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 ending         September 30, 1996
                               --------------------------------------

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

      For the transition period from ---------------- to -----------------------

      Commission File Number:                        1-10104
                             ---------------------------------------------------

                              United Capital Corp.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                       04-2294493
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

  9 Park Place, Great Neck, New York                                  11021
--------------------------------------------------------------------------------
(Address of principal executive offices)                            (Zip Code)

                                  516-466-6464
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                      N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

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

           Common stock, $.10 par value 5,412,929 shares outstanding
                            as of November 4, 1996.


                                  Page 1 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES


                                      INDEX

                          PART I FINANCIAL INFORMATION

                                                                            PAGE
                                                                            ----

ITEM 1.  FINANCIAL STATEMENTS

         Consolidated Balance Sheets as
         of  September  30, 1996 and December 31, 1995                         3

         Consolidated Statements of  Operations for
         the Three Months Ended September 30, 1996 and
         1995                                                                  4

         Consolidated Statements of  Operations for
         the Nine Months Ended September 30, 1996 and
         1995                                                                  5

         Consolidated Statements of Cash Flows for
         the Nine Months Ended September 30, 1996 and
         1995                                                              6 - 7

         Notes to Consolidated Financial Statements                       8 - 12

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                   12 - 17

                            PART II OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS                                                    17

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                     18

SIGNATURES                                                                    18


                                  Page 2 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES

   CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                                   (UNAUDITED)

              ASSETS                               1996               1995
              ------                           -------------      -------------
CURRENT ASSETS:
   Cash and cash equivalents                   $   2,965,082      $   3,527,925
   Marketable securities                             235,960             83,760
   Notes and accounts receivable, net             15,153,945         16,253,100
   Inventories                                     8,468,488          7,764,873
   Prepaid expenses and other current assets         689,772            687,535
   Deferred income taxes                           1,876,123          1,893,205
                                               -------------      -------------

       Total current assets                       29,389,370         30,210,398
                                               -------------      -------------

PROPERTY, PLANT AND EQUIPMENT, net                 7,429,673          9,957,648

REAL PROPERTY HELD FOR RENTAL, net                62,533,035         68,063,502

NONCURRENT NOTES RECEIVABLE                        3,622,664          3,624,188

OTHER ASSETS                                       5,319,220          4,387,064

DEFERRED INCOME TAXES                              1,758,606            956,991

                                               -------------      -------------
        Total assets                           $ 110,052,568      $ 117,199,791
                                               =============      =============


LIABILITIES AND STOCKHOLDERS' EQUITY               1996               1995
------------------------------------           -------------      -------------
CURRENT LIABILITIES:
   Current maturities of long-term debt        $  10,151,390      $  10,085,227
   Borrowings under revolving credit facilities    7,100,000          7,785,000
   Accounts payable and accrued liabilities       17,887,028         19,144,363
   Income taxes payable                            5,748,166          3,680,639
                                               -------------      -------------

          Total current liabilities               40,886,584         40,695,229
                                               -------------      -------------
LONG-TERM LIABILITIES:
   Long-term debt                                 32,365,863         41,899,690
   Other long-term liabilities                     8,657,425          8,375,643
                                               -------------      -------------

          Total liabilities                       81,909,872         90,970,562
                                               -------------      -------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Common stock                                      543,243            560,608
   Additional paid-in capital                      8,166,312         10,101,147
   Retained earnings                              19,511,021         15,678,511
   Minimum pension liability, net of tax            (165,659)          (165,659)
   Net unrealized gain on marketable securities,
   net of tax                                         87,779             54,622
                                               -------------      -------------

          Total stockholders' equity              28,142,696         26,229,229
                                               -------------      -------------
          Total liabilities and stockholders'
          equity                               $ 110,052,568      $ 117,199,791
                                               =============      =============

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
                            OF THESE BALANCE SHEETS.


                                  Page 3 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                   September 30, 1996 September 30, 1995
                                                       ------------    ------------
<S>                                                    <C>             <C>         
REVENUES:
    Net sales                                          $ 14,765,953    $ 13,567,104
    Rental revenues from real estate operations           6,482,497       5,740,559
                                                       ------------    ------------

    Total revenues                                       21,248,450      19,307,663
                                                       ------------    ------------

COSTS AND EXPENSES:
    Costs of sales                                       11,613,678      10,956,127
    Real estate operations -
      Mortgage interest expense                             944,740       1,154,275
      Depreciaiton expense                                1,516,912       1,569,251
      Other operating expenses                            2,133,374       1,511,610
    General and administrative expenses                   1,923,111       2,104,211
    Selling expenses                                      1,622,313       1,391,368
                                                       ------------    ------------

      Total costs and expenses                           19,754,128      18,686,842
                                                       ------------    ------------

      Operating income                                    1,494,322         620,821
                                                       ------------    ------------

OTHER INCOME (EXPENSE):
    Interest income                                         273,930          43,783
    Interest expense                                       (220,501)       (110,354)
    Other income and expense, net                           350,497         200,338
                                                       ------------    ------------

      Total other income (expense)                          403,926         133,767
                                                       ------------    ------------

      Income from continuing operations before
       income taxes                                       1,898,248         754,588

Provision for income taxes                                  912,000         261,000
                                                       ------------    ------------

      Income from continuing operations                     986,248         493,588

DISCONTINUED OPERATIONS:
      Operating loss, net of tax benefit of $225,000           --          (436,077)
      Provision for disposition, net of tax benefit
       of $2,040,000                                           --        (3,960,000)
                                                       ------------    ------------


      Loss from discontinued operations, net of tax            --        (4,396,077)
                                                       ------------    ------------


    Net income (loss)                                  $    986,248    ($ 3,902,489)
                                                       ============    ============

Earnings (loss) per share:
      Income from continuing operations                $        .18    $        .08
      Loss from discontinued operations, net of  tax           --              (.77)
                                                       ------------    ------------
      Net income (loss)                                $        .18    ($       .69)
                                                       ============    ============


Weighted average number of common shares outstanding      5,517,245       5,688,029
                                                       ============    ============
</TABLE>
           THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS

                                  Page 4 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          Nine Months Ended
                                                               September 30, 1996  September 30, 1995
                                                                    ------------    ------------
<S>                                                                 <C>             <C>         
REVENUES:
    Net sales                                                       $ 45,465,910    $ 46,010,697
    Rental revenues from real estate operations                       18,309,379      16,787,683
                                                                    ------------    ------------

    Total revenues                                                    63,775,289      62,798,380
                                                                    ------------    ------------

COSTS AND EXPENSES:
    Costs of sales                                                    35,438,022      35,062,028
    Real estate operations -
      Mortgage interest expense                                        2,878,948       3,433,127
      Depreciaiton expense                                             4,762,807       4,739,862
      Other operating expenses                                         6,023,164       4,205,956
    General and administrative expenses                                6,428,323       6,093,364
    Selling expenses                                                   4,959,316       4,390,710
                                                                    ------------    ------------

      Total costs and expenses                                        60,490,580      57,925,047
                                                                    ------------    ------------

      Operating income                                                 3,284,709       4,873,333
                                                                    ------------    ------------

OTHER INCOME (EXPENSE):
    Interest income                                                      766,158         554,370
    Interest expense                                                    (781,762)       (863,445)
    Other income and expense, net                                      3,393,405       1,506,579
                                                                    ------------    ------------

      Total other income (expense)                                     3,377,801       1,197,504
                                                                    ------------    ------------

      Income from continuing operations before income taxes            6,662,510       6,070,837

Provision for income taxes                                             2,830,000       2,585,000
                                                                    ------------    ------------

      Income from continuing operations                                3,832,510       3,485,837

DISCONTINUED OPERATIONS:
      Operating loss, net of tax benefit of $780,000                        --        (1,512,961)
      Provision for disposition, net of tax benefit of $2,040,000           --        (3,960,000)
                                                                    ------------    ------------


      Loss from discontinued operations, net of tax                         --        (5,472,961)
                                                                    ------------    ------------


     Net income (loss)                                              $  3,832,510    ($ 1,987,124)
                                                                    ============    ============

Earnings (loss) per share:
      Income from continuing operations                             $        .69    $        .59
      Loss from discontinued operations, net of  tax                        --              (.93)
                                                                    ------------    ------------
      Net income (loss)                                             $        .69    ($       .34)
                                                                    ============    ============


Weighted average number of common shares outstanding                   5,546,888       5,899,615
                                                                    ============    ============
</TABLE>
           THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS

                                  Page 5 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         1996            1995
                                                                     ------------    ------------
<S>                                                                  <C>             <C>          
Cash Flows From Operating Activities:
    Net income (loss)                                                $  3,832,510    ($ 1,987,124)
                                                                     ------------    ------------
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
    Depreciation and amortization                                       5,989,480       5,925,306
    Disposal of discontinued operations                                      --         1,868,597
    Net realized (gains) losses
       on marketable securities                                              --          (229,979)
    Changes in assets and liabilities net of effects from business
       acquisitions and disposals in 1995                               2,366,499       4,131,086
                                                                     ------------    ------------

       Total adjustments                                                8,355,979      11,695,010
                                                                     ------------    ------------

         NET CASH PROVIDED BY OPERATING ACTIVITIES                     12,188,489       9,707,886
                                                                     ------------    ------------

Cash Flows from Investing Activities:
       Purchase of marketable securities                                 (101,962)           --
       Proceeds from sales of marketable securities                          --           729,318
       Acquisition of property, plant and equipment                      (544,506)     (1,997,709)
                                                                     ------------    ------------

         NET CASH USED IN INVESTING ACTIVITIES                           (646,468)     (1,268,391)
                                                                     ------------    ------------

Cash Flows from Financing Activities:
       Principal payments on mortgage commitments, notes and loans     (9,467,664)     (7,713,957)
       Proceeds from mortgage commitments, notes and loans                   --         3,150,000
       Net borrowings under revolving credit facilities                  (685,000)        435,000
       Purchase and retirement of common shares                        (2,858,450)     (4,478,192)
       Proceeds from exercise of stock options                            906,250           3,500
                                                                     ------------    ------------

         NET CASH USED IN FINANCING ACTIVITIES                        (12,104,864)     (8,603,649)
                                                                     ------------    ------------

Net decrease in cash and cash equivalents                                (562,843)       (164,154)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        3,527,925       1,584,744
                                                                     ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  2,965,082    $  1,420,590
                                                                     ============    ============
</TABLE>


                                  Page 6 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Continued)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                    1996                1995
                                                                                                    ----                ----
<S>                                                                                              <C>                 <C>       
Supplemental Disclosures of Cash Flow
   Information:
      Cash Paid During the Period For:
         Interest                                                                                $3,802,085          $4,276,210
         Taxes                                                                                      896,943           1,029,946
                                                                                                 ==========          ==========


Supplemental Schedule of Noncash Investing
   and Financing Activities:
      See Notes to Consolidated Financial Statements


     (A)  Changes in assets and  liabilities for the nine months ended September
          30,  1996 and 1995,  net of effects  from  business  acquisitions  and
          disposals in 1995, are as follows:

Decrease in notes and accounts receivable, net                                                   $1,099,155          $   47,127
Decrease (increase) in inventories                                                                 (703,615)            402,410
Decrease (increase) in prepaid expenses
   and other current assets                                                                          (2,237)          3,947,558
Increase in deferred income taxes                                                                  (801,614)           (666,320)
Decrease (increase) in real property held for rental, net                                         2,613,468          (1,030,078)
Decrease in noncurrent notes receivable                                                               1,524              21,850
Decrease (increase) in other assets                                                                (932,156)            356,634
Increase (decrease) in accounts payable and
   accrued liabilities                                                                           (1,257,335)          2,256,734
Increase (decrease) in income taxes payable                                                       2,067,527          (1,236,864)
Increase in other long-term liabilities                                                             281,782              32,035
                                                                                                 ----------          ----------

      Total                                                                                      $2,366,499          $4,131,086
                                                                                                 ==========          ==========
</TABLE>
       THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN
                       INTEGRAL PART OF THESE STATEMENTS


                                  Page 7 of 18
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in  accordance  with the  instructions  to Form 10-Q used for quarterly
reports under Section 13 or 15(d) of the  Securities  Exchange Act of 1934,  and
therefore,  do not include all  information  and footnotes  necessary for a fair
presentation  of financial  position,  results of  operations  and cash flows in
conformity with generally accepted accounting principles.

         The consolidated financial information included in this report has been
prepared in conformity  with the  accounting  principles and methods of applying
those accounting principles,  reflected in the consolidated financial statements
included  in the  Annual  Report  on Form 10-K  filed  with the  Securities  and
Exchange Commission for the year ended December 31, 1995.

         All  adjustments  necessary for a fair statement of the results for the
interim periods presented have been recorded.

         The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.


DISCONTINUED OPERATIONS

         In August  1995,  the  operations  of the  Registrant's  Kentile,  Inc.
("Kentile")  subsidiary  ceased  when its raw  material  stocks  were  exhausted
resulting from an  unwillingness  of major trade  suppliers of Kentile to extend
further  credit.  In December  1995, the assets of Kentile were assigned for the
benefit of creditors and are currently being liquidated.  In connection with the
write-off  of the  Registrant's  investment  in  Kentile,  a  pretax  charge  of
approximately $6 million,  including estimated costs of disposition was recorded
in the  third  quarter  of  1995.  Additional  costs  could be  incurred  by the
Registrant as a result of this matter.  Management will continue to monitor this
situation very closely,  including the values  received upon the  disposition of
the Kentile assets.

         In addition, the accompanying consolidated statements of income include
operating  losses of Kentile,  incurred prior to its closure,  of  approximately
$436,000  and  $1,513,000,  on an after tax basis,  for the three and nine month
periods ended September 30, 1995, respectively.


                                  Page 8 of 18
<PAGE>
MARKETABLE SECURITIES

         Investments in debt securities are classified as  held-to-maturity  and
measured  at  amortized  cost  in the  consolidated  balance  sheet  only if the
Registrant  has the  positive  intent and  ability to hold those  securities  to
maturity. Debt and equity securities that are purchased and held principally for
the  purpose  of  selling  in the near term will be  measured  at fair value and
classified as trading securities.  For the purpose of calculating realized gains
and losses,  the cost of  investments  sold is  determined  using the  first-in,
first-out method. Unrealized gains and losses on trading securities are included
in   current   earnings.   All   securities   not   classified   as  trading  or
held-to-maturity  are  classified  as  available-for-sale  and  measured at fair
value. Unrealized gains and losses on securities available-for-sale are recorded
net of income  taxes,  as a separate  component  of  stockholders'  equity until
realized.  Management determines the appropriate classification of securities at
the time of purchase and reassesses the appropriateness of the classification at
each reporting date.

         The  aggregate  market value of marketable  securities,  which were all
available-for-sale,  was $235,960 and $83,760 at September 30, 1996 and December
31, 1995 respectively,  while gross unrealized holding gains of the Registrant's
marketable  security portfolio were $87,779 and $54,622 on a net of tax basis as
of September 30, 1996 and December 31, 1995, respectively.

DEFERRED TAXES

The  components of the net deferred tax asset (liability) at  September 30, 1996
are as follows:

Realization allowances related to
  accounts receivable and inventories                               $   585,046
Net unrealized (gain) loss on
  marketable securities                                                 (45,220)
Basis differences relating to real
  property held for rental                                            3,047,743
Accrued expenses, deductible when paid                                2,683,819
Deferred revenue and profit (for
  tax purposes)                                                        (221,486)
Basis differences relating to business acquisitions                  (1,858,912)
Property, plant and equipment                                          (579,619)
Pensions                                                                  7,959
Other, net                                                               15,399
                                                                    -----------

Net deferred tax asset                                                3,634,729

Current portion                                                       1,876,123
                                                                    -----------

Noncurrent portion                                                  $ 1,758,606
                                                                    ===========

                                  Page 9 of 18
<PAGE>
CONTINGENCIES

         The Registrant has undertaken the completion of  environmental  studies
and/or remedial action at Metex' two New Jersey facilities.

         The process of remediation has begun at one facility pursuant to a plan
filed with the New Jersey  Department  of  Environmental  Protection  and Energy
("NJDEPE").  Environmental experts engaged by the Registrant estimate that under
the  most  probable  remediation  scenario  the  remediation  of  this  site  is
anticipated to require initial  expenditures of $860,000,  including the cost of
capital equipment,  and $86,000 in annual operating and maintenance costs over a
15-year period.

         Environmental  studies at the second facility indicate that remediation
may be  necessary.  Based  upon the  facts  presently  available,  environmental
experts have advised the  Registrant  that under the most  probable  remediation
scenario,  the estimated  cost to remediate  this site is anticipated to require
$2.3 million in initial costs,  including  capital equipment  expenditures,  and
$258,000 in annual  operating and maintenance  costs over a 10-year period.  The
Registrant  may revise  such  estimates  in the  future  due to the  uncertainty
regarding the nature,  timing and extent of any remediation  efforts that may be
required at this site, should an appropriate regulatory agency deem such efforts
to be necessary.

         The foregoing estimates may also be revised by the Registrant as new or
additional information in these matters become available or should the NJDEPE or
other regulatory agencies require additional or alternative  remediation efforts
in the future.  It is not currently  possible to estimate the range or amount of
any such liability.

         Although the  Registrant  believes  that it is entitled to full defense
and indemnification with respect to environmental  investigation and remediation
costs under its insurance policies,  the Registrant's  insurers have denied such
coverage.  Accordingly,  the  Registrant  has  filed an action  against  certain
insurance carriers seeking defense and indemnification with respect to all prior
and future costs incurred in the  investigation  and remediation of these sites.
Upon the advice of counsel,  the  Registrant  believes that based upon a present
understanding of the facts and the present state of the law in New Jersey, it is
probable that the Registrant will prevail in the pending  litigation and thereby
access all or a very  substantial  portion of the insurance  coverage it claims;
however, the ultimate outcome of litigation cannot be predicted.

         As a result of the foregoing,  the Registrant has not recorded a charge
to  operations  for  the   environmental   remediation,   noted  above,  in  the
consolidated  financial  statements,  as  anticipated  proceeds  from  insurance
recoveries are expected to offset such  liabilities.  The Registrant has reached
settlements with several insurance carriers in this matter.

         Management  believes that recoveries in excess of the amounts reflected
in the accompanying  consolidated financial statements,  which were $2.9 million
at September 30, 1996 and December 31, 1995,  are available  under the insurance
policies but have not been recorded.  There can be no assurance,  however,  that
the Registrant  will prevail in its efforts to obtain amounts at or in excess of
the estimated recoveries.




                                 Page 10 of 18
<PAGE>
         In the opinion of management,  these matters will be resolved favorably
and such  amounts,  if any,  not  recovered  under  the  Registrant's  insurance
policies will be paid gradually over a period of years and, accordingly,  should
not have a material  adverse  effect upon the  business,  liquidity or financial
position of the Registrant.  However, adverse decisions or events,  particularly
as to the merits of the  Registrant's  factual  and legal  basis could cause the
Registrant  to change its estimate of liability  with respect to such matters in
the future.

         Effective  January 1, 1994 the Registrant has adopted the provisions of
Staff Accounting Bulletin 92 and accordingly has recorded the expected liability
associated  with   remediation   efforts  as  a  component  of  other  long-term
liabilities  and the  anticipated  insurance  recoveries as a component of other
assets in the Registrant's consolidated financial statements.

         The  Registrant  is  involved  in various  other  litigation  and legal
matters which are being defended and handled in the ordinary course of business.
None of these  matters are  expected  to result in a judgment  having a material
adverse effect on the Registrant's consolidated financial position or results of
operations.

COMMON STOCK

         During the first nine  months of 1996,  the  Registrant  purchased  and
retired 338,900 shares of its common stock at a cost of $2,858,450. In addition,
during this period 165,250 shares of the registrant's  common shares were issued
pursuant to the exercise of options under the  Registrant's  stock option plans.
During the same period in 1995, 445,887 shares of the Registrant's  common stock
were purchased and retired at a cost of $4,478,192.  In addition,  700 shares of
the  Registrant's  common shares were issued pursuant to the exercise of options
during the first nine months of 1995.

NET INCOME (LOSS) PER COMMON SHARE

         Net income  (loss) per share  computations  for each  quarterly  period
presented are based on the weighted average number of common shares and dilutive
common  equivalent  shares  outstanding  during the  period.  Fully  diluted and
primary  earnings  per common share are the same amounts for each of the periods
presented. Earnings per share data is neither restated nor adjusted currently to
obtain quarterly amounts which equal the amount computed for the year-to-date.

USE OF ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.



                                 Page 11 of 18
<PAGE>
FORWARD-LOOKING STATEMENTS

         This Form 10-Q contains certain  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),
which are  intended  to be  covered by the safe  harbors  created  thereby.  All
forward-looking   statements   involve  risks  and  uncertainty.   Although  the
Registrant   believes  that  the  assumptions   underlying  the  forward-looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the  forward-looking
statements included in this Form 10-Q will prove to be accurate. In light of the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the  Registrant or any other person that the  objectives  and
plans of the Registrant will be achieved.

RECLASSIFICATIONS

         Certain amounts have been  reclassified in the prior year  consolidated
financial  statements  to present  them on a basis  consistent  with the current
year.

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

RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

         Revenues  for the nine  month  period  ended  September  30,  1996 were
$63,775,000,  a $977,000  increase from  comparable  1995 revenues.  Income from
continuing  operations  for the  period  was  $3,833,000  or $.69  per  share as
compared to income from  continuing  operations  of $3,486,000 or $.59 per share
for the same period in 1995. Net loss in the prior year period was  ($1,987,000)
or ($.34) per share as this  period  included  both  losses  from the  Company's
discontinued  resilient  vinyl  flooring  operations as well as the write-off of
this investment in Kentile, Inc.

         Revenues  for the three  month  period  ended  September  30, 1996 were
$21,248,000,  an increase of  $1,940,000  from revenues in the  comparable  1995
period.  Income from  continuing  operations  for the third  quarter of 1996 was
$986,000 or $.18 per share as compared to $494,000 or $.08 per share  during the
comparable  1995 period.  The results for the quarter  ended  September 30, 1995
also  included a loss of  ($4,396,000)  or ($.77)  per share  from  discontinued
operations.

REAL ESTATE OPERATIONS

         Rental  revenues  from real estate  operations  increased  $742,000 and
$1,522,000,  respectively  for the three and nine month periods ended  September
30, 1996 as compared to the same periods in 1995.  These increases are primarily
the result of additional revenues related to 1995 property acquisitions, as well
as a 48% increase in revenues from the Registrant's hotel operations.

         Mortgage interest expense decreased  $210,000 or 18% during the current
quarter and  $554,000 or 16% during the nine month period  ended  September  30,
1996, versus such expense of the corresponding  periods in 1995. These decreases
are due to continuing mortgage amortization which approximated $8 million during
the last twelve months, including repayments associated with properties sold.




                                 Page 12 of 18
<PAGE>
         Depreciation   expense  associated  with  rental  properties  decreased
$52,000 during the quarter while increasing $23,000 during the nine month period
ended September 30, 1996,  versus such expense of the  corresponding  periods in
1995.  The  decrease in the current  quarter is  primarily  due to the impact of
properties  sold in the  current  year while the  increase  in the  year-to-date
period is primarily  due to  additional  depreciation  associated  with mid-1995
property additions.

         Operating  expenses  associated  with  the  management  of real  estate
properties  increased $622,000 and $1,817,000,  respectively,  for the three and
nine month periods ending  September 30, 1996 as compared to the same periods in
1995. These increases are due to expenses directly  associated with the increase
in rental revenues,  the  reclassification of prior manufacturing  facilities to
real property held for rental and the timing of certain maintenance costs in the
current quarter and prior year periods.

ANTENNA SYSTEMS

         The operating  results of the antenna systems segment for the three and
nine month periods ended September 30, 1996 and 1995 are as follows:

                                    Three Months              Nine Months
                                Ended September 30,       Ended September 30,
                                -------------------       -------------------

(In thousands)                    1996         1995         1996         1995
                                  ----         ----         ----         ----

Net Sales                       $  4,430     $  4,082     $ 13,097     $ 14,871
                                ========     ========     ========     ========

Cost of Sales                   $  3,997     $  3,749     $ 11,476     $ 11,723
                                ========     ========     ========     ========

Selling, General and
Administrative
    Expenses                    $  1,193     $  1,175     $  3,653     $  3,641
                                ========     ========     ========     ========

(Loss) from Operations          ($   760)    ($   842)    ($ 2,032)    ($   493)
                                ========     ========     ========     ========

         Net sales of the  antenna  system  segment  increased  $348,000 or 8.5%
during the third  quarter  but  decreased  $1,774,000  or 12% for the nine month
period  ended  September  30,  1996,  versus  such  sales  generated  during the
respective 1995 periods. In light of the significant decline in net sales in the
six months  ended June 30, 1996 as  compared  with the prior year and the strong
backlog  which  remains at  approximately  $14  million  management  prioritized
increasing  manufacturing  output during the quarter  ended  September 30, 1996.
While sales were increased over both the prior quarter and the comparable period
in the prior year, the segment still experienced a loss from operations. This is
primarily the result of  significant  increases in cost of sales as a percentage
of sales during the nine month period ended  September 30, 1996 as compared with
the results of the  corresponding  1995 period.  This  increase is the result of
cost  increases  resulting  from lower  factory  overhead  absorption  caused by
manufacturing  output  below  planned  levels  and a  shift  in  product  mix to
commercial products with lower margins.



                                 Page 13 of 18
<PAGE>
         Selling,  general  and  administrative  costs  of the  antenna  systems
segment increased  approximately  $18,000 and $12,000,  respectively  during the
current quarter and year-to-date  periods ended September 30, 1996,  versus that
of the  corresponding  prior year periods.  These increases are primarily due to
increased administrative costs related to additional salary expenses.

ENGINEERED PRODUCTS

         The Registrant's engineered products segment includes Metex Corporation
and AFP  Transformers,  Inc. The operating  results of the  engineered  products
segment for the three and nine month periods  ended  September 30, 1996 and 1995
are as follows:

                                          Three Months            Nine Months
                                       Ended September 30,   Ended September 30,
                                       -------------------   -------------------

(In thousands)                         1996        1995        1996        1995
                                       ----        ----        ----        ----

Net Sales                            $10,336     $ 9,484     $32,369     $31,139
                                     =======     =======     =======     =======

Cost of Sales                        $ 7,617     $ 7,207     $23,962     $23,339
                                     =======     =======     =======     =======

Selling, General and
 Administrative Expenses             $ 1,858     $ 1,516     $ 5,580     $ 4,741
                                     =======     =======     =======     =======

Income from Operations               $   861     $   761     $ 2,827     $ 3,059
                                     =======     =======     =======     =======


         Net sales of the engineered  products  segment  increased  $852,000 and
$1,230,000,  respectively  for the three and nine month periods ended  September
30, 1996,  as compared to the results of the  corresponding  prior year periods.
These increases are primarily the result of higher  automotive  related sales at
Metex'  Technical  Products  Division as well as higher  sales  generated by AFP
Transformers.

         Cost of sales as a  percentage  of net sales  decreased by 2% and 1% in
the three and nine month periods  ended  September  30, 1996,  respectively,  as
compared  to the  corresponding  periods  in  1995.  This  decrease  was  due to
continued management focus on cost containment as well as product mix.

         Selling, general and administrative expenses of the engineered products
segment  increased  $342,000  and $839,000  during the quarter and  year-to-date
periods  ended  September  30,  1996 versus  such costs of the  comparable  1995
periods.  These increases are primarily the result of additional  salary related
costs  and from the  reclassification  of  royalty  income  to net  sales in the
current year periods.


GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  ("G&A")  expenses not associated  with the
manufacturing  operations decreased by $310,000 for the three month period ended
September 30, 1996,  while there was a slight  increase in the nine month period
ending September 30, 1996,  versus the same periods in 1995. The decrease in the
current  quarter is primarily due to the reclass,  in the current year, of costs
associated with prior manufacturing  facilities to real estate operations.  Such
costs were  included  in general and  administrative  expenses in the prior year
period.  


                                 Page 14 of 18
<PAGE>
Included  in general  and  administrative  expenses  for the nine  months  ended
September  30,  1996 is  $490,000 of expense  recorded  in  connection  with the
repurchase of stock options from two Directors of the Registrant.

OTHER INCOME AND EXPENSE

         The  components  of  other  income  and  expense  in  the  accompanying
consolidated  statements  of income for the three and nine month  periods  ended
September 30, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>

                                                     Three Months                             Nine Months
                                                  Ended September 30,                     Ended September 30,
                                                  -------------------                     -------------------

(In thousands)                                  1996                1995                1996                 1995
                                           --------------      ---------------     ----------------    ------------------
<S>                                        <C>                 <C>                  <C>                 <C>        
Gain on sale of real estate assets         $   341,590         $    10,338          $ 3,954,439         $   854,595

Net realized gains
(losses) on marketable securities                 --                  --                   --               229,979

Income from equity investments                    --                  --                   --                 3,676

Other                                            8,907             190,000             (561,034)            418,329
                                           -----------         -----------          -----------         -----------


                                           $   350,497         $   200,338          $ 3,393,405         $ 1,506,579
                                           ===========         ===========          ===========         ===========
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 1996 the  Registrant's  current  liabilities  exceeded
current assets by approximately $11.5 million. This shortfall in working capital
results from  financing the purchase of long-term  assets  utilizing  short-term
borrowings and from the classification of current mortgage  obligations  without
the benefit of a  corresponding  current asset for such  properties.  Management
believes that through cash flow  generated from  operations,  the sale of select
assets and the refinancing of certain current  liabilities on a long-term basis,
all obligations will be satisfied as they become due.

         The  Registrant  has an  unsecured  line of  credit  with a bank  which
provides for  borrowings  up to $15 million at the bank's prime  lending rate or
LIBOR (London Inter-Bank  Offered Rate) plus 2%, at the Registrant's  option. At
September 30, 1996 there was $7.1 million outstanding under this facility.  This
demand facility is reviewed by the bank annually on May 31.

         In August 1995 the operations of the  Registrant's  Kentile  subsidiary
ceased  when  its  raw  material   stocks  were  exhausted   resulting  from  an
unwillingness of major trade suppliers of Kentile to extend further credit.  See
Notes to consolidated financial statements.



                                 Page 15 of 18
<PAGE>
         The Registrant has undertaken the completion of  environmental  studies
and/or  remedial  action at Metex'  two New Jersey  facilities  and has filed an
action against certain insurance carriers seeking recovery of costs incurred and
to be incurred in these  matters.  Based upon the advice of counsel,  management
believes  such  recovery is probable  and  therefore  should not have a material
effect on the liquidity or capital  resources of the  Registrant.  However,  the
ultimate  outcome of litigation  cannot be predicted.  To date  settlements have
been  reached with several  carriers in this matter.  See Notes to  consolidated
financial statements.

         Management  believes that recoveries in excess of the amounts reflected
in the accompanying  consolidated financial statements,  which were $2.9 million
at September 30, 1996 and December 31, 1995,  are available  under the insurance
policies but have not been recorded.  There can be no assurances,  however, that
the Registrant  will prevail in its efforts to obtain amounts at or in excess of
the estimated recoveries.

         The  cash  needs of the  Registrant  have  been  satisfied  from  funds
generated by current operations and additional  borrowings.  It is expected that
future operational cash needs will also be satisfied from ongoing operations and
additional  borrowings.  The primary source of capital to fund  additional  real
estate  acquisitions  will come from the sale,  financing and refinancing of the
Registrant's  properties  and from the third party  mortgages and purchase money
notes obtained in connection with specific acquisitions.

         In  addition  to  the  acquisition  of  properties  for   consideration
consisting of cash and mortgage financing  proceeds,  the Registrant may acquire
real  properties  in  exchange  for  the  issuance  of the  Registrant's  equity
securities.  The Registrant may also finance  acquisitions of other companies in
the future  with  borrowings  from  institutional  lenders  and/or the public or
private offerings of debt or equity securities.

         Funds of the  Registrant in excess of that needed for working  capital,
purchasing real estate and arranging  financing for real estate acquisitions are
invested by the  Registrant in corporate  equity  securities,  corporate  notes,
other financial instruments, certificates of deposit and government securities.

BUSINESS TRENDS

         Total  revenues of the  Registrant  increased  $977,000 or 1.5% for the
first nine months of 1996 versus such  results of the  comparable  1995  period.
Income  from  continuing  operations  for the  first  nine  months  of 1996  was
$3,833,000 or $.69 per share versus $3,486,000 or $.59 per share during the same
period in 1995.

         The  results of the  Registrant's  real  estate  operations  reflect an
increase in revenues for the first nine months of 1996, primarily as a result of
additional  revenues  related to 1995  acquisitions as well as a 48% increase in
revenues from the  Registrant's  hotel  operations.  The real estate segment was
also  favorably  impacted  by a  16%  reduction  in  mortgage  interest  expense
resulting from the repayment of $8 million in mortgage  indebtedness  during the
last twelve  months.  Continuing  mortgage  amortization  will  continue to have
favorable impact on this segment and will reduce current  mortgage  indebtedness
to virtually zero in less than ten years.

         The Registrant's engineered products segment posted a 4% increase in
revenues during the first nine months of 1996 versus comparable 1995 results.
With continued increases in automobile purchases, demand for these products
should continue. In addition, the results of this segments' transformer
operations reflect improvements over the prior year and management is hopeful to
continue this trend.



                                 Page 16 of 18
<PAGE>
         The results of the  Registrant's  antenna systems segment reflect lower
sales  during the first nine  months of 1996 than  during  the  comparable  1995
period. U.S. military sales, as well as commercial sales remain below prior year
levels and  management is focused on reversing this trend,  while  attempting to
increase the efficiency of its manufacturing operations. Backlog of this segment
is approximately $14 million as of September 30, 1996.

         Although  there can be no  assurances  as to how much events  discussed
above,  or other  changes  in the  economy  will  impact  the  future  financial
conditions or results of operations of the Registrant,  management  continues to
monitor these developments and has implemented measures to minimize the possible
negative effects they may have upon these businesses.

PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ROSATELLI VS. UNITED CAPITAL CORP.

In August 1996,  Dennis  Rosatelli,  the  Registrant's  former  Chief  Financial
Officer  commenced  an action in  Superior  Court of New Jersey,  Law  Division,
Bergen  County,  seeking,  among other  things,  indemnification  for (i) claims
against him by the Internal Revenue Service and (ii) other matters in connection
with his tenure,  as well as (iii) payment under his  employment  contract.  The
Registrant  believes  that as a  result  of Mr.  Rosatelli's  gross  negligence,
recklessness  and/or willful disregard of his duties and  responsibilities,  Mr.
Rosatelli is not entitled to the recoveries he seeks. Mr. Rosatelli's employment
was  terminated by the  Registrant  in May, 1996 for cause.  The matter has been
removed to United States District Court,  District of New Jersey. This action is
in the early stages of pretrial discovery.  The Registrant intends to vigorously
defend this action and has asserted  counterclaims  against Mr.  Rosatelli  for,
among  other  things,  the  set off of  amounts  by  which  he has  damaged  the
Registrant against his claims under his employment contract.

DAVISON VS. FIRST PENNCO, ET AL.

         In March 1991, plaintiffs,  including 55 investors and limited partners
in three  limited  partnerships,  commenced a civil action in the United  States
District  Court for the  Southern  District of New York  against 31  defendants,
including  the  Registrant,  asserting  causes  of action  under  the  Racketeer
Influenced and Corrupt Organizations Act. The action sought actual, punitive and
treble  damages in a total  unspecified  amount.  In addition,  several  amended
complaints were subsequently filed by the plaintiffs.

         While  management  continues  to believe  that the  allegations  of the
action are false and without merit, as a result of escalating  defense costs and
the continued  likelihood of extended  litigation,  the Registrant  settled this
matter in April 1996 for  approximately  $425,000,  after taxes. This charge has
been recorded by the Registrant in the second quarter of 1996.



                                 Page 17 of 18
<PAGE>
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

       (a)  Exhibit 27.  Financial Data Schedule
       (b)  Reports on Form 8-K
            none


                                   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.

                             UNITED CAPITAL CORP.

Dated:  November 14, 1996    By: /s/  Anthony J. Miceli
                                 -------------------------------------------
                                 Anthony J. Miceli
                                 Vice President, Chief Financial Officer and
                                 Secretary of the Registrant





                                 Page 18 of 18