SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                   Annual Report pursuant to Section 13 of the
                         Securities Exchange Act of 1934

                  For the fiscal year ended September 30, 1996
                          Commission File No.: 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, New York 11104
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (718) 729-5002
        Securities registered pursuant to Section 12 (b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock par value $0.01 per share
                                (Title of Class)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to this Form 10-K. |X|

      The aggregate market value of the voting stock held by non-affiliates of
the registrant was $25,341,447, based upon the last sales price as quoted on the
Nasdaq National Market for December 3, 1996.

      The number of shares outstanding of the registrant's Common Stock as of
December 20, 1996 was 1,747,686.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Annual Report to Stockholders for the year ended September
30, 1996 are incorporated by reference into Part II of this Form 10-K.

      Portions of the Proxy Statement for the 1997 Annual Meeting of
Stockholders to be held on January 22, 1997 are incorporated by reference into
Parts II and III of this Form 10-K.
<PAGE>

                                      INDEX

                                     Part I
                                                                            Page

Item 1.  Business                                                          1-35
Item 2.  Properties                                                       35-36
Item 3.  Legal Proceedings                                                   36
Item 4.  Submission of Matters to a Vote of Securities Holders               36

                                     Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder       36
         Matters
Item 6.  Selected Financial Data                                             36
Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                           37
Item 8.  Financial Statements and Supplementary Data                         37
Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure                                            37

                                    Part III

Item 10. Directors and Executive Officers of the Registrant                  37
Item 11. Executive Compensation                                              37
Item 12. Security Ownership of Certain Beneficial Owners and Management      37
Item 13. Certain Relationships and Related Transactions                      37

                                     Part IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K     38
<PAGE>

                                     PART I

Item 1. BUSINESS OF THE COMPANY

General

      Financial Bancorp, Inc. (the "Company"), was formed in February 1994 as
the holding company for Financial Federal Savings Bank (the "Bank") in
connection with the conversion of the Bank from mutual to stock form of
ownership on August 17, 1994. Effective October 20, 1994, the Bank changed its
name from Financial Federal Savings and Loan Association to Financial Federal
Savings Bank. The Company is headquartered in Long Island City, New York and its
principal business currently consists of the operations of the Bank. The
Company, as a savings and loan holding company, and the Bank are subject to the
regulation of the Office of Thrift Supervision ("OTS"), the Federal Deposit
Insurance Corporation ("FDIC") and the Securities and Exchange Commission
("SEC"). The Company is listed on the Nasdaq Stock Market under the symbol
"FIBC". The Company does not transact any material business other than through
its subsidiary, the Bank. The Bank's primary sources of funds are retail
deposits, loan repayments and borrowings. The principal business of the Bank is
attracting retail deposits from the areas surrounding its branch office. The
Bank may borrow funds from the Federal Home Loan Bank of New York ("FHLB") and
the Federal Reserve Bank of New York ("FRB") or through reverse repurchase
agreements. These funds are then primarily invested in fixed-rate and
adjustable-rate loans on one- to four-family residences, multi-family loans,
commercial real estate mortgage loans, and to a lesser extent construction loans
and other consumer loans. The Bank's revenues are derived principally from
interest on loans, mortgage-backed securities, interest and dividends on
investment securities and short-term investments, and other fees and service
charges.

Market Area and Competition

      The Bank has been, and continues to be, a community-oriented savings
institution offering a variety of financial services to meet the needs of the
communities it serves. Its primary market areas are the areas surrounding its
offices, while its lending activities extend throughout the New York City
metropolitan area. In addition to its principal office in the Long Island City
section of Queens, the Bank operates four other retail offices, three in Queens
and one in Brooklyn.

      The New York City metropolitan area has a high density of financial
institutions, most of which are significantly larger and have greater financial
resources than the Bank, and all of which are competitors of the Bank to varying
degrees. The Bank's competition for loans comes principally from mortgage
banking companies, commercial banks, savings banks and savings and loan
associations. The Bank's most direct competition for savings comes from
commercial banks, savings banks, savings and loan associations and credit
unions. The Bank also faces competition for savings from other financial
intermediaries such as brokerage firms and insurance companies.


                                      1
<PAGE>

      The Bank serves its market area with a wide selection of lending and
deposit products and other retail financial services. Management considers the
Bank's reputation for customer service and its strong branch network as its
major competitive advantages in attracting and retaining customers in its market
areas. The Bank also believes it benefits from its community orientation as well
as its established deposit base and significant levels of core deposits.

Lending Activities

      Loan and Mortgage-Backed Securities Portfolio Composition. The Bank's loan
portfolio consists primarily of conventional fixed-rate and adjustable-rate,
first and second mortgage loans secured by one- to four-family owner-occupied
residences, multi-family real estate loans, commercial real estate loans, and to
a lesser extent construction/land loans, other consumer loans and commercial
business loans. At September 30, 1996, the Bank's total loans receivable
equalled $144.7 million, of which $115.5 million, or 79.8%, were one- to
four-family residential first mortgage loans. Of the one- to four-family
residential first mortgage loans outstanding at that date, $56.5 million, or
48.9% were adjustable-rate mortgage ("ARM") loans. At September 30, 1996, the
Bank's loan portfolio also included $2.8 million of one- to four-family
residential second mortgage loans, $5.6 million of multi-family loans, $15.3
million of commercial real estate loans, $4.9 million of construction/land loans
and $568 thousand of other consumer and commercial business loans.

      The types of loans that the Bank may originate are regulated by federal
laws and regulations. Interest rates charged by the Bank on loans are affected
principally by the demand for such loans and market conditions. These factors
are, in turn, affected by general and economic conditions, monetary policies of
the federal government, legislative and tax policies and governmental budgetary
matters.


                                      2
<PAGE>

      The following table sets forth the composition of the Bank's loan
portfolio and mortgage-backed securities portfolio in dollar amounts and in
percentages of the portfolio at the dates indicated.

<TABLE>
<CAPTION>

                                                                  At September 30,
                                     -------------------------------------------------------------------------
                                             1996                      1995                      1994         
                                     ---------------------     ---------------------     ---------------------
                                                 Percent                   Percent                   Percent  
                                      Amount     of Total        Amount    of Total       Amount     of Total 
                                      ------     --------        ------    --------       ------     -------- 
                                                               (Dollars in thousands)
<S>                                  <C>           <C>          <C>          <C>          <C>          <C>     
Real estate loans:
   Residential one- to four-family:
     First mortgages...........      $115,300      79.68%       $ 93,361     82.55%       $72,669      85.29%  
     Second mortgages..........         2,980       2.06           3,806      3.36          4,491       5.27  
   Multi-family................         5,622       3.89           4,296      3.80          3,213       3.77  
   Commercial..................        15,302      10.58           8,031      7.10          2,940       3.45  
   Construction/land loans.....         4,920       3.40           3,080      2.72          1,455       1.71  
                                     --------     ------        --------    ------        -------     ------  
       Total real estate loans        144,124      99.61         112,574     99.53         84,768      99.49  

Consumer/commercial business:
   Consumer....................           400       0.27             404      0.36            400       0.47  
   Commercial business.........           168       0.12             123      0.11             35       0.04  
                                     --------     ------        --------    ------        -------     ------  
     Total consumer/commercial
       business loans..........           568       0.39             527      0.47            435       0.51  
                                     --------     ------        --------    ------        -------     ------  
       Total loans receivable..       144,692     100.00%        113,101    100.00%        85,203     100.00%  
                                                  ======                    ======                    ======   
   Less:
     Loans in process..........         2,509                      1,485                      352             
     Unearned discounts and net
       deferred loan fees......           296                        311                      226             
     Allowance for loan losses          1,573                      1,243                    1,120             
                                     --------                   --------                  -------             
                                        4,378                      3,039                    1,698             
                                     --------                   --------                  -------             
       Total loans receivable, net   $140,314                   $110,062                  $83,505             
                                     ========                   ========                  =======             

Mortgage-backed securities:
  GNMA ........................        27,106      49.41%        $33,144     53.45%       $26,749      53.67%  
  FHLMC (1)....................        23,015      41.96          22,979     37.06         15,816      31.74  
  FNMA.........................         2,697       4.92           3,388      5.46          4,368       8.76  
  Others.......................         2,035       3.71           2,497      4.03          2,906       5.83  
                                                                --------    ------        -------     ------  
Total mortgage-backed securities (2) $ 54,853     100.00%        $62,008    100.00%       $49,839     100.00%  
                                     ========     ======         =======    ======        =======     ======   
</TABLE>

                                                   At September 30,
                                      ------------------------------------------
                                             1993                    1992
                                      -------------------     ------------------
                                                Percent                 Percent
                                      Amount    of Total     Amount     of Total
                                      ------    --------     ------     --------
                                                (Dollars in thousands)   
Real estate loans:                                                      
   Residential one- to four-family:                                     
     First mortgages...........       $72,274     85.41%     $80,695      84.75%
     Second mortgages..........         6,429      7.60        8,556       8.99
   Multi-family................         2,320      2.74        2,574       2.70
   Commercial..................         3,091      3.65        3,008       3.16
   Construction/land loans.....           109      0.13           --         --
                                      -------   -------      -------    -------
       Total real estate loans.        84,223     99.53       94,833      99.60
                                                                        
Consumer/commercial business:                                           
   Consumer....................           332      0.40          344       0.36
   Commercial business.........            62      0.07           32       0.04
                                      -------   -------      -------    -------
     Total consumer/commercial                                          
       business loans..........           394      0.47          376       0.40
                                      -------   -------      -------    -------
       Total loans receivable..        84,617    100.00%      95,209     100.00%
                                                =======                 =======
   Less:                                                                
     Loans in process..........            44                     --    
     Unearned discounts and net                                         
       deferred loan fees......           143                    158    
     Allowance for loan losses.         1,005                    343    
                                      -------                -------    
                                        1,192                    501    
                                      -------                -------    
       Total loans receivable, net    $83,425                $94,708    
                                      =======                =======    
                                                                        
Mortgage-backed securities:                                             
  GNMA ........................       $24,156     48.89%     $17,354      42.47%
  FHLMC (1)....................        16,065     32.52       15,456      37.82
  FNMA.........................         5,741     11.62        4,052       9.92
  Others.......................         3,446      6.97        4,000       9.79
                                      -------   -------      -------    -------
Total mortgage-backed securities (2)  $49,408    100.00%     $40,862     100.00%
                                      =======   =======      =======    =======
                                                                       
----------
(1)   Includes $5.0 million in Mortgage-backed securities available for sale as
      of September 30, 1996.
(2)   Mortgage-backed securities are net of premiums and discounts.


                                        3
<PAGE>

Loan and Mortgage-Backed Security Maturity and Repricing

      The following table shows the maturity or period to repricing of the
Bank's loan and mortgage-backed security portfolio at September 30, 1996. Loans
and mortgage-backed securities that have adjustable rates are shown as being due
in the period during which the interest rates are next subject to change. The
table does not include prepayments or scheduled principal amortization.
Prepayments and scheduled principal amortization on mortgage loans and
mortgage-backed securities totaled $17.1 and $12.2 million respectively, for the
twelve months ended September 30, 1996.

<TABLE>
<CAPTION>
                                                                  Mortgage Loans and Other Loans
                                                                  ------------------------------
                                                                      At September 30, 1996
                                                                      ---------------------
                                 1 - 4    Multi-    Commercial   Construction/             Commercial     Total    Mortgage-Backed
                                Family    Family    Real Estate      Land       Consumer     Other        Loans      Securities
                                -------  ---------  -----------  ------------  ----------  -----------   -------  ----------------
                                                                         (In thousands)
<S>                            <C>         <C>        <C>           <C>          <C>          <C>       <C>            <C>    
Amounts due:
  Within one year ...........  $ 32,206    $ --       $   617       $4,920       $ 41         $ 49      $ 37,833       $29,081
  After one year:                                                                                                      
    One to three years ......    10,523        39        --           --          182          --         10,744           581
    Three to five years .....    14,794       651       1,168         --           36          119        16,768         2,222
    Five to ten years .......    12,382     1,137       1,014         --           62          --         14,595         2,762
    After ten years .........    48,375     3,795      12,503         --           79          --         64,752        20,207
                               --------    ------     -------       ------       ----         ----      --------       -------
    Total due or repricing                                                                                             
                                                                                                                       
        after one year ......    86,074     5,622      14,685         --          359          119       106,859        25,772
                               --------    ------     -------       ------       ----         ----      --------       -------
Total amounts due or                                                                                                   
  repricing, gross ..........  $118,280    $5,622     $15,302       $4,920       $400         $168      $144,692       $54,853
                               ========    ======     =======       ======       ====         ====      ========       =======
</TABLE>

      The following table sets forth at September 30, 1996, the dollar amount of
all loans and mortgage-backed securities due after September 30, 1997 and
indicates whether such loans and mortgage-backed securities have fixed or
adjustable interest rates.


                                            Due After September 30, 1997
                                    --------------------------------------------
                                       Fixed        Adjustable         Total
                                    -----------    -------------    ------------
                                                  (In thousands)
Mortgage loans:
  One- to four-family .............   $59,913        $26,161         $ 86,074
  Multi-family ....................     4,988            634            5,622
  Commercial real estate ..........    13,031          1,654           14,685
Other loans .......................       226            252              478
                                      -------        -------         --------
Total loans .......................   $78,158        $28,701         $106,859
                                      =======        =======         ========
Mortgage-backed securities ........   $25,772        $  --           $ 25,772
                                      =======        =======         ========


                                        4
<PAGE>

      Set forth below is a table showing the Bank's loan origination, purchase
and sales activity and activity in mortgage-backed security portfolio for the
periods indicated.

                                               For the Years Ended September 30,
                                               ---------------------------------
                                                 1996        1995        1994
                                               ---------   ---------   --------
                                                        (In thousands)

Loans receivable at beginning of period .....  $ 113,101   $  85,203   $ 84,617
   Originations:
   First mortgages ..........................     21,241      19,344      9,523
   Second mortgages .........................        342         354       --
   Multi-family .............................      2,058       1,136      1,200
   Commercial ...............................      7,491       5,187        100
   Construction/land ........................      2,870       4,364      1,455
   Consumer loans ...........................        212         279        184
   Student loans ............................         54          49        127
   Commercial business ......................         69         120         21
   Loan purchases ...........................     14,848       9,045       --
                                               ---------   ---------   --------
     Total originations and purchases .......     49,185      39,878     12,610
                                               ---------   ---------   --------
Transfer of mortgage loans to
  foreclosed real estate ....................       (100)       (682)      (568)
Loans charged-off ...........................       (327)       (219)       (70)
Repayments ..................................    (17,167)    (11,079)   (11,386)
Loan sales ..................................       --          --         --
                                               ---------   ---------   --------
   Total reductions .........................    (17,594)    (11,980)   (12,024)
                                               ---------   ---------   --------
Total loans receivable at end of period .....  $ 144,692   $ 113,101   $ 85,203
                                               =========   =========   ========

Mortgage-backed securities
  at beginning of period ....................  $  62,008   $  49,839   $ 49,408
   Purchases ................................      5,068      19,294      8,082
   Repayments ...............................    (12,214)     (7,169)    (7,536)
   Discount (premium) amortization ..........        (19)         44       (115)
   Unrealized gain ..........................         10        --         --
                                               ---------   ---------   --------
Mortgage-backed securities at
  end of period .............................  $  54,853   $  62,008   $ 49,839
                                               =========   =========   ========


                                        5
<PAGE>

      One- to Four-Family Residential Mortgage Lending. The Bank offers first
mortgage loans primarily secured by one- to four-family residences. Loan
originations are obtained from existing customers, referrals from real estate
brokers and builders and through advertising and general solicitations. The Bank
originates both ARM loans and fixed-rate loans. At September 30, 1996, first
mortgage loans secured by residential one- to four-family real estate totalled
$115.5 million, or 80.14% of total real estate loans at such date. Of the Bank's
first mortgage loans secured by one- to four- family residences, $56.5 million,
or 48.89% were ARM loans.

      The Bank has, from time to time, purchased one- to four-family mortgage
loans which generally include loans secured by properties located outside the
Bank's market area. All loans purchased by the Bank must generally meet the same
underwriting criteria as loans originated by the Bank. At September 30, 1996,
the Bank had $27.2 million in one- to four-family purchased mortgage loans and
single-family loan participations serviced by others.

      The Bank underwrites all mortgage loans generally in conformance with
secondary market guidelines and internally generated policies and procedures.
Upon receipt of a completed loan application from a prospective borrower, a
credit report is ordered, income and certain other information is verified, and
additional financial information is requested, if deemed necessary. An
independent appraisal of the real estate intended to secure the loan is
undertaken by an independent appraiser previously approved by the Board. It is
the Bank's policy to obtain title insurance on all real estate mortgage loans.
Borrowers must also obtain hazard/flood insurance prior to closing. Borrowers
generally are required to advance funds on a monthly basis to a mortgage escrow
account, from which the Bank makes disbursements for items such as real estate
taxes, hazard/flood insurance premiums and private mortgage insurance premiums
as they become due.

      The Bank generally makes mortgage loans secured by owner-occupied one- and
two-family residences in amounts up to 95% of the appraised value or sales price
of the property on loans that do not exceed $300,000. Mortgage loans originated
under the Bank's First Time Home Buyers' Program may be in amounts of up to 89%
of property values, with additional monthly principal repayments required for a
specified time in lieu of private mortgage insurance coverage. Except for the
loans originated under the Bank's First Time Home Buyers' Program, mortgage
loans on one- to four-family, owner-occupied residences are originated for up
to 95% of the property value provided that mortgage insurance on the amount in
excess of 80% is obtained. The Bank's one- to four-family residential mortgage
loans do not provide for negative amortization. When the information is obtained
and an appraisal is completed, loans are presented for approval to the Bank's
Loan Committee. The Loan Committee consists of two outside directors, the Chief
Executive Officer and the Chief Operating Officer.

      The Bank offers adjustable-rate first mortgage loans with interest rates
which adjust periodically based upon a spread above an agreed upon index, such
as a U.S. Treasury constant maturity index. ARM loans may carry an initial
interest rate which is less than the fully indexed rate for the loan. Borrowers
of ARM loans, that reset every twelve months, or less are qualified at the
lesser of the first rate adjustment or the fully indexed rate in an effort to
reduce the risk


                                      6
<PAGE>

of default as the interest rate and underlying payments increase. ARM loans have
periodic caps ranging from 1.0% to 2.5% per adjustment period and lifetime caps
of 5.0% to 6.0% over the initial rate. The Bank has two additional ARM loan
products: a 10/1 mortgage loan which provides for an initial 10 year fixed rate
period, thereafter adjusting each year, and a 6 month ARM which provides for
interest rate adjustments every six months.

      Equity and Second Mortgage Loans. The Bank originates equity and second
mortgage loans on one- to four-family residences. These loans generally are
originated as either fixed-rate or adjustable-rate loans secured by
owner-occupied one- to four-family residences with terms from 10 to 25 years.
The Bank offers equity and second mortgage loans with maximum combined
loan-to-value ratios of up to 80%, or 85% if the borrower has the first mortgage
with the Bank. At September 30, 1996, the Bank had $3.0 million, or 2.06% of
total one- to four-family loans in equity and second mortgage loans, including
$1.9 million of purchased second mortgage loans, which are subject to recourse
against the seller.

      Multi-Family and Commercial Real Estate Loans. The Bank also originates
multi-family and commercial real estate loans. As of September 30, 1996, the
Bank's total loan portfolio contained $5.6 million, or 3.89% of multi-family
loans, and $15.3 million, or 10.58% of commercial real estate loans. The
commercial real estate and multi-family loans in the Bank's portfolio consist of
both fixed-rate and adjustable-rate loans which were originated at prevailing
market rates. The Bank's policy has been to originate commercial real estate and
multi-family loans primarily in its market area. In making commercial real
estate and multi-family loans, the Bank considers the ability of net operating
income generated by the real estate to support the debt, the financial
resources, income level and managerial expertise of the borrower, the
marketability of the property and the Bank's lending experience with the
borrower.

      Construction and Land Loans. The Bank originates loans, on a selected
basis, to finance the construction of one- to four-family homes and other
properties in its market areas. As of September 30, 1996, the Bank's portfolio
contained $4.9 million, or 3.4% of construction loans. Construction loans
generally provide for interest-only payments and are originated for a
short-term. Borrowers must contribute equity in the construction projects to
establish acceptable loan-to-value ratios. The Bank generally requires personal
guarantees from the principals of the borrowing entity. Loan proceeds are
disbursed in stages as construction progresses and as inspections warrant.

      Consumer/Commercial Business Lending. The Bank also offers secured and
unsecured personal loans and commercial business loans. At September 30, 1996,
the Bank's consumer and commercial business loans totalled $568 thousand, or
 .39% of the Bank's total loan portfolio. Of that amount, $400 thousand consisted
of home improvement, personal, passbook and student loans; and $168 thousand of
commercial business loans.

      Mortgage-backed Securities. The Bank invests in a variety of
mortgage-backed securities, 96.28% of which were insured or guaranteed by the
FHLMC, GNMA or FNMA at September 30, 1996. The remaining 3.72% was invested in a
privately issued mortgage pass-through


                                      7
<PAGE>

security. At September 30, 1996, mortgage-backed securities totalled $54.9
million, or 20.56% of total assets, $5.0 million of which are classified by the
Bank as available for sale. Of the $54.9 million in mortgage-backed securities,
$29.1 million, or 53.0% were adjustable-rate and will reprice within one year.
During the year ended September 30, 1996, the Bank purchased $5.1 million of
mortgage-backed securities and received prepayments and scheduled principal
amortization of $12.2 million.

Asset Quality

      Loan Collection. When a borrower fails to make a required payment, the
Bank generally takes immediate steps to induce the borrower to cure the
delinquency and restore the loan to a current status. The Bank will send a late
notice and contact the borrower in order to determine the reason for the
delinquency and to effect a cure. In most cases delinquencies are cured
promptly; however, if a loan has been delinquent for more than 60 days, the Bank
reviews the loan status more closely and, where appropriate, appraises the
condition of the property and the financial circumstances of the borrower. Based
upon the results of any such investigation, the Bank may: (1) accept a repayment
program for the arrearage from the borrower; (2) seek evidence, in the form of a
listing contract, of efforts by the borrower to sell the property if the
borrower has stated that he is attempting to sell; (3) request a deed in lieu of
foreclosure; or (4) initiate foreclosure proceedings.

      When a loan payment is delinquent for three or more monthly installments,
the Bank may initiate foreclosure proceedings. The Bank continues to accrue
interest until foreclosure proceedings have commenced, at which time the accrual
is excluded from income by an offsetting increase in a special reserve account.
Under certain circumstances prior to commencement of foreclosure proceedings or
prior to the loan becoming 90 days delinquent, when recovery of interest is
doubtful, the Bank will immediately offset such interest in a special reserve
account. If such interest is ultimately collected, it is credited to income in
the period of recovery.

      At September 30, 1996, the Bank had 19 loans delinquent 90 days or more
totalling $2.0 million, of which $1.7 million are attributed to one- to
four-family mortgage loans and $2.5 million in participation loans on which the
FDIC is disputing the original servicing agreement which call for current
payment on principal and interest. At September 30, 1996, the Bank's real estate
owned totalled $378 thousand.


                                      8
<PAGE>

      TASCO Loan Participations. TASCO was a service corporation which was
formed by 36 savings banks and savings and loan associations located in the
State of New York. Member institutions participated in loans through TASCO in
various projects, including condominium and cooperative projects, construction
of new condominiums and hotel renovations. TASCO provided a means by which
smaller institutions could invest in larger projects. TASCO was dissolved on
November 11, 1994. The Bank presently has $922,000 or .64% of its total loan
portfolio invested in one TASCO project. The Bank has established loss reserves
of $504,000 on this loan participation. As of September 30, 1996, the Bank's net
exposure on the existing TASCO loan participation was $418 thousand. This loan
was restructured pursuant to which the interest rate on the loan was reduced to
2.0% (currently 4.0%) based upon the loan balance of $922,000. At September 30,
1996, the loan was performing under the restructured terms, and therefore, is no
longer classified as non-performing. The Bank has not participated in a new
TASCO project since the mid-1980s.


                                      9
<PAGE>

      Delinquent and Non-Performing Loans. At September 30, 1996, 1995 and 1994,
delinquencies in the Bank's loan portfolio were as follows:

<TABLE>
<CAPTION>

                                           At September 30, 1996                                At September 30, 1995
                            -------------------------------------------------     -----------------------------------------------
                                 60 - 89 Days             90 Days or More             60 - 89 Days            90 Days or More
                            ----------------------     ----------------------     ---------------------    ----------------------
                                        Principal                  Principal                 Principal                 Principal
                            Number of   Balance of     Number of   Balance of    Number of   Balance of    Number of   Balance of
                              Loans       Loans          Loans       Loans         Loans       Loans         Loans        Loans
                              -----       -----          -----       -----         -----       -----         -----        -----
                                                                    (Dollars in thousands)
<S>                          <C>         <C>            <C>         <C>            <C>         <C>          <C>          <C>   
Residential one- to 
  four-family:
  First mortgages .........       1      $  175             16      $3,955(1)           1      $    2           13       $1,216
  Second mortgages ........    --          --                1         200              2          55         --           --
Multi-family residential ..    --          --                2         350           --          --              3          677
Commercial real estate ....    --          --             --          --             --          --              1           38
Consumer loans ............    --          --                4          11           --          --              4           11
Commercial Business .......    --          --                1          45           --          --           --           --
                             ------      ------         ------      ------         ------      ------       ------       ------
         Total loans ......       1      $  175             24      $4,561              3      $   57           21       $1,942
                             ======      ======         ======      ======         ======      ======       ======       ======
Delinquent loans and non-                                                                   
  performing loans to total                0.12%                      3.15%                      0.05%                     1.72%
</TABLE>



                                               At September 30, 1994
                                   ---------------------------------------------
                                        60 - 89 Days          90 Days or More
                                   ---------------------   ---------------------
                                               Principal              Principal
                                   Number of  Balance of   Number of  Balance of
                                     Loans       Loans       Loans      Loans
                                     -----       -----       -----      -----
                                               (Dollars in thousands)

Residential one- to four-family:
  First mortgages ................    --        $ --             12     $1,199
  Second mortgages ...............       2          34            2         29
Multi-family residential .........    --          --              3        426
Commercial real estate ...........    --          --           --         --
Consumer loans ...................    --          --              4          5
Commercial Business ..............    --          --           --         --
                                    ------      ------       ------     ------
         Total loans .............       2      $   34           21     $1,659
                                    ======      ======       ======     ======

Delinquent and non-performing
  loans to total loans ...........                0.04%                   1.95%


----------
(1)Includes $2.5 million loan participation certificates at September 30, 1996.


                                      10
<PAGE>

      The following table sets forth information regarding non-accrual mortgage
loans, loans delinquent 90 days or more and still accruing interest, investments
in real estate, real estate owned ("REO") and in-substance foreclosure loans.
The Bank continues to accrue interest on loans delinquent 90 days or more until
commencement of foreclosure proceedings or until recovery of interest is
considered by the Bank to be doubtful based on the value of the property and
other considerations. During the years ended September 30, 1996, 1995 and 1994,
the amounts of additional interest income that would have been recorded on
non-accrual loans, had they been current, totalled $256,000, $171,000 and
$165,000, respectively. The Bank collected interest income on such non-accrual
loans in the amounts of $43,000, $24,000 and $17,000 during the years ended
September 30, 1996, 1995 and 1994, respectively.

<TABLE>
<CAPTION>
                                                                   At September 30,
                                         --------------------------------------------------------------------
                                          1996           1995           1994             1993           1992
                                         ------         ------         ------           ------         ------
                                                                    (In thousands)
<S>                                      <C>            <C>            <C>              <C>            <C>   
Non-accrual delinquent mortgage
  loans ..............................   $4,380         $1,794         $1,624(1)        $2,008(1)      $3,904
Delinquent other loans ...............       56             11              5               11             24
Mortgage loans delinquent 90 days
    or more and accruing .............      125            137             30              166            550
                                         ------         ------         ------           ------         ------
    Total non-performing loans .......    4,561          1,942          1,659            2,185          4,478
Investment in real estate (2) ........    3,308          3,531          2,789            3,153           --
In-substance foreclosures (3) ........     --             --             --               --              148
Real estate owned ....................      378            591            620              650            185
                                         ------         ------         ------           ------         ------
     Total non-performing assets .....   $8,247         $6,064         $5,068           $5,988         $4,811
                                         ======         ======         ======           ======         ======
Non-performing loans
    to total loans ...................     3.15%          1.72%          1.95%            2.58%          3.07%
Total non-performing assets
    to total assets ..................     3.09%          2.65%          2.95%            4.05%          4.70%
</TABLE>

----------
(1)  A TASCO commercial loan with a balance of $922,000, which previously had
     been delinquent, but was restructured in fiscal 1993.
(2)  Investments in real estate through the Bank's subsidiaries are classified
     as non-performing assets.
(3)  Represents reclassification of delinquent TASCO projects, net of specific
     reserves.

      Impaired loans and related amounts recorded in the allowance for loan
losses at September 30, 1996 are summarized as follows in thousands:

Recorded investment in impaired loans:
    With recorded allowance...............           $922
    Without recorded allowance ...........             --
                                                     ----
    Total impaired loans                              922
Recorded allowances for loan losses ......            504
                                                     ----

    Net impaired loans ...................           $418
                                                     ====

      For the year ended September 30, 1996, interest income that would have
been recognized for these loans had they been performing in accordance with the
original terms was approximately $78,000 and interest income recognized when
received was $31,000.

      The average balance of impaired loans during the years approximated
$933,000.


                                       11
<PAGE>

      Classified Assets. Federal regulations and the Bank's Classification of
Assets Policy require the classification of loans and other assets, such as debt
and equity securities considered to be of lesser quality, as "Substandard,"
"Doubtful" or "Loss" assets. An asset is considered "Substandard" if it is
inadequately protected by the current net worth and paying capacity of the
obligor or of the collateral pledged, if any. "Substandard" assets include those
characterized by the distinct possibility that the institution will sustain some
loss if the deficiencies are not corrected. Assets classified as "Doubtful" have
all of the weaknesses inherent in those classified "Substandard," with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions and values, highly
questionable and improbable. Assets classified as "Loss" are those considered
uncollectible and of such little value that their continuance as assets without
the establishment of a specific loss reserve is not warranted. Assets which do
not currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are required to be designated "Special Mention" or placed on an in-house "Watch
List" by management. When the Bank determines that an asset should be
classified, it generally does not establish a specific allowance for such asset
unless it determines that such asset may result in a loss. The Bank may,
however, increase its general valuation allowance in an amount deemed prudent.
The Bank believes that its policies are consistent with regulatory requirements
regarding classified assets.

      At September 30, 1996, classified assets totalled $8.2 million, or 3.1% of
total assets, of which $1,000 classified as "Doubtful" and the remaining
classified as "Substandard" consisted of 14 one- to four-family loans totalling
$1.8 million, 2 multi-family loans totalling $350,000, 1 commercial real estate
loan totalling $418,000, 1 building loan for $598,000 and a participation in
one- to four-family loans totalling $2.5 million, 3 foreclosed real estate
properties totalling $378,000 and $2.2 million in investment real estate. Real
estate owned and investment in real estate are carried at the lower of cost or
fair value less costs of disposal. Assets classified as "Doubtful" include 1
consumer loan for $1,000. Assets designated as "Special Mention" totalled $1.2
million, of which represents single family loans.

Allowances for Losses on Loans, Investments in Real Estate and Real Estate
Owned.

      The Bank's allowance for loan losses is maintained at a level considered
adequate to absorb future loan losses. Management of the Bank, in determining
the allowance for loan losses, considers the risks inherent in its loan
portfolio and changes in the nature and volume of its loan activities, along
with the general economic and real estate market conditions. The Bank utilizes a
two tiered approach in determining its allowance: (1) identification of problem
loans and establishment of appropriate loss allowances on such loans; and (2)
establishment of general valuation allowances on the remainder of its loan
portfolio. The Bank maintains a loan review system which allows for a periodic
review of its loan portfolio and the early identification of potential problem
loans. Such system takes into consideration, among other things, delinquency
status, amount, type of collateral and financial condition of the borrower. Loan
loss allowances are established for identified loans based on a review of such
data and/or estimates of the fair value of the underlying collateral. General
loan loss allowances are based upon a combination of

                                      12
<PAGE>

factors including, but not limited to, actual loan loss experience, composition
of the loan portfolio, current economic conditions and management's judgment.

      While the Bank believes it utilized the best information available and
that it has established an adequate allowance for loan losses, there can be no
assurance that regulators, in reviewing the Bank's loan portfolio, will not
request the Bank to materially increase its allowance for loan losses, thereby
negatively affecting the Bank's financial condition and earnings at that time.
Although management believes that an adequate allowance for loan losses has been
established, actual losses are dependent upon future events and, as such,
further additions and/or adjustments to the specific and general loan loss
allowances may become necessary.

      REO consists of real estate acquired by foreclosure or a deed in lieu of
foreclosure and is initially recorded at the lower of cost or fair value at the
date of acquisition or in-substance foreclosure. Real estate owned is carried at
the lower of cost or fair value less estimated selling costs. Loans foreclosed
in-substance consist of loans accounted for as foreclosed property even though
actual foreclosure has not taken place. Investments in real estate include
investments in non-consolidated joint ventures. These investments are recorded
at the lower of cost or fair value. The amounts ultimately recoverable from
investments in real estate could differ from the net carrying value of the
assets. See "Subsidiary and Joint Venture Activities -- FinFed Development
Corp."

      The following table sets forth the Bank's allowances for loan losses at
the dates indicated:

<TABLE>
<CAPTION>
                                                                    Year Ended September 30,
                                                ------------------------------------------------------------------
                                                 1996           1995           1994           1993           1992
                                                ------         ------         ------         ------         ------
                                                                      (Dollars in thousands)
<S>                                             <C>            <C>            <C>            <C>            <C>   
Allowance for loan losses:
Balance at beginning of period ..............   $1,243         $1,120         $1,005         $  343         $  295
Charge-Offs:
     One- to four-family ....................     --               31             51             50             26
     Multi-family ...........................      213            189           --             --             --
     Consumer and other loans ...............     --             --               19             20              1
                                                ------         ------         ------         ------         ------
Total charge-offs ...........................      213            220             70             70             27
Recoveries ..................................     --                1              2           --             --
Provision for loan losses ...................      543            342            183            732             75
                                                ------         ------         ------         ------         ------
Balance at end of period (1) ................   $1,573         $1,243         $1,120         $1,005         $  343
                                                ======         ======         ======         ======         ======
Ratio of total charge-offs during the
  period to average loans outstanding
  during the period .........................     0.17%          0.23%          0.08%          0.08%          0.03%
Ratio of allowance for loan losses to
  total loans at the end of the period ......     1.09%          1.10%          1.31%          1.20%          0.36%
Ratio of allowance for loan losses to
  non-performing loans at the end of
  the period ................................    34.50%         63.97%         67.48%         46.00%          7.66%
</TABLE>

----------
(1) Includes $504,000, $717,000, $739,000 and $739,000, which are attributable
    to TASCO loan participation(s), at September 30, 1996, 1995, 1994 and 1993.


                                       13
<PAGE>

      The following table sets forth the allocation of the allowance for loan
losses by loan category and the percent of loans in each category to total loans
receivable at the dates indicated. The portion of the allowance for loan losses
allocated to each loan category does not represent the total available for
future losses which may occur within the loan category since the total loan loss
reserve is a valuation reserve applicable to the entire loan portfolio.

<TABLE>
<CAPTION>
                                                                      At September 30,
                         ----------------------------------------------------------------------------------------------------------
                                1996                  1995                  1994                  1993                  1992
                         ------------------   --------------------   ------------------    ------------------    ------------------

                                 % of Loans            % of Loans            % of Loans            % of Loans            % of Loans
                                  in each               in each               in each                in each               in each
                                 category to           category to           category to           category to           category to
                         Amount  total loans   Amount  total loans   Amount  total loans   Amount  total loans   Amount  total loans
                         ------  -----------   ------  -----------   ------  -----------   ------  -----------   ------  -----------
                                                                   (Dollars in thousands)
<S>                      <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>   
Real Estate Loans:
  Residential one- to
  four-family .........  $  650     81.74%     $  305     85.91%     $  293     90.56%     $  235     93.01%     $  254     93.75%
                                                                                                                          
  Multi-family ........      53      3.89         218      3.80         278      3.77         250      2.74          79      2.70
                                                                                                                          
  Commercial ..........     757     10.57         686      7.10         529      3.45         500      3.65        --        3.16
                                                                                                                          
Commercial business                                                                                                       
  loans                      57      0.12          12      0.11           4      0.04        --        0.07        --        0.03
                                                                                                                          
Construction/land .....      53      3.40          17      2.72           9      1.71        --        0.13        --        --
                                                                                                                          
Consumer ..............       3      0.28           5      0.36           7       0.4          20      0.40          10      0.36
                         ------    ------      ------    ------      ------    ------      ------    ------      ------    ------
                                                                                                                          
   Total allowance for                                                                                                    
   loan losses (1) ....  $1,573    100.00%     $1,243    100.00%     $1,120    100.00%     $1,005    100.00%     $  343    100.00%
                         ======    ======      ======    ======      ======    ======      ======    ======      ======    ======
</TABLE>
                                                                           
----------
(1)   Includes $504,000, $717,000, $739,000 and $739,000, which are attributable
      to TASCO loan participations at September 30, 1996, 1995, 1994 and 1993.
      See "Asset Quality -- TASCO Loan Participations."

Investment Activities

      The Bank is required to maintain liquid assets at minimum levels which
vary from time to time. The Bank increases or decreases its liquid investments
depending on the availability of funds and comparative yields on liquid
investments relative to the return on loans. The Bank's liquid investments
primarily include United States Government and agency securities, overnight
federal funds and repurchase agreements. Historically, the Bank has maintained
its liquid assets at levels above the minimum regulatory requirements. At
September 30, 1996, $23.8 million, or 8.9% of the Bank's total assets were
invested in investment securities and other short-term investments that mature
in five years or less.


                                       14
<PAGE>

      The following table sets forth certain information regarding the carrying
and market values of the Bank's portfolio of investment securities at the dates
indicated:

<TABLE>
<CAPTION>
                                                                                   At September 30,
                                                  -----------------------------------------------------------------------------
                                                           1996                        1995                        1994
                                                  ---------------------       ---------------------       ---------------------
                                                  Carrying       Market       Carrying       Market       Carrying       Market
                                                   Value         Value         Value         Value         Value         Value
                                                  -------       -------       -------       -------       -------       -------
                                                                                    (In thousands)
<S>                                               <C>           <C>           <C>           <C>           <C>           <C>    
Investment Securities held to maturity:
U.S. Government and agency obligations ........   $51,122       $49,903       $38,921       $38,842       $16,509       $16,157
Common stock (1) ..............................      --            --              15            15            24            24
                                                  -------       -------       -------       -------       -------       -------
Total investment securities held to maturity ..   $51,122       $49,903       $38,936       $38,857       $16,533       $16,181
                                                  =======       =======       =======       =======       =======       =======
Available for sale:                                                                                                   
U.S. Treasury securities ......................   $ 2,908       $ 2,908          --            --            --            --
Equity securities .............................       700           700          --            --            --            --
                                                  -------       -------       -------       -------       -------       -------
Total investment securities available for sale    $ 3,608       $ 3,608          --            --            --            --
                                                  =======       =======       =======       =======       =======       =======
</TABLE>

----------
(1)  Investment in TASCO common stock written down to estimated fair value.

      The following table sets forth the carrying values, market values and
average yields for the Bank's debt security portfolio by maturity, call date or
repricing date, whichever is first, at September 30, 1996.


<TABLE>
<CAPTION>
                                         Less than One Year              One to Five Years           Total Investment Portfolio
                                    ----------------------------     --------------------------     ----------------------------

                                     Carrying   Market   Average     Carrying   Market  Average     Carrying   Market    Average
                                       Value     Value    Yield       Value     Value    Yield        Value    Value      Yield
                                    ---------  -------  --------     --------   ------  -------     --------   -------   -------
                                                                       (Dollars in thousands)                                     
<S>                                   <C>      <C>        <C>         <C>       <C>       <C>        <C>       <C>         <C>  
Debt securities:                                                                                    
                                                                                                    
U.S. Government agency securities...  $48,556  $47,428    7.33%       $2,566    $2,475    8.05%      $51,122   $49,903     7.37%
                                                                                                    
U.S. Government treasury securities.       --       --      --         2,908     2,908    6.35         2,908     2,908     6.35
                                                                      ------    ------               -------   -------
                                                                                                    
      Total.........................  $48,556  $47,428    7.33%       $5,474    $5,383    7.15%      $54,030   $52,811     7.32%
                                      =======  =======                ======    ======               =======   =======
</TABLE>


                                       15
<PAGE>

Sources of Funds

      General. The Bank's lending and investment activities are predominantly
funded by savings deposits, interest and principal payments on loans and other
investments, FHLB advances, other borrowings and proceeds from the maturities of
securities.

      Deposits. The Bank offers a variety of deposit accounts having a wide
range of interest rates and terms. The Bank's deposits consist of savings and
club accounts, interest-bearing and non-interest-bearing demand deposit
accounts, money market deposit accounts and certificates of deposit. In addition
to the standard certificate of deposit, the Bank has designed special flexible
certificates of deposit ("CDs") to accommodate its customers. The Bank's Golden
Advantage program pays a bonus rate of 1/8 of 1% (.125%) over the standard time
deposit rate for seniors who have direct deposit of their social security and/or
pension benefits to a Bank deposit account. The Bank also offers the Silver
Certificate of Deposit to all direct deposit customers 62 years of age or older.
This twelve month time deposit allows one withdrawal of principal per quarter
without an early withdrawal penalty. As of September 30, 1996, Silver
Certificates of Deposit represented $15.4 million, or 14.9% of certificates
outstanding. The Bank only solicits deposits from its market area and does not
use brokers to obtain deposits. The Bank relies primarily on competitive pricing
policies, advertising and customer service to attract new and retain existing
deposits.

      On February 24, 1995, the Bank consummated the purchase of certain deposit
liabilities from the East New York Savings Bank and consolidated these deposit
liabilities into Financial Federal Savings Bank's Greenpoint, Brooklyn branch.
Deposits totalling $14.8 million were acquired, for which the Bank paid a
premium of $127,000. The transaction was accounted for under the purchase method
of accounting.


                                      16
<PAGE>

      The following table presents the deposit activity of the Bank for the
periods indicated.

                                             For the Years Ended September 30,
                                          --------------------------------------
                                             1996         1995          1994
                                          --------------------------------------
                                                      (In thousands)

Deposits ...............................  $ 267,595    $ 264,455(1)  $ 138,174
                                                      
Withdrawals ............................    258,815      224,272       138,546
                                          ---------    ---------     ---------
                                                      
Net increase (decrease) before interest               
credited ...............................      8,780       40,183          (372)
                                                      
Interest credited ......................      7,612        6,127         3,916
                                          ---------    ---------     ---------
                                                      
Net increase (decrease) in deposits ....  $  16,392    $  46,310     $   3,544
                                          =========    =========     =========

----------
(1)  Includes $14.8 million of deposits purchased in February 1995.

      The following table indicates the amount of the Bank's certificates of
deposit of $100,000 or more by the time remaining until maturity as of September
30, 1996.

                                                 (In thousands)
Maturity Period:
Three months or less......................           $ 1,373
Over three through six months.............             1,252
Over six through 12 months................             2,299
Over 12 months............................             4,608
                                                     -------
      Total...............................           $ 9,532
                                                     =======


                                       17
<PAGE>

      The following table sets forth the distribution of the Bank's deposit
accounts for the periods indicated and the weighted average nominal interest
rates on each category of deposits presented at the dates indicated.

<TABLE>
<CAPTION>
                                                           For the year ended September 30,
                             --------------------------------------------------------------------------------------------
                                         1996                            1995                           1994
                             -----------------------------   ----------------------------   -----------------------------
                                                  Weighted                       Weighted                        Weighted
                                                   Average                        Average                         Average
                             Percent    Amount      Rate     Percent   Amount      Rate     Percent   Amount        Rate
                             -------    ------      ----     -------   ------      ----     -------   ------        ----
                                                              (Dollars in thousands)

<S>                           <C>      <C>          <C>       <C>      <C>          <C>       <C>    <C>           <C>  
Non-interest-bearing demand   3.52%    $ 7,156      0.00%     1.98%    $ 3,688      0.00%     1.07%  $  1,495      0.00%
Interest-bearing demand....    9.18     18,622      2.18      8.91      16,623      2.29     12.36     17,322      2.24
Savings and club...........   36.52     74,084      2.11     41.49      77,370      2.44     57.25     80,262      2.26
Certificates of deposit....   50.78    103,022      5.85     47.62      88,811      5.98     29.32     41,103      4.41
                             ------    --------              ------   --------              ------   --------
     Total deposits........  100.00%   $202,884     3.94%    100.00%  $186,492      4.06%   100.00%  $140,182      2.86%
                             ======    ========              ======   ========              ======   ========
</TABLE>

      The following table presents the amount of the Bank's certificates of
deposit outstanding, based upon weighted-average rate categories, at September
30, 1996, 1995 and 1994, and based upon contractual periods to maturity, at
September 30, 1996.

<TABLE>
<CAPTION>
                                          Period to Maturity from September 30, 1996                         At September 30,
                         =========================================================================   ==============================
                         Less Than     One to      Two to       Three to     Four to      After      
                          One Year   Two Years   Three Years   Four Years   Five Years  Five Years      1996       1995       1994
                          --------   ---------   -----------   ----------   ----------  ----------      ----       ----       ----
<S>                      <C>          <C>         <C>           <C>          <C>        <C>          <C>        <C>        <C>     
Certificate accounts:                                                                                
   2.99% or less ......  $   --       $   --      $   --        $   --       $   --     $   --       $   --     $   --     $    416
   3.00% to 3.99% .....       163         --          --            --           --         --            163      1,121     17,175
   4.00% to 4.99% .....    24,117          598          61          --           --         --         24,776     10,896     13,689
   5.00% to 5.99% .....    25,549       17,782       5,191           616        1,165        165       50,468     36,702      4,893
   6.00% to 6.99% .....     2,418        4,373         677         1,548          989        680       10,685     23,712      2,939
   7.00% to 7.99% .....       930          415        --          10,373        5,131         30       16,879     16,313          3
   8.00% to 8.99% .....      --           --          --            --             51       --             51         67     1, 988
                         --------     --------    --------      --------     --------   --------     --------   --------   --------
                                                                                                     
      Total ...........  $ 53,177     $ 23,168    $  5,929      $ 12,537     $  7,336   $    875     $103,022   $ 88,811   $ 41,103
                         ========     ========    ========      ========     ========   ========     ========   ========   ========
</TABLE>


                                                                18
<PAGE>

Borrowings

      Advances From Federal Home Loan Bank of New York. In the past and from
time to time, the Bank has obtained fixed-rate advances from the Federal Home
Loan Bank of New York ("FHLB") as a source of funding in order to take advantage
of favorable rates of interest in comparison to its other sources of funds. The
Bank's FHLB advances are generally secured by the Bank's mortgage loans and the
Bank's investment in the stock of the FHLB. In addition, the Bank has available
an overnight line of credit with the FHLB, subject to the terms and conditions
of the lender's overnight advance program, in the amount of $24.3 million.
Advances under this line of credit, which expires on December 22, 1996, are made
for one-day periods. As of September 30, 1996, advances were secured by stock of
Federal Home Loan Bank in the amount of $1.7 million and mortgage loans with an
unpaid balance of $25.2 million. Information concerning advances from FHLB are
summarized as follows:

                                                     September 30,
                                 Interest    ----------------------------
          Maturity                 Rate          1996           1995
----------------------------   ------------  ------------  --------------
                                                   (In Thousands)
Overnight advances due
  October 1995..............      6.625%         $   --         $5,375
Overnight advances due
  October 1996..............      6.125%            525             --
Notes maturing in
  February 1997.............      5.133%          1,200             --
Notes maturing in
  December 1997.............      5.597%          2,000             --
Notes maturing in
  December 1998.............      5.670%          6,000             --
                                                 ------         ------
                                                 $9,725         $5,375
                                                 ======         ======

There were no borrowings from the FHLB during the year ended September 30, 1994.


                                      19
<PAGE>

      Securities Sold Under Agreements to Repurchase. Borrowings under reverse
repurchase agreements involve the delivery of investment securities to
broker-dealers who arrange the transactions. The securities remain registered in
the name of the Bank, and are returned to the Bank upon the maturities of the
agreements. Information concerning borrowings collateralized by securities sold
under agreements to repurchase are summarized as follows:


                                      September 30,
                      Interest  --------------------------
     Maturity           Rate        1996          1995
------------------- ----------- ------------- ------------
                                       (In Thousands)

November 1995           5.78%      $    --       $5,112
January  1996           5.75%           --        2,014
December 1996           5.44%       14,046           --
                                   -------       ------
                                   $14,046       $7,126
                                                
                                              
      There were no borrowings under reverse repurchase agreements during the
year ended September 30, 1994.

      Information concerning borrowings collateralized by securities sold under
agreements to repurchase is summarized as follows:


                                    Year Ended September 30,
                                  ---------------------------
                                     1996              1995
                                  ---------          --------
                                         (In Thousands)
Average balance during
  the year....................      $8,228            $1,876
Average interest rate
  during the year.............        5.70%             6.01%
Maximum month end
   balance during the year....      15,064            $9,229
Investment securities underlying 
  the agreement at year end:
      Carrying value..........     $15,120            $6,988
      Estimated market value..     $14,520            $7,047


                                       20
<PAGE>

Treasury Tax and Loan Amount and Other Short Term Borrowings

      At September 30, 1996, the Bank had borrowings from Federal Reserve Bank
of New York under Treasury and Depository program in the amount of $9,880,970 at
an interest rate of 5.20% per annum payable on demand. These borrowings are
secured by investment securities with a carrying value of $10,972,000 and fair
value of $10,570,000.

Subsidiary and Joint Venture Activities

      The following is a description of the current subsidiaries (the
"Subsidiaries") of the Company and Bank. The Bank uses the equity method of
accounting to account for the Subsidiary's investment in the joint venture. The
Subsidiary's joint venture real estate development activity involves risks which
may adversely affect the profitability of the Bank. Real estate development
joint ventures generally incur substantial costs to acquire land, design
projects, install site improvements and engage in marketing activities prior to
commencement of development. Because the joint venture is unable to repay the
Subsidiary's loans and/or the Subsidiary's capital investments until the sales
of the lots are actually closed, there is negative cash flow in the early stages
of the project. In general, a Subsidiary's profit potential on any given project
may vary, if overruns are experienced, the underlying value of the property
declines or a combination of these factors occurs.

      842 Manhattan Avenue Corp. 842 Manhattan Avenue, a wholly-owned subsidiary
of the Company, was incorporated in October, 1995, for the purpose of holding a
Bank owned property for lease. At September 30, 1996, this subsidiary's
investment consists of the building located at 842 Manhattan Avenue, Greenpoint,
Brooklyn.

      FinFed Funding Ltd. FinFed Funding Ltd., a wholly-owned subsidiary of the
Bank, was incorporated in March 1985. It serves as a conduit for funding
investments through the Bank's real estate development subsidiary. As of
September 30, 1996, the subsidiary is inactive.

      FinFed Development Corp. This wholly-owned subsidiary of the Bank was
incorporated in May 1985 for the purpose of participating as a general partner
in a real estate joint venture, AFT Associates, with another New York City
metropolitan area financial institution and a local real estate developer. In
May 1985, AFT Associates acquired a parcel of land for the development of
approximately 400 lots designated for both detached residences and condominiums.
In July 1996, AFT Associates received the required approvals necessary to
develop the land for resale. Development of this property may require additional
contributions by FinFed Development and its partners to the joint venture.
FinFed Development Corp. has invested $3.4 million, which represents 44.0% of
the capital of the joint venture at September 30, 1996. The subsidiary has a
one-third interest in any profits realized from the sale of the developed
property. The investment in AFT Associates has been classified as substandard.
Furthermore, based upon a current appraisal of the value of real estate owned by
the joint venture, an additional $298,000 in provisions for losses on investment
in real estate were established for the fiscal year ended September 30, 1996. It
is also expected that the Bank's


                                       21
<PAGE>

subsidiary, FinFed Development Corp., will be contributing its share of the
normal operating costs of the joint venture.

      FS Agency Inc. This wholly-owned subsidiary of the Bank was formed in
August 1988 as a conduit to the Bank for commissions on the sale of tax deferred
annuities and life insurance. As of September 30, 1996, its total assets were
$30,400.

      FinFed Staten Island Corp. FinFed Staten Island Corp. was incorporated in
May 1985 for the purpose of developing for sale five acres of real estate on
Staten Island. It entered into a joint venture as a general partner, with
Salamander Associates, in May 1985, in which FinFed Staten Island Corp. had a
50% interest. This property was sold in December 1993, which resulted in an
allocated loss to FinFed Staten Island Corp. of $362,300. The corporation was
dissolved on September 30, 1994.

      At September 30, 1996, the Bank's loans to and investments in one of its
wholly owned subsidiaries, FS Agency Inc., were not subject to the deduction
from capital in accordance with FIRREA. However, the Bank's other wholly owned
subsidiaries, FinFed Funding Ltd. and FinFed Development Corp. are, or have
been, engaged in real estate development activities that are not permitted for a
national bank, and thus are subject to the general rule requiring the Bank's
loans to and investments in the subsidiaries to be deducted from capital.

Personnel

      As of September 30, 1996 the Bank had 55 full-time employees and 4
part-time employees.

                          REGULATION AND SUPERVISION

General

      The Company, as a savings and loan holding company, is required to file
certain reports with, and otherwise comply with the rules and regulations of the
Office of Thrift Supervision ("OTS") under the Home Owners' Loan Act, as amended
(the "HOLA"). In addition, the activities of savings institutions, such as the
Bank, are governed by the HOLA and the Federal Deposit Insurance Act ("FDI
Act").

      The Bank is subject to extensive regulation, examination and supervision
by the OTS, as its primary federal regulator, and the FDIC, as the deposit
insurer. The Bank is a member of the Federal Home Loan Bank ("FHLB") System and
its deposit accounts are insured up to applicable limits by the Savings
Association Insurance Fund ("SAIF") managed by the FDIC. The Bank must file
reports with the OTS and the FDIC concerning its activities and financial
condition in addition to obtaining regulatory approvals prior to entering into
certain transactions such as mergers with, or acquisitions of, other savings
institutions. The OTS and/or the FDIC conduct


                                      22
<PAGE>

periodic examinations to test the Bank's safety and soundness and compliance
with various regulatory requirements. This regulation and supervision
establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the insurance fund and
depositors. The regulatory structure also gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement
activities and examination policies, including policies with respect to the
classification of assets and the establishment of adequate loan loss reserves
for regulatory purposes. Any change in such regulatory requirements and
policies, whether by the OTS, the FDIC or the Congress, could have a material
adverse impact on the Company, the Bank and their operations. Certain of the
regulatory requirements applicable to the Bank and to the Company are referred
to below or elsewhere herein. The description of statutory provisions and
regulations applicable to savings institutions and their holding companies set
forth in this Form 10-K does not purport to be a complete description of such
statutes and regulations and their effects on the Bank and the Company.

Holding Company Regulation

      The Company is a nondiversified unitary savings and loan holding company
within the meaning of the HOLA. As a unitary savings and loan holding company,
the Company generally is not restricted under existing laws as to the types of
business activities in which it may engage, provided that the Bank continues to
be a qualified thrift lender ("QTL"). See "Federal Savings Institution
Regulation - QTL Test." Upon any non-supervisory acquisition by the Company of
another savings institution or savings bank that meets the QTL test and is
deemed to be a savings institution by the OTS, the Company would become a
multiple savings and loan holding company (if the acquired institution is held
as a separate subsidiary) and would be subject to extensive limitations on the
types of business activities in which it could engage. The HOLA limits the
activities of a multiple savings and loan holding company and its non-insured
institution subsidiaries primarily to activities permissible for bank holding
companies under Section 4(c)(8) of the Bank Holding Company Act ("BHC Act"),
subject to the prior approval of the OTS, and certain activities authorized by
OTS regulation.

      The HOLA prohibits a savings and loan holding company, directly or
indirectly, or through one or more subsidiaries, from acquiring more than 5% of
the voting stock of another savings institution or holding company thereof,
without prior written approval of the OTS; acquiring or retaining, with certain
exceptions, more than 5% of a nonsubsidiary company engaged in activities other
than those permitted by the HOLA; or acquiring or retaining control of a
depository institution that is not insured by the FDIC. In evaluating
applications by holding companies to acquire savings institutions, the OTS must
consider the financial and managerial resources and future prospects of the
company and institution involved, the effect of the acquisition on the risk to
the insurance funds, the convenience and needs of the community and competitive
factors.

      The OTS is prohibited from approving any acquisition that would result in
a multiple savings and loan holding company controlling savings institutions in
more than one state, subject


                                      23
<PAGE>

to two exceptions: (i) the approval of interstate supervisory acquisitions by
savings and loan holding companies and (ii) the acquisition of a savings
institution in another state if the laws of the state of the target savings
institution specifically permit such acquisitions. The states vary in the extent
to which they permit interstate savings and loan holding company acquisitions.

      Although savings and loan holding companies are not subject to specific
capital requirements or specific restrictions on the payment of dividends or
other capital distributions, HOLA does prescribe such restrictions on subsidiary
savings institutions as described below. The Bank must notify the OTS 30 days
before declaring any dividend to the Company. In addition, the financial impact
of a holding company on its subsidiary institution is a matter that is evaluated
by the OTS and the agency has authority to order cessation of activities or
divestiture of subsidiaries deemed to pose a threat to the safety and soundness
of the institution.

Federal Savings Institution Regulation

      Capital Requirements. The OTS capital regulations require savings
institutions to meet three minimum capital standards: a 1.5% tangible capital
ratio, a 3% leverage (core) capital ratio and an 8% risk-based capital ratio. In
addition, the prompt corrective action standards discussed below also establish,
in effect, a minimum 2% tangible capital standard, a 4% leverage (core) capital
ratio (3% for institutions receiving the highest rating on the CAMEL financial
institution rating system), and, together with the risk-based capital standard
itself, a 4% Tier I risk-based capital standard. Core capital is defined as
common stockholders' equity (including retained earnings), certain noncumulative
perpetual preferred stock and related surplus, and minority interests in equity
accounts of consolidated subsidiaries less intangibles other than certain
purchased mortgage servicing rights and credit card relationships. The OTS
regulations also require that, in meeting the tangible, leverage (core) and
risk-based capital standards, institutions must generally deduct investments in
and loans to subsidiaries engaged in activities not permissible for a national
bank.

      The risk-based capital standard for savings institutions requires the
maintenance of Tier I (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of 4% and 8%, respectively.
In determining the amount of risk-weighted assets, all assets, including certain
off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 100%,
as assigned by the OTS capital regulation based on the risks OTS believes are
inherent in the type of asset. The components of Tier I (core) capital are
equivalent to those discussed earlier. The components of supplementary capital
currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate
preferred stock and the allowance for loan and lease losses limited to a maximum
of 1.25% of risk-weighted assets. Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital.

      The OTS regulatory capital requirements also incorporate an interest rate
risk component. Savings institutions with "above normal" interest rate risk
exposure are subject to a deduction from total capital for purposes of
calculating their risk-based capital requirements. A savings


                                      24
<PAGE>

institution's interest rate risk is measured by the decline in the net portfolio
value of its assets (i.e., the difference between incoming and outgoing
discounted cash flows from assets, liabilities and off-balance sheet contracts)
that would result from a hypothetical 200 basis point increase or decrease in
market interest rates divided by the estimated economic value of the
institution's assets. In calculating its total capital under the risk-based
capital rule, a savings institution whose measured interest rate risk exposure
exceeds 2% must deduct an amount equal to one-half of the difference between the
institution's measured interest rate risk and 2%, multiplied by the estimated
economic value of the institution's assets. The Director of the OTS may waive or
defer a savings institution's interest rate risk component on a case-by-case
basis. A savings institution with assets of less than $300 million and
risk-based capital ratios in excess of 12% is not subject to the interest rate
risk component, unless the OTS determines otherwise. For the present time, the
OTS has deferred implementation of the interest rate risk component. At
September 30, 1996, the Bank met each of its capital requirements, in each case
on a fully phased-in basis and it is anticipated that the Bank will not be
subject to the interest rate risk component.

      The following table presents the Bank's capital position at September 30,
1996 relative to fully phased-in regulatory requirements. For a description of
the Bank's delayed phase-in schedule, see "Business of the Bank - Subsidiary and
Joint Venture Activities."

                                                               Capital
                                            Excess     -----------------------
                   Actual     Required    (Deficiency)   Actual     Required
                  Capital      Capital      Amount      Percent      Percent
                ------------  ---------   -----------  ----------  -----------
                                    (Dollars in thousands)
         
Tangible.....     $18,209      $3,908       $14,301       6.99%       1.50%
Core (Leverage)   $18,209      $7,816       $10,393       6.99%       3.00%
Risk-based...     $19,230      $8,337       $10,893      18.45%       8.00%
                                                    

      Prompt Corrective Regulatory Action. Under the OTS prompt corrective
action regulations, the OTS is required to take certain supervisory actions
against undercapitalized institutions, the severity of which depends upon the
institution's degree of undercapitalization. Generally, a savings institution is
considered "well capitalized" if its ratio of total capital to risk-weighted
assets is at least 10%, its ratio of Tier I (core) capital to risk-weighted
assets is at least 6%, its ratio of core capital to total assets is at least 5%,
and it is not subject to any order or directive by the OTS to meet a specific
capital level. A savings institution generally is considered "adequately
capitalized" if its ratio of total capital to risk-weighted assets is at least
8%, its ratio of Tier I (core) capital to risk-weighted assets is at least 4%,
and its ratio of core capital to total assets is at least 4% (3% if the
institution receives the highest CAMEL rating). A savings institution that has a
ratio of total capital to risk weighted assets of less than 8%, a ratio of Tier
I (core) capital to risk-weighted assets of less than 4% or a ratio of core
capital to


                                      25
<PAGE>

total assets of less than 4% (3% or less for institutions with the highest
examination rating) is considered to be "undercapitalized." A savings
institution that has a total risk-based capital ratio less than 6%, a Tier 1
capital ratio of less than 3% or a leverage ratio that is less than 3% is
considered to be "significantly undercapitalized" and a savings institution that
has a tangible capital to assets ratio equal to or less than 2% is deemed to be
"critically undercapitalized." Subject to a narrow exception, the banking
regulator is required to appoint a receiver or conservator for an institution
that is "critically undercapitalized." The regulation also provides that a
capital restoration plan must be filed with the OTS within 45 days of the date a
savings institution receives notice that it is "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." Compliance
with the plan must be guaranteed by any parent holding company. In addition,
numerous mandatory supervisory actions become immediately applicable to an
undercapitalized institution, including, but not limited to, increased
monitoring by regulators and restrictions on growth, capital distributions and
expansion. The OTS could also take any one of a number of discretionary
supervisory actions, including the issuance of a capital directive and the
replacement of senior executive officers and directors.

      Insurance of Deposit Accounts. Deposits of the Bank are presently insured
by the SAIF, except for deposits acquired in a branch purchase from East New
York Savings Bank which are insured by the Bank Insurance Fund ("BIF"). Both the
SAIF and the BIF, (the deposit insurance fund that covers most commercial bank
deposits), are statutorily required to be recapitalized to a 1.25% of insured
reserve deposits ratio. Until recently, members of the SAIF and BIF were paying
average deposit insurance premiums of between 24 and 25 basis points. The BIF
met the required reserve in 1995, whereas the SAIF was not expected to meet or
exceed the required level until 2002 at the earliest. This situation was
primarily due to the statutory requirement that SAIF members make payments on
bonds issued in the late 1980s by the Financing Corporation ("FICO") to
recapitalize the predecessor to the SAIF.

      In view of the BIF's achieving the 1.25% ratio, the FDIC ultimately
adopted a new assessment rate schedule of 0 to 27 basis points under which 92%
of BIF members paid an annual premium of only $2,000. With respect to SAIF
member institutions, the FDIC adopted a final rule retaining the previously
existing assessment rate schedule applicable to SAIF member institutions of 23
to 31 basis points. As long as the premium differential continued, it may have
had adverse consequences for SAIF members, including reduced earnings and an
impaired ability to raise funds in the capital markets. In addition, SAIF
members, such as the Bank could have been placed at a substantial competitive
disadvantage to BIF members with respect to pricing of loans and deposits and
the ability to achieve lower operating costs.

      On September 30, 1996, the President signed into law the Deposit Insurance
Funds Act of 1996 (the "Funds Act") which, among other things, imposed a special
one-time assessment on SAIF member institutions, including the Bank, to
recapitalize the SAIF. As required by the Funds Act, the FDIC imposed a special
assessment of 65.7 basis points on SAIF assessable deposits held as of March 31,
1995, payable November 27, 1996 (the "SAIF Special Assessment"). The SAIF
Special Assessment was recognized by the Bank as an expense during


                                      26
<PAGE>

the quarter ended September 30, 1996 and is generally tax deductible. The SAIF
Special Assessment recorded by the Bank amounted to $1.1 million on a pre-tax
basis and $598,000 on an after-tax basis.

      The Funds Act also spreads the obligations for payment of the FICO bonds
across all SAIF and BIF members. Beginning on January 1, 1997, BIF deposits will
be assessed for FICO payments of 1.3 basis points, while SAIF deposits will pay
6.48 basis points. Full pro rata sharing of the FICO payments between BIF and
SAIF members will occur on the earlier of January 1, 2000 or the date the BIF
and SAIF are merged. The Funds Act specifies that the BIF and SAIF will be
merged on January 1, 1999, provided no savings associations remain as of that
time.

      As a result of the Funds Act, the FDIC recently voted to effectively lower
SAIF assessments to 0 to 27 basis points as of January 1, 1997, a range
comparable to that of BIF members. However, SAIF members will continue to make
the FICO payments described above. The FDIC also lowered the SAIF assessment
schedule for the fourth quarter of 1996 to 18 to 27 basis points. Management
cannot predict the level of FDIC insurance assessments on an on-going basis,
whether the savings association charter will be eliminated or whether the BIF
and SAIF will eventually be merged.

      The Bank's assessment rate for fiscal 1996 was 23 basis points and the
premium paid for this period was $$387,065, exclusive of the $1,115,000 or 65.7
basis points one-time SAIF special assessment.

      Under the FDI Act, insurance of deposits may be terminated by the FDIC
upon a finding that the institution has engaged in unsafe or unsound practices,
is in an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC or the
OTS. The management of the Bank does not know of any practice, condition or
violation that might lead to termination of deposit insurance.

      Thrift Rechartering Legislation. The Funds Act provides that the BIF and
SAIF will merge on January 1, 1999 if there are no more savings associations as
of that date. That legislation also requires that the Department of Treasury to
submit a report to Congress by March 31, 1999 that makes recommendations
regarding a common financial institutions charter, including whether the
separate charters for thrifts and banks should be abolished. Various proposals
to eliminate the federal thrift charter, create a uniform financial institutions
charter and abolish the OTS were introduced in the 104th Congress. It is likely
that legislation will be introduced in the new Congress addressing the
elimination of the savings association charter. However, the Bank is unable to
predict whether such legislation would be enacted and, if so, the extent to
which the legislation would restrict or disrupt its operations.

      Loans to One Borrower. Under the HOLA, savings institutions are generally
subject to the limits on loans to one borrower applicable to national banks.
Generally, savings institutions may not make a loan or extend credit to a single
or related group of borrowers in excess of 15%


                                      27
<PAGE>

of its unimpaired capital and surplus. An additional amount may be lent, equal
to 10% of unimpaired capital and surplus, if such loan is secured by
readily-marketable collateral, which is defined to include certain financial
instruments and bullion. At September 30, 1996, the Bank's limit on loans to one
borrower was $3.2 million. At September 30, 1996, the Bank's largest aggregate
outstanding balance of loans to one borrower was $2.4 million.

      QTL Test. The HOLA requires savings institutions to meet a QTL test. Under
the QTL test, a savings and loan association is required to maintain at least
65% of its "portfolio assets" (total assets less: (i) specified liquid assets up
to 20% of total assets; (ii) intangibles, including goodwill; and (iii) the
value of property used to conduct business) in certain "qualified thrift
investments" (primarily residential mortgages and related investments, including
certain mortgage-backed securities) in at least 9 months out of each 12 month
period.

      A savings institution that fails the QTL test is subject to certain
operating restrictions and may be required to convert to a bank charter. As of
September 30, 1996, the Bank maintained 82.7% of its portfolio assets in
qualified thrift investments and, therefore, met the QTL test.

      Limitation on Capital Distributions. OTS regulations impose limitations
upon all capital distributions by savings institutions, such as cash dividends,
payments to repurchase or otherwise acquire its shares, payments to shareholders
of another institution in a cash-out merger and other distributions charged
against capital. The rule establishes three tiers of institutions, which are
based primarily on an institution's capital level. An institution that exceeds
all fully phased-in capital requirements before and after a proposed capital
distribution ("Tier 1 Bank") and has not been advised by the OTS that it is in
need of more than normal supervision, could, after prior notice but without
obtaining approval of the OTS, make capital distributions during a calendar year
equal to the greater of (i) 100% of its net earnings to date during the calendar
year plus the amount that would reduce by one-half its "surplus capital ratio"
(the excess capital over its fully phased-in capital requirements) at the
beginning of the calendar year or (ii) 75% of its net income for the previous
four quarters. Any additional capital distributions would require prior
regulatory approval. In the event the Bank's capital fell below its regulatory
requirements or the OTS notified it that it was in need of more than normal
supervision, the Bank's ability to make capital distributions could be
restricted. In addition, the OTS could prohibit a proposed capital distribution
by any institution, which would otherwise be permitted by the regulation, if the
OTS determines that such distribution would constitute an unsafe or unsound
practice. In December 1994, the OTS proposed amendments to its capital
distribution regulation that would generally authorize the payment of capital
distributions without OTS approval provided that the payment does not cause the
institution to be undercapitalized within the meaning of the prompt corrective
action regulation. However, institutions in a holding company structure would
still have a prior notice requirement. At September 30, 1996, the Bank was a
Tier 1 Bank.

      Liquidity. The Bank is required to maintain an average daily balance of
specified liquid assets equal to a monthly average of not less than a specified
percentage of its net withdrawable deposit accounts plus short-term borrowings.
This liquidity requirement is currently 5% but may be changed from time to time
by the OTS to any amount within the range of 4% to 10%


                                      28
<PAGE>

depending upon economic conditions and the savings flows of member institutions.
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 Bank's liquidity and
short-term liquidity ratios for September 30, 1996 were 13.9% and 3.2%
respectively, which exceeded the applicable requirements. The Bank has never
been subject to monetary penalties for failure to meet its liquidity
requirements.

      Assessments. Savings institutions are required to pay assessments to the
OTS to fund the agency's operations. The general assessments, paid on a
semi-annual basis, are computed upon the savings institution's total assets,
including consolidated subsidiaries, as reported in the Bank's latest quarterly
thrift financial report. The assessments paid by the Bank for the fiscal year
ended September 30, 1996 totalled $64,000.

      Branching. OTS regulations permit nationwide branching by federally
chartered savings institutions to the extent allowed by federal statute. This
permits federal savings institutions to establish interstate networks and to
geographically diversify their loan portfolios and lines of business. The OTS
authority preempts any state law purporting to regulate branching by federal
savings institutions.

      Transactions with Related Parties. The Bank's authority to engage in
transactions with related parties or "affiliates" (e.g.., any company that
controls or is under common control with an institution, including the Company
and its non-savings institution subsidiaries) is limited by Sections 23A and 23B
of the Federal Reserve Act ("FRA"). Section 23A limits the aggregate amount of
covered transactions with any individual affiliate to 10% of the capital and
surplus of the savings institution. The aggregate amount of covered transactions
with all affiliates is limited to 20% of the savings institution's capital and
surplus. Certain transactions with affiliates are required to be secured by
collateral in an amount and of a type described in Section 23A and the purchase
of low quality assets from affiliates is generally prohibited. Section 23B
generally provides that certain transactions with affiliates, including loans
and asset purchases, must be on terms and under circumstances, including credit
standards, that are substantially the same or at least as favorable to the
institution as those prevailing at the time for comparable transactions with
non-affiliated companies. In addition, savings institutions are prohibited from
lending to any affiliate that is engaged in activities that are not permissible
for bank holding companies and no savings institution may purchase the
securities of any affiliate other than a subsidiary.

      The Bank's authority to extend credit to executive officers, directors and
10% shareholders, as well as entities such persons control, is governed by
Sections 22(g) and 22(h) of the FRA and Regulation O thereunder. Among other
things, such loans are required to be made on terms substantially the same as
those offered to unaffiliated individuals and to not involve more than the
normal risk of repayment. Regulation O also places individual and aggregate
limits on the amount of loans the Bank may make to such persons based, in part,
on the Bank's capital position and requires certain board approval procedures to
be followed.


                                      29
<PAGE>

      Enforcement. Under the FDI Act, the OTS has primary enforcement
responsibility over savings institutions and has the authority to bring actions
against the institution and all institution-affiliated parties, including
stockholders, and any attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or
directors to institution of receivership, conservatorship or termination of
deposit insurance. Civil penalties cover a wide range of violations and can
amount to $25,000 per day, or even $1 million per day in especially egregious
cases. Under the FDI Act, the FDIC has the authority to recommend to the
Director of the OTS enforcement action to be taken with respect to a particular
savings institution. If action is not taken by the Director, the FDIC has
authority to take such action under certain circumstances. Federal law also
establishes criminal penalties for certain violations.

      Standards for Safety and Soundness. The federal banking agencies have
adopted Interagency Guidelines Prescribing Standards for Safety and Soundness
("Guidelines") and a final rule to implement safety and soundness standards
required under the FDI Act. The Guidelines set forth the safety and soundness
standards that the federal banking agencies use to identify and address problems
at insured depository institutions before capital becomes impaired. The
standards set forth in the Guidelines address internal controls and information
systems; internal audit system; credit underwriting; loan documentation;
interest rate risk exposure; asset growth; and compensation, fees and benefits.
If the appropriate federal banking agency determines that an institution fails
to meet any standard prescribed by the Guidelines, the agency may require the
institution to submit to the agency an acceptable plan to achieve compliance
with the standard, as required by the FDI Act. The final rule establishes
deadlines for the submission and review of such safety and soundness compliance
plans when such plans are required.

Federal Reserve System

      The Federal Reserve Board regulations require savings institutions to
maintain non-interest earning reserves against their transaction accounts
(primarily NOW and regular checking accounts). During fiscal 1996, the Federal
Reserve Board regulations generally required that reserves be maintained against
aggregate transaction accounts as follows: for accounts aggregating $52.0
million or less (subject to adjustment by the Federal Reserve Board) the reserve
requirement is 3%; and for accounts aggregating greater than $52.0 million, the
reserve requirement is $1.6 million plus 10% (subject to adjustment by the
Federal Reserve Board between 8% and 14%) against that portion of total
transaction accounts in excess of $52.0 million. The first $4.3 million of
otherwise reservable balances (subject to adjustments by the Federal Reserve
Board) are exempted from the reserve requirements. The Bank is in compliance
with the foregoing requirements. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve Board may be used to satisfy
liquidity requirements imposed by the OTS.


                                      30
<PAGE>

                          FEDERAL AND STATE TAXATION

Federal Taxation

      General.  The Company and the Bank report their income on a
consolidated/unconsolidated basis and the accrual/cash method of accounting, and
are subject to federal income taxation in the same manner as other corporations
with some exceptions, including particularly the Bank's reserve for bad debts
discussed below. The following discussion of tax matters is intended only as a
summary and does not purport to be a comprehensive description of the tax rules
applicable to the Bank or the Company. The Bank has not been audited by the
Internal Revenue Service ("IRS") during the last seven years. For its 1996
taxable year, the Bank is subject to a maximum federal income tax rate of 34%.

      Bad Debt Reserves. For fiscal years beginning prior to December 31, 1995,
thrift institutions which qualified under certain definitional tests and other
conditions of the Internal Revenue Code of 1986 (the "Code") were permitted to
use certain favorable provisions to calculate their deductions from taxable
income for annual additions to their bad debt reserve. A reserve could be
established for bad debts on qualifying real property loans (generally secured
by interests in real property improved or to be improved) under (i) the
Percentage of Taxable Income Method (the "PTI Method") or (ii) the Experience
Method. The reserve for nonqualifying loans was computed using the Experience
Method.

      The Small Business Job Protection Act of 1996 (the "1996 Act"), which was
enacted on August 20, 1996, requires savings institutions to recapture (i.e.,
take into income) certain portions of their accumulated bad debt reserves. The
1996 Act repeals the reserve method of accounting for bad debts effective for
tax years beginning after 1995. Thrift institutions that would be treated as
small banks are allowed to utilize the Experience Method applicable to such
institutions, while thrift institutions that are treated as large banks (those
generally exceeding $500 million in assets) are required to use only the
specific charge-off method. Thus, the PTI Method of accounting for bad debts is
no longer available for any financial institution.

      Use of the PTI Method had the effect of reducing the marginal rate of
federal tax on the Bank's income to 32.2%, exclusive of any minimum or
environmental tax, as compared to the maximum corporate federal income tax rate
of 35%.

      A thrift institution required to change its method of computing reserves
for bad debts will treat such change as a change in method of accounting,
initiated by the taxpayer, and having been made with the consent of the IRS. Any
Section 481(a) adjustment required to be taken into income with respect to such
change generally will be taken into income ratably over a six-taxable year
period, beginning with the first taxable year beginning after 1995, subject to
the residential loan requirement.

      Under the residential loan requirement provision, the recapture required
by the 1996 Act will be suspended for each of two successive taxable years,
beginning in 1996 or 1997 in which


                                      31
<PAGE>

the Bank's loan originations is at least equal to the average of the principal
amounts of such loans made by the Bank during its six most recent tax years
prior to 1996.

      The provisions of the 1996 Act are effective for the Bank's taxable year
beginning October 1, 1996, and the Bank is permitted to make additions to bad
debt reserves based on experience method only. In addition, the Bank is required
to recapture (i.e. take into taxable income) over a six year period or not more
than an eight year period if residential loan requirements are met, the excess
of the balance of its bad debt reserves as of September 30, 1996 (other than its
supplemental reserves for losses on loans) over the balance of such reserves for
the base year (i.e. the last year beginning before 1988). Since the percentage
of taxable income method for Federal tax bad debt deduction and the
corresponding increase in the Federal tax bad debt reserve in excess of the base
year has been recorded as temporary differences pursuant to SFAS 109, this
change in the tax law is not expected to have a material adverse effect on the
Bank's statement of operations.

      Distributions. Under the 1996 Act, if the Bank makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Bank's unrecaptured tax bad debt reserves (including the
balance of its reserves as of December 31, 1987) to the extent thereof, and then
from the Bank's supplemental reserve for losses on loans, to the extent thereof,
and an amount based on the amount distributed (but not in excess of the amount
of such reserves) will be included in the Bank's taxable income. Non-dividend
distributions include distributions in excess of the Bank's current and
accumulated earnings and profits, as calculated for federal income tax purposes,
distributions in redemption of stock, and distributions in partial or complete
liquidation. Dividends paid out of the Bank's current or accumulated earnings
and profits will not be so included in the Bank's taxable income.

      The amount of additional taxable income triggered by a non-dividend is an
amount that, when reduced by the tax attributable to the income, is equal to the
amount of the distribution. Thus, if the Bank makes a non-dividend distribution
to the Company, approximately one and one-half times the amount of such
distribution (but not in excess of the amount of such reserves) would be
includable in income for federal income tax purposes, assuming a 35% federal
corporate income tax rate. The Banks does/does not intend to pay dividends that
would result in a recapture of any portion of its bad debt reserves.

      SAIF Recapitalization Assessment. The Funds Act levies a 65.7-cent fee on
every $100 of thrift deposits held on March 31, 1995. For financial statement
purposes, this assessment must be reported as an expense for the quarter ended
September 30, 1996. The Funds Act includes a provision which states that the
amount of any special assessment paid to capitalize SAIF under this legislation
is deductible under Section 162 of the Code in the year of payment.

State and Local Taxation

      New York State and New York City Taxation. The Bank is subject to the New
York State Franchise Tax on Banking Corporations in an amount equal to the
greater of (i) 9.0% of "entire net income" allocable to New York State during
the taxable year, or (ii) the applicable alternative


                                      32
<PAGE>

minimum tax. The alternative minimum tax is generally the greater of (a) 3.0% of
"alternative entire net income" allocable to New York State, (b) 0.01% of the
Bank's assets allocable to New York State, or (c) $250. Entire net income is
similar to federal taxable income, subject to certain modifications (including
the addition of interest income on state and municipal obligations, the partial
exclusion of interest income on certain United States Treasury, New York State,
and New York City obligations, and an additional New York State bad debt
deduction). Alternative entire net income is equal to entire net income without
certain deductions which are allowable for the calculation of entire net income.
New York State also imposes several surcharges on the Franchise Tax on Banking
Corporations including a 17.0% Metropolitan Transportation Business Tax
Surcharge and an additional 2.5% surcharge which currently apply to the Bank.

      The Bank is also subject to the New York City Financial Corporation Tax
calculated, subject to a New York City income and expense allocation, on a
similar basis as the New York State Franchise Tax. Currently, New York City does
not impose surcharges applicable to the Bank.

      Delaware Taxation. As a Delaware holding company not earning income in
Delaware, the Company is exempted from Delaware corporate income tax but is
required to file an annual report with and pay an annual franchise tax to the
State of Delaware.

Impact of New Accounting Standards

      In March 1995, the FASB issued SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of." SFAS 121 established
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used and for long-lived assets and certain identifiable intangibles to be
disposed of. SFAS 121 does not apply to financial instruments, long-term
customer relationships of a financial institution (i.e. core deposit
intangibles), mortgage and other servicing rights, or deferred tax assets. SFAS
121 requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. In such cases, an impairment loss is to be recognized if the
carrying value of such asset exceeds its fair value. In regard to long-lived
assets to be disposed of either through sales or abandonment, such assets are to
be carried at the lower of cost or fair value less costs to sell. SFAS 121 is
effective for fiscal years beginning after December 15, 1995 and restatement of
previously issued financial statements is not permitted. SFAS 121 was adopted
effective October 1, 1996 and such adoption did not have a material adverse
effect on the Company's consolidated financial condition or results of
operations.

      In June 1995, the FASB issued SFAS 122, "Accounting for Mortgage Servicing
Rights." SFAS 122 amends SFAS 65, "Accounting for Certain Mortgage Banking
Activities," to require that a mortgage banking enterprise recognize as separate
assets rights to service mortgage loans for others, however those servicing
rights were acquired, should such loans be sold or securitized and the related
mortgage servicing rights retained. The servicing rights are to be recorded
based on an allocation of the total investment in related loans to the relative
fair values of the loans and


                                      33
<PAGE>

the separated servicing rights retained, providing it is practical to estimate
those fair values. SFAS 122 is effective prospectively in fiscal years beginning
after December 15, 1995. Retroactive capitalization of mortgage servicing rights
retained in transactions in which a mortgage banking enterprise originates
mortgage loans and sells or securitizes those loans before adoption of SFAS 122
is prohibited. SFAS 122 was adopted effective October 1, 1996 and such adoption
did not have a material adverse effect on the Company's consolidated financial
condition or results of operations.

      In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
Compensation." SFAS 123 establishes financial accounting and reporting standards
for stock-based employees compensation plans. SFAS 123 encourages all entities
to adopt the "fair value base method" of accounting for employee stock
compensation plans.. However, SFAS 123 also allows an entity to continue to
measure compensation cost under such plans using the "intrinsic value based
method." Under the fair value based method, compensation cost is measured at the
grant date based on the value of the award and its recognized over the service
period, usually the vesting period. Fair value is determined using an option
pricing model that takes into account the stock price at the grant date, the
exercise price, the expected life of the option, the volatility of the
underlying stock and the expected dividends on it, and the risk free interest
rate over the expected life of the option. Under the intrinsic value based
method, compensation cost is the excess, if any, of the quoted market price of
the stock at the grant date or other measurement date over the amount an
employee must pay to acquire the stock. Most stock plans have no intrinsic value
at date of grant, and under previous accounting guidance, no compensation cost
was to be recognized.

      The accounting requirements of SFAS 123 are effective for transactions
entered into in fiscal years that begin after December 15, 1995. The Company
intends to continue accounting for compensation cost under the intrinsic value
based method and will provide pro forma disclosures for all awards granted after
October 1, 1996. Such disclosures include net income and earnings per share as
if the fair value based method of accounting has been applied.

      In September 1996, the FASB issued SFAS 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 125").
This Statement provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities based on
consistent application of financial-components approach that focuses on control.
It distinguishes transfers of financial assets that are sales from transfers
that are secured borrowings. Under the financial-components approach, after a
transfer of financial assets, an entity recognizes all financial and servicing
assets it controls and liabilities it has incurred and derecognizes financial
assets it no longer controls and liabilities that have been extinguished. The
financial-components approach focuses on the assets and liabilities that exist
after the transfer. Many of these assets and liabilities are components of
financial assets that existed prior to the transfer. If a transfer does not meet
the criteria for a sale, the transfer is accounted for as a secured borrowing
with a pledge of collateral. SFAS 125 is effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring after December
31, 1996, and should be applied prospectively. Earlier or retroactive
application of


                                      34
<PAGE>

SFAS 125 is not permitted. SFAS 125, when adopted, is not expected to have a
material adverse effect on the Company's consolidated financial condition or
results of operations.

Additional Item.  Executive Officers Who Are Not Directors

      The following table sets forth certain information regarding executive
officers of the Company, at September 30, 1996, who are not also directors.

       Name                 Age                     Position Held
------------------------------------------------------------------------------

P. James O'Gorman            37           Senior Vice President, Chief Financial
                                          Officer and Treasurer
Robert E. Adamec             53           Senior Vice President and Corporate
                                          Secretary

      P. James O'Gorman. Mr. O'Gorman joined the Bank in 1990 as Controller. In
March 1991, he was promoted to Treasurer of the Bank. From November 1993 to
March 1994, Mr. O'Gorman served as Vice President and Treasurer of the Bank.
Since March 1994, Mr. O'Gorman has served as Senior Vice President, Chief
Financial Officer and Treasurer of the Bank and is a Certified Public
Accountant.

      Robert E. Adamec. Mr. Adamec has been employed with the Bank since July
1990. From October 1990 to November 1993, he served as Vice President of the
Bank. In November 1993, Mr. Adamec was elected Senior Vice President and
Corporate Secretary of the Bank.

Item 2. Properties

      The Bank conducts its business through its main office and four
full-service branch offices. Loan originations are processed at the main office.
The Bank believes that its current facilities are adequate to meet the present
and immediately foreseeable needs of the Bank and the Company.


                                      35
<PAGE>

                                                   Lease
                                                Expiration
                                      Date         Date              Net
                          Owned/    Acquired     Including        Book Value
       Location           Leased    or Leased     Options     September 30, 1996
------------------------  ------    ---------   -----------   ------------------
                                                                (In thousands)
Main Office:
  Long Island City
  42-25 Queens Boulevard   Owned      1962          --             $  579
Branches:
  Long Island City
  45-14 46th Street....   Leased      1976         2001                10
  Jackson Heights
  75-23 37th Avenue....   Leased      1990         2005               213
  Flushing
  59-23 Main Street....   Leased      1974         1999               159
  Brooklyn
  814 Manhattan Avenue.    Owned      1995          --              1,117
                                                                    -----

Total                                                              $2,078
                                                                   ======

Item 3. Legal Proceedings

      Neither the Company nor the Bank are involved in any pending legal
proceedings other than routine legal proceedings occurring in the ordinary
course of business, which in the aggregate involve amounts which are believed by
management to be immaterial to the financial condition and results of the
operation of the Company and the Bank.

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

      None.

                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholders Matters

      Information relating to the market for Registrant's common stock and
related stockholder matters appears under Common Stock Information in the
Registrant's 1996 Annual Report to Stockholders on page 41 and is incorporated
herein by reference.

Item 6. Selected Financial Data

      The selected financial data appears under Selected Consolidated Financial
and Other Data of the Bank in the Registrant's 1996 Annual Report to
Stockholders on pages 6 through 7 and is incorporated herein by reference.

                                      36
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      The above-captioned information appears under Management's Discussion and
Analysis of Financial Condition and Results of Operations in the Registrant's
1996 Annual Report to Stockholders on pages 8 through 15 and is incorporated
herein by reference.

Item 8. Financial Statements and Supplementary Data

      The Consolidated Financial Statements and related notes thereto of
Financial Bancorp, Inc. and its subsidiaries, together with the report thereon
by Radics & Co., LLC, appears in the Registrant's 1996 Annual Report to
Stockholders on pages 16 through 40 and are incorporated herein by reference.

Item 9. Change In and Disagreements with Accountants on Accounting and Financial
        Disclosure

      Not Applicable.

                                   PART III

Item 10. Directors and Executive Officers of the Registrant

      The information relating to Directors and Executive Officers of the
Registrant is incorporated herein by reference to the Registrant's Proxy
Statement for the 1997 Annual Meeting of Stockholders to be held January 22,
1997 pages 5 through 6.

Item 11. Executive Compensation

     The information relating to executive compensation is incorporated herein
by reference to the Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders to be held on January 22, 1997 at pages 7 through 8 and 13 through
17, excluding the Compensation Committee Report.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      The information relating to security ownership of certain beneficial
owners and management is incorporated herein by reference to the Registrant's
Proxy Statement for the 1997 Annual Meeting of Stockholders to be held on
January 22, 1997 at pages 3 through 6.

Item 13. Certain Relationships and Related Transactions

      The information relating to certain relationships and related transactions
is incorporated herein by reference to the Registrant's Proxy Statement for the
1997 Annual Meeting of Stockholders to be held on January 22, 1997 at page 17.


                                      37
<PAGE>

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 10-K.

      (a)   The following documents are filed as a part of this report:

      (1)   Consolidated Financial Statements of Financial Bancorp, Inc. are
            incorporated by reference to the indicated pages of the 1996 Annual
            Report to Stockholders.

                                                                            PAGE
                                                                            ----

Independent Auditors' Report ..............................................  40
                                                                           
Consolidated Statements of Financial Condition as of                       
      September 30, 1996 and 1995 .........................................  16
                                                                           
                                                                           
Consolidated Statements of Income for Each of the Years in                 
      the Three-Year Period Ended September 30, 1996 ......................  17
                                                                           
                                                                           
Consolidated Statements of Changes in Stockholders' Equity for Each        
      of the Years in the Three-Year Period Ended September 30, 1996 ......  18
                                                                           
                                                                           
Consolidated Statements of Cash Flows for Each                             
      of the Years in the Three-Year Period Ended September 30, 1996 ......  19
                                                                           
                                                                           
Notes to Consolidated Financial Statements ................................  21
                                                                      
The remaining information appearing in the 1996 Annual Report to Stockholders is
not deemed to be filed as part of this report, except as expressly provided
herein.

      (2)   All schedules are omitted because they are not required or
            applicable, or the required information is shown in the consolidated
            financial statements or the notes thereto.

      (3)   Exhibits

      (a)   The following exhibits are filed as part of this report:

      3.1   Certificate of Incorporation of Financial Bancorp, Inc.*

      3.2   Bylaws of Financial Bancorp, Inc.*

      4.0   Stock Certificate of Financial Bancorp, Inc.*


                                       38
<PAGE>

      10.1    Financial Federal Savings Bank Recognition and Retention Plan**

      10.2    Financial Bancorp, Inc. 1995 Incentive Stock Option Plan***

      10.3    Financial Bancorp, Inc. 1995 Stock Option Plan for Outside
              Directors**

      10.4    Financial Savings and Loan Association Employee Stock Ownership
              Plan and Trust*

      10.5    Salary Continuation Agreement between Financial Bancorp, Inc.,
              Financial Savings and Loan Association and Frank S. Latawiec
              (filed herewith)

      10.6    Employment Agreement between Financial Federal Savings and Loan
              Association and Irene C. Greco****

      10.7    Employment Agreement between Financial Federal Savings and Loan
              Association and P. James O'Gorman****

      10.8    Employment Agreement between Financial Federal Savings and Loan
              Association and Robert E. Adamec****

      10.9    Employment Agreement between Financial Bancorp, Inc. and Irene
              C. Greco****

      10.10   Employment Agreement between Financial Bancorp, Inc. and P.
              James O'Gorman****

      10.11   Employment Agreement between Financial Bancorp, Inc. and Robert
              E. Adamec****

      10.12   Financial Federal Savings and Loan Association Outside
              Directors' Consultation and Retirement Plan*

      11.0    Computation of earnings per share (filed herewith)

      13.0    Annual Report to Stockholders for the year ended September 30,
              1996 (filed herewith)

      21.0    Subsidiary information is incorporated herein by reference to
              "Subsidiaries" 

      23.0    Consent of Radics & Co., LLC (filed herewith) 

      99.0    Proxy Statement for 1997 Annual Meeting*****

----------
      *       Incorporated herein by reference into this document from the
              Exhibits to Form S- 1, Registration Statement and amendments
              thereto, initially filed on March 18, 1994, Registration No.
              33-76664.

      **      Incorporated herein by reference into this document from the
              Proxy Statement for the January 17, 1996 Annual Meeting of
              Stockholders filed on December 18, 1995.

      ***     Incorporated herein by reference into this document from the
              Proxy Statement for the January 26, 1995 Annual Meeting of
              Stockholders filed on December 15, 1994.

      ****    Incorporated herein by reference into this document from the
              Annual Report on Form 10-K for the fiscal year ended September
              30, 1994 filed with the SEC on December 20, 1994.

      *****   Incorporated herein by reference into this document from the 
              Proxy Statement for the January 22, 1997 Annual Meeting of 
              Stockholders filed with the SEC on December 23, 1996.

      (b)     Reports on Form 8-K


                                       39
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 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.


                                    By:/s/Frank S. Latawiec
                                       ---------------------------------
                                       Frank S. Latawiec
                                       President, Chief Executive
                                       Officer and Director
                                       (Principal Executive Officer)

      Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

    Name                        Title                             Date

/s/Frank S. Latawiec         President, Chief Executive        December 30, 1996
-----------------------      Officer and Director         
Frank S. Latawiec            (Principal Executive Officer)
                             


/s/P. James O'Gorman         Senior Vice President, Chief      December 30, 1996
-----------------------      Financial Officer and Treasurer 
P. James O'Gorman            (Principal Accounting Officer)  
                             


/s/Irene C. Greco            Executive Vice President,         December 30, 1996
-----------------------      Chief Operating Officer    
Irene C. Greco               and Director               
                             


/s/Dominick L. Segrete       Chairman of the Board             December 30, 1996
-----------------------                                       
Dominick L. Segrete                                           
                                                              
                                                              
/s/Peter S. Russo            Director                          December 30, 1996
-----------------------                                       
Peter S. Russo                                                
                                                              
                                                              
/s/Richard J. Hickey         Director                          December 30, 1996
-----------------------                                       
Richard J. Hickey                                             
                                                       

/s/Raymond M. Calamari       Director                          December 30, 1996
-----------------------
Raymond M. Calamari


                                       40