -----------    ------------   -----------       ------------
                                                              
               Total interest expense                 2,329,824       2,169,936     4,787,803          4,240,765

Net interest income                                   2,478,951       2,223,255     4,933,445          4,364,247
Provision for loan losses                                96,000          76,000       195,600            130,000
                                                    -----------    ------------   -----------       ------------
Net interest income after provision for 
  loan losses                                         2,382,951       2,147,255     4,737,845          4,234,247
                                                    -----------    ------------   -----------       ------------

Non-interest income (loss):
   Fees and service charges                             136,075          83,772       267,355            171,844
   Gain on sale of investment securities                      0          20,020        26,353             20,020
   Gain (loss) from real estate operations               26,081         (19,438)       (1,972)           (42,048)
   Miscellaneous                                          8,761           7,590        19,390             19,288
                                                    -----------    ------------   -----------       ------------
               Total non-interest income                170,917          91,944       311,126            169,104
                                                    -----------    ------------   -----------       ------------

Non-interest expenses:
   Salaries and employee benefits                     1,003,416         664,677     1,745,463          1,311,182
   Net occupancy expense of premises                    138,217         118,853       270,728            231,333
   Equipment                                            160,999         138,760       311,345            276,410
   Advertising                                            6,465          20,018        16,052             45,067
   (Gain) Loss from real estate owned                   (10,071)         16,731         8,313             45,947
   Federal insurance premium                             30,456          98,636       112,228            187,781
   Miscellaneous                                        329,966         295,607       580,009            557,017
                                                   ------------    ------------   -----------       ------------
               Total non-interest expenses            1,659,448       1,353,282     3,044,138          2,654,737
                                                   ------------    ------------   -----------       ------------

Income before income taxes                              894,420         885,917     2,004,833          1,748,614
Income taxes                                            314,894         391,316       831,868            770,255
                                                   ------------    ------------   -----------       ------------

Net income                                             $579,526        $494,601    $1,172,965           $978,359
                                                   ============    ============   ===========       ============

Net income per common share & common stock 
  equivalents                                             $0.35           $0.27         $0.70              $0.53
                                                   ============    ============   ===========       ============

Weighted average number of common shares & common
   stock equivalents                                  1,671,700       1,816,200     1,680,100          1,847,300
                                                   ============    ============   ===========       ============
</TABLE>
See accompanying notes to consolidated financial statements

                                                  -4-
<PAGE> 5

<TABLE>
<CAPTION>

                                                          FINANCIAL BANCORP. INC.
                                                              AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                                 (UNAUDITED)


                                                  Retained        Common     Common    Unrealized (Loss) on
                                   Additional     Earnings -      Stock      Stock     Investment Securities
                         Common     Paid-in     Substantially    Acquired   Acquired    Available for sale,    Treasury
                          Stock      Capital      Restricted     By ESOP     By RRP    Net of Income Taxes       Stock        Total
                         -------    ---------    ------------   ---------   ---------  ---------------------    --------     -------

<S>                      <C>      <C>            <C>          <C>           <C>              <C>           <C>          <C> 
Balance at September 
  30, 1996               $21,850  $20,151,858    $12,218,607  ($1,173,422)  ($454,221)          ($488)     ($4,976,986) $25,787,198

Net Income for the six 
  months ended March 
  31, 1997                     -            -      1,172,965            -           -               -                -    1,172,965

Purchase of 47,000 
  shares of treasury 
  stock                        -            -              -            -           -               -         (663,938)   ($663,938)

Amortization relating 
  to allocation of
  ESOP stock and earned 
  portion of RRP stock         -       47,451              -       80,928      68,133               -                -     $196,512

Adjustment to valuation 
  reserve on securities 
  available for sale           -            -              -            -           -         (40,236)               -     ($40,236)

Stock issued upon exercise 
  of stock options             -      (12,942)             -            -           -               -           51,306      $38,364

Cash dividends paid on 
  common stock                 -            -       (298,749)           -           -               -                -     (298,749)
                         -------  -----------    ------------  -----------   ---------       ---------       ----------  -----------

Balance at March 31, 
  1997                   $21,850  $20,186,367    $13,092,823   ($1,092,494) ($386,088)       ($40,724)     ($5,589,618) $26,192,116
                         =======  ===========    ===========   ============ ==========       =========     ============ ===========

</TABLE>

See accompanying notes to consolidated financial statements.

                                                         -5-

<PAGE> 6

<TABLE>
<CAPTION>


                                  FINANCIAL BANCORP, INC.
                                     AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)

                                                                            SIX MONTHS ENDED
                                                                     ----------------------------
                                                                                MARCH 31,
                                                                     ----------------------------
                                                                          1997          1996
                                                                    ------------    -------------     
<S>                                                                  <C>             <C>     
Cash flow from operating activities:
  Net income                                                         $1,172,965         $978,359
  Adjustments to reconcile net income to net cash
    provided by operating activities
  Loss (Gain) on sale of real estate owned                                5,411           (5,837)
 (Gain) on sale of securities available for sale                        (26,353)         (20,020)
  Net amortization of premiums and accretion
    of discounts on investment securities                               (99,291)           7,010
  Net amortization of premiums and accretion
    of discounts on mortgage-backed securities                           17,270            1,368
  Accretion of deferred loan fees and discounts                         (57,253)         (34,565)
  Depreciation and amortization of premises
   and equipment                                                        146,132          150,565
  Provision for loan losses                                             195,600          130,000
  Provision for losses on real estate owned                                   0            8,436
  Cost of ESOP and RRP                                                  196,512          174,494
  Deferred income taxes                                                  (7,492)          18,827
  (Increase) in accrued interest receivable, net                        (47,370)        (411,211)
  (Increase) in refundable income taxes                                (212,598)        (134,452)
  (Increase) in other assets                                           (183,987)         (61,142)
  (Decrease) in other liabilities                                      (833,322)         (90,274)
                                                                    ------------    -------------
   Net cash provided by operating activities                            266,224          711,558
                                                                    ------------    -------------

Cash flows from investing activities:
  Purchases of investment securities available for sale              (4,938,672)      (5,686,719)
  Purchases of investment securities  held to maturity               (8,840,000)     (30,566,875)
  Proceeds from sales of investment securities available for sale     2,947,031        2,010,625
  Proceeds from maturities of investment securities                  16,000,000       21,430,000
  Purchases of mortgage-backed securities available for sale         (5,046,497)               0
  Purchases of mortgage loans                                                 0       (7,960,066)
  Proceeds from principal repayments on
   mortgage-backed securities                                         4,924,319        6,186,101
  Loan originations, net of repayments                               (6,945,777)      (8,377,946)
  Additions to premises and equipment                                  (158,686)        (980,656)
  Proceeds from sale of and insurance recoveries
   on real estate owned                                                 276,499           25,066
  Capitalized expenses on real estate owned                                   0           (1,476)
  Purchase of Federal Home Loan Bank of N.Y. stock                      (95,100)        (252,800)
  Net decrease in investments in real estate                              7,000                0
                                                                    ------------    -------------
   Net cash provided by investing activities                         (1,869,883)     (24,174,746)
                                                                    ------------    -------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       -6-

<PAGE> 7

<TABLE>
<CAPTION>




                                  FINANCIAL BANCORP, INC.
                                     AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                     (UNAUDITED)

                                                                            SIX MONTHS ENDED
                                                                    -----------------------------
                                                                                MARCH 31,
                                                                    -----------------------------
                                                                          1997          1996
                                                                    ------------    -------------     
<S>                                                                 <C>              <C>       
Cash flows from financing activities:
  Net increase in deposits                                           $3,296,021       $7,496,599
  Proceeds from FHLB of NY advances                                           0        9,200,000
  Repayments of FHLB of NY advances                                  (1,725,000)               0
  Net (decrease) in short-term borrowings from FHLB of NY                     0       (4,200,000)
  Proceeds from reverse repurchase agreements                         5,000,000       18,100,000
  Repayments of reverse repurchase agreements                       (14,046,000)     (12,126,250)
  Net increase in other short-term borrowings                        10,119,030        4,867,356
  Increase in advance payments by
   borrowers for taxes and insurance                                    218,964          145,565
  Dividends paid                                                       (298,750)        (223,168)
  Reissuance of treasury stock                                           38,365                0
  Purchase of treasury stock                                           (663,938)      (1,286,186)
                                                                    ------------    -------------
     Net cash provided by financing activities                        1,938,692       21,973,916
                                                                    ------------    -------------


Net increase (decrease) in cash and cash equivalents                    335,033       (1,489,272)
Cash and cash equivalents - beginning                                 5,102,223        7,853,316
                                                                    ------------    -------------
Cash and cash equivalents - ending                                   $5,437,256       $6,364,044
                                                                    ============    =============

Supplemental schedule of noncash investing and financing activities:
  Loans transferred to real estate owned                                     $0          $47,360
                                                                    ============    =============
  Loans to facilitate sale of real estate owned                         $96,000         $148,500
                                                                    ============    =============

  Property transferred to investment in real estate                          $0         $195,724
                                                                    ============    =============

  Transfer to investment securities available for sale
    Investment securities                                                    $0       $1,989,839
                                                                    ============    =============
 Unrealized (loss) gain on securities available for sale               ($71,851)         $22,978
 Deferred income taxes                                                   31,615          (10,110)
                                                                    ------------    -------------
                                                                       ($40,236)         $12,868
                                                                    ============    =============

Supplemental  disclosures  of cash flow  information:  
  Cash paid (net of refunds received) during the year for:
    Federal, state and city income taxes                              1,051,957          888,000
                                                                    ============    =============
   Interest paid on deposits and borrowed funds                      $4,790,337       $4,099,891
                                                                    ============    =============
</TABLE>


See accompanying notes to consolidated financial statements.

                                       -7-


<PAGE> 8


                    FINANCIAL BANCORP, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


BASIS OF PRESENTATION
The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts  of  Financial  Bancorp,   Inc.  (the  "Company"),   its  wholly  owned
subsidiaries,  842  Manhattan  Avenue Corp.  which  manages real  property,  and
Financial  Federal  Savings  Bank  (the  "Bank")  a  federally  chartered  stock
association, and the Bank's wholly owned subsidiaries, Finfed Development Corp.,
which  participates  in a joint venture for the  development of land and sale of
lots, Finfed Funding Ltd., which serves as a conduit for funding  investments in
Finfed  Development Corp., and F.S. Agency Inc., which is engaged in the sale of
annuities.  All significant  intercompany  accounts and  transactions  have been
eliminated in consolidation.

Certain information and footnote  disclosures  required under generally accepted
accounting  principles  have  been  condensed  or  omitted  from  the  following
consolidated  financial  statements pursuant to the rules and regulations of the
Securities and Exchange Commission. Financial Bancorp, Inc. (the "registrant" or
the "Company")  believes that the  disclosures  presented are adequate to assure
that the information  presented is not misleading in any material respect. It is
suggested  that  the  following  consolidated  financial  statements  be read in
conjunction  with the  year-end  consolidated  financial  statements  and  notes
thereto  included in the  registrant's  Annual  Report on Form 10-K for the year
ended September 30, 1996.

The results of operations  for the three and six months ended March 31, 1997 are
not  necessarily  indicative  of the results that may be expected for the entire
fiscal year.

Certain  amounts  for the three and six months  ended  March 31,  1996 have been
reclassified to conform with the current period's presentation.

RECENT ACCOUNTING PRONOUNCEMENTS
In October 1995, the Financial  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 123  "Accounting for
Stock-Based  Compensation,"  effective for fiscal years beginning after December
15, 1995. The Company has elected to continue to measure compensation cost using
the  intrinsic  value-based  method of accounting  prescribed by the  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees." Pro forma  disclosures  required for entities that elect to continue
to measure  compensation  cost using APB Opinion No. 25 must include the effects
of all awards  granted  in fiscal  years that begin  after  December  15,  1994.
Management will implement the pro forma disclosure required by SFAS No. 123 with
the  preparation  of the annual  financial  statement for the fiscal year ending
September 30, 1997.

                                      -8-


<PAGE> 9


EARNINGS PER SHARE
Net income per common share and common stock equivalents is computed by dividing
net income by the weighted average number of shares of common stock  outstanding
adjusted for the unallocated  shares held by the ESOP. Stock options granted are
considered in earnings per share as common stock equivalents, if dilutive, using
the treasury stock method.

INVESTMENT SECURITIES
The following  table sets forth certain  information  regarding the carrying and
estimated  fair value of the Company's  investment  securities at March 31, 1997
and September 30, 1996, respectively.

<TABLE>
<CAPTION>
                                                             MARCH 31, 1997         SEPTEMBER 30, 1996
                                                         ----------------------   ----------------------
                                                          CARRYING       FAIR      CARRYING     FAIR
                                                            VALUE        VALUE      VALUE       VALUE
                                                         ----------   ---------  ----------   ----------
                                                                           (in thousands)
<S>                                                       <C>          <C>         <C>         <C>   
Investment Securities:
Available for sale
    U.S. Treasury securities                               $4,939       $4,894      $2,919      $2,908
    Corporate preferred stock                                 700          710         700         700
    Less: Unrealized gain (loss)                              (35)           -         (11)          -
                                                         ----------   ---------  ----------   ----------
       Total investment securities available for sale      $5,604       $5,604      $3,608      $3,608
                                                         ==========   =========  ==========   ==========

 Held to maturity
    U.S. Government and agency obligations                $44,059      $42,264     $51,122     $49,903
                                                         ----------   ---------  ----------   ----------
        Total investment securities held to maturity      $44,059      $42,264     $51,122     $49,903
                                                         ==========   =========  ==========   ==========
</TABLE>

MORTGAGE-BACKED SECURITIES
The following  table sets forth certain  information  regarding the carrying and
estimated  fair value of the  Company's  mortgage-backed  security  portfolio at
March 31, 1997 and September 30, 1996, respectively.

<TABLE>
<CAPTION>
                                                             MARCH 31, 1997         SEPTEMBER 30, 1996
                                                         ----------------------   ----------------------
                                                          CARRYING       FAIR      CARRYING     FAIR
                                                            VALUE        VALUE      VALUE       VALUE
                                                         ----------   ---------  ----------   ----------
                                                                           (in thousands)
<S>                                                       <C>          <C>         <C>         <C>   
Mortgage-backed securities:

  Available for sale
    FHLMC certificates                                     $4,704       $4,696      $5,006      $5,016
    FNMA certificates                                       5,037        5,008           -           -
    Add: Unrealized (loss) gain                               (37)           -          10           -
                                                         ----------   ---------   ---------    --------
          Total mortgage-backed securities available 
            for sale                                       $9,704       $9,704      $5,016      $5,016
                                                         ==========   =========   =========    ========

  Held to maturity
    GNMA certificates                                     $25,359      $25,473     $27,106     $27,198
    FHLMC certificates                                     15,432       15,398      17,999      17,960
    FNMA certificates                                       2,421        2,398       2,697       2,708
    Other pass-through certificates                         1,995        1,995       2,035       2,035
                                                         ----------   ---------   ---------    --------

          Total mortgage-backed securities held 
            to maturity                                   $45,207      $45,264     $49,837     $49,901
                                                         ==========   =========   =========    ========
</TABLE>

                                                -9-


<PAGE> 10


LOANS RECEIVABLE, NET
The following  table sets forth the  composition of the Company's loan portfolio
at March 31, 1997 and September 30, 1996, respectively.

<TABLE>
<CAPTION>

                                                 MARCH 31,        SEPTEMBER 30,
                                                   1997                1996
                                                ----------          ----------
                                                       (in thousands)
<S>                                              <C>                <C>     
Real estate mortgages:
     One-to-four family                          $120,113           $115,500
     Equity and second mortgages                    2,700              2,780
     Multi-family                                   6,198              5,622
     Commercial                                    17,330             15,301
                                                ---------           --------
                                                  146,341            139,203
                                                ---------           --------

Construction/land                                   2,806              4,920
                                                ---------           --------

Consumer:
     Passbook or certificate                          174                171
     Home improvement                                   5                  7
     Student education guaranteed by
       the State of New York                          220                202
     Personal                                          35                 21
                                                ---------           --------
                                                      434                401

Commercial, including lines of credit                 139                168
                                                ---------           --------

          Total loans                             149,720            144,692
                                                ---------           --------

Less:  Loans in process                             1,029              2,509
       Allowance for loan losses                    1,264              1,573
       Deferred loan fees and discounts               209                296
                                                ---------           --------
                                                    2,502              4,378
                                                ---------           --------

          Total loans receivable, net            $147,218           $140,314
                                                =========           ========
</TABLE>

                                         -10-

<PAGE> 11


ADVANCES FROM FEDERAL HOME LOAN BANK OF NEW YORK ("FHLB")
As a member  of the FHLB,  the Bank has an  available  overnight  line of credit
subject to the terms and conditions of the lender's overnight advance program in
the amount of $26,398,500 at March 31, 1997. The following  table sets forth the
composition  of the Bank's FHLB  advances as of March 31, 1997 and September 30,
1996, respectively.

<TABLE>
<CAPTION>


                                                              MARCH 31,        SEPTEMBER 30,
                                                                1997                1996
                                                             ----------          ----------
                                                                    (in thousands)
<S>                                                            <C>                <C>   
FHLB advances:
          Fixed rate:
                5.133% due February 1997                       $    -             $1,200
                5.597% due December 1997                        2,000              2,000
                5.670% due December 1998                        6,000              6,000
                                                             --------            -------
                          Total fixed rate                      8,000              9,200

          Overnight line of credit:
                6.125% due October 1996                             -                525
                                                             --------            -------
                          Total overnight line of credit            -                525
                                                             --------            -------

Total FHLB advances                                            $8,000             $9,725
                                                             ========            =======
</TABLE>


SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
Securities   sold  under   agreements  to   repurchase   consist  of  borrowings
collateralized  by investment  securities.  The  following  table sets forth the
composition of the Company's borrowings  collateralized by securities sold under
agreements  to  repurchase  as  of  March  31,  1997  and  September  30,  1996,
respectively.

<TABLE>
<CAPTION>

  
                                                                       MARCH 31,        SEPTEMBER 30,
                                                                         1997                1996
                                                                      ----------          ----------
                                                                             (in thousands)

<S>                                                                       <C>                <C> 
Securities sold under agreements to repurchase:
                5.44% due December 1995                                   $    0             $14,046
                5.291% due December 2001, callable December 1997           5,000                   -
                                                                      ----------          ----------

Total securities sold under agreements to repurchase                      $5,000             $14,046
                                                                      ==========          ==========
</TABLE>


                                            -11-

<PAGE> 12


Item 2.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

GENERAL


Financial  Bancorp,  Inc. is the holding  company for Financial  Federal Savings
Bank,  which  converted to a federally  chartered  stock savings  association on
August 17, 1994 and to a federally  chartered  stock savings bank on October 20,
1994. The Bank is  headquartered in Long Island City, New York and operates five
full service branches, four in Queens and one in Brooklyn.  Deposits of the Bank
are  insured  up to the  applicable  limits  of the  Federal  Deposit  Insurance
Corporation ("FDIC").  The Bank is subject to regulation by the Office of Thrift
Supervision  ("OTS")  and the FDIC.  The  Company is listed on The Nasdaq  Stock
Market under the symbol "FIBC".

The Company's  results of operations  are generally  dependent on the Bank.  The
Bank's sources of earnings  primarily  consist of net interest income,  which is
the  difference  between the income  earned on  interest-earning  assets and the
expenses paid on  interest-bearing  liabilities.  The results of operations  are
also affected,  to a lesser extent, by non-interest  income, which includes loan
servicing  fees and  charges,  and  other  miscellaneous  income.  In  addition,
operations are impacted by non-interest  expenses such as employee  salaries and
benefits,  office  occupancy,  data  processing  and federal  deposit  insurance
premiums.

The  Bank  is  primarily  engaged  in  the  origination  of  one-to-four  family
residential  mortgage  loans,   multi-family and commercial real estate mortgage
loans, and to a lesser extent residential and commercial  construction loans. As
a  community-oriented  institution,  the Bank is generally engaged in attracting
retail deposits from the areas surrounding its branch offices. In addition,  the
Bank may borrow funds from the FHLB or through  reverse  repurchase  agreements.
These funds are then generally concentrated in lending activities throughout the
New York City metropolitan area.

FINANCIAL CONDITION

As  of  March  31,  1997,  the  Company's  total  assets  were  $269.2  million,
representing  a $2.4  million,  or a 0.9%  increase  from  $266.8  million as of
September 30, 1996.  Loans  receivable  increased by $6.9  million,  or 4.9%, to
$147.2 million at March 31, 1997, from $140.3 million at September 30, 1996. The
increase in loans receivable was partially offset by a $5.0 million,  or a 9.3 %
decrease in  investment  securities,  inclusive of available  for sale, to $49.7
million at March 31,  1997,  from $54.7  million at September  30,  1996.  Asset
growth was funded by a $3.3  million  increase in deposits to $206.2  million at
March 31, 1997, from $202.9 million at September 30, 1996. Furthermore, advances
from the FHLB  decreased by $1.7 million to $8.0 million,  at March 31, 1997, as
compared to $9.7 million at September 30, 1996. Securities sold under agreements
to repurchase decreased by $9.0 million, to $5.0 million at March 31, 1997, from
$14.0 million at September 30, 1996. The treasury tax and loan account and other
short-


                                      -12-

<PAGE> 13


term borrowings  increased by $10.1 million, to $20.0 million at March 31, 1997,
from $9.9 million at September 30, 1996.

At  March  31,  1997,  investment  securities,  including  available  for  sale,
consisted  primarily of medium term U.S.  Government  Agency  obligations,  with
features such as calls and/or interest rate  "step-ups".  Investment  securities
available for sale increased by $2.0 million, to $5.6 million at March 31, 1997,
from $3.6 million at September 30, 1996,  while  investment  securities  held to
maturity,  decreased by $7.1 million to $44.0 million,  at March 31, 1997,  from
$51.1 at  September  30, 1996.  Mortgage-backed  securities  available  for sale
increased by $4.7 million at March 31, 1997, to $9.7 million,  from $5.0 million
at  September  30,  1996,  while  mortgage-backed  securities  held to  maturity
decreased by $4.6  million,  at March 31,  1997,  to $45.2  million,  from $49.8
million at September 30, 1996. The decrease in the investment securities held to
maturity is due to $16.0  million of  callable  bonds which were called by their
issuer.  The decrease in  mortgage-backed  securities held to maturity is due to
normal  repayments  experienced  during the period.  As of March 31, 1997, loans
receivable  increased by $6.9 million, or 4.9%, to $147.2 million,  from $140.3
million as of September 30, ]996.  This increase in loans  receivable  primarily
resulted from $15.1 million of loan originations.

  Non-performing  loans totaled $5.3  million,  or 3.53% of total loans at March
31, 1997 as compared to $4.6  million,  or 3.15% of total loans at September 30,
1996. Of the $5.3 million in non-performing  loans, $2.5 million consists of the
balance  of  Thrift  Association  Service  Corporation  ("TASCO")   pass-through
securities.  In May 1996,  the FDIC  stated  that they  would not  continue  the
pass-through of principal and interest  payments  whether or not collected.  The
most  recent  information  received  stated  that the  scheduled  principal  and
interest payments would resume in April 1997, however, interest and principal in
arrears would not be paid. At March 31, 1997 non-performing assets totalled $7.4
million,  or 2.77% of total  assets,  as compared to $7.1  million,  or 2.67% of
total assets as of September 30, 1996.  The Company's  allowance for loan losses
to total assets and to total loans equalled 16.97% and 0.84%,  respectively,  as
compared to 22.11% and 1.09%, respectively, at September 30, 1996.

Total deposits at March 31, 1997,  increased by $3.3 million, or 1.6%, to $206.2
million from $202.9 million at September 30, 1996.  Furthermore,  advances from
the FHLB,  decreased  by $1.7  million,  or 17.7%,  to $8.0 million at March 31,
1997.  During the six month  period ended March 31 1997,  securities  sold under
agreements to repurchase  decreased by $9.0 million,  to $5.0 million, or 64.4%,
from $14.0 million at September 30, 1996.  The treasury tax and loan account and
other short term borrowings increased by $10.1 million to $20.0 million at March
31, 1997 from $9.9 million at September 30, 1996.

Total  stockholders'  equity was $26.2  million at March 31, 1997,  reflecting a
$405,000 or a 1.6%  increase  from $25.8  million at  September  30,  1996.  The
increase in stockholders' equity was the result of retained earnings,  partially
offset by the  repurchase of the  Company's  common stock and the payment of the
Company's  regular  quarterly cash dividend.  At March 31, 1997, the Company had
1,747,686  common shares  outstanding.  Since  September 30, 1996, the Company's
tangible and stated book value per share of common stock  increased by $0.59, to
$14.91  and $14.99,  from $14.32 and $14.40,  respectively,  at September  30,
1996.

                                      -13-


<PAGE> 14



ANALYSIS OF OPERATIONS

COMPARISON OF THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996

Net income for the three months ended March 31, 1997 totalled $579,526, or $0.35
per share as compared  to  $494,601,  or $0.27 per share for the  quarter  ended
March 31, 1996.  The $84,925 or 17.2% increase was primarily  attributable  to a
$255,696,  or 11.5% increase in net interest  income and a $78,973,  or an 85.9%
increase  in  non-interest  income,  offset in part by a  $306,166  increase  in
non-interest expense, during the quarter ended March 31, 1997. For the six month
period  ended  March 31,  1997,  net income  increased  $194,606,  or 19.9%,  to
$1,172,965,  or $0.70 per share, from $978,359, or $0.53 per share, for the same
period in 1996.

The return on average  assets  equalled  0.88% and 0.89% for the quarter and the
six months  ended March 31, 1997,  respectively,  as compared to 0.82% and 0.83%
for the quarter ended and the six months ended March 31, 1996, respectively. The
Company's return on average equity equalled 8.92% and 9.06%, for the quarter and
six months ended March 31, 1997, respectively,  compared with 7.35 % and 7.22 %,
for the quarter and the six months ended March 31, 1996, respectively.

Net  interest  income  increased  $255,696,  or 11.5 %, to $2.5  million for the
quarter ended March 31, 1997,  from $2.2 million for the quarter ended March 31,
1996.  For the six month  period  ended  March 31,  1997,  net  interest  income
increased  $569,198, or 13.0%,  to $4.9 million,  from $4.4 million for the same
period in 1996.  The  increase  in net  interest  income for the quarter and six
months ended March 31, 1997,  was primarily  due to the continued  leveraging of
the balance  sheet,  utilizing low cost  borrowings  and deposit  growth to fund
mortgage  loan   originations   and  purchases  of  investment   securities  and
mortgage-backed securities.

As a result,  for the quarter  ended March 31,  1997,  average  interest-earning
assets  were  $250.7  million,  which  represents  a $20.4  million,  or an 8.9%
increase,  from $230.3  million,  for the same period in 1996.  The  increase in
average  interest-earning  assets  was  offset  by a $16.6  million,  or an 8.0%
increase  in average  interest-bearing  liabilities  to $224.2  million  for the
quarter  ended March 31,  1997,  from $207.6  million for the same  quarter last
year. For the six months ended March 31, 1997, average  interest-earning  assets
increased by $27.5 million, or 12.2%, to $252.8 million, from $225.3 million for
the same period last year. The increase in average  interest-earning  assets was
offset  by a $26.1  million,  or 13.0%,  increase  in  average  interest-bearing
liabilities  to $227.4  million  for the six months  ended  March 31,  1997,  as
compared to $201.3 million for the same six month period in 1996.

The Company's net interest margin increased by 10 basis points to 3.96%, for the
quarter  ended  March 31, 1997, as compared to 3.86% for the quarter ended March
31, 1996. For the six month period ended March 31, 1997, the net interest margin
increased by 3 basis  points to 3.90%,  as compared to 3.87% for the same period
in 1996. The net interest spread  increased 2 basis points and 3 basis points to
3.46% and 3.47%,  for the  quarter  and the six  months  ended  March 31,  1997,
respectively,  as  compared  with 3.44% and 3.44% for the same  periods in 1996,
respectively. The increase in the net interest margin and net interest spread is
reflective


                                      -14-
<PAGE> 15


of the positive  results obtained by the Company's  continuing  efforts to build
its loan portfolio.  The average yield on interest-earning  assets was 7.67% for
the quarter  ended March 31,  1997,  as compared to 7.64% for the quarter  ended
March 31, 1996, and the average cost of interest  bearing  liabilities was 4.21%
for the quarter ended March 31, 1997, as compared to 4.19% for the quarter ended
March 31, 1996. For the six month period ended March 31, 1997, the average yield
on  interest-earning  assets was 7.69%, as compared to 7.64% for the same period
in 1996,  and the average cost of  interest-bearing  liabilities  was 4.22%,  as
compared to 4.20% for the same period in 1996.

The Company's provision for loan losses for the quarter ended and the six months
ended March 31, 1997 increased by $20,000 and $65,600,  to $96,000 and $195,600,
respectively.  The increase in provisions for loan losses  reflects  managements
on-going effort to maintain adequate allowances.

Non-interest income, for the quarter ended March 31, 1997, increased $78,973, or
85.9%,  to $170,917 as compared to $91,944 for the quarter ended March 31, 1996.
For the six month  period ended March 31, 1997,  non-interest  income  increased
$142,022,  or 84.0%,  to $311,126  from  $169,104 for the six month period ended
March 31, 1996. The increase in non-interest  income for the quarter ended March
31, 1997, is primarily  attributable to the $52,303  increase in income realized
from additional fee income and automated teller machines (ATM's) related service
fees and a $45,519  increase in income  realized from the Company's  real estate
operations.  The  $142,022  increase in  non-interest  income for the six months
ended March 31, 1997, is primarily  attributable to the $95,511  increase in fee
related  income and the  $40,076  increase in income  realized  from real estate
operations.

Non-interest  expenses increased by $306,166,  or 22.6%, to $1.7 million for the
quarter  ended March 31.  1997,  from $1.4  million for the same period in 1996.
During  the six  month  period  ended  March  31,  1997,  non-interest  expenses
increased by $389,401,  or 14.7%, to $3.0 million, from $2.7 million for the six
month period ended March 31, 1996.

For the quarter ended March 31, 1997,  salaries and employee benefits  increased
by  $338,739,  or 50.l% to $1.0  million,  from  $664,677 for the same period in
1996. The increase in salaries and employee  benefits is primarily  attributable
to a one-time  charge of $268,000  pursuant to the employment  contract with the
former Executive Vice President and Chief Operating Officer,  in addition to the
reinstatement  of the Company's  bonus accrual and additional  costs  associated
from the amortization and appreciation of shares in the Company's  stock-related
benefit  plans.  For the six months ended March 31, 1997,  salaries and employee
benefits increased  by $434,281, or 33.1%, to $1.7 million from $1.3 million for
the six months ended March 31, 1996.

For the quarter ended March 31, 1997,  occupancy expense increased by $19,364 to
$138,217 from  $118,853 for the same period last year.  For the six months ended
March 31,  1997,  occupancy  expense  increased  by $39,395,  to  $270,728  from
$231,333  for the same  period  in  1996.  The  increase  in  occupancy  cost is
primarily  attributable to the increased rental costs associated with one of the
Bank's branch  offices.  Equipment  expense for the quarter and six months ended
March 31, 1997, increased by $22,239 and $34,935, to $160,999 and $311,345,

                                      -15-

<PAGE> 16

respectively,  from $138,760 and $276,410,  respectively for the same periods in
1996.  The  increase in  equipment  expense for the quarter and six months ended
March 31, 1997,  represents  costs  associated with the Banks demand deposit and
check processing servicing fees and other vendor related services and contracts.
Advertising  expense,  for the  quarter  and six months  ended  March 31,  1997,
decreased  by $13,553 and  $29,015,  to $6,645 and  $16,052,  respectively.  The
Company has limited  advertising  expenditures  in an effort to bolster  current
earnings.  Although non-interest expenses have increased, the ratio of operating
expenses  to  average  assets,  exclusive  of the former  executive's  severance
payment,  for the quarter and six months ended March 31, 1997, decreased 8 basis
points and 13 basis  points,  to 2.13% and 2.09%,  respectively,  as compared to
2.21 % and 2.22% for the same periods in 1996.  During 1997 the Company has been
successful in  controlling  operating  expenses,  as evidenced by the efficiency
ratio of 53.4% and 53.0%,  exclusive of the former executives severance payment,
for the quarter and six months ended March 31, 1997,  respectively,  as compared
to 57.7% and 57.2%, respectively for the same periods in 1996.

For the quarter ended March 31, 1997, income tax expense decreased by $76,422 to
$314,894 as compared to $391,316  for the same  quarter in 1996,  as a result of
the  recent  enactment  of the New York  State  and New  York  City  income  tax
amendments.  For the six month period  ended March 31, 1997,  income tax expense
increased by $61,613 to $831,868 as compared to $770,255 for the same period in
1996, as a result of the increase in income before taxes.

LIQUIDITY AND CAPITAL RESOURCES

The Bank is required to maintain an average  daily  balance of liquid assets (as
defined  in the  regulations)  equal to a monthly  average  of not less than the
specified  percentage of its net  withdrawable  deposit accounts plus short-term
borrowings.  This liquidity  requirement is currently 5%. OTS  regulations  also
require each member savings  institution to maintain an average daily balance of
short-term liquid assets at a specified percentage  (currently 1 %) of the total
of its net withdrawable  deposit accounts and borrowings  payable in one year or
less.  Monetary  penalties  may be imposed for  failure to meet these  liquidity
requirements.  The  liquidity  of the Bank at March 31,  1997 was  11.5%,  which
exceeded the then applicable 5% liquidity requirement. It's short-term liquidity
ratio at March 31. 1997, was 3.3%.

The primary  investment  activities of the Bank are the  origination of mortgage
loans and the purchase of investment securities and mortgage-backed  securities.
The Company's primary sources of funds are the Bank's deposit accounts, proceeds
from principal and interest  payments on loans and investments,  and to a lesser
extent,  advances and  overnight  borrowings  from the FHLB,  as well as reverse
repurchase  agreements.  While  maturities and scheduled  amortization of loans,
mortgage-backed  securities and investment securities are predictable sources of
funds, deposit flows,  mortgage  prepayments and callable investment  securities
are greatly influenced by market interest rates, general economic conditions and
competition within the financial industry.

At March 31,  1997,  the Bank had  outstanding  loan  commitments  to  originate
mortgage  loans of $5.2  million  and $5.0  million in  commitments  to purchase
investment securities. Management anticipates that it will have sufficient funds
available and borrowing capability to meet its current

                                      -16-

<PAGE> 17


loan   originations   and   commitments  to  purchase   investment   securities.
Certificates of deposit,  which are scheduled to mature in one-year or less from
March 31, 1997 totalled $54.6 million,  of which $16.3 million represent "Silver
Certificate  of Deposit"  accounts,  which allow one withdrawal of principal per
quarter  without an early  withdrawal  penalty for direct  deposit  customers 62
years of age or older. The Bank generally  maintains  competitive pricing of its
deposits in order to maintain a steady deposit growth balance.

Although the OTS capital regulations require savings institutions to meet a 1.5%
tangible  capital ratio and a 3.0% leverage  (core)  capital  ratio,  the prompt
corrective  action standards also establish,  in effect, a minimum 2.0% tangible
capital  standard,  a 4.0% leverage (core) capital ratio (3.0% for  institutions
receiving the highest rating on the CAMEL financial  institution rating system).
The Bank's tangible capital and core capital totalled $20.7 million, or 7.43% at
March 31,  1997,  far in  excess  of the  regulatory  requirements.  The  Bank's
risk-based  capital ratio as of March 31, 1997,  was $20.7  million,  or 18.94%,
also well in excess of the regulatory capital requirement of 8.0%.


                                      -17-


<PAGE> 18




                             FINANCIAL BANCORP, INC.


Part II. OTHER INFORMATION

Item 1. Legal Proceedings
              The Company is not presently  engaged in any legal 
              proceeding of a material nature.

Item 2. Changes in Securities
              Not applicable.

Item 3. Defaults Upon Senior Securities
              Not applicable.

Item 4. Submission of Matters to a Vote
            of Security-Holders

            The Company held its Annual Meeting of  Shareholders  on January 22,
            1997.  At the said  meeting  1,747,686  shares of Common  Stock were
            eligible to vote, of which 1,577,351 shares,  were present in person
            or by proxy.  The  following  matters  were voted upon at the Annual
            Meeting  and the number of  affirmative  votes,  negative  votes and
            abstentions with respect to the matters are as follows:

            1. At the Annual Meeting, one director  was elected for a three year
            term.  The nominee was Peter S. Russo.

                              FOR               WITHHELD
                              ---               --------

            Peter S. Russo    1,560,172         17,179

            The names of each of the  directors  whose term of office  continued
            after the Annual Meeting and their  respective term  expirations are
            as follows:

                  Dominick L. Segrete     1998
                  Frank S. Latawiec       1998
                  Richard J. Hickey       1999
                  Raymond M. Calamari     1999

            2. The  appointment  of Radics & Co., LLC as independent auditors of
            Financial Bancorp,  Inc. for  the fiscal  year ending  September 30,
            1997, was ratified and approved in all respects.


            FOR           AGAINST           ABSTAIN
            ---           -------           -------
            1,566,484     9,267             1,600


Item 5. Other information

                                      -18-

<PAGE> 19



            On  September  27,  1996,  the  Company  announced  that it received
            regulatory  approval  from  the  Office  of  Thrift  Supervision  to
            commence its fifth repurchase program.  The Company is authorized to
            purchase up to 89,531 or 5% of its common stock outstanding  through
            open-market  transactions,  subject  to the  availability  of stock,
            prior to August 17, 1997.  Since  September  27,  1996,  the Company
            repurchased 77,200 shares at an average price of $15.01.

            On  February  20,  1997,  the  Company  announced  that its Board of
            Directors  unanimously  elected  Peter S. Russo as  Chairman  of the
            Board.  In addition,  the Company's  Board of Directors  unanimously
            elected Salvatore Farenga as a member of the Board.

            On  April  23,  1997,  the  Holding  Company  declared  its  regular
            quarterly  cash  dividend for the quarter  ended March 31, 1997,  of
            $0.10 per share,  payable on May 20, 1997 to  stockholders of record
            on May 6, 1997.

Item 6. (A) Exhibits

            Exhibit 3.1  Certificate of Incorporation of Financial 
                         Bancorp, Inc. *
            Exhibit 3.2  Bylaws of Financial Bancorp, Inc. *
            Exhibit 11   Earnings Per Share
            Exhibit 27   Financial Data Schedule

            (B) Reports on Form 8-K

            On March 13, 1997 the Company  filed a Report on Form 8-K related to
            the  resignation of its Executive Vice President and Chief Operating
            Officer, Irene C. Greco in order to persue other business interests.
            Ms. Greco received severance payments equivalent to the compensation
            she would have  received  under her existing  employment  agreements
            with the Company and Bank.


                                      -19-


<PAGE> 20




                                        SIGNATURES


Pursuant  to the  requirements  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.



                                    Financial Bancorp, Inc.
                                    (Registrant)





Date:  May 15, 1997           By:   /s/ Frank S. Latawiec
                                    ------------------------------
                                    Frank S. Latawiec
                                    President and Chief
                                    Executive Officer




Date:  May 15, 1997           By:   /s/ P. James O'Gorman
                                    ------------------------------
                                    P. James O'Gorman
                                    Executive Vice President and
                                    Chief Financial Officer






                                      -21-