UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended December 31, 1999

                                       or

[X]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                    For the transition period from          to


                         Commission File Number 0-27650

                         CATSKILL FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

          DELAWARE                                               14-1788465
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                   341 MAIN STREET, CATSKILL, NY           12414
             -----------------------------------------------------
             (Address of principal executive offices)   (Zip Code)

                                  (518)943-3600
              (Registrant's telephone number, including area code)


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

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


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

         Common Shares, $.01 par value                         3,735,269
         -----------------------------         ---------------------------------
                 (Title of class)              (outstanding at January 31, 2000)


<PAGE>
                         CATSKILL FINANCIAL CORPORATION
                                    FORM 10-Q
                                December 31, 1999



INDEX
-----

PART I      FINANCIAL INFORMATION                                          Page
------      ---------------------

Item 1.     Consolidated Interim Financial Statements

            Consolidated Statements of Financial Condition as of
            December 31, 1999 (Unaudited) and September 30, 1999             1

            Consolidated  Statements  of  Income  for the three
            months ended December 31, 1999 and 1998 (Unaudited)              2

            Consolidated Statements of Changes in Shareholders'
            Equity for the three months ended December 31, 1999
            and 1998 (Unaudited)                                             3

            Consolidated Statements of Cash Flows for the three
            months ended December 31, 1999 and 1998 (Unaudited)              4

            Notes to Unaudited Consolidated Interim Financial Statements     5

Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                        6

Item 3.     Quantitative and Qualitative Disclosures about Market Risk      15

PART II.    OTHER INFORMATION
--------    -----------------

Item 1.     Legal Proceedings                                               17

Item 2.     Changes in Securities                                           17

Item 3.     Default on Senior Securities                                    17

Item 4.     Submission of Matters to a Vote of Security Holders             17

Item 5.     Other Information                                               17

Item 6.     Exhibits and Reports on Form 8-K                                17

            Signatures                                                      18


<PAGE>
<TABLE>
<CAPTION>
                                          CATSKILL FINANCIAL CORPORATION
                                  Consolidated Statements of Financial Condition
                                 (In thousands, except share and per share data)

                                                             December 31,  September 30,
                                                                 1999            1999
                                                               ---------      ---------
Assets:                                                       (Unaudited)
<S>                                                            <C>            <C>
Cash and due from banks                                        $   5,139      $   3,025
Securities available for sale, at fair value                     159,209        165,833
Federal Home Loan Bank of NY stock, at cost                        3,298          2,634
Loans receivable, net                                            157,357        150,821
Corporate-owned life insurance                                    10,514         10,381
Accrued interest receivable                                        2,709          2,576
Premises and equipment, net                                        3,793          3,297
Other real estate owned                                              107           --
Other assets                                                       4,411          3,014
                                                               ---------      ---------
Total assets                                                   $ 346,537      $ 341,581
                                                               =========      =========

Liabilities and Shareholders' Equity:
Liabilities
Deposits:
Non-interest bearing                                           $   8,583      $   8,918
Interest bearing                                                 210,454        210,146
                                                               ---------      ---------
Total deposits                                                   219,037        219,064
Short-term borrowings                                             45,350         31,100
Long-term borrowings                                              20,000         25,000
Mortgagors' escrow deposits                                        2,334          2,449
Other liabilities                                                  3,704          4,756
                                                               ---------      ---------
Total liabilities                                              $ 290,425      $ 282,369
                                                               ---------      ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                            <C>            <C>
Shareholders' equity
Preferred stock, $.01 par value;
  authorized   5,000,000 shares                                       --             --
Common stock, $.01 par value;
  authorized 15,000,000 shares;
  5,686,750 shares issued
  at December 31, 1999 and September 30, 1999                         57             57
Additional paid-in capital                                        55,092         55,114
Retained earnings, substantially restricted                       40,716         39,997
Unallocated common stock acquired by ESOP                         (3,753)        (3,753)
Unearned management recognition plan                                (894)        (1,011)
Treasury stock, at cost (1,901,481 shares at
  December 31, 1999 and 1,778,342
shares at September 30, 1999)                                    (30,294)       (28,521)
Accumulated other comprehensive income (loss)                     (4,812)        (2,671)
                                                               ---------      ---------
Total shareholders' equity                                        56,112         59,212
                                                               ---------      ---------
Total liabilities and shareholders' equity                     $ 346,537      $ 341,581
                                                               =========      =========
</TABLE>

 See accompanying notes to unaudited consolidated interim financial statements.

                                      -1-
<TABLE>
<CAPTION>
                         CATSKILL FINANCIAL CORPORATION
                        Consolidated Statements of Income
                 (In thousands, except share and per share data)


                                                        THREE MONTHS ENDED
                                                             December 31,
                                                       1999              1998
                                                   -----------       -----------
                                                   (Unaudited)
<S>                                                <C>               <C>
Interest and dividend income:
Loans                                              $     3,006       $     2,764
Securities available for sale:
Taxable                                                  1,999             2,030
Non-taxable                                                718               491
Investment securities held to maturity                    --                  33
Federal funds sold and other                                 1                 1
Federal Home Loan Bank of NY stock                          51                34
                                                   -----------       -----------
Total interest and dividend income                       5,775             5,353
Interest expense:
Deposits                                                 2,084             2,226
Short-term borrowings                                      556                71
Long-term borrowings                                       295               329
                                                   -----------       -----------
Total interest expense                                   2,935             2,626
                                                   -----------       -----------
Net interest income                                      2,840             2,727
Provision for loan losses                                   50                45
                                                   -----------       -----------
Net interest income after provision for
  loan losses                                            2,790             2,682
                                                   -----------       -----------
Non-interest income:
Corporate-owned life insurance                             133              --
Service fees on deposit accounts                           106                90
Net securities gains (losses)                              (93)               22
Other income                                                53                45
                                                   -----------       -----------
Total non-interest income                                  199               157
                                                   -----------       -----------


</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                <C>               <C>
Non-interest expense:
Salaries and employee benefits                             927               871
Advertising and business promotion                          55                22
Net occupancy on premises                                  111                95
Federal deposit insurance premium                            7                 6
Postage and supplies                                        86                67
Data processing fees                                       132               122
Equipment                                                   58                40
Professional fees                                           58                59
Other real estate expenses, net                              1                14
Other                                                      158               169
                                                   -----------       -----------
Total non-interest expense                               1,593             1,465
                                                   -----------       -----------
Income before taxes                                      1,396             1,374
Income tax expense                                         294               393
                                                   -----------       -----------
Net income                                         $     1,102       $       981
                                                   ===========       ===========
Basic earnings per common share                    $       .32       $       .26
Diluted earnings per common share                  $       .32       $       .25



Weighted Average Common Shares-Basic                 3,408,380         3,839,278

Weighted Average Common Shares-Diluted               3,468,656         3,879,890
</TABLE>

 See accompanying notes to unaudited consolidated interim financial statements.

                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                                                   CATSKILL FINANCIAL CORPORATION
                                     Consolidated Statements of Changes in Shareholders' Equity
                                     (In thousands, except share and per share data) (Unaudited)

                                                                                          Retained       Common       Unearned
                                                                            Additional   earnings,       stock      management
                                                                  Common     paid-in   substantially  acquired by   recognition
                                                                   stock      capital   restricted       ESOP           plan
                                                                   -----      -------   ----------       ----           ----
<S>                                                               <C>         <C>          <C>           <C>          <C>
     Balance at September 30, 1999                                $ 57        $55,114      $39,997       $(3,753)     $(1,011)

     Comprehensive loss:
            Net income                                                                       1,102
            Other comprehensive income (loss), net of tax:
               Unrealized net losses arising during the
                 period on AFS securities (Pre-tax $3,662)
               Reclassification adjustment for losses
                 realized in net income (pre-tax $93) 56
             Other comprehensive losses
     Comprehensive loss

     Dividends paid on common stock ($.11 per share)                                         (383)

     Purchase of common stock (150,000 shares)

     Exercise of stock options
     (26,861 shares issued, net)
                                                                                 (22)
     Amortization of unearned MRP compensation                                                                             117
                                                                  ----        -------      -------       -------        -----
     Balance at December 31, 1999                                 $ 57        $55,092      $40,716       $(3,753)       $(894)
                                                                  ====        =======      =======       ========       ======


     Balance at September 30, 1998                                $ 57        $54,974      $37,374       $(3,981)     $(1,433)

     Comprehensive income :
            Net income                                                                         981
            Other comprehensive income (loss), net of tax:
              Unrealized net losses arising during the period
            on AFS securities (Pre-tax $811)
              Reclassification adjustment for gains realized in
            net income (pre-tax $22)
            Other comprehensive losses
     Comprehensive income

     Dividends paid on common stock ($.0925 per share)                                       (366)

     Amortization of unearned MRP compensation                                                                            116
                                                                  ----        -------      -------       -------      -------

     Balance at December 31, 1998                                 $ 57        $54,974      $37,989       $(3,981)     $(1,317)
                                                                  ====        =======      =======       =======      =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                Accumulated
                                                                 Treasury          other
                                                                  stock,      comprehensive         Comprehensive
                                                                 at cost       income (loss)        income (loss)          Total
                                                                 -------       -------------        -------------          -----
<S>                                                                <C>              <C>                 <C>               <C>
     Balance at September 30, 1999                                 $(28,521)        $(2,671)                              $59,212

     Comprehensive loss:
            Net income                                                                                     $ 1,102          1,102
            Other comprehensive income (loss), net of tax:
               Unrealized net losses arising during the
                 period on AFS securities (Pre-tax $3,662)                                                 (2,197)
               Reclassification adjustment for losses
                 realized in net income (pre-tax $93)                                                          56
                                                                                                         --------
            Other comprehensive losses                                               (2,141)               (2,141)        (2,141)
                                                                                                         --------
     Comprehensive loss                                                                                  $ (1,039)
                                                                                                         ========

     Dividends paid on common stock ($.11 per share)                                                                        (383)

     Purchase of common stock (150,000 shares)                       (2,203)                                              (2,203)

     Exercise of stock options
     (26,861 shares issued, net)                                         430                                                  408

     Amortization of unearned MRP compensation                                                                                117
                                                                   --------         -------                               -------
     Balance at December 31, 1999                                  $(30,294)        $(4,812)                              $56,112
                                                                   =========        ========                              =======
     Balance at September 30, 1998                                 $(21,223)         $ 2,063                              $67,831

     Comprehensive income :
            Net income                                                                                      $  981            981
            Other comprehensive income (loss), net of tax:
              Unrealized net losses arising during the period
            on AFS securities (Pre-tax $811)                                                                  (487)
              Reclassification adjustment for gains realized in
            net income (pre-tax $22)                                                                           (13)
                                                                                                            ------
            Other comprehensive losses                                                 (500)                  (500)          (500)
                                                                                                            ------
     Comprehensive income                                                                                   $  481
                                                                                                            ======

     Dividends paid on common stock ($.0925 per share)                                                                      (366)

     Amortization of unearned MRP compensation                                                                                116
                                                                    --------          -------                              -------
      Balance at December 31, 1998                                  $(21,223)         $ 1,563                              $68,062
                                                                    ========          =======                              =======
</TABLE>
See accompanying notes to unaudited consolidated interim financial statements.

                                       -3-
<PAGE>
<TABLE>
<CAPTION>
                              CATSKILL FINANCIAL CORPORATION
                          Consolidated Statements of Cash Flows
                                      (In Thousands)

                                                                    Three Months Ended
                                                                       December 31,
                                                                    1999          1998
                                                                  --------      --------
<S>                                                               <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                  (Unaudited)
Net income                                                        $  1,102      $    981
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation                                                            66            49
Net accretion on securities                                           (124)          (23)
Provision for loan losses                                               50            45
MRP compensation expense                                               117           116
ESOP compensation expense                                               84            77
Increase in cash surrender value on COLI                              (133)         --
Losses (gains) on sale of other real estate owned                     --              13
Losses (gains) on sales and calls of securities                         93           (22)
Net increase in other assets                                          (102)          (45)
Net decrease in other liabilities                                   (1,136)         (424)
                                                                  --------      --------
Net cash provided by operating activities                               17           767
                                                                  --------      --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturity/calls/paydown of investment securities         --               9
Net increase in loans                                               (6,693)       (4,836)
Capital expenditures, net                                             (562)          (88)
Purchase of corporate-owned life insurance                            --         (10,000)
Purchase of AFS securities                                          (2,839)      (12,699)
Purchase of Federal Home Loan Bank stock                              (664)         --
Proceeds from sale of AFS securities                                 2,821         5,394
Proceeds from maturity/calls/paydown of AFS securities               3,104        13,702
Proceeds from sale of other real estate owned                         --              10
                                                                  --------      --------
Net cash used by investing activities                               (4,833)       (8,508)
                                                                  --------      --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock options exercises                              408          --
Net increase (decrease) in deposits                                    (27)        5,156
Net increase (decrease) in mortgagors' escrow deposits                (115)        1,347
Net increase in short-term borrowings                               14,250         2,985
Repayment of long-term borrowings                                   (5,000)         --
Cash dividends paid on common stock                                   (383)         (366)
Purchase of common stock for treasury                               (2,203)         --
                                                                  --------      --------
Net cash provided by financing activities                            6,930         9,122
                                                                  --------      --------
Net increase in cash and cash equivalents                            2,114         1,381
Cash and cash equivalents at beginning of period                     3,025         2,795
                                                                  --------      --------
Cash and cash equivalents at end of period                        $  5,139      $  4,176
                                                                  ========      ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                               <C>           <C>
Supplemental cash flow information disclosure:
Interest paid                                                     $  2,869      $  2,630
Income taxes paid                                                      290           370
Transfer of loans to other real estate owned                           107            32
Change in net unrealized gain (loss) on AFS securities,
net of change in deferred tax benefit of $1,428 and
$333, respectively                                                  (2,141)         (500)
</TABLE>

  See accompanying notes to unaudited consolidated interim financial statements

                                      -4-
<PAGE>
                         CATSKILL FINANCIAL CORPORATION
                         Notes to Unaudited Consolidated
                          Interim Financial Statements

       Note 1. Basis of Presentation

             The unaudited consolidated interim financial statements include the
             accounts  of Catskill  Financial  Corporation  ("Company")  and its
             wholly  owned  subsidiary,  Catskill  Savings  Bank  ("Bank").  All
             intercompany  accounts and  transactions  have been  eliminated  in
             consolidation.  Amounts in prior  periods'  unaudited  consolidated
             interim financial statements are reclassified whenever necessary to
             conform  to the  current  period's  presentation.  In  management's
             opinion,  the unaudited  consolidated  interim financial statements
             reflect  all  adjustments  of  a  normal  recurring   nature,   and
             disclosures  which are  necessary  for a fair  presentation  of the
             results for the  interim  periods  presented  and should be read in
             conjunction with the consolidated  financial statements and related
             notes included in the Company's 1999 Annual Report to Stockholders.
             The  results  of  operations  for  the  interim   periods  are  not
             necessarily  indicative of the results of operations to be expected
             for the full fiscal year ended September 30, 2000.

       Note 2. Earnings Per Share

             Basic  earnings  per share  excludes  dilution  and is  computed by
             dividing  income  available to common  stockholders by the weighted
             average  number  of  common  shares  outstanding  for  the  period.
             Unvested  restricted  stock is not considered  outstanding and only
             included in the computation of basic earnings per share on the date
             they are fully  vested.  Diluted  earnings  per share  reflects the
             potential   dilution  that  could  occur  if  securities  or  other
             contracts to issue common  stock were  exercised or converted  into
             common  stock or resulted in the issuance of common stock that then
             shared in the earnings of the entity,  such as the Company's  stock
             options and unvested restricted stock.  Unallocated ESOP shares are
             not  included  in the  weighted  average  number of  common  shares
             outstanding  for  either the basic or  diluted  earnings  per share
             calculations.

             The  following  sets  forth  certain   information   regarding  the
             calculation  of basic and diluted  earnings per share for the three
             month periods ended December 31:

<TABLE>
<CAPTION>
                 (in thousands, except share and per share data)


                                                         1999            1998
                                                      ----------      ----------
<S>                                                   <C>             <C>
Net income                                            $    1,102      $      981
                                                      ==========      ==========

Weighted average common shares                         3,408,380       3,839,278

Dilutive effect of potential common shares
related to stock compensation plans                       60,276          40,612
                                                      ----------      ----------

Weighted average common shares including
potential dilution                                     3,468,656       3,879,890
                                                      ==========      ==========
Basic earnings per share                              $      .32      $      .26

Diluted earnings per share                            $      .32      $      .25
</TABLE>

                                      -5-
<PAGE>
                         CATSKILL FINANCIAL CORPORATION
                                    FORM 10-Q
                                December 31, 1999

                   PART I - FINANCIAL INFORMATION (continued)

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

GENERAL

Catskill  Financial  Corporation  (the  "Company" or "Catskill  Financial") is a
savings and loan holding company, which owns all of the outstanding common stock
of Catskill Savings Bank (the "Bank").

The Bank has been and continues to be a community oriented financial institution
offering a variety of financial  services.  The Bank attracts  deposits from the
general public and uses such deposits,  together with other funds,  to originate
one to four family  residential  mortgages,  and, to a lesser  extent,  consumer
(including  home equity  lines of credit),  commercial,  and  multi-family  real
estate and other loans in its primary  market area.  The Bank's  primary  market
area is comprised of Greene and Schoharie Counties and southern Albany County in
New York, which are serviced through six banking offices, the most recent having
opened in August  1999.  The Bank's  deposit  accounts  are  insured by the Bank
Insurance Fund ("BIF") of the Federal Deposit  Insurance  Corporation  ("FDIC"),
and, as a federal  savings bank, the Bank is subject to regulation by the Office
of Thrift Supervision ("OTS").

The Company's profitability, like many financial institutions, is dependent to a
large extent upon its net interest income,  which is the difference  between the
interest it receives on interest earning assets,  such as loans and investments,
and the interest it pays on interest bearing  liabilities,  principally deposits
and borrowings.

Results of  operations  are also  affected by the  Company's  provision for loan
losses, non-interest expenses such as salaries and employee benefits,  occupancy
and other operating expenses and to a lesser extent, non-interest income such as
service charges on deposit accounts.

General economic conditions, competition and the monetary and fiscal policies of
the federal  government  also  significantly  affect  financial  institutions in
general,   including  the  Company.  The  demand  for  and  supply  of  housing,
competition among lenders,  interest rate conditions and funds  availability all
impact  lending   activities,   while  prevailing   market  rates  on  competing
investments,  customer  preference and the levels of personal income and savings
in the Bank's primary market area affect deposit inflows and outflows.


                                      -6-
<PAGE>
FORWARD-LOOKING STATEMENTS

            When used in this Form 10-Q or future  filings by the  Company  with
the Securities and Exchange Commission, in the Company's press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result",  "are expected to",  "will  continue",  "is  anticipated",  "estimate",
"project",   "believe",   or  similar   expressions  are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigations Reform Act of 1995. In addition, certain disclosures and information
customarily provided by financial institutions, such as analysis of the adequacy
of the allowance for loan losses or an analysis of the interest rate sensitivity
of the Company's assets and  liabilities,  are inherently based upon predictions
of future events and circumstances.  Furthermore, from time to time, the Company
may  publish  other  forward-looking  statements  relating  to such  matters  as
anticipated financial performance, business prospects, and similar matters.

            The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking  statements. In order to comply with the terms of the
safe  harbor,  the  Company  notes  that a variety of  factors  could  cause the
Company's   actual  results  and  experience  to  differ   materially  from  the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking  statements. Some of the risks and uncertainties that may affect
the operations, performance,  development and results of the Company's business,
the interest rate sensitivity of its assets and liabilities, and the adequacy of
its allowance for loan losses, include but are not limited to the following:

o           Deterioration  in  local,  regional,  national  or  global  economic
            conditions which could result, among other things, in an increase in
            loan  delinquencies,  a decrease in property values,  or a change in
            the housing turnover rate;

o           changes  in market  interest  rates or changes in the speed at which
            market interest rates change;

o           changes in laws and  regulations  affecting  the  financial  service
            industry;

o           changes in competition; and

o           changes in consumer preferences.

            The Company wishes to caution readers not to place undue reliance on
any  forward-looking  statements,  which speak only as of the date made,  and to
advise readers that various  factors,  including  those described  above,  could
affect the Company's financial  performance and could cause the Company's actual
results or  circumstances  for future  periods to differ  materially  from those
anticipated or projected.

            The Company  does not  undertake,  and  specifically  disclaims  any
obligation, to publicly release any revisions to any forward-looking  statements
to  reflect  the   occurrence  of  anticipated   or   unanticipated   events  or
circumstances after the date of such statements.

                                      -7-

<PAGE>
FINANCIAL CONDITION

Total  assets were  $346.5  million at December  31,  1999,  an increase of $4.9
million, or 1.4% from the $341.6 million at September 30, 1999. The increase was
primarily  in loans,  and to a lesser  extent,  cash and due from  banks and was
funded principally by increases in short-term borrowings.

Cash and cash  equivalents  were $5.1 million,  an increase of $2.1 million,  or
70.0% from the $3.0 million at September 30, 1999. The increase was  principally
from the Company's decision to temporarily  build-up cash due to the uncertainty
of customer withdrawals related to Year 2000 concerns.

Securities available for sale ("AFS") were $159.2 million, down $6.6 million, or
4.0% from  $165.8  million,  due to sales,  mortgage-backed  securities  ("MBS")
prepayments  and the increase in  unrealized  losses on the AFS portfolio due to
rising  interest  rates.  During the quarter,  the Company  sold lower  yielding
securities and reinvested some of the proceeds at higher rates. In addition, the
Company  invested some of its MBS  prepayments in new MBS's backed by adjustable
rate mortgages  ("ARM's") with teaser rates, with the remaining  balance,  along
with some of the sales proceeds used to fund loan growth.  The unrealized losses
on the  Company's  AFS  portfolio  changed  from  $4.5  million  or  2.6% of the
portfolio's  book cost to $8.0 million or 4.8% of book cost due  principally  to
rising interest rates.

Loans  receivable  were $159.5  million as of December 31, 1999,  an increase of
$6.6  million or 4.3% over the $152.9  million as of  September  30,  1999.  The
following  table  shows  the loan  portfolio  composition  as of the  respective
balance sheet dates:
<TABLE>
<CAPTION>
                                December 31,                  September 30,
                                   1999                           1999
                                   ----                           ----
                               (In thousands)  % of Loans    (In thousands)   % of Loans
<S>                                <C>             <C>           <C>            <C>
Real Estate Loans
One-to-four family                 $123,551        77.5%         $121,151       79.2%
Multi-family and commercial           8,291         5.2             7,940        5.2
Construction                          3,629         2.3             3,176        2.1
                                   --------       -----          --------      -----
Total real estate loans             135,471        85.0           132,267       86.5
Consumer Loans                       22,980        14.4            19,729       12.9
Commercial Loans                      1,036          .6               994         .6
                                   --------       -----          --------      -----
Gross Loans                         159,487       100.0%          152,990      100.0%
                                                  =====                        =====
Net deferred loan costs (fees)           10                           (76)
                                   --------                      --------
Total loans receivable             $159,497                      $152,914
                                   ========                      ========
</TABLE>
One-to-four  family real estate loans  increased  $2.4 million,  or 2.0%, as the
Company has  continued to promote a 15 year fixed rate  mortgage  product with a
preferred  rate for  borrowers  who have their  monthly  payments  automatically
deducted from a checking  account with the Bank.  Consumer loans  increased $3.3
million or 16.8% from  September  30, 1999,  due  principally  to an increase in
indirect  auto loans.  The Company began its indirect auto program in June 1998,
and still  originates only through a limited number of dealers in its contiguous
market  area.  At December  31,  1999,  the Company had $5.8 million of indirect
loans representing  25.2% of the consumer loan portfolio,  and less than 3.7% of
the Company's gross loan portfolio.

                                      -8-
<PAGE>
Non-performing  assets at  December  31,  1999 were  $646,000,  or .19% of total
assets, compared to the $544,000, or .16% of total assets at September 30, 1999.
The  table  below  sets  forth  the  amounts  and  categories  of the  Company's
non-performing assets.
<TABLE>
<CAPTION>
                                          December 31,      September 30,
                                               1999            1999
                                               ----            ----
<S>                                            <C>             <C>
Non-performing loans:
One-to-four family                             $350            $396
Multi-family and commercial                     --              --
Consumer                                        189             148
                                               ----            ----
Total non-performing loans                      539             544
                                               ----            ----
Foreclosed assets, net:
One-to-four family                              107             --
Multi-family and commercial                     --              --
                                               ----            ----
Total foreclosed assets, net                    107             --
                                               ----            ----
Total non-performing assets                    $646            $544
                                               ====            ====
Total non-performing loans
as a % of total loans                           .34%            .36%

</TABLE>

The  decrease  in  non-performing  loans at  December  31,  1999 as  compared to
September  30, 1999 was  principally  due to the  foreclosure  of one loan which
resulted in the  Company  acquiring  title to the  mortgaged  property.  The net
realizable value of the property,  totaling  $107,000,  was transferred to other
real estate,  and since the net realizable value exceeded the Company's carrying
value, the Company recorded no loss. The following table summarizes the activity
in other real estate for the periods presented:
<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                             December 31,
                                                       -----------------------
                                                        1999              1998
<S>                                                    <C>                <C>
 Other real estate beginning of period                 $ ---              $ 53

 Transfer of loans to other real estate owned            107                32
                                                          --               (23)
 Sales of other real estate, net                       -----              ----
                                                       $ 107              $ 62
 Other real estate end of period                       =====              ====
</TABLE>
Additionally,  at December 31, 1999,  the Company had  identified  approximately
$214,000 in loans having more than normal credit risk,  principally all of which
were  secured by real  estate.  The Company  believes  that if  economic  and/or
business conditions change in its lending area, some of these loans could become
non-performing in the future.

                                      -9-
<PAGE>
The allowance for loan losses was $2.1 million,  or 1.34% of period end loans at
December 31,  1999,  and provided  coverage of  non-performing  loans of 397.0%,
compared  to  coverage  of  384.7%  as of  September  30,  1999.  The  following
summarizes the activity in the allowance for loan losses:
<TABLE>
<CAPTION>
                                               Three Months Ended December 31,
                                                  1999            1998
                                                -------          ------
<S>                                             <C>              <C>
Allowance at beginning of the period            $ 2,093          $ 1,950
Charge-offs                                         (11)             (13)
Recoveries                                            8                2
                                                -------          -------
Net charge-offs                                      (3)             (11)
Provision for loan losses                            50               45
                                                -------          -------
Allowance at end of the period                  $ 2,140          $ 1,984
                                                =======          =======
</TABLE>

Total deposits were $219.0 million at December 31, 1999,  down slightly from the
$219.1  million at September  30, 1999.  The  following  table shows the deposit
composition as of the two dates:
<TABLE>
<CAPTION>
                                         December 31, 1999                  September 30, 1999
                                ---------------------------------    ---------------------------------
                                (In thousands)      % of Deposits    (In thousands)      % of Deposits
<S>                                  <C>                  <C>             <C>                  <C>
    Savings                          $ 81,355             37.1%           $ 81,894             37.4%
    Money market                        5,904              2.7               6,435              2.9
    NOW                                15,973              7.3              14,833              6.8
    Non-interest demand                 8,583              3.9               8,918              4.1
    Certificates of deposits          107,222             49.0             106,984             48.8
                                      -------            -----             -------            -----
                                     $219,037            100.0%           $219,064            100.0%
                                      =======            =====             =======            =====
</TABLE>

      Deposits were essentially flat despite the fact that the Company generated
      new  deposits  of $1.3  million  during  the  quarter at its new branch in
      Middleburgh.  The Company  attributes the decline in deposits at the other
      branches to seasonal outflows in its business checking accounts as well as
      some withdrawals due to Year 2000 concerns.

      The Company  increased its  borrowings  with the Federal Home Loan Bank of
      New York  ("FHLB"),  to $65.4 million at December 31, 1999, an increase of
      $9.3 million from the $56.1 million at September 30, 1999.  The additional
      borrowings were used to fund the Company's stock repurchases,  loan growth
      and the  temporary  increase in cash and due from banks.  At December  31,
      1999,  the Company still has additional  available  credit of $2.8 million
      under its  overnight  line and $3.2 million  under its  one-month  advance
      program with the FHLB.


                                      -10-
<PAGE>
      Shareholders' equity at December 31, 1999 was $56.1 million, a decrease of
      $3.1  million or 5.2% from the $59.2  million at September  30, 1999.  The
      decrease was  principally  caused by the  Company's  repurchase of 150,000
      shares of its stock at a cost of $2.2 million and the $2.1 million adverse
      change in the Company's net  unrealized  gain (loss) on AFS securities net
      of taxes, due to recent increases in market interest rates. Offsetting the
      decreases were the $.7 million of net income retained after cash dividends
      and  the  $.5  million  increase  in  shareholders'   equity  due  to  the
      amortization of restricted stock awards and the proceeds from the exercise
      of stock options.

      Shareholders' equity as a percentage of total assets was 16.2% at December
      31, 1999  compared to 17.3% at September  30, 1999.  Book value per common
      share was $14.82.


COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED
----------------------------------------------------------
 DECEMBER 31, 1999 AND 1998
---------------------------

General
-------

For the three months ended December 31, 1999, the Company recorded net income of
$1,102,000,  an  increase  of  $121,000,  or 12.3%,  compared to the three month
period  ended  December  31,  1998.  Diluted  earnings  per share were $.32,  an
increase of 28.0%  compared to diluted  earnings per share of $.25 for the three
months ended December 31, 1998. Basic earnings per share were $.32 for the three
month period, an increase of 23.1% compared to $.26 for the comparable  quarter.
For the three months ended December 31, 1999,  weighted  average common shares -
basic  were  3,408,380,  down  430,898,  or 11.2%,  due to the  Company's  share
repurchase programs.

Annualized return on average assets for the three months ended December 31, 1999
and 1998,  was 1.29%  and  1.24%,  respectively,  and the  annualized  return on
average equity was 7.64% and 5.79%, respectively.

Net Interest Income
-------------------

Net  interest  income  on a tax  equivalent  basis for the  three  months  ended
December 31, 1999,  was $3.2  million,  an increase of $224,000,  or 7.6%,  when
compared  to the  three  months  ended  December  31,  1998.  The  increase  was
principally  volume related as the Company  increased its average earning assets
$23.1 million,  or 7.5%, more than  offsetting the increase in interest  expense
from the Company's funding of its stock repurchase  program.  The Company funded
the share repurchases, along with its growth in earning assets, principally with
borrowings and, to a lesser extent, deposit growth.

Interest income for the three months ended December 31, 1999 was $6.1 million on
a tax equivalent  basis,  an increase of $533,000,  or 9.5%, over the comparable
period last year.  The $23.1 million  increase in the average  volume of earning
assets had a direct  positive effect on interest income as the Company sought to
leverage its excess  capital.  The Company also  benefited from a 13 basis point
increase  in the  yield  on its  average  earning  assets  caused  primarily  by
increases in the yield earned on its securities and MBS portfolios due to higher
market interest rates.


                                      -11-
<PAGE>
Average  earning  assets  increased  principally  in  the  loan  and  securities
portfolios, which on average grew 10.6% and 4.9%, respectively.  Loan growth was
principally due to the promotion of a 15 year fixed rate mortgage product, which
increased  volume,  but had an adverse impact on the loan portfolio  yield since
the loans originated during the past fiscal year were at rates below the average
portfolio yield. In addition, the Company, due to lower market interest rates in
late 1998 and early 1999,  experienced higher loan prepayments,  and refinancing
of its existing  portfolio,  which together with the loan  promotion  caused the
yield on the loan portfolio to decrease 13 basis points to 7.68%.

Average MBS were $71.6  million for the three  months  ended  December 31, 1999,
down $13.7 million or 16.1% from the comparable  period due to prepayments.  The
Company  used some of the  proceeds to fund higher  yielding  loans  rather than
purchase  MBS. The average  yield on MBS was 6.66%,  up 34 basis points from the
comparable  period, as the interest rates on the Company's MBS's with underlying
teaser rate ARM's purchased in prior periods  continue to reset to higher rates.
Management  expects the average  yield of these ARM's to increase as they adjust
to their fully indexed rate;  however,  the actual increase will depend upon the
level of the one-year constant maturity treasury index when the rates adjust.

Average securities  increased $21.8 million,  or 14.1%, as the Company purchased
longer call  protected  bank qualified  municipals  and  non-callable  corporate
securities to increase yields and reduce reinvestment risk. The average yield on
the  securities  portfolio  for the three  months ended  December 31, 1999,  was
7.59%, an increase of 16 basis points from the comparable period, as the Company
replaced  securities  called and/or matured with higher yielding  municipals and
corporates.  Municipal  securities  now represent  52.0% of average  securities,
compared to 46.2% in the comparable period.

Interest expense for the three months ended December 31, 1999, was $2.9 million,
an increase of  $309,000,  or 11.8%.  The increase  was  principally  due to the
higher  volume of average  interest-bearing  liabilities  offset  somewhat  by a
decrease in the Company's cost of funds.  Average  interest-bearing  liabilities
were $274.2  million,  an increase of $36.9  million,  or 15.5%,  as the Company
borrowed  in order to fund its  earning  asset  growth and the stock  repurchase
program.  Average short-term  borrowings were $39.3 million for the three months
ended  December  31, 1999,  up $33.9  million  from the  comparable  three-month
period.  Although  the Company  experienced  a decline in the balance of savings
accounts  during the quarter ended December 31, 1999, the Company  believes this
decline was a result of temporary seasonal and Year 2000 issues, as evidenced by
the fact that the year end savings  account  balance of $81.4 million was higher
than the average  balance for the  quarter of $81.2  million.  The cost of funds
decreased 13 basis points to 4.26% as the Company had lowered its deposit  rates
in  late  1998  and  early   1999.   Consequently,   the  cost  of  its  average
interest-bearing  deposits  has  dropped  37 basis  points to  3.92%,  more than
offsetting  the 45 basis point  increase in the Company's  short-term  borrowing
costs.

The Company's net yield on average earning assets was 3.85% for the three months
ended December 31, 1999, up 1 basis point  compared to the comparable  period of
the prior  year.  The  increase  was  principally  caused by the 26 basis  point
increase in the Company's net interest spread, offset by the reduced level of no
cost funding  sources as the Company  funded its stock  repurchase  program with
short-term  borrowings,  which  increased the amount of average  earning  assets
funded by interest bearing liabilities.  For the three months ended December 31,
1999,  the Company had $55.2 million of average  earning  assets with no funding
costs,  a decrease of $13.8  million,  or 20.0%,  from the $69.1 million for the
three months ended December 31, 1998.


                                      -12-
<PAGE>
For more information on average balances, interest, yield and rate, please refer
to Table #1, included in this report.

Provision for Loan Losses
-------------------------

The Company  establishes  an  allowance  for loan losses based on an analysis of
risk factors in its loan portfolio.  This analysis  includes  concentrations  of
credit,  past loan loss  experience,  current  economic  conditions,  amount and
composition  of loan  portfolio,  estimated  fair  market  value  of  underlying
collateral, delinquencies and other factors. Accordingly, the calculation of the
adequacy of the  allowance  for loan losses is not based  solely on the level of
non-performing loans.

The  provision  for loan losses was  $50,000,  or .13% of average  loans for the
three months ended  December  31, 1999,  up $5,000 or 11.1% from the  comparable
period of the prior year. The increase was  principally  based on loan growth as
the provision represented .13% of average loans in both periods. The Company had
net charge-offs of $3,000 or .01% of average loans for the quarter,  compared to
net  charge-offs of $11,000 or .03% of average loans in the  comparable  period.
Non-performing  loans were  $539,000 as of December 31,  1999,  or .34% of total
loans,  an increase of $33,000 from  December  31, 1998,  when they were .35% of
total loans. At December 31, 1999, the allowance for loan losses was $2,140,000,
or 1.34% of period end loans, and provided coverage of  non-performing  loans of
397.0% compared to 1.37% and 392.1%, respectively, as of December 31, 1998.

Non-Interest Income
-------------------

Non-interest  income was $199,000 for the three months ended  December 31, 1999,
an increase of $42,000 or 26.8% from the three months  ended  December 31, 1998.
The increase was principally due to the investment  performance on the Company's
corporate-owned  life  insurance  ("COLI"),  which  increased its cash surrender
value by $133,000.  In addition,  the Company's service fees on deposit accounts
increased  $16,000,  or 18.0%  as the  Company  continues  to  promote  checking
accounts to increase its core deposits.  The Company also earned $16,000 in fees
due to the  implementation  of ATM surcharges during the quarter on non-customer
transactions.  Somewhat  offsetting  these  increases  was the $115,000  adverse
change in net securities  transactions  as the Company sold  securities at a net
loss of $93,000 in this quarter compared to net security gains of $22,000 in the
comparable period.


                                      -13-
<PAGE>
Non-Interest Expense
--------------------

Non-interest   expense  for  the  three  months  ended  December  31,  1999  was
$1,593,000,  an increase of $128,000,  or 8.7%, over the comparable  period last
year. The increase was  principally  the cost  attributable to our new branch in
Middleburgh,  which opened in August 1999,  including  certain  promotional  and
start-up costs.

Salaries  and employee  benefits  for the three months ended  December 31, 1999,
were $927,000,  an increase of $56,000,  or 6.4%,  principally from staffing our
new branch. Advertising,  as well as occupancy,  equipment and supplies were all
higher due to the new branch.

Income Tax Expense
------------------

Income tax expense for the three months ended December 31, 1999, was $294,000, a
decrease  of  $99,000,  or 25.2%,  from the  comparable  period  last year.  The
Company's  effective tax rates for the three months ended  December 31, 1999 and
1998, were 21.06% and 28.60%,  respectively.  The decrease in both the effective
tax rate and  income  tax  expense is  principally  the impact of the  Company's
purchase of tax-exempt securities,  primarily bank qualified municipals, as well
as the non-taxable increase in the cash surrender value of the COLI.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Liquidity  is the ability to generate  cash flows to meet  present and  expected
future funding needs.  Management monitors the Company's liquidity position on a
daily basis to evaluate its ability to meet  expected and  unexpected  depositor
withdrawals  and to make new loans and or  investments.  The Company has reduced
its high level of liquidity,  but continues to manage its balance sheet so there
has been no need for unanticipated sales of assets.

The Company's primary sources of funds for operations are deposits,  borrowings,
principal and interest payments on loans,  mortgage-backed  securities and other
securities available for sale.


                                      -14-
<PAGE>
Net cash provided by operating activities was $17,000 for the three months ended
December  31,  1999,  a decrease of  $750,000  from the  comparable  three month
period. The decrease was principally the change in other liabilities caused by a
decrease in official bank checks  outstanding.  Official  bank checks  decreased
principally  as a result  of the  Company's  payment  of real  estate  taxes for
mortgage  borrowers  using  escrowed  funds  earlier in  September  1999 than in
September 1998.

Investing  activities  used $4.8 million in the three months ended  December 31,
1999,  as the Company  increased  its assets  principally  from the $6.7 million
increase in loans, $.7 million purchase of FHLB stock and $.6 million in capital
expenditures  principally  for the  construction  of a new full service  branch,
offset somewhat by a $3.1 million reduction in securities.  Financing activities
provided $6.9 million,  as the Company  experienced a $14.3 million  increase in
short-term  borrowings,  somewhat  offset by a $5.0 million  payoff of long-term
borrowings  and the $2.2 million cost related to its stock  repurchase  program.
For  more  details  concerning  the  Company's  cash  flows,  see  "Consolidated
Statements of Cash Flows."

An  important  source  of the  Company's  funds  is the  Bank's  core  deposits.
Management  believes that a substantial  portion of the Bank's $219.0 million of
deposits   are  a  dependable   source  of  funds  due  to  long-term   customer
relationships.  The Company does not currently use brokered deposits as a source
of funds,  and as of December  31, 1999,  deposit  accounts  having  balances in
excess of $100,000 totaled $23.8 million, or 10.9%, of total deposits.  The Bank
is required to maintain  minimum  levels of liquid  assets as defined by the OTS
regulations.  The  requirement,  which may be varied by the OTS  depending  upon
economic  conditions and deposit  flows,  is based upon a percentage of deposits
and short-term borrowings. The OTS required minimum liquidity ratio is currently
4% measured  on a monthly  basis and for the month of  December  1999,  the Bank
exceeded that, maintaining an average liquidity ratio of 33.9%, primarily due to
the large percentage of its assets represented by AFS securities.

The Company  anticipates  that it will have sufficient funds to meet its current
commitments.  At December 31,  1999,  the Company had  commitments  to originate
loans of $3.0 million. In addition,  the Company had undrawn commitments of $3.8
million on home equity and other lines of credit. Certificates of deposits which
are scheduled to mature in one year or less at December 31, 1999,  totaled $81.0
million,  and  management  believes that a significant  portion of such deposits
will remain with the Company.

Although there are no minimum capital ratio  requirements  for the Company,  the
Bank is required to maintain minimum regulatory capital ratios. The following is
a summary of the Bank's actual capital  amounts and ratios at December 31, 1999,
compared to the OTS minimum capital requirements:
<TABLE>
<CAPTION>
                                     Actual                     Minimum
                                     Amount            %         Amount         %
                                     ------           ---        ------        --
                                                   (Dollars in thousands)
<S>                                 <C>              <C>        <C>            <C>
            Tangible Capital        $51,971          14.84%     $ 5,252        1.5%
            Core Capital             51,971          14.84       14,005        4.0
            Risk Based Capital       54,111          30.74       14,080        8.0
</TABLE>
                                      -15-
<PAGE>
At December 31, 1999, the Company had $4.6 million of available resources at the
holding company level on an unconsolidated basis to use for direct activities of
the Company.  Furthermore,  the Company has the ability to obtain dividends from
the Bank to provide additional funds.  However,  OTS regulations require advance
OTS approval before the Bank can declare a dividend if dividends paid during the
two prior years plus the current  period exceed  dividends paid during that same
period. The Bank has already paid dividends to the Company in the past two years
in excess of that amount.  Therefore, OTS approval for additional dividends from
the Bank to the Company  would be required  unless and until the passage of time
and new net income from the Bank cause  cumulative  dividends on a rolling basis
to fall below that threshold.

Year 2000

The Company did not experience any material  adverse  effects as a result of the
rollover to January 1, 2000. Some customers withdrew a portion of their deposits
in anticipation  of problems,  but the Company  believes that these  withdrawals
were temporary and that the customers will be gradually redepositing the funds.

                                      -16-
<PAGE>
                   PART I - FINANCIAL INFORMATION (continued)

Item 3.      Quantitative and Qualitative Disclosures About Market Risk

The  Company  believes  there have been no  material  changes  in the  Company's
interest rate risk  position  since  September  30, 1999.  Other types of market
risk, such as foreign  exchange rate risk and commodity price risk, do not arise
in the normal course of the Company's business activities.


               TABLE #1 AVERAGE BALANCES, INTEREST, YIELD AND RATE

  The  following  table  presents,  for the periods  indicated  the total dollar
  amount  of  interest  income  from  average  interest-earning  assets  and the
  resultant yields, as well as the interest expense on average  interest-bearing
  liabilities,  expressed both in dollars and rates. Tax equivalent adjustments,
  principally  on  municipal  securities  totaled  $347,000 and $235,000 for the
  three-month  periods  ended  December  31,  1999 and 1998,  respectively.  All
  average  balances are daily  average  balances.  Non-accruing  loans have been
  included in the table as loans receivable with interest earned recognized on a
  cash basis only.  Securities  include both the  securities  available for sale
  portfolio  and the held to  maturity  portfolio,  other than  mortgage  backed
  securities which are shown separately. Securities available for sale are shown
  at amortized cost.

                                      -17-
<PAGE>
<TABLE>
<CAPTION>
                                                                               THREE MONTH PERIODS ENDED
                                                    -------------------------------------------------------------------------------
                                                             December 31, 1999                           December 31, 1998
                                                    -------------------------------------        ----------------------------------
                                                    Average                        Yield/        Average                     Yield/
                                                    Balance        Interest        Rate          Balance     Interest        Rate
                                                    -------        --------        ----          -------     --------        ----
                                                                                  (Dollars in thousands)
Interest-Earning Assets
<S>                                                 <C>             <C>             <C>          <C>          <C>              <C>
  Loans receivable, net                             $156,552        $ 3,006         7.68%        $141,515     $ 2,764          7.81%
  Mortgage-backed securities                          71,611          1,193         6.66%          85,331       1,348          6.32%
  Securities                                         101,201          1,921         7.59%          79,410       1,475          7.43%
  Federal funds sold and other                            64              1         6.22%              62           1          6.40%
                                                    --------        -------                      --------     -------

  Total interest-earning assets                      329,428          6,121         7.43%         306,318       5,588          7.30%
                                                                    -------                                   -------
Allowance for loan losses                             (2,115)                                      (1,965)
Other assets, net                                     13,165                                       10,185
                                                    --------                                     --------
  Total Assets                                      $340,478                                     $314,538
                                                    ========                                     ========
Interest-Bearing Liabilities
  Savings deposits                                  $ 81,167           $609         2.98%        $ 77,797        $607          3.10%
  Money market                                         6,255             48         3.05%           6,106          45          2.92%
  Now deposits                                        15,519             76         1.95%          13,109          64          1.94%
  Certificates of deposit                            107,028          1,334         4.96%         107,921       1,499          5.51%
  Short-term borrowings                               39,297            556         5.63%           5,436          71          5.18%
  Long-term borrowings                                22,500            295         5.22%          25,000         329          5.22%
  Escrow and other                                     2,451             17         2.76%           1,897          11          2.30%
                                                    --------        -------                      --------     -------
  Total interest-bearing liabilities
                                                     274,217          2,935         4.26%         237,266       2,626          4.39%
                                                                    -------                                   -------
Non-interest bearing                                   8,718                                        6,541
Other liabilities                                        149                                        3,558
Shareholders' equity                                  57,394                                       67,173
                                                    --------                                     --------
  Total Equity and Liabilities                      $340,478                                     $314,538
                                                    ========                                     ========
  Net interest income                                                $3,186                                    $2,962
                                                                     ======                                    ======
  Net interest rate spread                                                          3.17%                                      2.91%
                                                                                    ====                                       ====
  Net yield on average
interest-earning assets                                                             3.85%                                      3.84%
                                                                                    ====                                       ====
  Average interest earning   assets to
average interest  bearing liabilities
                                                      120.13%                                      129.10%
                                                      ======                                       ======
  Earning Assets/Total Assets                          96.75%                                       97.39%
                                                      ======                                        =====

</TABLE>
                                      -18-

<PAGE>
                         CATSKILL FINANCIAL CORPORATION
                                    FORM 10-Q

                                DECEMBER 31, 1999



                           PART II - OTHER INFORMATION

            Item 1. Legal Proceedings

            In the  ordinary  course of  business,  the Company and the Bank are
            subject to legal actions which involve  claims for monetary  relief.
            Management,  based on advice of counsel,  does not believe  that any
            currently known legal actions, individually or in the aggregate will
            have a material effect on its  consolidated  financial  condition or
            results of operation.

            Item 2. Changes in Securities

                                None

            Item 3. Defaults on Senior Securities

                                Not Applicable

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

                                None

            Item 5. Other Information

                                None

            Item 6. Exhibits and Reports on Form 8-K

             (a) Exhibits
                        (11)        Computation of Net Income per Common Share
                        (27)        Financial Data Schedule



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<PAGE>


                                   SIGNATURES


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


                                             CATSKILL FINANCIAL CORPORATION


Date: February 14, 2000                      /s/ Wilbur J. Cross
                                             --------------------
                                             Wilbur J. Cross
                                             Chairman of the Board, President
                                             and Chief Executive Officer
                                             (Principal Executive Officer)



Date: February 14, 2000                      /s/ David J. DeLuca
                                             --------------------
                                             David J. DeLuca
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)



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