U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.  20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission File No.:  000-27481

ROME BANCORP, INC.(Name of small business issuer in its charter)

Delaware							     16-1573070(State or other jurisdiction of							(I.R.S. Employer
incorporation or organization)							Identification No.)

100 W. Dominick Street, Rome, New York 13440-5810(Address of principal executive offices)(315) 336-7300(Issuer's Telephone Number)

Securities registered under Section 12(g) of the Exchange Act:

Title of Class					Name of Exchange on which Registered

Common Stock, par value $0.0667 per share					Nasdaq

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 __

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.    [   ]

The revenues for the issuer's fiscal year ended December 31, 2003 were $15,282,000.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, as of a specified date within the last 60 days.  On March 05, 2004:  $31,746,000.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Rome Bancorp had 4,263,101 shares outstanding as of March 05, 2004.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement pursuant to Regulation 14A to be delivered to the Commission for filing and the 2003 Annual Report to Shareholders for the fiscal year ended December 31, 2003 which has not previously been mailed to the Commission, are incorporated by reference into Parts II and III of this report.

Transitional Small Business Disclosure Format (check one):
Yes     No X

|TABLE OF CONTENTS |         
|----------------- | --------
|                  |         
|PART I            |         
|                  |         
|                  | ITEM 1. 
|                  | ITEM 2. 
|                  | ITEM 3. 
|                  | ITEM 4. 
|                  |         
|PART II           |         
|                  |         
|                  | ITEM 5. 
|                  |         
|                  | ITEM 6. 
|                  |         
|                  | ITEM 7. 
|                  | ITEM 8. 
|                  |         
|                  | ITEM 8A.
|PART III          |         
|                  |         
|                  | ITEM 9. 
|                  | ITEM 10.
|                  | ITEM 11.
|                  |         
|                  | ITEM 12.
|                  | ITEM 13.
|                  | ITEM 14.





Forward looking Statements



Statements included in this Form 10-KSB and in future filings by Rome Bancorp, Inc. with the Securities and Exchange Commission, in Rome Bancorp, Inc. press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected.  Rome Bancorp, Inc. wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made.  The following important factors, among others, in some cases have affected and in the future could affect Rome Bancorp, Inc. actual results, and could cause Rome Bancorp, Inc. actual financial performance to differ materially from that expressed in any forward-looking statement:  (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which the Company is engaged; (6) competitors may have greater financial resources and developed products that enable such competitors to compete more successfully than the Company; and (7) adverse changes may occur in the securities markets or with respect to inflation.  The foregoing list should not be construed as exhaustive, and Rome Bancorp, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.





PART I



ITEM 1.	DESCRIPTION OF THE BUSINESS



General



Rome Bancorp, Inc. (Rome Bancorp or the Company) is a Delaware corporation organized on June 9, 1999 as the stock holding company for The Rome Savings Bank (Rome Savings), a New York-chartered stock savings bank headquartered in Rome, New York.  Rome Bancorp's principal business is to hold the capital stock of Rome Savings.



Rome Savings was originally chartered in 1851 as a New York mutual savings bank headquartered in Rome, New York.  Deposits in Rome Savings are insured by the FDIC, and Rome Savings is examined and regulated by the New York State Department of Banking (Department of Banking) and the FDIC.



On October 15, 2003, the Board of Trustees of Rome, MHC, a New York-chartered mutual holding company and the majority shareholder of Rome Bancorp, and the Boards of Directors of Rome Savings and Rome Bancorp adopted a Plan of Charter Conversion.  Pursuant to the Plan of Charter Conversion, Rome MHC will establish a federal mutual holding company (the "Federal MHC").  Rome MHC will then merge with and into the Federal MHC, with the Federal MHC as the surviving entity.  Concurrently, Rome Savings will exchange its New York stock savings bank charter for a federal stock savings bank charter (the "Federal Savings Bank").  As a result of the charter conversion, Rome, MHC and Rome Bancorp will become savings and loan holding companies regulated by the Office of Thrift Supervision (the "OTS") and Rome Savings will become a federal savings bank regulated by the OTS.  Rome Bancorp expects that the charter conversion will be completed in the second quarter of 2004.





The charter conversion will have little impact on the daily operations of Rome, MHC, Rome Bancorp or Rome Savings.  Rome Savings will continue its operations at the same locations, with the same officers and employees, and be subject to all the rights, obligations and liabilities of Rome Savings existing immediately prior to the charter conversion.  The charter conversion would not likely result in any material increased expenses or regulatory burden to Rome, MHC, Rome Bancorp or Rome Savings.  Following the charter conversion, Rome Bancorp will continue to file periodic reports and proxy materials with the Securities and Exchange Commission ("SEC"), and its stock will continue to be listed on the Nasdaq under the symbol "ROME."



Rome Savings is a community and customer oriented retail savings bank that offers traditional deposit products, residential real estate mortgage loans and consumer, commercial and commercial real estate loans.  In addition, Rome Savings purchases securities issued by the U.S. Government and government agencies, municipal securities, mortgage-backed securities and other investments permitted by applicable laws and regulations.  At December 31, 2003, Rome Bancorp had assets of $261.9 million, deposits of $203.2 million and shareholders' equity of $36.6 million.



Business Strategy



Our revenues are derived principally from interest on our loans and interest and dividends on our investment securities.  Our primary sources of funds are deposits, payments of loan principal and mortgage-backed securities, maturities and calls of investment securities and funds provided by operations.



Market Area



Operations are conducted out of our executive office in Rome, New York and three branch offices located in Oneida County, New York, two of which are located in Rome and one in New Hartford, New York.  As of June 30, 2003, we maintained a 6.35% share of all Oneida County, New York deposits, ranking us 5th in the size of deposits in Oneida County.  We also maintained 44.55% market share of all reported funds on deposit in the City of Rome as of June 30, 2003, making us the largest depository institution in Rome.



Our geographic market area for loans and deposits is principally Oneida County, New York.  The local economy is not dependent on one key employer.  The principal employment sectors are service-related (excluding financial), wholesale and retail trade and manufacturing.



Similar to national trends, most of the job growth currently realized in Oneida County has been in service related industries, and service jobs now account for the largest portion of the workforce.  Our market area also includes a growing number of healthcare, engineering, software and technical firms which have located in Oneida County in order to take advantage of its well-educated work force including current and former military and defense industry personnel.  Rome, New York is located 15 miles west of Utica and 50 miles east of Syracuse.



Future growth opportunities for Rome Bancorp will be influenced by growth and stability in the regional and statewide economies, other demographic trends and the competitive environment.  We believe that we have developed lending products and marketing strategies to address the credit-related needs of the residents in our local market area.



Competition



Rome Bancorp faces intense competition both in making loans and attracting deposits.  New York has a high concentration of financial institutions, many of which are branches of large money center and regional banks which have resulted from the consolidation of the banking industry in New York and surrounding states. Some of these competitors have greater resources than we do and may offer services that we do not provide.  For example, Rome Savings does not provide trust or investment services, or credit cards.  Customers who seek "one stop shopping" may be drawn to these institutions.



Competition for loans comes principally from commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, insurance companies and brokerage and investment banking firms.  The most direct competition for deposits has historically come from credit unions, commercial banks, savings banks and savings and loan associations.  Rome Bancorp faces additional competition for deposits from short-term money market funds, corporate and government securities funds, and from brokerage firms, mutual funds, and insurance companies.



Lending Activities



General. Rome Savings has a long-standing commitment to originate commercial real estate, commercial and consumer loans in addition to a traditional emphasis on residential lending.  As of December 31, 2003, we had total loans of $209.5 million.   We currently retain substantially all of the loans that we originate.



Our loans are subject to federal and state laws and regulations.  The interest rates we charge on loans are affected principally by the demand for loans, the supply of money available for lending purposes and the  interest rates offered by our competitors.  These factors are, in turn, affected by general and local economic conditions, monetary policies of the federal government, including the Federal Reserve Board, legislative tax policies and governmental budgetary matters.

Loan Portfolio.	The following table sets forth the composition of our mortgage and other loan portfolios, by type of loan, in dollar amounts and in percentages at the dates indicated.



|                                |                        | At December 31,
|------------------------------- | ---------------------- | ---------------
|                                |                        | 2003           
|                                |                        |                
|                                |                        |                
|                                |                        | Amount         
|                                |                        |                
|Mortgage loans:                 |                        |                
|                                | One to four family     | $   96,217     
|                                | Commercial real estate | 50,239         
|                                | Construction and land  | 4,197          
|                                | Total mortgage loans   | 150,653        
|                                |                        |                
|Commercial loans                | 19,189                 | 9.16           
|                                |                        |                
|Consumer loans:                 |                        |                
|                                | Automobile             | 15,780         
|                                | Property improvement   | 9,420          
|                                | Education              | -              
|                                | Other                  | 14,423         
|                                | Total consumer loans   | 39,623         
|                                |                        |                
|Total loans                     | 209,465                | 100.00%        
|                                |                        |                
|Less: Allowance for loan losses | 1,809                  |                
|Loans, net                      | $   207,656            |                



Loan Maturity.







|                       |                     |                          | At December 31, 2003
|---------------------- | ------------------- | ------------------------ | --------------------
|                       |                     |                          | Commercial Loans    
|                       |                     |                          | (In thousands)      
|Amounts due:           |                    
|Within one year        | $           8,228  
|After one year:        |                    
|                       | One to three years  | 2,088                   
|                       | Three to five years | 2,403                   
|                       | Five to ten years   | 4,085                   
|                       | Ten to twenty years | 970                     
|                       | After twenty years  | 1,415                   
|                       |                     | Total due after one year | 10,961              
|Total commercial loans | $        19,189    





The following table presents, as of December 31, 2003, the dollar amount of all commercial loans, due after December 31, 2004, and whether these loans have fixed interest rates or adjustable interest rates.





|                 | Due After December 31, 2004
|---------------- | ---------------------------
|                 | Fixed                      
|                 | (In thousands)             
|                 |                            
|Commercial loans | $    7,113                 





Residential Mortgage Lending.



Commercial Real Estate Loans.  We originate commercial real estate loans to finance the purchase of real property, which generally consists of developed real estate.  In underwriting commercial real estate loans, consideration is given to the property's historic cash flow, current and projected occupancy, location and physical condition.  At December 31, 2003, our commercial real estate loan portfolio consisted of 177 loans, totaling $50.2 million, or 24.0%, of total loans.  Most of the commercial real estate portfolio consists of loans which are collateralized by properties in our normal lending area.  To a lesser extent, commercial real estate loans are secured by out of market properties.  Our commercial real estate loan portfolio is diverse, and does not have any significant loan concentration by type of industry or borrower.  We lend up to a maximum loan-to-value ratio of 75% on commercial properties and require a minimum debt coverage ratio of 1.25.



Commercial Loans.  In addition to commercial real estate loans, we also engage in small business commercial lending, including business installment loans, lines of credit and other commercial loans.  At December 31, 2003, our commercial loan portfolio consisted of 651 loans, totaling $19.2 million, or 9.2% of total loans.



Consumer Loans.  Rome Savings offers a variety of consumer loans.  At December 31, 2003, the consumer loan portfolio totaled $39.6 million or 18.9% of total loans. Consumer loans generally are offered for terms of up to five or 10 years, depending on the collateral, at fixed interest rates.  We expect consumer lending to be an area of steady lending growth, with installment loans continuing to account for the major portion of our consumer lending volume.  Automobile loans currently comprise the largest portion at 39.8% of the consumer loan portfolio, which consists primarily of loans for used cars.



Asset Quality



Non-performing Assets.  Non-performing assets totaled $1.6 million at both December 31, 2003 and December 31,  2002.



The following table presents information regarding non-accrual mortgage and consumer and other loans, accruing loans delinquent 90 days or more, and foreclosed real estate as of the dates indicated.





|                                      |                  |                        |                 |                |              
|------------------------------------- | ---------------- | ---------------------- | --------------- | -------------- | -------------
|                                      |                  | At December 31,       
|                                      |                  | 2003                   | 2002            | 2001           | 2000         
|                                      |                  | (Dollars in thousands)
|Nonaccruing loans:                    |                  |                        |                 |                |              
|                                      | Mortgage loans   | $          689         | $          531  | $           51 | $         41 
|                                      | Commercial loans | 513                    | 377             | 420            | 1,076        
|                                      | Consumer loans   | 138                    | 148             | 103            | 41           
|                                      | Total            | 1,340                  | 1,056           | 574            | 1,158        
|Accruing loans delinquent 90          |                  |                        |                 |                |              
|                                      | days or more     | 66                     | 460             | 181            | 188          
|Total non-performing loans            | 1,406            | 1,516                  | 755             | 1,346          | 487          
|Foreclosed real estate, net           | 202              | 55                     | -               | -              | 183          
|Total non-performing assets           | $      1,608     | $      1,571           | $           755 | $       1,346  | $         670
|Non-performing loans to total loans   | 0.67%            | 0.83%                  | 0.45%           | 0.80%          | 0.34%        
|Non-performing assets to total assets | 0.61%            | 0.63%                  | 0.31%           | 0.55%          | 0.30%        





We define the population for evaluation of impaired loans to be all non-accrual commercial real estate and commercial loans greater than $250,000.  Impaired loans are individually assessed to determine whether a loan's carrying value is not in excess of the fair value of the collateral or the present value of the loan's cash flows.  Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio.  The Company's recorded investment in loans that are considered impaired totaled $284,000 and $307,000 at December 31, 2003 and 2002, respectively. If all non-accrual loans had been current in accordance with their terms during the year ended December 31, 2003 and 2002, interest income on such loans would have amounted to $83,800 and $87,400, respectively. At December 31, 2003, Rome Savings did not have any loans not included above which are "troubled debt restructurings" as defined in SFAS No. 15.

















Allowance for Loan Losses.  The following table sets forth activity in Rome Savings' allowance for loan losses and other ratios at or for the dates indicated.





|                             | At December 31,            
|---------------------------- | ---------------------------
|                             |                            
|                             |                            
|Balance at beginning of year | $      1,730               
|Provision for loan losses    | 510                        
|Charge-offs:                 |                            
|                             | Mortgage loans             
|                             | Commercial loans           
|                             | Consumer loans             
|                             | Total                      
|Recoveries                   | 109                        
|Net charge-offs              | 431                        
|Balance at end of year       | $      1,809               
|Ratio of net charge-offs to  |                            
|                             | average loans outstanding  
|                             | during the period          
|Allowance for loan losses as |                            
|                             | a percent of loans         
|Allowance for loan losses as |                            
|                             | a percent of non-performing
|                             | Loans                      
|                             |                            
|                             |                            



The allowance for loan losses is a valuation account that reflects our evaluation of the losses inherent in our loan portfolio.  We maintain the allowance through provisions for loan losses that we charge to income.  We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely.



Our evaluation of risk in maintaining the allowance for loan losses includes the review of all loans on which the collectibility of principal may not be reasonably assured.  We consider the following factors as part of this evaluation: our historical loan loss experience, known and inherent risks in the loan portfolio, the estimated value of the underlying collateral and current economic and market trends.  There may be other factors that may warrant our consideration in maintaining an allowance at a level sufficient to provide for probable losses.  Although we  believe that we have established and maintained the allowance for loan losses at adequate levels, future additions may be necessary if economic and other conditions in the future differ substantially from the current operating environment.



In addition, various regulatory agencies, as an integral part of their examination process, periodically review our loan and foreclosed real estate portfolios and the related allowance for loan losses and valuation allowance for foreclosed real estate.  These agencies, including the FDIC, may require us to increase the allowance for loan losses or the valuation allowance for foreclosed real estate based on their judgments of information available to them at the time of their examination, thereby adversely affecting our results of operations.



For the year ended December 31, 2003, we increased our allowance for loan losses through a $510,000 provision for loan losses based on our evaluation of the items discussed above.  We believe that the allowance for loan losses accurately reflects the level of risk in the loan portfolio.  In addition to the non-performing loans, management has identified, through normal internal credit review procedures, $12.0 million in "potential problem loans" at December 31, 2003.  Payments are current on $9.6 million or 80.0% of these loans.  These problem loans are defined as loans not included as non-performing loans, but about which management has developed information regarding possible credit problems, which may cause the borrowers future difficulties in complying with loan repayments.  Rome Savings will continue to be aggressive in identifying, monitoring and resolving potential problem loans.  See "Management's Discussion and Analysis - Comparison of Results of Operations for the Years Ended December 31, 2003 and 2002 - Provision for Loan Losses."



The following table presents our allocation of the allowance for loan losses by loan category and the percentage of loans in each category to total loans at the periods indicated.

|                 |                                 |                      | At December 31,
|---------------- | ------------------------------- | -------------------- | ---------------
|                 |                                 |                      | 2003           
|                 |                                 |                      |                
|                 |                                 |                      |                
|                 |                                 |                      |                
|                 |                                 |                      | Amount         
|Mortgage loans: 
|                 | One-to-four family              | $192                 | 45.94%         
|                 | Commercial real estate          | 702                  | 23.98          
|                 | Construction & land             | 0                    | 2.00           
|                 |                                 | Total mortgage loans | 894            
|                 |                                 |                      |                
|Commercial loans | 619                             | 9.16                 | 511            
|                 |                                 |                      |                
|Consumer loans   | 296                             | 18.92                | 232            
|                 |                                 |                      |                
|                 | Total allowance for loan losses | $1,809               | 100.00%        
|                 |                                 |                      |                

Securities



General. The Board of Directors reviews and approves our investment policy on an annual basis.  The Board of Directors has delegated primary responsibility for ensuring that the guidelines in the investment policy are followed by the Treasurer/Chief Financial Officer.  The Treasurer reports to the Asset Liability Management Committee and to the Executive Committee monthly.



Our investment policy is designed primarily to manage the interest rate sensitivity of our assets and liabilities, to generate a favorable return without incurring undue interest rate and credit risk, to complement our lending activities and to provide and maintain liquidity within established guidelines.  In establishing our investment strategies, we consider our interest rate sensitivity, the types of securities to be held, liquidity and other factors.  New York-chartered savings banks have authority to invest in various types of assets, including U.S. Government obligations, securities of various federal agencies, obligations of states and municipalities, mortgage-backed securities, certain time deposits of insured banks and savings institutions, certain bankers' acceptances, repurchase agreements, loans of federal funds, and, subject to certain limits, corporate debt and equity securities, commercial paper and mutual funds.



The following table presents the composition of our securities portfolios in dollar amount and in percentage of each investment type at the dates indicated.  It also presents the coupon type for the mortgage-backed securities portfolio.

|                                         |                                 | At December 31,            
|---------------------------------------- | ------------------------------- | ---------------------------
|                                         |                                 |                            
|                                         |                                 |                            
|                                         |                                 |                            
|Held to Maturity:                       
|                                         | Mortgage-backed securities      |                            
|                                         |                                 | GNMA                       
|                                         |                                 | FHLMC                      
|                                         | U.S. Government securities      | 2,479                      
|                                         | Other bonds                     | 151                        
|                                         |                                 | Total held to maturity     
|                                         |                                 |                            
|Available for sale:                      |                                 |                            
|                                         | U.S. Government agencies        | 3,457                      
|                                         | State and Municipal obligations | 8,654                      
|                                         |                                 |                            
|                                         | Mortgage-backed securities      |                            
|                                         |                                 | FNMA                       
|                                         |                                 | FHLMC                      
|                                         | Corporate bonds                 | 6,499                      
|Total available for sale debt securities | 20,309                          | 21,314                     
|                                         |                                 |                            
|                                         | Equity securities               | 3,792                      
|                                         |                                 |                            
|                                         | FHLB stock                      | 905                        
|                                         |                                 |                            
|                                         |                                 | Total available for sale   
|                                         |                                 | Total investment securities
|                                         |                                 |                            
|                                         |                                 |                            

Carrying Values, Yields and Maturities.



|                                                     |                  |                      | More Than One Year  | More Than Five Years |                        |          |            
|---------------------------------------------------- | ---------------- | -------------------- | ------------------- | -------------------- | ---------------------- | -------- | -----------
|                                                     | One Year or Less | less than Five Years | less than Ten Years | More Than Ten Years  | Total                 
|                                                     |                  | Weighted             |                     | Weighted             |                        | Weighted |            
|                                                     | Carrying         | Average              | Carrying            | Average              | Carrying               | Average  | Carrying   
|                                                     | Value            | Yield                | Value               | Yield                | Value                  | Yield    | Value      
|                                                     |                  |                      |                     |                      | (Dollars in thousands) |          |            
|Available for sale securities:                       |                  |                      |                     |                      |                        |          |            
|U.S. Government agencies                             | $           -    | -                    | $             -     | -                    | $    2,050             | 1.66%    | $     1,543
|State and Municipal obligations (1)                  | 1,668            | 6.25%                | 6,819               | 6.17%                | 363                    | 6.23%    | 305        
|Mortgage-backed securities                           | -                | -                    | 1,386               | 5.35%                | 382                    | 5.21%    | -          
|Corporate bonds                                      | 3,518            | 6.81%                | 3,280               | 5.60%                | -                      | -        | -          
|                                                     |                  |                      |                     |                      |                        |          |            
|Held to maturity securities:                         |                  |                      |                     |                      |                        |          |            
|U.S. Government securities                           | 2,268            | 4.03%                | 211                 | 2.50%                | -                      | -        | -          
|Mortgage-backed securities                           | -                | -                    | 19                  | 8.06%                | 141                    | 9.69%    | -          
|Other                                                | -                | -                    | -                   | -                    | -                      | -        | 151        
|                                                     |                  |                      |                     |                      |                        |          |            
|Total debt securities                                | $   7,454        | 5.84%                | $  11,715           | 5.85%                | $  2,936               | 3.07%    | $    1,999 
|                                                     |                  |                      |                     |                      |                        |          |            
|_______________________________________              |                  |                      |                     |                      |                        |          |            
|(1)  Yields are presented on a tax-equivalent basis. |                  |                      |                     |                      |                        |          |            

Deposit Activity and Other Sources of Funds



General.  Deposits, borrowings, scheduled amortization and prepayments of loan principal, maturities and calls of investments securities and funds provided by operations are our primary sources of funds for use in lending, investing and for other general purposes.  See "Management's Discussion and Analysis - Liquidity and Capital Resources."



Deposits.  We offer a variety of deposit accounts having a range of interest rates and terms.  We currently offer regular savings deposits (consisting of passbook and statement savings accounts), interest-bearing demand accounts, non-interest-bearing demand accounts, money market accounts and time deposits.



Deposit flows are influenced significantly by general and local economic conditions, changes in prevailing interest rates, pricing of deposits and competition.  Our deposits are primarily obtained from areas surrounding our offices and we rely primarily on paying competitive rates, service and long-standing relationships with customers to attract and retain these deposits.  We do not use brokers to obtain deposits.



When we determine our deposit rates, we consider local competition, U.S. Treasury securities offerings and the rates charged on other sources of funds.  Core deposits (defined as savings deposits, money market accounts and demand accounts) represented 65.2% and 61.4% of total deposits on December 31, 2003 and 2002, respectively.  At December 31, 2003 and 2002, time deposits with remaining terms to maturity of less than one year amounted to $48.4 million and $51.2 million, respectively.  See "Management's Discussion and Analysis - Analysis of Net Interest Income" for information relating to the average balances and costs of our deposit accounts for the years ended December 31, 2003 and 2002.



At December 31, 2003, we had $10.4 million in time deposits with balances of $100,000 or more maturing as follows:





|Maturity Period                      | Amount            
|------------------------------------ | ------------------
|                                     | (In thousands)    
|Three months or less                 | $            2,182
|Over three months through six months | 1,991             
|Over six months through 12 months    | 3,346             
|Over 12 months                       | 2,899             
|Total                                | $          10,418 



Borrowings.



Subsidiary Activities



Rome Savings has four subsidiaries, 100 On the Mall Corporation, Clocktower Insurance Agency Incorporated, Clocktower Financial Corporation and RSB Capital Inc.  100 On the Mall acts as a manager, and developer of real estate.  Its only activity is ownership of Rome Savings' main office building and premises. Clocktower Insurance owns real estate for future expansion, which is currently being leased to a Dunkin Donuts franchise adjacent to one of our branch offices.  Clocktower Financial Corporation and RSB Capital, Inc. are currently inactive.



Employees



At December 31, 2003, Rome Savings had 98 full-time and 22 part-time employees.  Rome Savings' employees are not represented by a collective bargaining agreement, and Rome Savings considers its relationship with its employees to be good.



REGULATION AND SUPERVISION



General



Rome Savings is a New York-chartered savings bank, and its deposit accounts are insured up to applicable limits by the Federal Deposit Insurance Corporation (FDIC) under the Bank Insurance Fund (BIF).  Rome Savings is subject to extensive regulation, examination and supervision by the New York State Banking Department (Banking Department) as its chartering agency, and by the FDIC as the deposit insurer.



Rome, MHC and Rome Bancorp, as bank holding companies controlling Rome Savings are subject to the Bank Holding Company Act of 1956, as amended (BHCA), and the rules and regulations of the Federal Reserve Board (FRB) under the BHCA and to the provisions of the New York State Banking Law and the regulations of the Banking Department under the Banking Law applicable to bank holding companies.  Rome, MHC and Rome Bancorp are required to file reports with, and otherwise comply with the rules and regulations of the FRB and the Banking Department.  Rome Bancorp is also required to file certain reports with, and otherwise comply with, the rules and regulations of the SEC under the federal securities laws.



On November 12, 1999, President Clinton signed into law landmark financial services legislation, titled the Gramm-Leach-Bliley Act (A
GLB Act@
).  The GLB Act repeals depression-era laws restricting affiliations among banks, securities firms, insurance companies and other financial services providers.  The impact of the GLB Act on  the Company and the Bank, where relevant, is discussed throughout the regulation section below.



The following discussion is intended to be a summary of the material statutes and regulations applicable to savings associations and their holding companies, and it does not purport to be a comprehensive description of all such statutes and regulations.



New York Banking Regulation



Activity Powers.  Rome Savings derives its lending, investment and other activity powers primarily from the applicable provisions of the New York Banking Law and its related regulations.  Under these laws and regulations, savings banks, including Rome Savings generally may invest in:



(1) 	real estate mortgages;



(2)	consumer and commercial loans;



(3)	specific types of debt securities, including certain corporate debt securities and obligations of federal, state and local governments and agencies;



(4)	certain types of corporate equity securities; and



(5)	certain other assets.



A savings bank may also exercise trust powers upon approval of the New York Banking Board.  The exercise of these lending, investment and activity powers are limited by federal law and the related regulations.  See "- Federal Banking Regulation - Activity Restrictions on State-Chartered Banks" below.



Loans-to-One-Borrower Limitations.  With certain specified exceptions, a New York-chartered savings bank may not make loans or extend credit to a single borrower and to entities related to the borrower in an aggregate amount that would exceed 15% of the bank's net worth. Rome Savings currently complies with applicable loans-to-one-borrower limitations.  At December 31, 2003, Rome Savings' limit on loans to one borrower was $5.5 million.



Dividends.  Under the New York Banking Law, a stock savings bank may declare and pay a dividend on its capital stock only to the extent that the payment of the dividend would not impair the capital stock of the savings bank.  In addition, Rome Savings cannot declare and pay dividends without regulatory approval in any calendar year in excess of its "net profits" of the current year combined with its "retained net profits" of the two preceding years, less any required transfer to surplus or a fund for the retirement of preferred stock.  Federal law may also limit the amount of dividends that may be paid by Rome Savings. See "- Federal Banking Regulation - Prompt Corrective Action" below.



Community Reinvestment Act. Rome Savings is also subject to provisions of the Banking Law that, like the provisions of the federal Community Reinvestment Act ("federal CRA"), impose continuing and affirmative obligations upon a banking institution organized in the State of New York to serve the credit needs of its local community ("New York CRA").  See "Federal Banking Regulation - Community Reinvestment Act" below.  Pursuant to the New York CRA, a bank must file with the Banking Department copies of all federal CRA reports, and the Banking Department is required to consider a bank's New York CRA rating when reviewing an application by the bank to engage in certain transactions, including mergers, asset purchases and the establishment of branch offices or automated teller machines, and provide that such assessment may serve as a basis for the denial of any such application.  The New York CRA requires the Banking Department to make a written assessment of a bank's compliance with the New York CRA and to make such assessment available to the public.  The Banking Department adopted, effective December 3, 1997, performance-focused regulations that were intended to parallel the current CRA regulations of the federal banking agencies and to promote consistency in New York CRA evaluations by considering more objective criteria.  The regulations require a biennial assessment of a bank's compliance with the New York CRA, utilizing a four-tiered rating system, and require the Banking Department to make available to the public such rating and a written summary of the assessment results. Rome Savings' latest New York CRA rating from the Banking Department, was a rating of "Satisfactory."



Enforcement.  Under the New York Banking Law, the Banking Department may issue an order to a New York-chartered banking institution to appear and explain an apparent violation of law, to discontinue unauthorized or unsafe practices and to keep prescribed books and accounts.  Upon a finding by the Banking Department that any director, trustee or officer of any banking organization has violated any law, or has continued unauthorized or unsafe practices in conducting the business of the banking organization after having been notified by the Banking Department to discontinue such practices, the Banking Department may remove such director, trustee or officer from office after notice and an opportunity to be heard. Rome Savings does not know of any past or current practice, condition or violation that might lead to any proceeding by the Banking Department against it or any of its directors or officers.



Federal Banking Regulation



Capital Requirements.  FDIC regulations require BIF-insured banks, such as Rome Savings to maintain minimum levels of capital.  The FDIC regulations define two classes of capital known as Tier 1 and Tier 2 capital.



The FDIC regulations establish a minimum leverage capital requirement for banks in the strongest financial and managerial condition, with a rating of 1 (the highest examination rating of the FDIC for banks) under the Uniform Financial Institutions Rating System, of not less than a ratio of 3.0% of Tier 1 capital to total assets.  For all other banks, the minimum leverage capital requirement is 4.0%, unless a higher leverage capital ratio is warranted by the particular circumstances or risk profile of the depository institution.



The FDIC regulations also require that savings banks meet a risk-based capital standard.  The risk-based capital standard requires the maintenance of a ratio of total capital (which is defined as the sum of Tier 1 capital and Tier 2 capital) to risk-weighted assets of at least 8% and a ratio of Tier 1 capital to risk-weighted assets of at least 4%.  In determining the amount of risk-weighted assets, all assets, plus certain off balance sheet items, are multiplied by a risk-weight of 0% to 100%, based on the risks the FDIC believes are inherent in the type of asset or item.



The federal banking agencies, including the FDIC, have also adopted regulations to require an assessment of an institution's exposure to declines in the economic value of a bank's capital due to changes in interest rates when assessing the bank's capital adequacy.  Under such a risk assessment, examiners will evaluate a bank's capital for interest rate risk on a case-by-case basis, with consideration of both quantitative and qualitative factors.

Institutions with significant interest rate risk may be required to hold additional capital.  The agencies also issued a joint policy statement providing guidance on interest rate risk management, including a discussion of the critical factors affecting the agencies' evaluation of interest rate risk in connection with capital adequacy.  Rome Savings was considered "well-capitalized" under FDIC guidelines at December 31, 2003.

Activity Restrictions on State-Chartered Banks.  Section 24 of the Federal Deposit Insurance Act, as amended (FDIA), which was added by the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), generally limits the activities and investments of state-chartered FDIC insured banks and their subsidiaries to those permissible for federally-chartered national banks and their subsidiaries, unless such activities and investments are specifically exempted by Section 24 or consented to by the FDIC.



Section 24 provides an exception for investments by a bank in common and preferred stocks listed on a national securities exchange or the shares of registered investment companies if



(1) 	the bank held such types of investments during the 14-month period from September 30, 1990 through November 26, 1991;



(2) 	the state in which the bank is chartered permitted such investments as of September 30, 1991; and



(3) 	the bank notifies the FDIC and obtains approval from the FDIC to make or retain such investments.  Upon receiving such FDIC approval, an institution's investment in such equity securities will be subject to an aggregate limit up to the amount of its Tier 1 capital.



Rome Savings received approval from the FDIC to retain and acquire such equity investments subject to a maximum permissible investment equal to the lesser of 100% of Rome Savings' Tier 1 capital or the maximum permissible amount specified by the Banking Act.  Section 24 also provides an exception for majority-owned subsidiaries of a bank, but Section 24 limits the activities of such subsidiaries to those permissible for a national bank, permissible under Section 24 of the FDIA and the FDIC regulations issued pursuant thereto, or as approved by the FDIC.



Before making a new investment or engaging in a new activity not permissible for a national bank or otherwise permissible under Section 24 of the FDIC regulations thereunder, an insured bank must seek approval from the FDIC to make such investment or engage in such activity.  The FDIC will not approve the activity unless the bank meets its minimum capital requirements and the FDIC determines that the activity does not present a significant risk to the FDIC insurance funds.



Enforcement.  The FDIC has extensive enforcement authority over insured savings banks, including Rome Savings.  This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease and desist orders and to remove directors and officers.  In general, these enforcement actions may be initiated in response to violations of laws and regulations and to unsafe or unsound practices.



The FDIC is required, with certain exceptions, to appoint a receiver or conservator for an insured state bank if that bank is "critically undercapitalized."  For this purpose, "critically undercapitalized" means having a ratio of tangible capital to total assets of less than 2%.  The FDIC may also appoint a conservator or receiver for a state bank on the basis of the institution's financial condition or upon the occurrence of certain events.



Deposit Insurance.  Pursuant to FDICIA, the FDIC established a system for setting deposit insurance premiums based upon the risks a particular institution poses to its deposit insurance fund.  Under the risk-based deposit insurance assessment system, the FDIC assigns an institution to one of three capital categories based on the institution's financial information, as of the most recent quarterly report filed with the applicable bank regulatory agency prior to the assessment period.  The three capital categories are (1) well capitalized, (2) adequately capitalized and (3) undercapitalized using capital ratios that are substantially similar to the prompt corrective action capital ratios discussed below.  See "- Federal Banking Regulation - Prompt Corrective Action" below.  The FDIC also assigns an institution to supervisory subgroup based on a supervisory evaluation provided to the FDIC by the institution's primary federal regulator and information that the FDIC determines to be relevant to the institution's financial condition and the risk posed to the deposit insurance funds (which may include, if applicable, information provided by the institution's state supervisor).  An institution's assessment rate depends on the capital category and supervisory category to which it is assigned.  Any increase in insurance assessments could have an adverse effect on the earnings of insured institutions, including Rome Savings. In addition, legislation requires BIF-insured institutions like Rome Savings to assist in the payment of the Financing Corporation ("FICO") bonds.



Under the FDIA, the FDIC may terminate the insurance of an institution's deposits upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.  The management of Rome Savings does not know of any practice, condition or violation that might lead to termination of deposit insurance.



Transactions with Affiliates of Rome Savings.   Transactions between an insured bank, such as Rome Savings, and any of its affiliates is governed by Sections 23A and 23B of the Federal Reserve Act.  An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank.  Currently, a subsidiary of a bank that is not also a depository institution is not treated as an affiliate of the bank for purposes of Sections 23A and 23B.

Section 23A:

-

-

The term "covered transaction" includes the making of loans, purchase of assets, issuance of guarantees and other similar types of transactions.  Further, most loans by a bank to any of its affiliates must be secured by collateral in amounts ranging from 100 to 130 percent of the loan amounts.  In addition, any covered transaction by a bank with an affiliate and any purchase of assets or services by a bank from an affiliate must be on terms that are substantially the same, or at least as favorable to the bank, as those that would be provided to a non-affiliate.



Effective April 1, 2003, the Federal Reserve Board, or FRB, is rescinded its interpretations of Sections 23A and 23B of the FRA and replaced these interpretations with Regulation W.  In addition, Regulation W makes various changes to existing law regarding Sections 23A and 23B, including expanding the definition of what constitutes an affiliate subject to Sections 23A and 23B and exempting certain subsidiaries of state-chartered banks from the restrictions of Sections 23A and 23B.

Under Regulation W, all transactions entered into on or before December 12, 2002, which either became subject to Sections 23A and 23B solely because of Regulation W, and all transactions covered by Sections 23A and 23B, the treatment of which will change solely because of Regulation W, became subject to Regulation W on July 1, 2003.   All other covered affiliate transactions become subject to Regulation W on April 1, 2003.  The Federal Reserve Board expects each depository institution that is subject to Sections 23A and 23B to implement policies and procedures to ensure compliance with Regulation W.  We do not expect that the changes made by Regulation W will have a material adverse effect on our business.



Community Reinvestment Act.  Under the Community Reinvestment Act (CRA), any insured depository institution, including Rome Savings has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.  The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community.  The CRA requires the FDIC, in connection with its examination of a savings bank, to assess the depository institution's record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications for additional branches and acquisitions.



The CRA requires the FDIC to provide a written evaluation of an institution's CRA performance utilizing a four-tiered descriptive rating system and requires public disclosure of an institution's CRA rating. Rome Savings received a "Satisfactory" rating on its last CRA exam in May 2002.



Safety and Soundness Standards.  Pursuant to the requirements of FDICIA, as amended by the Riegle Community Development and Regulatory Improvement Act of 1994, each federal banking agency, including the FDIC, has adopted guidelines establishing general standards relating to internal controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, and compensation, fees and benefits.  In general, the guidelines require, among other things, appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines.  The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director, or principal stockholder.



In addition, the FDIC adopted regulations to require a bank that is given notice by the FDIC that it is not satisfying any of such safety and soundness standards to submit a compliance plan to the FDIC.  If, after being so notified, a bank fails to submit an acceptable compliance plan or fails in any material respect to implement an accepted compliance plan, the FDIC may issue an order directing corrective and other actions of the types to which a significantly undercapitalized institution is subject under the "prompt corrective action" provisions of FDICIA.  If a bank fails to comply with such an order, the FDIC may seek to enforce such an order in judicial proceedings and to impose civil monetary penalties.



Real Estate Lending Policies.  FDIC regulations require that state-chartered non-member banks adopt and maintain written policies that establish appropriate limits and standards for extensions of credit that are secured by liens or interest in real estate or are made for the purpose of financing permanent improvements to real estate.  These policies must establish loan portfolio diversification standards, prudent underwriting standards, including loan-to-value limits that are clear and measurable, loan administration procedures and documentation, approval and reporting requirements.  The real estate lending policies must reflect consideration of the Interagency Guidelines for Real Estate Lending Policies that have been adopted by the federal bank regulators.



Prompt Corrective Action.  FDICIA also established a system of prompt corrective action to resolve the problems of undercapitalized institutions.  The FDIC, as well as the other federal banking regulators, adopted regulations governing the supervisory actions that may be taken against undercapitalized institutions.  The regulations establish five categories, consisting of "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized."  The severity of the action authorized or required to be taken under the prompt corrective action regulations increases as a bank's capital decreases within the three undercapitalized categories.  All banks are prohibited from paying dividends or other capital distributions or paying management fees to any controlling person if, following such distribution, the bank would be undercapitalized.



Federal Home Loan Bank System.  Rome Savings is a member of the Federal Home Loan Bank (the "FHLB") of New York , which is one of the regional FHLBs making up the FHLB System.  Each FHLB provides a central credit facility primarily for its member institutions.  Rome Savings is required to acquire and hold shares of capital stock in the FHLB-NY.  Effective July 10, 2002, each member of the FHLB-NY must maintain a minimum investment in FHLB-NY stock in an amount equal to the sum of (i) the greater of $1,000 or 0.20% of the member's mortgage-related assets and (ii) 4.50% of the dollar amount of any outstanding advances under such member's Advances, Collateral Pledge and Security Agreement with the FHLB-NY.

Rome Savings was in compliance with this requirement with an investment in the capital stock of the FHLB-NY at December 31, 2003, of $905,000.  Any advances from a FHLB must be secured by specified types of collateral, and all long term advances may be obtained only for the purpose of providing funds for residential housing finance.

FHLBs are required to provide funds for the resolution of insolvent thrifts and to contribute funds for affordable housing programs.  These requirements could reduce the amount of earnings that the FHLBs can pay as dividends to their members and could also result in the FHLBs imposing a higher rate of interest on advances to their members.  If dividends were reduced, or interest on future FHLB advances increased, Rome Savings's net interest income would be affected.

Under the GLB Act, membership in the FHLB System is now voluntary for all federally-chartered savings associations, such as Rome Savings.  The GLB Act also replaces the existing redeemable stock structure of the FHLB System with a capital structure that requires each FHLB to meet a leverage limit and a risk-based permanent capital requirement.  Two classes of stock are authorized: Class A (redeemable on 6-months notice) and Class B (redeemable on 5-years notice).

Loans to a Bank's Insiders



Federal Regulation.  A bank's loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any of certain entities affiliated to any such person (an insider's related interest) are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and the FRB's Regulation O thereunder.  Under these restrictions, the aggregate amount of the loans to any insider and the insider's related interests may not exceed the loans-to-one-borrower limit applicable to national banks, which is comparable to the loans-to-one-borrower limit applicable to Rome Savings' loans.  See "New York Banking Regulation - Loans-to-One Borrower Limitations."  All loans by a bank to all insiders and insiders' related interests in the aggregate may not exceed the bank's unimpaired capital and unimpaired surplus.  With certain exceptions, loans to an executive officer, other than loans for the education of the officer's children and certain loans secured by the officer's residence, may not exceed the lesser of  (1) $100,000 or (2) the greater of $25,000 or 2.5% of the bank's capital and unimpaired surplus.  Regulation O also requires that any proposed loan to an insider or a related interest of that insider be approved in advance by a majority of the board of directors of the bank, with any interested director not participating in the voting, if such loan, when aggregated with any existing loans to that insider and the insider's related interests, would exceed either (1) $500,000 or (2) the greater of $25,000 or 5% of the bank's unimpaired capital and surplus.  Generally, such loans must be made on substantially the same terms as, and follow credit underwriting procedures that are not less stringent than those that are prevailing at the time for comparable transactions with other persons.



An exception is made for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other employees of the bank.



Section 402 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, prohibits the extension of personal loans to directors and executive officers of issuers (as defined in Sarbanes-Oxley).  The prohibition, however, does not apply to mortgages advanced by an insured depository institution, such as Rome Savings, that are subject to the insider lending restrictions of Section 22(h) of the FRA.



The Bank Holding Company Act of 1956, as amended (the "BHCA"), also prohibits extensions of credit to a bank's insiders and their related interests by any other institution that has a correspondent banking relationship with the bank, unless such extension of credit is on substantially the same terms as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.



New York Regulation.  Provisions of the New York Banking Law impose conditions and limitations on the liabilities to a savings bank of its directors and executive officers and of corporations and partnerships controlled by such persons that are comparable in many respects to the conditions and limitations imposed on the loans and extensions of credit to insiders and their related interests under Regulation O, as discussed above.  However, New York law does not affect loans to shareholders owning more than 10% or more of the savings bank's stock.  Under applicable New York law, savings banks that comply with the requirements of Regulation O are deemed to be in compliance with the requirements of the New York law.



Federal Reserve System

Under regulations of the Federal Reserve Board (the "FRB"), Rome Savings is required to maintain non-interest-earning reserves against its transaction accounts.  FRB regulations generally require that reserves of 3% must be maintained against aggregate transaction accounts of $42.1 million or less, subject to adjustment by FRB, and an initial reserve of $1.083 million plus 10%, subject to adjustment by FRB between 8% and 14%, against that portion of total transaction accounts in excess of $42.1 million.  The first $6.0 million of otherwise reservable balances, subject to adjustments by FRB, are exempted from the reserve requirements.  Rome Savings is in compliance with these requirements.  Because required reserves must be maintained in the form of either vault cash, a non-interest-bearing account at an Federal Reserve bank or a pass-through account as defined by FRB, the effect of this reserve requirement is to reduce Rome Savings's interest-earning assets, to the extent the requirement exceeds vault cash.

Holding Company Regulation



Federal Regulation.  Rome, MHC and Rome Bancorp are governed as bank holding companies.  Bank holding companies are subject to examination, regulation and periodic reporting under the BHCA, as administered by the FRB.  The FRB has adopted capital adequacy guidelines for bank holding companies on a consolidated basis substantially similar to those of the FDIC for Rome Savings. As of December 31, 2003, the total capital and Tier 1 capital ratios for Rome, MHC and Rome Bancorp would, on a pro forma basis, exceed these minimum capital requirements.  See "- Federal Banking Regulation - Capital Requirements" above.



The activities of bank holding companies are generally limited to the business of banking, managing or controlling banks, and other activities that the Federal Reserve Board determines to be so closely related to banking or managing or controlling banks as to be properly incident thereto.  In addition, bank holding companies, all of whose controlled depository institutions are "well capitalized" and "well managed," as defined in FRB Regulation Y, and which obtain satisfactory Community Reinvestment Act ratings, can declare themselves to be "financial holding companies" and engage in a broader spectrum of activities than those generally permitted to bank holding companies, including insurance underwriting and brokerage (including annuities), and underwriting and dealing securities without a revenue limit and without limits on the amounts of equity securities it may hold in conducting its underwriting and dealing activities.  If financial holding companies do not continue to meet the requirements for financial holding company status, depending on the requirements they fail to meet, they may not be permitted to undertake new activities or acquisitions that are financial in nature and may lose their ability to conduct activities that are not generally permissible for bank holding companies.  Rome Bancorp has not elected to be regulated as a financial holding company, but may elect to do so in the future.



Regulations of the FRB provide that a bank holding company must serve as a source of strength to any of its subsidiary banks and must not conduct its activities in an unsafe or unsound manner.  Under the prompt corrective action provisions of FDICIA, a bank holding company parent of an undercapitalized subsidiary bank would be directed to guarantee, within limitations, the capital restoration plan that is required of such an undercapitalized bank.  See " - Federal Banking Regulation - Prompt Corrective Action" above.  If the undercapitalized bank fails to file an acceptable capital restoration plan or fails to implement an accepted plan, the FRB may prohibit the bank holding company parent of the undercapitalized bank from paying any dividend or making any other form of capital distribution without the prior approval of the FRB.



As bank holding companies, Rome, MHC and Rome Bancorp will be required to obtain the prior approval of the FRB to acquire all, or substantially all, of the assets of any bank or bank holding company.  Prior FRB approval will be required for Rome, MHC or Rome Bancorp to acquire direct or indirect ownership or control of any voting securities of any bank or bank holding company if, after giving effect to such acquisition, it would, directly or indirectly, own or control more than 5% of any class of voting shares of such bank or bank holding company.



Subject to certain limitations and restrictions, a bank holding company, with the prior approval of the FRB, may acquire an out-of-state bank.  Banks in states that do not prohibit out-of-state mergers may merge with other banks only after receiving the approval of the appropriate federal bank regulatory agency.  A national or state bank may establish a de novo branch out of state if such branching is expressly permitted by the other state.



New York Regulation.  Under the New York Banking Law, certain companies owning or controlling banks are regulated as bank holding companies.  For the purposes of the New York Banking Law, the term "bank holding company," is defined generally to include any "company"  that, directly or indirectly, either (a) controls the election of a majority of the directors, or (b) owns, controls or holds with power to vote more than 10% of the voting stock of a bank holding company or, if Rome Bancorp is a banking institution, another banking institution, or 10% or more of the voting stock of each of two or more banking institutions.  The term "company" is defined to include corporations, partnerships and other types of business entities, chartered or doing business in New York, and the term "banking institution" is defined to include commercial banks, stock savings banks and stock savings and loan associations.  A company controlling, directly or indirectly, only one banking institution in New York will not be deemed to be a bank holding company for the purposes of the Banking Law.  Under the Banking Law, the prior approval of the Banking Department is required before:



(1)	any action is taken that causes any company to become a bank holding company;



(2)	any action is taken that causes any banking institution to become or to be merged or consolidated with a subsidiary of a bank holding company;



(3)	any bank holding company acquires direct or indirect ownership or control of more than 5% of the voting stock of a banking institution;



(4)	any bank holding company or subsidiary thereof acquires all or substantially all of the assets of a banking institution; or



(5)	any action is taken that causes any bank holding company to merge or consolidate with another bank holding company.



Additionally, certain restrictions apply to New York bank holding companies regarding the acquisition of banking institutions that have been chartered for five years or less and are located in smaller communities.  Directors, officers and employees of a New York bank holding company are subject to limitations regarding their affiliation with securities underwriting or distribution firms and with other bank holding companies, and directors and executive officers are subject to limitations regarding loans obtained from certain of the holding company's banking subsidiaries.  Although Rome Bancorp is not a bank holding company for purposes of the New York Banking Law, any future acquisition of ownership, control, or the power to vote 10% or more of the voting stock of another banking institution or bank holding company would cause it to become such.



Mutual Holding Company Regulation.  Under the New York Banking Law, Rome, MHC may exercise all powers and privileges of a New York-chartered mutual savings bank, except the power to take deposits.  As  a bank holding company, Rome, MHC is also be subject to the limitations on activities imposed on a bank holding company under the BHCA.



Change in Control Regulations

Under the federal Change in Bank Control Act, any person (including a company or a group acting in concert) seeking to acquire 10% or more of the outstanding shares of Rome Bancorp's common stock is required to submit prior notice to the FRB, unless the FRB has found that the acquisition of such shares will not result in a change in control of Rome Bancorp.  Under the BHCA, the FRB has 60 days within which to act on such a notice, taking into consideration such factors as the financial and managerial resources of the acquirer, the convenience and needs of the communities served by Rome Bancorp and Rome Savings, and the anti-trust effects of the acquisition.  Under the BHCA, any company would be required to obtain prior approval from the FRB before it may obtain "control" of Rome Bancorp.  The term "control" is defined generally under the BHCA to mean the ownership or power to vote 25% or more of any class of voting securities of an institution, or the ability to control in any manner the election of a majority of the institution's directors.

Other Federal Regulation



USA PATRIOT Act

In response to the events of September 11th, President George W. Bush signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act, on October 26, 2001.  The USA PATRIOT Act gives the federal government new powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.  By way of amendments to the Bank Secrecy Act, Title III of the USA PATRIOT Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies.  Further, certain provisions of Title III impose affirmativeobligations on a broad range of financial institutions, including banks, thrifts,brokers, dealers, credit unions, money transfer agents and parties registered under the Commodity Exchange Act.



Among other requirements, Title III of the USA PATRIOT Act imposes the following requirements with respect to financial institutions:



- Pursuant to Section 352, all financial institutions must establish anti-money laundering programs that include, at minimum: (i) internal policies, procedures, and controls, (ii) specific designation of an anti-money laundering compliance officer, (iii) ongoing employee training programs, and (iv) an independent audit function to test the anti-money laundering program.
- Pursuant to Section 326, on July 23, 2002 the Secretary of the Department of Treasury, in conjunction with other bank regulators, issued Joint Final Rules that provide for minimum standards with respect to customer identification and verification.  These became effective on October 1, 2003.
- Section 312 requires financial institutions that establish, maintain, administer, or manage private banking accounts or correspondent accounts in the United States for non-United States persons or their representatives (including foreign individuals visiting the United States) to establish appropriate, specific, and, where necessary, enhanced due diligence policies, procedures, and controls designed to detect and report money laundering.
- Effective December 25, 2001, financial institutions are prohibited from establishing, maintaining, administering or managing correspondent accounts for foreign shell banks (foreign banks that do not have a physical presence in any country), and will be subject to certain recordkeeping obligations with respect to correspondent accounts of foreign banks.
- Bank regulators are directed to consider a holding company's effectiveness in combating money laundering when ruling on Federal Reserve Act and Bank Merger Act applications.



The Sarbanes-Oxley Act

On July 30, 2002, President George W. Bush signed into law the Sarbanes-Oxley Act of 2002.  The Sarbanes-Oxley Act implements a broad range of corporate governance and accounting measures for public companies designed to promote honesty and transparency in corporate America and better protect investors from the type of corporate wrongdoing that occurred in Enron, WorldCom and similar companies.  The Sarbanes-Oxley Act's principal legislation includes:

- the creation of an independent accounting oversight board;
- auditor independence provisions which restrict non-audit services that accountants may provide to their audit clients;
- additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer certify financial statements;
- the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer's securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement;
- an increase the oversight of, and enhancement of certain requirements relating to audit committees of public companies and how they interact with the company's independent auditors;
- requirement that audit committee members must be independent and are absolutely barred from accepting consulting, advisory or other compensatory fees from the issuer;
- requirement that companies disclose whether at least one member of the committee is a "financial expert" (as such term will be defined by the Securities and Exchange Commission) and if not, why not;
- expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition  on insider  trading during pension blackout periods;
- a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions;
- disclosure of a code of ethics and filing a Form 8-K for a change or waiver of such code;
- mandatory disclosure by analysts of potential conflicts of interest; and
- a range of enhanced penalties for fraud and other violations.



Federal Securities Law



Rome Bancorp's common stock is registered with the SEC under Section 12(b) of the Securities Exchange Act of 1934 (the "Exchange Act").  Rome Bancorp is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Exchange Act.



Conversion to Federal Savings Association and Savings and Loan Holding Companies



On October 15, 2003, the Board of Trustees of Rome, MHC and the Boards of Directors of Rome Savings and Rome Bancorp adopted a Plan of Charter Conversion.  Pursuant to the Plan of Charter Conversion, Rome, MHC will establish a federal mutual holding company (the "Federal MHC").  Rome, MHC will then merge with and into the Federal MHC, with the Federal MHC as the surviving entity.  Concurrently, Rome Savings will exchange its New York stock savings bank charter for a federal stock savings bank charter (the "Federal Savings Bank").  As a result of the charter conversion, Rome, MHC and Rome, Bancorp will become savings and loan holding companies regulated by the Office of Thrift Supervision (the "OTS") and Rome Savings will become a federal savings bank regulated by the OTS.   Rome Bancorp expects that the charter conversion will be completed in the second quarter of 2004.



Powers.  The federal mutual holding company charter has been modernized and improved under recently enacted financial modernization legislation.  Specifically, federal mutual holding companies now have all of the powers of financial holding companies, plus certain additional enumerated powers.



Upon a charter conversion to a federally-chartered savings bank, the lending and investment powers of Rome Savings will come from federal law and regulations.  A federally-chartered savings bank has a wide range of lending authority and specified investment authority in debt securities.  Its lending authority is capped in the amount of consumer loans and commercial loans it may make under the Home Owners' Loan Act.



A New York-chartered savings bank also has a wide range of lending and investment authorities that are comparable to those of a full-service commercial bank.  Additionally, unlike a federal savings bank, a New York-chartered savings bank has broad authority to invest in equity securities.  Moreover, New York law allows a savings bank, subject to regulations or approval of the Superintendent, to perform any activity or make any investment authorized to a federally-chartered bank or a bank chartered by another state.



Additionally, the FDIC regulates the activities of state-chartered banks and their subsidiaries. If a state-chartered bank desired to engage in activities not permissible for national banks, it generally must obtain permission or non-objection from the FDIC to engage in such activities.



Commercial and Consumer Lending Limits.  The charter conversion would subject Rome Savings to a lending limit of 35% of assets for consumer loans and 20% of assets for commercial loans, of which amounts in excess of 10% must be in small business loans.  New York law does not restrict the commercial and consumer lending of state-chartered banks.  Rome Savings does not currently exceed the OTS' commercial and consumer lending limits.  New York law does not limit the aggregate amount of consumer credit and commercial loans a savings bank may make.



Qualified Thrift Lender Test.  In addition, in order for Rome, MHC and Rome Bancorp to be regulated as savings and loan holding companies, Rome Savings must qualify as a "qualified thrift lender."  Under the qualified thrift lender test, a savings institution is required to maintain at least 65% of its "portfolio assets" (total assets less: (i) specified liquid assets up to 20% of total assets; (ii) intangibles, including goodwill; and (iii) the value of property used to conduct business) in certain "qualified thrift investments" (primarily residential mortgages and related investments, including certain mortgage-backed and related securities) in at least nine months out of each 12 month period.  Rome Savings currently maintains the majority of its portfolio assets in qualified thrift investments and would have met the qualified thrift lender test in each of the last 12 months had Rome Savings been subject to the test.  However, attaining and maintaining its status as a qualified thrift lender may require Rome Savings to restructure its balance sheet from time to time



ITEM 2.	DESCRIPTION OF PROPERTY



We conduct our business through our executive office, operations center and three banking offices.  At December 31, 2003, the net book value of the computer equipment and other furniture, fixtures and equipment of Rome Savings and Rome Bancorp at their offices totaled $1,113,000.  For more information, see Note 5 of Notes to Consolidated Financial Statements.



|Location                            | Leased or
Owned | Original Date Acquired | Net Book Value
December 31, 2003
|----------------------------------- | --------------- | ---------------------- | --------------------------------
|                                    |                 |                        | (In thousands)                  
|Executive Office:                   |                 |                        |                                 
|100 West Dominick St.
Rome, NY      | Owned           | 1956                   | $  1,259                        
|Branch Offices:                     |                 |                        |                                 
|1629 Black River Boulevard
Rome, NY | Owned           | 1963                   | 303                             
|1300 Erie Boulevard
Rome, NY        | Owned           | 1997                   | 1,035                           
|82 Seneca Turnpike
New Hartford, NY | Owned           | 1983                   | 140                             
|Mortgage Center:                    |                 |                        |                                 
|137 West Dominick Street
Rome, NY   | Owned           | 2002                   | 479                             
|Accounting Center:                  |                 |                        |                                 
|139 West Dominick Street
Rome, NY   | Owned           | 1995                   | 370                             

ITEM 3.	LEGAL PROCEEDINGS



As of the date of this Form 10-KSB, we are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business.  We believe that these routine legal proceedings, in the aggregate, are immaterial to our financial condition and results of operations.





ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



PART II



ITEM 5.	MARKET FOR ROME BANCORP'S COMMON STOCK AND RELATED                                                SHAREHOLDER MATTERS



The following information included in the Rome Bancorp, Inc. 2003 Annual Report to Shareholders (the "Annual Report") is incorporated herein by reference: "Market for Rome Bancorp's Common Stock."

ITEM 6.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                         RESULTS OF OPERATIONS



The following information included in the Rome Bancorp, Inc. 2003 Annual Report to Shareholders (the "Annual Report") is incorporated herein by reference:  "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Financial Highlights," on pages 4 through 16 of the Annual Report.



ITEM 7.	FINANCIAL STATEMENTS



The following information included in the Annual Report is incorporated herein by reference: "Consolidated Financial Statements and Notes to Consolidated Financial Statements."

ITEM 8.	CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING                                 AND FINANCIAL DISCLOSURE



The following information included in Rome Bancorp's 2004 Proxy Statement for the 2004 annual Meeting of Shareholders ("Proxy statement") is incorporated herein by reference: "Proposal 2: Ratification of Appointment of Independent Auditors."

PART III

Item 8A.	CONTROLS AND PROCEDURES



Management, including the Company's President and Chief Executive Officer and Chief Financial Officer and Treasurer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report.  Based upon that evaluation, the Company's President and Chief Executive Officer and Chief Financial Officer and Treasurer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation that occurred during the Company's last fiscal quarter that has materially affected, or that is reasonably likely to materially affect, the Company's internal control over financial reporting.





ITEM 9.	DIRECTORS AND PRINCIPAL OFFICERS OF ROME BANCORP



The following information included in the Proxy Statement is incorporated herein by reference: "Proposal 1, Election of Directors" and the following subsections of the section entitled "Information About Board of Directors and Management":  "Board of Directors," "Committees of the Board," "Executive Officers Who Are Not Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance."



Code of Ethics



Rome Bancorp has adopted a Code of Conduct and Ethics, which applies to all employees, directors and officers of Rome Bancorp.  The Code of conduct and Ethics meets the requirements of a "code of ethics" as defined by Item 406 of Regulation S-K.  The Code of Conduct and Ethics is filed as Exhibit 14.1 to this report.





ITEM 10.	EXECUTIVE COMPENSATION



The information set forth in the following subsections of the section entitled "Information About Board of Directors and Management" of the Proxy Statement are incorporated herein by reference:  "Directors' Compensation," "Executive Compensation" (including the Summary Compensation Table), "Benefit Plans" and "Transactions with Certain Related Persons."

ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                                                   MANAGEMENT



The following subsections of the section entitled "Security Ownership of Certain Beneficial Owners and Management" included in the Proxy Statement are incorporated herein by reference:  "Principal Shareholders of Rome Bancorp" and "Security Ownership of Management."



The following table sets forth the aggregate information of our equity compensation plans in effect as of December 31, 2003.

|Plan category                                              | Number of securities
to be issued
upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))1
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------
|                                                           | (a)                                                                                         | (b)                                                                         | (c)                                                                                                                                         
|Equity compensation plans approved by security holders     | 119,560                                                                                     | $	4.96                                                                      | 124,664                                                                                                                                     
|                                                           |                                                                                             |                                                                             |                                                                                                                                             
|Equity compensation plans not approved by security holders | --                                                                                          | --                                                                          | --                                                                                                                                          
|                                                           |                                                                                             |                                                                             |                                                                                                                                             
|Total                                                      | 119,560                                                                                     | $	4.96                                                                      | 124,664                                                                                                                                     



(1)	The number of securities remaining for future issuance under equity compensation plans includes 21,120 shares granted but unvested under the 2000 Recognition and Retention Plan, 22,187 shares available for issuance under the 2000 Recognition and Retention Plan and 81,357 shares available for issuance under the 2000 Stock Option Plan.



ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



The following information included in the Proxy Statement is incorporated herein by reference:  "Transactions with Certain Related Persons."





ITEM 13.	EXHIBITS AND REPORTS ON FORM 8-K



(a)	The following financial statements included in the 2003 Annual Report are incorporated herein by reference:

Consolidated Balance Sheets - At December 31, 2003 and 2002;

Consolidated Statements of Income - Years Ended December 31, 2003 and 2002;

Consolidated Statements of Shareholders' Equity and Comprehensive Income - Years Ended December 31, 2003 and 2002;

Consolidated Statements of Cash Flows - Years Ended December 31, 2003 and 2002; and

Notes to Consolidated Financial Statements - Years Ended December 31, 2003 and 2002





(b)	Exhibits.  The following exhibits are either filed as part of this report or are incorporated herein by reference:

2.1	Amended Plan of Reorganization of The Rome Savings Bank.(1)

3.1 	Certificate of Incorporation of Rome Bancorp, Inc.(1)

3.2	Bylaws of Rome Bancorp, Inc.(1)

4.3	Form of Stock Certificate of Rome Bancorp, Inc.(1)

10.1	Form of Employee Stock Ownership Plan of Rome Bancorp, Inc.(1)

10.2	Form of Executive Employment Agreement, by and between Charles M. Sprock and Rome Bancorp, Inc.(1)

10.3    	Form of Benefit Restoration Plan of Rome Bancorp, Inc.(1)

13.1	Annual Report to Shareholders for the Year Ended December 31, 2003.

14.1      Code of Conduct and Ethics

1. Subsidiaries of the Registrant.(1)

1. Consent of KPMG LLP

1. Rule 13a-14a)/15d-14(a) Certifications
2. Section 1350 Certifications

1. Rome Bancorp, Inc. 2000 Stock Option Plan filed on April 5, 2000 as Exhibit B to Registrant





______________________

1. Incorporated herein by reference in the Registration Statement on Form SB-2 (Registration No. 333-80487), filed with the Securities and Exchange Commission on June 11, 1999, as amended.





(c)	Reports on Form 8-K.



The Company filed the following Current Reports on Form 8-K during the fourth quarter of 2003 and through the filing date:



Current Report on Form 8-K filed with the SEC on October 17, 2003 announcing earnings for the quarter and nine months ended September 30, 2003.



Current Report on Form 8-K filed with the SEC on October 20, 2003 announcing the Proposed Plan of Charter Conversion.



Current Report on Form 8-K filed with the SEC on February 2, 2004 announcing earnings for the quarter and year ended December 31, 2003.



Current Report on Form 8-K filed with the SEC on March 3, 2004 announcing a change in the Company's certifying accountants.



Current Report on Form 8-K/A filed with the SEC on March 3, 2004 amending the Current Report on Form 8-K filed earlier that same day.



ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES



The following information included in the Proxy Statement is incorporated herein by reference:

" Principal Accountant Fees and Services."



SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Rome Bancorp, Inc.



By: /s/Charles M. Sprock

President, Chairman of the Board and

Chief Executive Officer



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|Name                                         |  | Title                                                                                      | Date          
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------ | --------------
|/s/Charles M. SprockCharles M. Sprock        |  | Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer) | March 24, 2004
|/s/David C. Nolan
David C. Nolan             |  | Treasurer and Chief Financial Officer (Principal Financial Officer)                        | March 24, 2004
|/s/Bruce R. Engelbert
Bruce R. Engelbert     |  | Director                                                                                   | March 24, 2004
|/s/David C. Grow
David C. Grow               |  | Director                                                                                   | March 24, 2004
|/s/Kirk B. Hinman
Kirk B. Hinman             |  | Director                                                                                   | March 24, 2004
|/s/T. Richard Leidig
T. Richard Leidig       |  | Director                                                                                   | March 24, 2004
|/s/Richard H. McMahon
Richard H. McMahon     |  | Director                                                                                   | March 24, 2004
|/s/Michael J. Valentine
Michael J. Valentine |  | Director                                                                                   | March 24, 2004
|/s/Marion C. Scoville
Marion C. Scoville     |  | Director                                                                                   | March 24, 2004