-----------------------------------------------------------------


                          SECURITIES AND EXCHANGE COMMISSION

                                WASHINGTON, D.C. 20549

                                               
                                       --------

                                      FORM 10-Q


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


                       FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                            COMMISSION FILE NUMBER 0-27190


                           PARAMOUNT FINANCIAL CORPORATION
                (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                DELAWARE                          11-3072768
     (STATE OR OTHER JURISDICTION OF     (I.R.S. EMPLOYER IDENTIFICATION
      INCORPORATION OR ORGANIZATION)                 NO.)



                  ONE JERICHO PLAZA, JERICHO, NEW YORK           11753
                 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)      (ZIP CODE)


                                    (516) 938-3400
                 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


          INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL
          REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS
          (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO
          FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
          REQUIREMENTS FOR THE PAST 90 DAYS.  YES    X      NO
                                                 ---------    --------


                 NUMBER OF SHARES OUTSTANDING AT SEPTEMBER 11, 1997:

             7,940,000 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE.

          -----------------------------------------------------------------
          
     <PAGE>


                           PARAMOUNT FINANCIAL CORPORATION

                       INDEX TO FORM 10-Q FOR THE QUARTER ENDED

                                  SEPTEMBER 30, 1997





          PART I - FINANCIAL INFORMATION                           Page No.
                                                                   --------

            Item 1 - Financial Statements

                   Consolidated Balance Sheets
                   September 30, 1997 and December 31, 1996   . . . . . . 1

                   Consolidated Statements of Operations
                   Three Months Ended and Nine Months Ended
                   September 30, 1997 and 1996  . . . . . . . . . . . . . 2

                   Consolidated Statement of Changes in Stockholders' 
                   Equity Nine Months Ended September 30, 1997  . . . . . 3

                   Consolidated Statements of Cash Flows
                   Nine Months Ended September 30, 1997 and 1996  . . . . 4

                   Notes to Unaudited Consolidated Financial Statements   6

            Item 2 - Management's Discussion and Analysis of
                     Financial Condition and Results of Operations  . . 7-11


          PART II - Other Information . . . . . . . . . . . . . . . . .  12


          SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . .  13


     <PAGE>

                            PART I:  FINANCIAL INFORMATION

          ITEM 1.   FINANCIAL STATEMENTS

                    PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------------

                             CONSOLIDATED BALANCE SHEETS
                             ---------------------------


                                         DECEMBER 31,      SEPTEMBER 30,
                    ASSETS                   1996              1997    
                    ------              -------------       ------------
                                                            (UNAUDITED)

           Cash and cash                  $ 3,700,774      $    850,589
            equivalents  . . . . .

           Investments available            3,163,841         4,065,732
            for sale . . . . . . .

           Accounts receivable . .          2,260,013           792,159

           Net investment in direct
            finance and sales-type         20,942,542        43,785,739
            leases . . . . . . . .

           Assets held under
            operating leases, net          21,103,033         6,188,925
            of accumulated
            depreciation . . . . .

           Other assets  . . . . .            391,317           639,750
                                        -------------      ------------

           Total assets  . . . . .        $51,561,520       $56,322,894
                                         ============      ============


               LIABILITIES AND SHAREHOLDERS' EQUITY
               ------------------------------------

           Notes payable . . . . .        $    18,384       $ 3,348,786

           Accounts payable  . . .          1,062,226           545,956

           Accounts payable -              18,234,518         4,353,876
            leases . . . . . . . .

           Accrued expenses  . . .            188,169           345,997

           Obligations for financed        23,461,175        39,234,888
            equipment - non-recourse 

           Deferred income taxes .            425,662           425,662
                                        -------------     -------------

           Total liabilities . . .         43,390,134        48,255,165
                                         ------------      ------------

           Shareholders' equity:

           Preferred stock, $.01
            par value; 5,000,000
            shares authorized, none
            outstanding  . . . . .                 --                --

           Common stock, $.01 par
            value; 35,000,000
            shares authorized,
            3,500,000 and 7,990,000
            shares issued,             
            respectively . . . . .             79,900            79,900

           Additional paid-in              13,644,228        13,644,228
            capital  . . . . . . .

           Accumulated deficit . .         (5,552,742)       (5,627,034)

           Treasury stock, 50,000
            shares at cost . . . .                 --           (29,365)
                                      ---------------     -------------

           Total shareholders'              8,171,386         8,067,729
           equity  . . . . . . . .      -------------      ------------

           Total liabilities and          $51,561,520       $56,322,894
            shareholders' equity .      =============      ============


                   See accompanying notes to financial statements.

                                      -1-
     <PAGE>


                    PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------------

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                        -------------------------------------

                                      UNAUDITED
                                      ---------



                        THREE MONTHS ENDED             NINE MONTHS ENDED
                           SEPTEMBER 30,                  SEPTEMBER 30,
                     ------------------------      --------------------------
                        1996         1997              1996           1997
                        ----         ----              ----           ----

      REVENUES:

      Sales . . . .  $ 528,544   $ 13,364,035      $ 22,612,437  $ 20,114,906

      Lease revenue    986,678      2,764,898         2,433,049     8,188,263

      Fee, interest
       and other
       income . . .    252,631         76,800           415,902       857,764
                    ----------     ----------        ----------    ----------
         Total
          revenues   1,767,853     16,205,733        25,461,388    29,160,933
                    ----------     ----------        ----------    ----------


      COSTS AND EXPENSES:

      Cost of sales    407,067     12,775,064        21,489,156    18,808,375

      Lease expense    882,027      2,679,478         2,234,239     7,870,158

      Selling,
       general and
       administra-
       tive expenses   588,119      1,118,006         1,733,030     2,605,548
                    ----------     ----------        ----------    ----------

         Total costs
          and
          expenses   1,877,213     16,572,548        25,456,425    29,284,081
                    ----------     ----------        ----------    ----------

      (Loss) income
       before
       provision for
       income taxes   (109,360)      (366,815)            4,963      (123,148)

      PROVISION
       (BENEFIT) FOR
       INCOME TAXES    375,974       (146,565)          421,704       (48,856)
                    ----------     ----------        ----------    ----------

         Net loss .  ($485,334)     ($220,250)        ($416,741)     ($74,292)
                    ==========     ==========        ==========    ==========
         Loss per
          common
          share . .     ($0.06)        ($0.03)           ($0.05)       ($0.01)
                    ==========     ==========        ==========    ==========
      Weighted
       average
       common
       shares
       outstanding   7,990,000      7,946,304         7,749,927     7,972,711
                    ==========     ==========        ==========    ==========


                   See accompanying notes to financial statements.

                                      -2-
     <PAGE>

                    PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------------

              CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
              ---------------------------------------------------------

                     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
                     --------------------------------------------

                                      UNAUDITED
                                      ---------

  <TABLE>
  <CAPTION>

                    COMMON STOCK
                 ------------------                    
                                      ADDITIONAL
                                       PAID-IN    ACCUMULATED    TREASURY
                  SHARES    AMOUNT    -CAPITAL     (DEFICIT)      STOCK       TOTAL
                  ------    ------    --------     ---------      -----       -----

 <S>          <C>        <C>      <C>          <C>            <C>       <C>
   BALANCE,
    DECEMBER
    31, 1996 .  7,990,000  $79,900  $13,644,228  ($5,552,742)   $    --   $8,171,386

   Net loss  .        --       --            --      (74,292)        --      (74,292)

   Purchase of
    treasury
    stock  . .        --       --            --           --     (29,365)    (29,365)
                ---------  -------  -----------  ------------   --------  ----------
   BALANCE,
    SEPTEMBER
    30, 1997 .  7,990,000  $79,900  $13,644,228  ($5,627,034)  ($29,365)  $8,067,729
                =========  =======  ===========  ===========   ========   ==========

  </TABLE>



                   See accompanying notes to financial statements.

                                      -3-
     <PAGE>

                    PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------------

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                        -------------------------------------

                       FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                       ---------------------------------------

                                      UNAUDITED
                                      ---------


                                            1996               1997
                                        -----------        -----------

     CASH FLOWS FROM OPERATING
       ACTIVITIES:

     Net loss                           $  (416,741)       $  (74,292)

     Adjustments to reconcile net loss
      to net cash provided by operating
      activities:

      Deferred tax liability                419,819                --

      Depreciation                        1,280,277         5,687,422
      
      Amortization of discounts on
       investments                         (118,285)         (154,642)

      Amortization of unearned
        operating lease revenue
        from sublease transactions          (19,928)              --

      Amortization of prepaid operating
         lease expense from sublease
         transactions                        25,067               -- 

      Changes  in operating  assets  and
        liabilities:

               Accounts receivable         (847,962)        1,467,854

               Other assets                 273,521          (248,433)

               Accounts payable            (108,227)         (516,270)

               Accrued expenses             (45,614)          157,828
                                        -----------        ----------


     Net cash provided by operating         441,927         6,319,467
      activities                        -----------        ----------

     CASH FLOWS FROM INVESTING
      ACTIVITIES:

        Purchase of equipment for direct
         finance leases and sales-type
         leases                         (18,236,564)      (37,470,321)

         Termination of direct finance
          leases                            974,152         4,236,465

         Proceeds applied to direct
          finance leases and sales-type
          leases                          3,784,071         8,057,474

         Purchase of equipment for
          operating leases              (19,121,819)          (41,333)

         Termination of operating
           leases                        12,749,549         6,972,505

         Residual value sharing
          arrangements                          --          4,628,698

         Purchases of investments       (16,980,988)      (14,187,250)

         Proceeds from sale/maturity of
          investments                    14,008,924        13,440,000
                                        -----------

     Net cash used in investing         (22,822,675)      (14,363,762)
      activities                        -----------       -----------
      

     CASH FLOWS FROM FINANCING
      ACTIVITIES:

        Proceeds from sale of common
         stock in an initial public
         offering, net of fees            8,413,801               --

        Repurchase of common stock              --            (29,365)

        Proceeds from notes payable             --          3,578,697

        Repayment of notes payable       (1,592,829)         (248,294)


              See accompanying notes to financial statements.

                                      -4-
     <PAGE>

                                           1996               1997
                                        -----------       -----------

        Decrease in amounts due on
         purchases of equipment for
         leases                           4,497,318       (13,880,642)

        Increase in non-recourse lease
         financing                       34,895,847        32,501,416

        Termination of non-recourse
         lease financing                (16,291,873)       (3,220,910)

        Repayments and interest
         amortization applied to non-    (5,196,245)      (13,506,792)
         recourse lease financing       -----------       -----------

     Net cash provided by financing
      activities                         24,726,019         5,194,110
                                        -----------       -----------

     Net increase (decrease) in cash and
      cash equivalents                    2,345,271        (2,850,185)


     CASH AND CASH EQUIVALENTS,           1,153,476         3,700,774
      beginning of period               -----------       -----------


     CASH AND CASH EQUIVALENTS, end of   $3,498,747        $  850,589
      period                            ===========       ===========


     SUPPLEMENTAL CASH FLOW INFORMATION:
        Cash paid for income taxes       $   49,366        $   38,570
                                        ===========       ===========

        Cash paid for interest          $   923,063        $2,221,754
                                        ===========       ===========





                   See accompanying notes to financial statements.

                                      -5-
     <PAGE>

                    PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------------

                 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------------


          1.   The accompanying unaudited consolidated financial statements
               have been prepared in accordance with the instructions for
               Form 10-Q and Regulation S-X related to interim period
               financial statements and, therefore, do not include all
               information and footnotes required by generally accepted
               accounting principles.  However, in the opinion of
               management, all adjustments (consisting of normal recurring
               adjustments and accruals) considered necessary for a fair
               presentation of the financial position of Paramount
               Financial Corporation and subsidiary (the "Company") at
               September 30, 1997 and its results of operations and cash
               flows for the three and nine months ended September 30, 1996
               and 1997, respectively, have been included.  The results of
               operations for the interim periods are not necessarily
               indicative of the results that may be expected for the
               entire year.  Reference should be made to the annual
               financial statements, including footnotes thereto, included
               in the Company's Form 10-K for the fiscal year ended
               December 31, 1996.

          2.   The financial statements for the three and nine months ended
               September 30, 1997 are consolidated to include the results
               of Paratech Resources Inc.  All intercompany balances and
               transactions have been eliminated.

          3.   Included in cash and cash equivalents is $600,000 of
               restricted cash pledged as collateral under a letter of
               credit arrangement.

          4.   In the second quarter of 1997, the Company granted a total
               of 165,000 stock options to employees.  The Company shall
               continue to apply the Accounting Principles Board Opinion
               No. 25 and will provide the year end disclosures as required
               under Statement of Financial Accounting Standards No. 123,
               "Accounting for Stock-Based Compensation."

          5.   In March 1997, the Financial Accounting Standards Board
               issued Statement of Financial Accounting Standards ("SFAS")
               No. 128 "Earnings Per Share."  This statement establishes
               standards for computing and presenting earnings per share
               ("EPS") replacing the presentation of currently required
               Primary EPS with a presentation of Basic EPS.  For entities
               with complex capital structures, the statement requires the
               dual presentation of both Basic EPS and Diluted EPS on the
               face of the statement of earnings.  Under this new standard,
               Basic EPS is computed based on weighted average common
               shares outstanding and contingently issuable shares (which
               satisfy certain conditions) and excludes any potential
               dilution; Diluted EPS reflects potential dilution from the
               exercise or conversion of securities into common stock, or
               from other contracts to issue common stock, and is similar
               to the currently required Fully Diluted EPS.  SFAS 128 is
               effective for financial statements issued for periods ending
               after December 15, 1997, including interim periods, and
               earlier application is not permitted.  When adopted, the
               Company will be required to restate its EPS data for all
               periods presented.  The Company does not expect the impact
               of adoption of this statement to be material to previously
               reported EPS amount.

          6.   Certain prior year amounts have been reclassified to conform
               with the 1997 presentation.


                                      -6-
     <PAGE>

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


             The following discussion and analysis should be read in
          conjunction with and is qualified in its entirety by, the
          unaudited financial statements, including the notes thereto,
          appearing elsewhere in this 10-Q.


          GENERAL

             Paramount Financial Corporation ("Paramount" or the "Company")
          is a comprehensive asset management and information technology
          ("IT") solution provider offering customers a wide range of
          integrated services, including lease finance, IT consulting,
          network design and implementation. 

             The operating results of Paramount are subject to quarterly
          fluctuations resulting from a variety of factors, including new
          product announcements by manufacturers, economic conditions,
          interest rate fluctuations and variations in the mix of leases
          written.  In addition, the Company's sales volume fluctuates
          significantly from quarter to quarter based on the closing date
          and nature of each particular sales transaction.  The mix of
          leases written in a quarter is a result of a combination of
          factors, including changes in customer demands and/or
          requirements, new product announcements, price changes, changes
          in delivery dates, changes in maintenance policies and pricing
          policies of equipment manufacturers and price competition from
          other lessors.  Leasing transactions (other than sales type
          leases), in general, do not provide for significant earnings in
          the month of lease origination.  Instead, revenue, expense and
          profit from lease transactions are recorded over the life of the
          asset and the lease.  Lease revenue and lease expense recognition
          is dependent upon a number of factors, including the term of the
          lease, the accounting classification of the lease (i.e.
          operating, direct finance, or sales type) and the commencement
          date of the lease and the lease financing within a particular
          period.  See "Lease Accounting".  Given the possibility of such
          fluctuations, the Company believes that comparisons of the
          results of its operations for preceding quarters are not
          necessarily meaningful and that the results for one quarter
          should not be relied upon as an indication of future performance.

             During the quarter ended September 30, 1997, the Company
          continued its evolution from a strict lease finance company into
          a total technology solution provider.  The key elements to this
          strategy are the development and maturity of the Company's
          systems integration and network design capabilities, and the
          continued growth of the Company's portfolio of essential IT
          equipment on lease to relationship based end-user customers.  The
          Company believes that this strategy will create financial
          benefits over a continuum of time, since, unlike other equipment,
          IT equipment is frequently upgraded and/or enhanced during the
          term of its lease.  As a lessor and solution provider, the
          Company believes that it is well positioned to meet the ever
          changing needs of its customers

             The results of operations for the three and nine months ended
          September 30, 1997 are presented on a consolidated basis
          including the results of Paratech Resources Inc. ("Paratech"),
          the Company's system integration subsidiary, which commenced
          operations during the third quarter of 1996.  The Company
          believes that the addition of Paratech is a major step towards
          establishing Paramount as a total high technology solution
          provider.  Paratech generates revenue from sales of desktop
          computer and related systems and through sales of technical
          support services.  The third quarter of 1997 was once again a
          period of significant expansion for Paratech, as the Company
          greatly increased the size of its technical, sales and support
          staff.  

             Paramount operates in a highly competitive and rapidly
          changing marketplace.  The Company believes that its ability to
          adapt to changes and to evolve into a valued business partner for
          its customers, offering a complete package of products in the
          high technology area, is a key component to the Company's long
          term growth strategy.

                                      -7-
     <PAGE>

          LEASE ACCOUNTING

             In accordance with Statement of Financial Accounting Standard
          No. 13, "Accounting for Leases," the Company classifies its
          leases as either operating leases or direct finance leases.  The
          allocation of income among accounting periods within a lease term
          will vary depending upon the lease classification, as described
          below.

             Direct Finance Leases: Direct finance leases transfer
          substantially all benefits and risks of equipment ownership to
          the lessee.  A lease is a direct finance lease if it meets one of
          the following criteria: (1) the lease transfers ownership of the
          equipment to the lessee by the end of the lease term; (2) the
          lease contains a bargain purchase option; (3) the lease term at
          inception is at least 75% of the estimated economic life of the
          leased equipment; or (4) the present value of the minimum lease
          payments is at least 90% of the fair value of the leased 
          equipment at lease inception. 

             At lease inception, the cost of equipment under a direct
          finance lease is recorded as "Net investment in direct finance
          leases."  The difference between the gross lease payments
          receivable, plus the estimated residual value of the equipment,
          and the equipment cost is recognized as income over the life of
          the lease using the interest method.

             A lease transaction which meets all of the above criteria, and
          in which the Company has made a dealer's profit, is recorded as a
          sales type lease.  A sales type lease is a type of direct finance
          lease, but one in which the Company recognizes, at lease
          inception, revenue and profit which arises from the difference
          between the fair market value of the leased equipment and its
          acquisition cost.

             Operating Leases: All lease contracts which do not meet the
          criteria of direct finance leases are accounted for as operating
          leases.  Monthly lease payments are recorded as operating lease
          revenue.  Leased equipment is recorded at the Company's cost and
          depreciated on a straight-line basis over the lease term to the
          estimated residual value at the expiration of the lease term. 

             The Company's portfolio of equipment on lease is further
          divided into equipment owned by Paramount and equipment managed
          by Paramount.  As of September 30, 1997, the portfolio of
          equipment on lease owned by Paramount had a combined net book
          value on the balance sheet of $50.0 million and had an original
          cost basis of $68.0 million.  Equipment managed by Paramount is
          equipment on lease to customers of Paramount which was
          subsequently sold to investors, but with respect to which
          Paramount remains the lessor and remarketing agent.  The
          portfolio of equipment managed by Paramount had an original cost
          of $26.2 million.  Thus, as of September 30, 1997, the portfolio
          of equipment on lease owned and managed by Paramount had an
          original acquisition cost of $94.2 million.


          RESULTS OF OPERATIONS

          THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS
          ENDED SEPTEMBER 30, 1996

             The Company recorded a net loss of $220,300 for the three
          months ended September 30, 1997, as compared to a net loss of
          $485,300 for the comparable period ended September 30, 1996. The
          results for the quarter ended September 30, 1996 include a one
          time, non-cash adjustment of $419,800 to Provision for Income
          Taxes.  This adjustment was necessitated by the change of the
          Company's tax status from a  Sub-Chapter S-Corporation to a C-
          Corporation in connection with the Company's January 1996 initial
          public offering and was made in accordance with Statement of
          Financial Accounting Standards No.109.  The amount of the
          adjustment represents the cumulative deferred tax liability,
          which arose primarily from temporary tax differences with respect
          to depreciation, generated by the S-Corporation and payable in
          the future by the C-Corporation.

                                      -8-
     <PAGE>

             Lease revenue, comprised of rental income from operating
          leases and interest income from direct finance and sales type
          leases, increased by 180.2% to $2.8 million for the three months
          ended September 30, 1997 from $986,700 for the comparable period
          ended September 30, 1996.  Lease expense, which includes
          depreciation expense on operating leases, interest expense on
          lease financing and sublease rent expense, increased by 203.8% to
          $2.7 million for the three months ended September 30, 1997 from
          $882,000 for the three months ended September 30, 1996.  These
          increases are a direct result of the Company's continuing efforts
          to expand its leasing portfolio.  See "General" and "Lease
          Accounting."

             During the three months ended September 30, 1997, the Company
          recorded $13.4 million of sales revenue.  This represents an
          increase of $12.8 million over the $528,500 recorded during the
          three months ended September 30, 1996.  Included in the sales
          revenue for the three months ended September 30, 1997, was $11.6
          million of revenue from sales type leases of which there were
          none during the three months ended September 30, 1996.  See
          "General."

             During the three months ended September 30, 1997, the Company
          generated $76,800 in fee, interest and other income, compared to
          $253,000 for the comparable period last year.  The Company
          generates fee income from either the sale of equipment under a
          direct finance lease to an investor or from commissions earned on
          third party lease financing transactions.  These transactions
          generally come about as a result of the Company's relationship
          with other lessors and financial institutions.  The Company
          cannot predict with any certainty the timing and nature of any
          future such transactions.  See "General."  Interest income is
          derived from the investment of the Company's cash balances in
          interest bearing cash accounts, cash equivalents and marketable
          securities.

             Selling, general and administrative expenses ("SG&A") totaled
          $1.1 million for the three months ended September 30, 1997,
          representing an increase of 90.1% over the $588,100 recorded
          during the three months ended September 30, 1996.  The increase
          in SG&A is a result of the expansion of the operations of
          Paratech and the increased sales and support staff at the
          Company.  See "General."

             The benefit from income taxes of $146,600 for the three months
          ended September 30, 1997 reflects an effective tax rate of 40%
          for federal and state taxes.  The tax provision of $375,900 for
          the three months ended September 30, 1996 represents the
          cumulative adjustment of $419,800, described above, less a
          benefit of $43,900, which reflects an effective rate of 40% for
          federal and state taxes on the current period loss.  Prior to
          1996, the Company was an S-Corporation and not subject to a
          corporate federal income tax.

             During the three months ended September 30, 1997, the Company
          entered into new lease transactions totaling $12.1 million of
          equipment cost.  Of this amount, $11.0 million were for sales
          type leases for which the sale price and cost of equipment were
          recorded as sales revenue and cost of sales, respectively.  The
          remaining $1.1 million were recorded as direct finance leases. 
          This compares with $5.4 million for the three months ended
          September 30, 1996, of which $815,000 were recorded as direct
          finance leases and $4.6 million were recorded as operating
          leases.  See "General" and "Lease Accounting."  During the
          quarter ended September 30, 1997, the Company entered into
          $309,300 and terminated $2.3 million of non-recourse lease
          financing arrangements, as compared with $2.0 million of non-
          recourse lease arrangements, net of terminations, for the three
          months ended September 30, 1996.  See "Liquidity and Capital
          Resources."


          NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS
          ENDED SEPTEMBER 30, 1996

             The Company recorded a net loss of $74,300 for the nine months
          ended September 30, 1997, as compared to a net loss of $416,700
          for the comparable period ended September 30, 1996.  The results
          for the nine months ended September 30, 1996 include a one time,
          non-cash adjustment of $419,800 to Provision for Income Taxes.

                                      -9-
     <PAGE>

          This adjustment was necessitated by the change of the Company's
          tax status from a  Sub-Chapter S-Corporation to a C-Corporation
          in connection with the Company's January 1996 initial public
          offering and was made in accordance with Statement of Financial
          Accounting Standards No.109.  The amount of the adjustment
          represents the cumulative deferred tax liability, which arose
          primarily from temporary tax differences with respect to
          depreciation, generated by the S-Corporation and payable in the
          future by the C-Corporation.  

             Lease revenue, comprised of rental income from operating
          leases and interest income from direct finance and sales type
          leases, increased by  236.5% to $8.2 million for the nine months
          ended September 30, 1997 from $2.4 million for the comparable
          period ended September 30, 1996.  Lease expense, which includes
          depreciation expense on operating leases, interest expense on
          lease financing and sublease rent expense, increased by 252.3% to
          $7.9 million for the nine months ended September 30, 1997 from
          $2.2 for the nine months ended September 30, 1996.  These
          increases are a direct result of the Company's continuing efforts
          to expand its leasing portfolio.  See "General" and "Lease
          Accounting."

             For the nine months ended September 30, 1997, the Company
          recorded sales revenue of $20.1 million, a decrease of 11.0% over
          the $22.6 million recorded during the nine months ended September
          30, 1996.  Of the total sales revenue recorded during the nine
          months ended September 30, 1997, approximately $2.6 million was
          contributed by Paratech.  This represents an increase of 420%
          over the twelve months ended December 31, 1996.  See "General."

             During the nine months ended September 30, 1997, the Company
          generated $857,800 in fee, interest and other income, compared to
          $415,900 for the comparable period last year.  The Company
          generates fee income from either the sale of equipment under a
          direct finance lease to an investor or from commissions earned on
          third party lease financing transactions.  These transactions
          generally come about as a result of the Company's relationship
          with other lessors and financial institutions.  The Company
          cannot predict with any certainty the timing and nature of any
          future such transactions.  See "General."  Interest income is
          derived from the investment of the Company's cash balances in
          interest bearing cash accounts, cash equivalents and marketable
          securities.

             Selling, general and administrative expenses ("SG&A") totaled
          $2.6 million for the nine months ended September 30, 1997,
          representing an increase of 50.4% over the $1.7 million recorded
          during the nine months ended September 30, 1996.  The increase in
          SG&A is a result of the expansion of the operations of Paratech,
          and the increased sales and support staff at the Company.  See
          "General."

             The benefit from income taxes of $48,900 for the nine months
          ended September 30, 1997 reflects an effective tax rate of 40%
          for federal and state taxes.  The tax provision of $421,700 for
          the nine months ended September 30, 1996 represents the
          cumulative adjustment of $419,800, described above, plus $1,900
          which reflects an effective rate of 40% for federal and state
          taxes on the current period income.  Prior to 1996, the Company
          was an S-Corporation and not subject to a corporate federal
          income tax.

             During the nine months ended September 30, 1997, the Company
          entered into new lease transactions totaling $37.5 million of
          equipment cost as compared with $37.4 million for the nine months
          ended September 30, 1996.  See "General" and "Lease Accounting." 
          During the nine months ended September 30, 1997, the Company
          entered into $29.3 million of non-recourse lease financing
          arrangements, net of terminations resulting from lease extensions
          and renewals, as compared with $18.6 million for the nine months
          ended September 30, 1996.  Of the total amount of non-recourse
          debt entered into during the first nine months of 1997, $13.3
          million related to leases that commenced in December 1996, but
          for which the Company was not required to pay for the equipment
          until January 1997.  This amount was recorded as accounts
          payable-leases on the Company's December 31, 1996 balance sheet.

                                      -10-
     <PAGE>

          LIQUIDITY AND CAPITAL RESOURCES

             As of September 30, 1997, the Company had $4.9 million in
          cash, cash equivalents and marketable securities, including
          $600,000 of restricted cash pledged as additional collateral
          under a Letter of Credit arrangement.  Substantially all of this
          amount was invested in interest-bearing savings accounts, money
          market accounts established by major commercial banks, or in
          United States Government or other AA rated obligations.

             The Company finances substantially all of its leases by
          discounting the payment streams on a non-recourse basis through
          various banks and financial institutions. Thus, the only cash
          required in these lease transactions is the residual value
          investment by the Company.  The Company believes that it
          currently has sufficient resources to make the residual value
          investments required to grow its lease portfolio.  In addition,
          the Company has numerous options available to it for the
          financing of residual value investments, including sales of
          equipment on lease to equipment investors, residual value sharing
          arrangements, recourse loans and non-recourse loans.  The Company
          intends to use, on an opportunistic basis, all such available
          resources in order to maximize its portfolio of equipment on
          lease.

             During the nine months ended September 30, 1997, the Company
          entered into several residual value sharing and financing
          arrangements with an equipment investor totaling $8.0 million. 
          This investor (i) purchased a portion of the Company's residual
          value of equipment on lease in exchange for the right to share in
          remarketing proceeds generated from the equipment on lease, and
          (ii) provided recourse financing for the remaining portion of the
          Company's residual value investment.  The equipment on lease and
          the related leases serve as collateral for these financings. 
          During the nine months ended September 30, 1997, in connection
          with the early extension of leases, the Company repaid $247,000
          of such loans using the proceeds of these extensions.  The
          Company expects to repay the balance of these loans through the
          proceeds generated from remarketing the subject equipment in the
          future.  These transactions allow the Company to continue to grow
          and expand its lease portfolio without significantly affecting
          its current cash balances. 

             At September 30, 1997, the Company had two lines of credit
          available.  These credit lines allow the Company to borrow up to
          $1.25 million in the aggregate and are secured by equipment and
          contracts to sell or lease that equipment.  Borrowings under
          these lines bear interest at 1% above the prime rate.  In
          addition, one of these lines offers the Company the ability to
          borrow up to $100,000 on an unsecured basis.  The purpose of
          these credit lines is to allow the Company to pay its suppliers
          on a timely basis while waiting for the customer to pay or for
          the non-recourse financing to occur.  During the nine months
          ended September 30, 1997, the Company had not borrowed any
          amounts from these lines, and accordingly had nothing outstanding
          as of September 30, 1997.  As a result of its cash balances, the
          Company has been able to internally bridge finance its equipment
          purchases.  The Company believes that its current cash balances
          and existing credit lines are sufficient to meet the short-term
          growth needs of the business.

             During the nine months ended September 30, 1997, the Board of
          Directors of the Company approved a plan that would allow for the
          repurchase of up to $500,000 worth of common stock of the
          Company.  The repurchase program took effect immediately and is
          authorized to continue for a period of two years.  Subject to
          applicable rules, the plan allows the Company to repurchase
          shares at any time during the authorized period in any increments
          it deems appropriate.  As of September 30, 1997, the Company had
          repurchased 50,000 shares for a cash purchase price of $29,400.


          FORWARD LOOKING STATEMENTS AND ASSOCIATED RISK

             Statements contained in this Form 10-Q which are not
          historical facts are forward-looking statements.  The forward-
          looking statements in this Form 10-Q are made pursuant to the
          safe harbor provisions of the Private Securities Litigation
          Reform Act of 1995.  Forward-looking statements made herein
          contain a number of risks and uncertainties that could cause
          actual results to differ materially.  These risks and
          uncertainties include, but are not limited to, the specific
          factors impacting the Company's business discussed under the
          caption "General", as well as increased competition; the
          availability of computer equipment; the ability of the Company to
          expand its operations and attract and retain qualified sales
          representatives experienced in the purchase, sale and lease of
          new and used computer equipment; technological obsolescence of
          the Company's portfolio of computer equipment; and general
          economic conditions.

                                      -11-
     <PAGE>

                             PART II:  OTHER INFORMATION



          ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                 (a)     Exhibits
                         --------

                         27.  Financial Data Schedule.

                 (b)     Reports on Form 8-K.
                         -------------------

                         None.




                                      -12-
     <PAGE>

                                      SIGNATURES


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


                                          PARAMOUNT FINANCIAL CORPORATION



          Date:  November 13, 1997        By:    /s/ Paul Vecker          
                                             ------------------------------
                                             Paul Vecker, Senior Vice
                                             President and Chief Fiancial
                                             Officer




                                      -13-
     <PAGE>


                                  EXHIBIT INDEX


              Exhibit     Description
              -------     -----------

                27        Financial Data Schedule