**FORM 10-Q**

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

For the quarterly period ended June 30, 2002



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

For the transition period from **** to ****

Commission File Number: 0-23293

**Warwick Community Bancorp, Inc.**
*(Exact name of registrant as specified in its charter)*

|**Delaware**                                                    |                                            | **06-1497903**                       
|--------------------------------------------------------------- | ------------------------------------------ | -------------------------------------
|*(State or other jurisdictionof incorporation or organization)* |                                            | *(I.R.S. EmployerIdentification No.)*
|                                                                |                                            |                                      
|                                                                | **18 Oakland Avenue, Warwick, New York**   | **10990-0591**                       
|                                                                | *(Address of principal executive offices)* | *(Zip 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 for the
past 90 days.

Yes X                     No

As of August 8, 2002, there were 4,979,142 shares of the registrant's common stock outstanding.

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**INDEX**

|**PART I - FINANCIAL INFORMATION** | Page
Number                                                                                            
|---------------------------------- | -------------------------------------------------------------------------------------------------------
|                                   |                                                                                                        
|Item 1.                            | Financial Statements                                                                                   
|                                   |                                                                                                        
|                                   | Consolidated Statements of Financial Condition at June 30,
2002(Unaudited) and December 31, 2001       
|                                   |                                                                                                        
|                                   | Consolidated Statements of Income (Unaudited)for the three and six
months ended June 30, 2002 and 2001 
|                                   |                                                                                                        
|                                   | Consolidated Statements of Changes in Equity(Unaudited) for the six
months ended June 30, 2002 and 2001
|                                   |                                                                                                        
|                                   | Consolidated Statements of Cash Flows(Unaudited)for the six months
ended June 30, 2002 and 2001        
|                                   |                                                                                                        
|                                   | Notes to Unaudited Consolidated Financial Statements                                                   
|                                   |                                                                                                        
|Item 2.                            | Management's Discussion and Analysis of Financial Condition and
Results of Operations                  
|                                   |                                                                                                        
|Item 3.                            | Quantitative and Qualitative Disclosures about Market Risk                                             
|                                   |                                                                                                        
|**PART II - OTHER INFORMATION**   
|                                   |                                                                                                        
|Item 1.                            | Legal Proceedings                                                                                      
|                                   |                                                                                                        
|Item 2.                            | Changes in Securities                                                                                  
|                                   |                                                                                                        
|Item 3.                            | Defaults Upon Senior Securities                                                                        
|                                   |                                                                                                        
|Item 4.                            | Submission of Matters to a Vote of Security Holders                                                    
|                                   |                                                                                                        
|Item 5.                            | Other Information                                                                                      
|                                   |                                                                                                        
|Item 6.                            | Exhibits and Reports on Form 8-K                                                                       
|                                   |                                                                                                        
|Signature Page                     | 22                                                                                                     

---

|Statements contained in this Form 10-Q which are not historical facts are forward-looking
statements, as that term is defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and uncertainties which could cause
actual results to differ materially from those projected.  Such risks and uncertainties include,
but are not limited to, general economic conditions; changes in interest rates, deposit flows,
loan demand, real estate values and competition; changes in accounting principles, policies
or guidelines; changes in legislation or regulation; other economic, competitive,
governmental, regulatory or technological factors affecting the Company's operations,
pricing, products and services; and other risks detailed in documents filed by the Company
with the Securities and Exchange Commission from time to time.  Forward-looking
statements made by us are based on beliefs, plans, objectives, goals, expectations,
anticipations, estimates and intention of management as of the date made and are not
guarantees of future performance.  We expressly disclaim any obligation to update or revise
any forward-looking statements based on the occurrence of future events, the receipt of new
information, or otherwise.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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**PART I - FINANCIAL INFORMATION**

**Item 1.     Financial Statements - Unaudited**

**WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)**

|                                                                                                                                                                                                                                                                                                      | June 30, 2002          | December 31, 2001
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | -----------------
|                                                                                                                                                                                                                                                                                                      | (Unaudited)            |                  
|**ASSETS**                                                                                                                                                                                                                                                                                            | (Dollars in thousands)
|Cash on hand and in banks                                                                                                                                                                                                                                                                             | $  23,616              | $  20,766        
|Federal funds sold                                                                                                                                                                                                                                                                                    | -                      | 5,000            
|Securities:                                                                                                                                                                                                                                                                                           |                        |                  
|Available-for-sale, at fair value                                                                                                                                                                                                                                                                     | 184,586                | 206,253          
|Held-to-maturity, at amortized cost (fair value of $2,282 at
          June 30, 2002 and $3,336 at December 31, 2001)                                                                                                                                                                                 | 2,272                  | 3,319            
|Total securities                                                                                                                                                                                                                                                                                      | 186,858                | 209,572          
|Mortgage loans                                                                                                                                                                                                                                                                                        | 335,460                | 361,181          
|Commercial loans                                                                                                                                                                                                                                                                                      | 182,689                | 115,376          
|Consumer loans                                                                                                                                                                                                                                                                                        | 34,740                 | 43,264           
|Total loans                                                                                                                                                                                                                                                                                           | 552,889                | 519,821          
|Allowance for loan losses                                                                                                                                                                                                                                                                             | (4,079)                | (3,649)          
|Total loans, net                                                                                                                                                                                                                                                                                      | 548,810                | 516,172          
|Accrued interest receivable                                                                                                                                                                                                                                                                           | 4,013                  | 3,680            
|Federal Home Loan Bank stock                                                                                                                                                                                                                                                                          | 13,225                 | 16,935           
|Bank premises & equipment, net                                                                                                                                                                                                                                                                        | 9,642                  | 9,925            
|Other real estate owned, net                                                                                                                                                                                                                                                                          | 1,147                  | 1,149            
|Bank owned life insurance                                                                                                                                                                                                                                                                             | 11,693                 | 11,339           
|Goodwill and other intangible assets                                                                                                                                                                                                                                                                  | 2,712                  | 2,816            
|Other assets                                                                                                                                                                                                                                                                                          | 6,033                  | 9,348            
|Total assets                                                                                                                                                                                                                                                                                          | $807,749               | $806,702         
|                                                                                                                                                                                                                                                                                                      |                        |                  
|**LIABILITIES AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                              |                        |                  
|Liabilities:                                                                                                                                                                                                                                                                                          |                        |                  
|Deposits:                                                                                                                                                                                                                                                                                             |                        |                  
|NOW and money market                                                                                                                                                                                                                                                                                  | $123,135               | $114,339         
|Savings                                                                                                                                                                                                                                                                                               | 156,289                | 133,655          
|Certificates of deposit                                                                                                                                                                                                                                                                               | 111,536                | 122,883          
|Non-interest-bearing checking                                                                                                                                                                                                                                                                         | 55,051                 | 51,369           
|Total depositor accounts                                                                                                                                                                                                                                                                              | 446,011                | 422,246          
|Mortgage escrow funds                                                                                                                                                                                                                                                                                 | 5,036                  | 3,676            
|Accrued interest payable                                                                                                                                                                                                                                                                              | 1,762                  | 2,148            
|Securities sold under agreements to repurchase                                                                                                                                                                                                                                                        | 2,500                  | 2,500            
|Federal Home Loan Bank advances                                                                                                                                                                                                                                                                       | 259,995                | 290,785          
|Other liabilities                                                                                                                                                                                                                                                                                     | 11,148                 | 11,344           
|Total liabilities                                                                                                                                                                                                                                                                                     | 726,452                | 732,699          
|                                                                                                                                                                                                                                                                                                      |                        |                  
|**STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                                              |                        |                  
|Preferred stock, $.01 par value; 5,000,000 authorized; none
          issued                                                                                                                                                                                                                          | -                      | -                
|Common stock, $.01 par value; 15,000,000 shares authorized;
          6,630,814 and 6,628,148 shares issued as of June 30, 2002 and
          December 31, 2001, respectively; 4,984,142 and 4,991,976
          shares outstanding as of June 30, 2002 and December 31, 2001,
          respectively | 66                     | 66               
|Additional paid-in capital                                                                                                                                                                                                                                                                            | 64,090                 | 63,681           
|Retained earnings                                                                                                                                                                                                                                                                                     | 44,215                 | 39,739           
|Accumulated other comprehensive income(loss), net                                                                                                                                                                                                                                                     | 1,166                  | (822)            
|Unallocated ESOP common stock                                                                                                                                                                                                                                                                         | (4,488)                | (4,900)          
|Unearned RRP common stock                                                                                                                                                                                                                                                                             | (1,752)                | (2,001)          
|                                                                                                                                                                                                                                                                                                      | 103,297                | 95,763           
|Treasury stock (1,646,672 and 1,636,172 shares at June 30,
          2002 and December 31, 2001, respectively)                                                                                                                                                                                        | (22,000)               | (21,760)         
|Total stockholders' equity                                                                                                                                                                                                                                                                            | 81,297                 | 74,003           
|Total liabilities and stockholders' equity                                                                                                                                                                                                                                                            | $807,749               | $806,702         

---

**WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)**

|                                                    | For the Three Months
Ended June 30,      | For the Six Months
Ended June 30,
|--------------------------------------------------- | ---------------------------------------- | ---------------------------------
|                                                    | 2002                                     | 2001                             
|                                                    | (In thousands, except per share amounts)
|Interest Income:                                    |                                          |                                  
|Interest on mortgage loans                          | $  6,037                                 | $  6,478                         
|Interest on other loans                             | 3,094                                    | 2,774                            
|Interest and dividends on securities                | 3,277                                    | 3,528                            
|Interest on federal funds sold                      | -                                        | 49                               
|Interest on short-term money market instruments     | 72                                       | 6                                
|Total interest income                               | 12,480                                   | 12,835                           
|                                                    |                                          |                                  
|Interest Expense:                                   |                                          |                                  
|Time deposits                                       | 873                                      | 1,729                            
|Money market deposits                               | 379                                      | 617                              
|Savings deposits                                    | 1,042                                    | 1,016                            
|Mortgagors' escrow deposits                         | 23                                       | 7                                
|Borrowed funds                                      | 3,210                                    | 3,657                            
|Total interest expense                              | 5,527                                    | 7,026                            
|Net interest income                                 | 6,953                                    | 5,809                            
|                                                    |                                          |                                  
|Provision for Loan Losses                           | (225)                                    | (245)                            
|Net interest income after provision for loan losses | 6,728                                    | 5,564                            
|                                                    |                                          |                                  
|Non-Interest Income:                                |                                          |                                  
|Service and fee income                              | 1,313                                    | 1,231                            
|Gain on securities transactions                     | -                                        | 14                               
|Net gain on sale of loans                           | 129                                      | 97                               
|Gain on sale of mortgage servicing rights           | -                                        | -                                
|Other income                                        | 1,070                                    | 177                              
|Total non-interest income                           | 2,512                                    | 1,519                            
|                                                    |                                          |                                  
|Non-Interest Expense:                               |                                          |                                  
|Salaries and employee benefits                      | 2,790                                    | 2,794                            
|FDIC insurance                                      | 21                                       | 17                               
|Occupancy                                           | 541                                      | 561                              
|Data processing                                     | 303                                      | 266                              
|Advertising                                         | 54                                       | 42                               
|Professional fees                                   | 376                                      | 495                              
|Other                                               | 835                                      | 1,081                            
|Total non-interest expense                          | 4,920                                    | 5,256                            
|                                                    |                                          |                                  
|Income before provision for income taxes            | 4,320                                    | 1,827                            
|Provision for Income Taxes                          | 1,798                                    | 631                              
|Net income                                          | $  2,522                                 | $  1,196                         
|                                                    |                                          |                                  
|Weighted Average:                                   |                                          |                                  
|Common shares                                       | 4,596                                    | 4,704                            
|Dilutive stock options                              | 189                                      | 22                               
|                                                    | 4,785                                    | 4,726                            
|Earnings per Share:                                 |                                          |                                  
|Basic                                               | $    0.55                                | $    0.25                        
|Diluted                                             | $    0.53                                | $    0.25                        

---

**WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)**

|                                                                   | CommonStock    | AdditionalPaid InCapital | RetainedEarnings | Accumulated OtherComprehensive(Loss)Income, net | UnallocatedCommon StockHeld by ESOP | UnearnedCommon StockHeld by RRP | TreasuryStock | ComprehensiveIncome
|------------------------------------------------------------------ | -------------- | ------------------------ | ---------------- | ----------------------------------------------- | ----------------------------------- | ------------------------------- | ------------- | -------------------
|                                                                   | (In thousands)
|                                                                   |                |                          |                  |                                                 |                                     |                                 |               |                    
|BALANCE, December 31,2000                                          | $  66          | $63,039                  | $35,774          | $(2,508)                                        | $(5,720)                            | $(2,371)                        | $(15,699)     |                    
|Net Income, January 1, 2001 -
     June 30, 2001                   | -              | -                        | 2,284            | -                                               | -                                   | -                               | -             | $2,284             
|Unrealized appreciation on
     securities available-for-sale, net | -              | -                        | -                | 1,635                                           | -                                   | -                               | -             | 1,635              
|Comprehensive income                                               | -              | -                        | -                | -                                               | -                                   | -                               |               | $3,919             
|Purchase of treasury stock                                         | -              | -                        | -                | -                                               | -                                   | -                               | (2,643)       |                    
|Allocation of ESOP stock                                           | -              | 50                       | -                | -                                               | 410                                 | -                               | -             |                    
|Cash dividends paid                                                | -              | -                        | (972)            | -                                               | -                                   | -                               | -             |                    
|Outside Director stock plan                                        | -              | (5)                      | -                | -                                               | -                                   | -                               | -             |                    
|Earned portion of RRP                                              | -              | 47                       | -                | -                                               | -                                   | 152                             | -             |                    
|BALANCE, June 30, 2001                                             | $  66          | $63,131                  | $37,086          | $   (873)                                       | $(5,310)                            | $(2,219)                        | $(18,342)     |                    
|BALANCE, December 31, 2001                                         | $  66          | $63,681                  | $39,739          | $   (822)                                       | $(4,900)                            | $(2,001)                        | $(21,760)     |                    
|Net Income, January 1, 2002 -
     June 30, 2002                   | -              | -                        | 4,974            | -                                               | -                                   | -                               | -             | $4,974             
|Unrealized appreciation on
     securities available-for-sale, net | -              | -                        | -                | 1,988                                           | -                                   | -                               | -             | 1,988              
|Comprehensive income                                               | -              | -                        | -                | -                                               | -                                   | -                               | -             | $6,962             
|Purchase of treasury stock                                         | -              | -                        | -                | -                                               | -                                   | -                               | (240)         |                    
|Allocation of ESOP stock                                           | -              | 249                      | -                | -                                               | 412                                 | -                               | -             |                    
|Cash dividends paid                                                | -              | -                        | (498)            | -                                               | -                                   | -                               | -             |                    
|Stock option plan                                                  | -              | 32                       | -                | -                                               | -                                   | -                               | -             |                    
|Earned portion of RRP                                              | -              | 47                       | -                | -                                               | -                                   | 249                             | -             |                    
|BALANCE, June 30, 2002                                             | $  66          | $64,090                  | $44,215          | $ 1,166                                         | $(4,488)                            | $(1,752)                        | (22,000)      |                    

---

---

**WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)**

|                                                                              | For the Six Months
Ended June 30,
|----------------------------------------------------------------------------- | ---------------------------------
|                                                                             
|                                                                              | 2002                             
|                                                                              | (In thousands)                   
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |                                  
|Net income                                                                    | $   4,974                        
|Adjustments to reconcile net income to net cash used in operating activities: |                                  
|Depreciation                                                                  | 469                              
|Amortization of goodwill                                                      | 103                              
|Net gain on sale of mortgage servicing rights                                 | -                                
|Accretion of discount on investment securities                                | (1,101)                          
|Net increase in accrued interest receivable                                   | (332)                            
|Net decrease (increase) in BOLI and other assets                              | 2,962                            
|Provision for loan losses                                                     | 455                              
|Net gain on curtailment of the defined benefit pension plan                   | (817)                            
|Net gain on sales of loans                                                    | (188)                            
|Net gain on sales of credit card portfolio                                    | (68)                             
|Net gain on sales of securities                                               | (242)                            
|Net (decrease) increase in accrued interest payable                           | (385)                            
|Net (decrease) increase in accrued expenses and other liabilities             | (197)                            
|Total reconciliation adjustments                                              | 659                              
|Net cash provided by (used in) operating activities                           | 5,633                            
|CASH FLOWS FROM INVESTING ACTIVITIES                                          |                                  
|Proceeds from maturities and calls of securities                              | 17,853                           
|Purchases of securities                                                       | (45,328)                         
|Proceeds from sale of securities available-for-sale                           | 31,231                           
|Principal repayments from mortgage-backed securities                          | 23,375                           
|Redemption (purchases)of Federal Home Loan Bank capital stock                 | 3,710                            
|Purchase of commercial loan portfolios                                        | (58,910)                         
|Net decrease (increase) in loans                                              | 26,183                           
|Purchases of fixed assets, net                                                | (186)                            
|Net cash used in investing activities                                         | (2,072)                          
|CASH FLOWS FROM FINANCING ACTIVITIES                                          |                                  
|Net increase in deposits                                                      | 23,764                           
|Net increase in escrow deposits                                               | 1,361                            
|Net (decrease) increase in borrowed funds                                     | (30,790)                         
|Dividends on common stock                                                     | (499)                            
|Purchase of treasury stock                                                    | (240)                            
|Stock options exercised                                                       | 32                               
|ESOP allocation                                                               | 412                              
|Earned portion of RRP.                                                        | 249                              
|Net cash (used in) provided by financing activities                           | (5,711)                          
|(Decrease) increase in cash and cash equivalents                              | (2,150)                          
|Cash and Cash Equivalents, beginning of year                                  | 25,766                           
|Cash and Cash Equivalents, end of period                                      | $ 23,616                         
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                             |                                  
|Cash paid during the year for-                                                |                                  
|Interest on deposits and borrowed funds                                       | $11,605                          
|Income taxes                                                                  | 3,438                            

---

**WARWICK COMMUNITY BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

**1.          Basis of Presentation**

The accompanying unaudited consolidated financial statements include the accounts of Warwick
Community Bancorp, Inc. ("Parent Company"), its savings bank subsidiary, The Warwick Savings Bank
("Warwick Savings"),  its commercial bank subsidiary, The Towne Center Bank ("Towne Center") and
its title business subsidiary,   Hardenburgh Abstract Company of Orange County, Inc. ("Hardenburgh").
The consolidated financial statements of the Parent Company and its subsidiaries (collectively, the
"Company") conform to generally accepted accounting principles and reporting practices followed by the
banking industry. Warwick Commercial Bank ("Warwick Commercial") was formed in 2001, as a
subsidiary of Warwick Savings, for the purpose of accepting government deposits and whose results are
included the consolidated financial statements of the Company.

The unaudited consolidated financial statements included herein reflect all normal recurring
adjustments which are, in the opinion of management, necessary to present a fair statement of the results
for the interim periods presented.  The results of operations for the six months ended June 30, 2002 are
not necessarily indicative of the results of operations that may be expected for the entire year ending
December 31, 2002. Certain information and note disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission ("SEC").

These unaudited consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001, as filed with the SEC on March 15, 2002.

**2.          Earnings Per Share**

Basic earnings per share is computed by dividing net income by the weighted average number of
common shares outstanding for the period, adjusted for the unallocated portion of the shares held by the
Warwick Community Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") in accordance with
American Institute of Certified Public Accountants ("AICPA") Statement of Position 93-6, "Employers
Accounting for Employee Stock Ownership Plans," and unearned shares held by the Recognition and
Retention Plan of Warwick Community Bancorp, Inc. ("RRP").  Diluted earnings per share, which
reflects the potential dilution that could occur if outstanding stock options were exercised and resulted in
the issuance of common stock that then shared in the earnings of the Company, is computed by dividing
net income by the weighted average number of common shares and dilutive instruments.

**3.          Comprehensive Income**

Comprehensive income includes net income and all other changes in equity during a period
except those resulting from investments by owners and distributions to owners.  Other comprehensive
income includes revenues, expenses, gains and losses that, under accounting principles generally
accepted in the United States of America, are included in comprehensive income but excluded from net
income.  Comprehensive income and accumulated other comprehensive income are reported net of
related income taxes.  Accumulated other comprehensive income for the Company consists solely of
unrealized holding gains or losses on available for sale securities.

**4.          New Accounting Pronouncements**

On July 20, 2001, the FASB issued Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets," ("SFAS 142").  This Statement addresses financial accounting
and reporting for acquired goodwill and other intangible assets and supercedes APB Opinion No. 17,
"Intangible Assets".  It  addresses how intangible assets that are acquired individual or with a group of
other assets should be accounted for in financial statements upon their acquisition.  SFAS 142 requires
that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested
for impairment at least annually in accordance with the provisions of SFAS 142.  SFAS 142 also requires
that intangible assets with definite  useful lives be amortized over their respective estimated useful lives
to their estimated residual values and periodically reviewed for impairment.

The Company adopted provisions of SFAS 142 on January 1, 2002.  The Company had $885,600 in
recorded goodwill at January 1, 2002 and $1.8 million of other intangible assets, with amortization of
$227,200 per year.  The cessation of amortization of goodwill upon the adoption of SFAS 142 had no
significant impact on reported operations for the second quarter of 2002 or year-to-date 2002 as
compared to the same periods ended June 30, 2001.  Excluding the $24,000 of goodwill amortization
recorded in the quarter ended June 30, 2001, the basic and diluted earnings per share were $0.26 and
$0.26, respectively.  Year-to-date 2001 basic and diluted earnings per share excluding $40,600 of year-to-date goodwill amortization were $0.49 and $0.48, respectively.

**5.          Loan Portfolio Composition**

The following table sets forth the composition of the Company's loan portfolio in dollar amounts
and percentage of the portfolio at the dates indicated.

|                                          | At June 30, 2002       | At December 31, 2001
|----------------------------------------- | ---------------------- | --------------------
|                                          | Amount                 | Percentof Total     
|                                          | (Dollars in thousands)
|Residential mortgage loans:               |                        |                     
|Conventional one- to four-family loans    | $277,696               | 50.23%              
|VA and FHA loans                          | 57                     | 0.01                
|Home equity loans                         | 28,127                 | 5.09                
|Residential construction loans, net       | 29,580                 | 5.35                
|Total residential mortgage loans          | 335,460                | 60.68               
|Commercial real estate and business loans | 182,689                | 33.04               
|Consumer loans:                           |                        |                     
|Automobile                                | 32,773                 | 5.93                
|Other consumer loans                      | 1,967                  | 0.35                
|Total consumer loans                      | 34,740                 | 6.28                
|Total loans                               | 552,889                | 100.00%             
|Allowance for loan losses                 | (4,079)                |                     
|Total loans, net                          | $548,810               |                     

---

The following table sets forth information regarding non-accrual loans, other past due loans and
other real estate owned at the dates indicated.    The $1.3 million increase in non-accrual mortgage loans
delinquent more than 90 days from $886,000 at December 31, 2001 to $2.2 million at June 30, 2002
resulted primarily from two residential mortgage loans  in the amounts of $693,000 and $479,000.
Loan-to-value ratios on the properties are 80.0% and 70.0%, respectively.

|                                                                  | June 30,2002           | December 31,2001
|----------------------------------------------------------------- | ---------------------- | ----------------
|                                                                  | (Dollars in thousands)
|Non-accrual mortgage loans delinquent morethan 90 days            | $2,233                 | $   886         
|Non-accrual other loans delinquent more than 90 days              | 692                    | 508             
|Total non-accrual loans                                           | 2,925                  | 1,394           
|Total 90 days or more delinquent and still accruing               | -                      | 183             
|Total non-performing loans                                        | 2,925                  | 1,577           
|Total foreclosed real estate, net of related allowance for losses | 1,147                  | 1,151           
|Total non-performing assets                                       | $4,072                 | $2,728          
|Non-performing loans to total loans                               | 0.53%                  | 0.30%           
|Total non-performing assets to total assets                       | 0.50%                  | 0.34%           

The following table sets forth the activity in the Company's allowance for loan losses at and for
the periods indicated.

|                                                                        | Six Months EndedJune 30, | Year EndedDecember 31,
|----------------------------------------------------------------------- | ------------------------ | ----------------------
|                                                                        | 2002                     | 2001                  
|                                                                        | (Dollars in thousands)  
|**Allowance for loan losses:**                                          |                          |                       
|Balance at beginning of period                                          | $3,650                   | $2,722                
|**Charge-offs**:                                                        |                          |                       
|Commercial real estate and business loans                               | -                        | -                     
|Consumer loans                                                          | 38                       | 48                    
|Total charge-offs                                                       | 38                       | 48                    
|**Recoveries**:                                                         |                          |                       
|Consumer loans                                                          | 12                       | 43                    
|Total recoveries                                                        | 12                       | 43                    
|                                                                        |                          |                       
|Provision for loan losses                                               | 455                      | 480                   
|Balance at end of Period                                                | $4,079                   | $3,197                
|                                                                        |                          |                       
|Ratio of net charge-offs during the period to
average loans outstanding | 0.00%                    | 0.00%                 
|Ratio of allowance for loan losses to total loans at
end of period      | 0.74%                    | 0.64%                 
|Ratio of allowance for loan losses to non-
performing loans             | 139.45%                  | 152.17%               

---

**General**

The Parent  Company is a bank holding company incorporated in September 1997 under the laws
of the State of Delaware and is registered under the Bank Holding Company Act of 1956, as amended
("BHCA").  The Parent Company elected to become a financial holding company under the BHCA in
October 2000.  The primary business of the Parent Company is the operation of its wholly owned
subsidiaries, Warwick Savings, Towne Center and Hardenburgh, the Parent Company's recently acquired
title insurance agency subsidiary.  Presently, the only significant assets of the Parent Company are the
capital stock of Warwick Savings, Towne Center and Hardenburgh, the note evidencing the loan the
Parent Company made to the ESOP to allow the ESOP to purchase 8% of the Parent Company's common
stock issued in the Parent Company's initial public offering, and the investments acquired with the net
proceeds of the offering retained by the Parent Company.  While the following discussion of financial
condition and results of operations includes the collective results of the Parent Company and its
subsidiaries, this discussion reflects primarily Warwick Savings' activities.  Unless otherwise disclosed,
the information presented herein reflects the financial condition and results of operations of the Parent
Company and its subsidiaries on a consolidated basis, and as used herein the term " Company" refers to
the Parent Company and its subsidiaries collectively.

**Financial Condition**

For the six-month period ended June 30, 2002, total assets of the Company increased $1.0
million from $806.7 million at December 31, 2001 to $807.7 million at June 30, 2002.  This increase in
total assets was primarily attributable to a $33.1 million, or 6.4%, increase in total loans, which increased
from $519.8 million at December 31, 2001 to $552.9 million at June 30, 2002, and was partially offset by
the $22.7 million, or 10.8%, decrease in total securities, which decreased from $209.6 million at
December 31, 2001 to $186.9 million at June 30, 2002.  The increase in total loans was attributable to the
growth in the commercial portfolio, which increased $67.3 million and was partially offset by the
decrease in the residential mortgage loan and consumer loan portfolios of $25.7 million and $8.5 million,
respectively.  The net increase in the commercial loan portfolio resulted primarily from the Company's
purchase of seasoned commercial mortgage loan offerings from two separate sellers that aggregated
$45.0 million and $13.9 million, respectively.  Funding for the purchases was provided principally by the
net decrease in the Company's securities portfolio that resulted primarily from investment security sales,
maturities and amortization, as well as by the decreases cited previously in the residential mortgage loan
and consumer loan portfolios.  Additionally, the  Federal Home Loan Bank of New York (" FHLBNY")
repurchased $3.7 million, net, of its capital stock from the Company which reduced the Company's
investment in FHLBNY capital stock from $16.9 million at December 31, 2001 to $13.2 million at June
30, 2002.

Deposits increased $23.8 million, or 5.6%, from $422.2 million at December 31, 2001 to $446.0
million at June 30, 2002.  This increase was primarily attributable to an increase in savings accounts of
$22.6 million, an increase of $8.8 million in  NOW and money market accounts and an increase of $3.7
million in  non-interest-bearing checking accounts, which were partially offset by the decrease in
certificates  of deposit accounts of $11.3 million.

Borrowed funds, comprised primarily of advances from the FHLBNY, decreased $30.8 million,
to $260.0 million at June 30, 2002 from $290.8 million at December 31, 2001.

Total stockholders' equity increased by $7.3 million, or 9.9%, from $74.0 million at December
31, 2001 to $81.3 million at June 30, 2002.  The increase was primarily attributable to net income of $5.0
million for the six months ended June 30, 2002 and the $2.0 million increase in unrealized appreciation
of securities available for sale.  The increase in total stockholders' equity was partially offset by the open
market

---

**Analysis of Net Interest Income**

Net interest income represents the difference between income on interest-earning assets and
expense on interest-bearing liabilities.  Net interest income depends upon the volume of interest-earning
assets and interest-bearing liabilities and the interest rates earned or paid on them.

*Average Balance Sheets*.  The following table sets forth certain information regarding the
Company's average statements of financial condition and its statements of income for the three and six
months ended June 30, 2002 and 2001, and reflects the average yield on assets and average cost of
liabilities for the periods indicated.  Such yields and costs were derived by dividing interest income or
expense by the average balance of assets or liabilities, respectively, for the periods shown.  The yields
include deferred fees and discounts, which are considered yield adjustments.  Average balances were
computed based on month-end balances.  Management believes the use of average monthly balances
instead of average daily balances does not have a material effect on the information presented.

---

|                                                                    |                                        | Three Months Ended June 30,
|------------------------------------------------------------------- | -------------------------------------- | ---------------------------
|                                                                    |                                        | 2002                       
|                                                                    |                                        | AverageBalance             
|Assets:                                                             | (Dollars in thousands)                
|Interest-earning assets:                                            |                                        |                            
|                                                                    | Mortgage loans, net                    | $342,164                   
|                                                                    | Consumer and commercial loans, net     | 166,667                    
|                                                                    | Mortgage-backed securities             | 99,974                     
|                                                                    | Federal funds sold                     | -                          
|                                                                    | Interest earning accounts at banks     | 18,373                     
|                                                                    | Investment securities                  | 113,604                    
|                                                                    | Total interest-earning assets          | 740,782                    
|                                                                    | Non-interest earning assets            | 40,182                     
|                                                                    | Total assets                           | $780,964                   
|                                                                    |                                        |                            
|Liabilities and retained earnings:                                  |                                        |                            
|Interest-bearing liabilities:                                       |                                        |                            
|                                                                    | Passbook accounts                      | $150,059                   
|                                                                    | Escrow deposits                        | 4,600                      
|                                                                    | NOW accounts                           | 42,382                     
|                                                                    | Money market accounts                  | 77,181                     
|                                                                    | Certificate accounts                   | 111,484                    
|                                                                    | Total deposits                         | 385,706                    
|                                                                    | Borrowed funds                         | 249,406                    
|                                                                    | Total interest-bearing liabilities     | 635,112                    
|Non-interest bearing liabilities                                    | 67,092                                 |                            
|                                                                    | Total liabilities                      | 702,205                    
|Retained earnings                                                   | 78,759                                 |                            
|                                                                    | Total liabilities and retainedearnings | $780,964                   
|Net interest income/interest rate spread                            |                                        | $  6,953                   
|Net interest-earning assets/net
   interest margin                  | $105,670                               |                            
|                                                                    |                                        |                            
|Ratio of interest-earning assets to
   interest-bearing liabilities |                                        |                            

---

|                                                                    |                                        | Six Months Ended June 30,
|------------------------------------------------------------------- | -------------------------------------- | -------------------------
|                                                                    |                                        | 2002                     
|                                                                    |                                        | AverageBalance           
|Assets:                                                             | (Dollars in thousands)                
|Interest-earning assets:                                            |                                        |                          
|                                                                    | Mortgage loans, net                    | $349,538                 
|                                                                    | Consumer and commercial loans, net     | 165,724                  
|                                                                    | Mortgage-backed securities             | 97,708                   
|                                                                    | Federal funds sold                     | 2,557                    
|                                                                    | Interest earning accounts at banks     | 11,870                   
|                                                                    | Investment securities                  | 119,116                  
|                                                                    | Total interest-earning assets          | 746,513                  
|                                                                    | Non-interest earning assets            | 40,652                   
|                                                                    | Total assets                           | $787,165                 
|                                                                    |                                        |                          
|Liabilities and retained earnings:                                  |                                        |                          
|Interest-bearing liabilities:                                       |                                        |                          
|                                                                    | Passbook accounts                      | $144,909                 
|                                                                    | Escrow deposits                        | 3,700                    
|                                                                    | NOW accounts                           | 40,819                   
|                                                                    | Money market accounts                  | 77,679                   
|                                                                    | Certificate accounts                   | 112,564                  
|                                                                    | Total deposits                         | 379,671                  
|                                                                    | Borrowed funds                         | 263,852                  
|                                                                    | Total interest-bearing liabilities     | 643,523                  
|Non-interest bearing liabilities                                    | 66,358                                 |                          
|                                                                    | Total liabilities                      | 709,881                  
|Retained earnings                                                   | 77,284                                 |                          
|                                                                    | Total liabilities and retainedearnings | $787,165                 
|Net interest income/interest rate spread                            |                                        | $14,055                  
|Net interest-earning assets/net
   interest margin                  | $102,990                               |                          
|                                                                    |                                        |                          
|Ratio of interest-earning assets to
   interest-bearing liabilities |                                        |                          

---

|                                                 | Three Months Ended June 30, 2002Compared toThree Months Ended June 30, 2001 | Six Months Ended June 30, 2002Compared toSix Months Ended June 30, 2001
|------------------------------------------------ | --------------------------------------------------------------------------- | -----------------------------------------------------------------------
|Increase (Decrease) in NetInterest Income Due to |                                                                             | Increase (Decrease) in NetInterest Income Due to                       
|Volume                                           | Rate                                                                        | Net                                                                    
|(In thousands)                                   | (In thousands)                                                             
|Interest-earning assets:                         |                                                                             |                                                                        
|Mortgage loans, net                              | $    (5)                                                                    | $   (436)                                                              
|Consumer and commercial loans, net               | 708                                                                         | (388)                                                                  
|Mortgage-backed securities                       | 196                                                                         | (32)                                                                   
|Federal funds sold                               | (49)                                                                        | -                                                                      
|Interest earning accounts at banks               | 131                                                                         | (65)                                                                   
|Investment securities                            | (230)                                                                       | (185)                                                                  
|Total                                            | 751                                                                         | (1,106)                                                                
|                                                 |                                                                             |                                                                        
|Interest-bearing liabilities:                    |                                                                             |                                                                        
|Passbook accounts                                | 291                                                                         | (239)                                                                  
|Escrow accounts                                  | 16                                                                          | -                                                                      
|NOW accounts                                     | 30                                                                          | (54)                                                                   
|Money market accounts                            | 74                                                                          | (312)                                                                  
|Certificates of deposit                          | (212)                                                                       | (645)                                                                  
|Borrowed funds                                   | (207)                                                                       | (241)                                                                  
|Total                                            | (8)                                                                         | (1,491)                                                                
|                                                 |                                                                             |                                                                        
|Net change in net interest income                | $   759                                                                     | $      385                                                             

*General*.  For the three months ended June 30, 2002, the Company recognized net income of $2.5
million, or $0.53 per diluted share, as compared to net income of $1.2 million, or $0.25 per diluted share,
for the three months ended June 30, 2001, which represents a $1.3 million, or 110.9%, increase.  Net
interest income and non-interest income increased $1.1 million and $993,000, or 19.7% and 65.4%,
respectively, for the three months ended June 30, 2002, and  non-interest expense decreased  $336,000,
or 6.4% during the same period.  For the second quarter ended June 30, 2002, annualized return on
average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.29% and 12.81%,
respectively.  The ROAA and ROAE for the corresponding quarter of 2001 were 0.65% and 6.52%,
respectively.

*Interest Income*.  Interest income amounted to $12.5 million for the three months ended June 30,
2002, as compared to $12.8 million for the three months ended June 30, 2001.  This decrease of
$355,000, or 2.8%,

---

The decrease in interest earned on the Company's mortgage loan portfolio resulted primarily
from the decrease in the average yield of the portfolio to 7.06% for the three months ended June 30, 2002
from 7.57% for the three months ended June 30, 2001.  The increase in interest income on consumer and
other loans was primarily the result of the increase in average balances of $33.9 million, or 25.5%, and
was partially offset by a decrease in the average yield of such portfolio to 7.43% from 8.36%.

Interest and dividends earned on securities declined slightly from $3.5 million to $3.3 million
mainly due to the decrease in the average balances of investment securities and mortgage-backed
securities, which aggregated $213.6 million for the three months ended June 30, 2002, as compared to
$216.1 million for the three months ended June 30, 2001.  The average yield on investment securities and
mortgage-backed securities decreased to 5.79% and 6.53%, respectively, for the three months ended June
30, 2002 from 6.44% and 6.66%, respectively, for the comparable period in 2001.

*Interest Expense*.  Total interest expense for the three-month period ended June 30, 2002
decreased from $7.0 million to $5.5 million , a decrease of $1.5 million, or 21.3%, as compared to the
same three-month period one year earlier.  A $25.9 million increase in average interest bearing liabilities
was offset by a 113 basis point decrease in the cost of funds to 3.48%.  The cost of funds was influenced
by a decline in rates as well as a change in the mix of deposits. Average time deposits decreased $15.5
million, or 13.9%,  for the three-month period ended June 30, 2002 while lower yielding savings and
interest bearing demand accounts increased $53.2 million,  or 24.6% during the same period.  Also
contributing to this decline was the decrease in average borrowed funds of $14.9 million, or 5.7%,
coupled with  the decrease in the average cost of borrowed funds to 5.15% as of June 30, 2002 from
5.54% at June 30, 2001.

*Net Interest Income*.  Net interest income for the three months ended June 30, 2002 increased
$1.1 million, or 19.7%, to $6.9 million compared to the three months ended June 30, 2001, primarily as a
result of the decline in the cost of interest bearing liabilities resulting from a decrease in rates paid on
deposits and a more favorable mix of deposits.   This increase was partially offset by the decrease in the
average yield of interest-earning assets and the increase in the average balances of the Company's
interest-bearing deposits.  Interest rate spread increased to 3.26% from 2.76%, and the net interest margin
was 3.75% and 3.33%, respectively, for the three-month periods ended June 30, 2002 and 2001.

*Provision for Loan Losses*.  The provision for loan losses for the three months ended June 30,
2002  and 2001 was $225,000 and $245,000, respectively.  This provision is a result of management's
assessment of the loan portfolio, the level of the Company's allowance for loan losses and its assessment
of the local economy and market conditions, coupled with the growth in the loan portfolio, particularly in
commercial loans.

*Non-Interest Income*.  Non-interest income, net, for the three months ended June 30, 2002 totaled
$2.5 million, as compared to $1.5 million for the three months ended June 30, 2001.  This increase was
primarily due to the $893,000 increase in other income, the $82,000 increase in service and fee income.
The increase in other income was attributable to a one-time $817,000 gain recognized on the curtailment
of the Company's defined benefit pension plan. The increase in service and fee income can be attributed to the deposit
and commercial loan growth, an increase in the amount of income generated from the sales of mutual
funds and tax-deferred annuities and fees associated with the Company's debit card.  Partially offsetting
these increases was the $14,000 decrease in the gain on securities transaction.

---

*Non-Interest Expense*.  Non-interest expense decreased by $336,000 for the three-month period
ended June 30, 2002 as compared to June 30, 2001. Other expenses and professional fees decreased
$246,000 and $119,000, respectively, for the three months ended June 30, 2002 as compared to June 30,
2001.   The decrease in other expenses resulted from increased expenses incurred in 2001 related to the
Company's exiting the residential mortgage loan service business, as well as, costs incurred with the
integration of Hardenburgh and the Carmel, New York branch with the Company. The decrease in
professional fees was attributable to higher legal and consulting services incurred in 2001 to complete the
acquisition of Hardenburgh and the Carmel, New York branch office, as well as costs incurred for the
formation of the Warwick Commercial Bank.   Salaries and employee benefits expense remained at the
same level for the three months ended June 30, 2002 as compared to the comparable period in 2001.
However, the quarter ending June 30, 2002 included non-recurring expenses associated with the
previously mentioned curtailment of the Company's defined benefit pension plan in the amount of
$197,000.  Data processing expense increased $37,000, or 13.9% for the three months ended June 30,
2002 as compared to June 30, 2001.

*Provision for Income Taxes*.  The $1.2 million increase in the provision for income taxes to $1.8
million for the three-month period ended June 30, 2002, as compared to the three-month period ended
June 30, 2001, was primarily attributable to the 136.4% increase in pre-tax income.

**Comparison of Operating Results for the Six Months Ended June 30, 2002 and 2001**

*General*.  For the six months ended June 30, 2002, the Company recognized net income of $5.0
million, or $1.05 per diluted share, as compared to net income of $2.3 million, or $0.48 per diluted share,
for the six months ended June 30, 2001.  The increase was primarily attributable to the decrease in
interest expense coupled with  increased interest income generated from the continued growth in the
Company's loan and securities portfolios.  Net interest income  and  non-interest income increased $3.1
million and $1.3 million, or 28.4% and 48.0%, respectively, for the six months ended June 30, 2002,
while non-interest expense decreased $382,000, or 3.9%.  For the six months ended June 30, 2002, the
annualized ROAA and ROAE were 1.26% and 12.87%, respectively.  The ROAA and ROAE for the
corresponding period in 2001 were 0.66% and 6.21%, respectively.

*Interest Income*.  Interest income amounted to $25.3 million for the six months ended June 30,
2002, as compared to $24.4 million for the six months ended June 30, 2001.  This increase of $886,000,
or 3.6%, was primarily the result of the $1.0 million increase in interest earned on other loans and the
$296,000 increase in interest and dividends on securities, as compared to the respective amounts earned
over the six-month period ended June 30, 2001.   Partially offsetting these increases was the decrease of
$450,000 in interest earned on  the Company's mortgage loan portfolio.

The increase in interest earned on the Company's consumer and other loan portfolio resulted
primarily from the increase in the average balances of those loans at June 30, 2002 to $165.7 million for
the six months ended June 30, 2002, as compared to $119.7 million for the six months ended June 30,
2001. The average yield of the portfolio declined  to 7.38% for the six months ended June 30, 2002 from
8.52% for the six months ended June 30, 2001.  The decrease in interest income on the Company's
mortgage loan portfolio was attributable to the decrease in the average yield to 7.07% for the six months
ended June 30, 2002 from 7.57% for the comparable period in 2001.  This decrease was only partially
offset by the  increase in the average balances of mortgage loans at June 30, 2002 to $349.5 million for
the six months ended June 30, 2002, as compared to $338.6 million for the six months ended June 30,
2001.

The increase in interest and dividends earned on securities resulted mainly from the increase in
the average aggregate balances of investment securities and mortgage-backed securities, to $216.8
million for the six months ended June 30, 2002 as compared to $188.8 million for the six months ended
June 30, 2001 partially offset by  the decrease in the average yield on mortgage-backed securities to
5.30% for the six months ended June 30, 2001 as compared to 6.74%, respectively, for the six months
ended June 30, 2001.  The increase in the average balances was due primarily to excess liquid funds
being invested in the available for sale portfolio.

---

*Interest Expense*.  Interest expense over the six-month period ended June 30, 2002 on total
interest-bearing deposits and borrowed funds decreased by $2.2 million when compared to the same six-month period one year earlier, primarily as a result of the decrease in the average cost and average
balance of certificate accounts as well as the decrease in the average cost of money market accounts
which decreased to 1.95% at June 30, 2002 from 4.01% for the comparable period in 2001.   The cost of
funds was influenced by a decline in rates as well as a change in the mix of deposits. Over the same
periods, the average balances of  total interest-bearing liabilities increased by $75.2 million, or 13.2%,
from $568.3 million to $643.5 million.   Partially offsetting these increases was the decrease in the
average cost of interest-bearing liabilities to 3.49% for the six month period ended June 30, 2002 from
4.73% at June 30, 2001.

*Net Interest Income*.  Net interest income for the six months ended June 30, 2002 increased $3.1
million, or 28.4%, to $14.1 million compared to the six months ended June 30, 2001, primarily as a result
of the increase in the average balances of the Company's loan and securities portfolio.  This increase was
partially offset by the increase in the average balances  of the Company's interest-bearing liabilities.
Interest rate spread increased to 3.28% from 2.77%, and the net interest margin increased to 3.77% from
3.36%, respectively, for the six-month period ended June 30, 2002 compared to the six-month period
ended June 30, 2001.

*Provision for Loan Losses*.  The provision for loan losses for the six months ended June 30, 2002
and 2001 was $455 thousand and $480 thousand, respectively.  This provision is a result of
management's assessment of the loan portfolio, the level of the Company's allowance for loan losses and
its assessment of the local economy and market conditions.

*Non-Interest Income*.  Non-interest income, net, for the six months ended June 30, 2002 and June
30, 2001 totaled $4.1 million and $2.8 million, respectively. Other income, service and fee income and
gain on sale of securities transaction increased $867,000, $386,000 and $228,000, respectively, for the
six months ended June 30, 2002, as compared to the comparable period in 2001.   The increase in other
income was primarily the result of the $816,000 gain on the curtailment of the Company's pension plan.  The increase in service
and fee income resulted primarily from deposit and loan growth and fee income and fee income
associated Company's debit and ATM cards. Partially offsetting these increases was the $110,000
decrease in the gain on sale of mortgage servicing rights and the $38,000 decrease in the net gain on sale
of loans.

*Non-Interest Expense*.  Non-interest expense decreased by $382,000 million for the six-month
period ended June 30, 2002 as compared to June 30, 2001.  Other expenses and occupancy expense
decreased by $602,000 and $21,000, respectively, for the six months ended June 30, 2002.     The
decrease in other expenses resulted from increased expenses incurred in 2001 related to the Company's
exiting the residential mortgage loan service business as well as costs incurred with the integration of
Hardenburgh and the Carmel, New York branch with the Company.  Salaries and employee benefits
expense increased by $151,000 for the six months ended June 30, 2002.  This is primarily the result of
the non-recurring increased expense related to the curtailment of the Company's pension plan, increases
in ESOP compensation and increases in medical benefits that were only partially offset by a decrease in
salary expense.    Data processing expense and advertising expense increased  $59,000 and $18,000,
respectively, for the six months ended June 30, 2002.

*Provision for Income Taxes*.  The increase of $2.2 million in the provision for income taxes for
the six-month period ended June 30, 2002, as compared to the same period ended June 30, 2001, was
primarily attributable to the increase of 139.3% in pre-tax income.

---

**Liquidity and Capital Resources**

Liquidity is managed using a combination of customer deposits, cash and short-term interest-earning assets,  mortgage loans held for sale,  investment securities held as available for sale and
borrowings  from the FHLBNY.  At June 30, 2002, management had utilized $2.5 million in repurchase
agreements and $260.0 million in FHLBNY advances to supplement its deposit flows and liquidity
needs.

At June 30, 2002, the Company's total approved loan origination commitments outstanding
totaled $46.4 million.  Certificates of deposit scheduled to mature in one year or less at June 30, 2002
totaled $94.5 million.  Based on historical experience, management believes that a significant portion of
such deposits will remain with the Company.

At June 30, 2002, the Company had cash and due from banks of $23.6 million and securities
available for sale of $184.6 million.  Management believes these amounts, together with the Company's
borrowing capabilities, to be more than adequate to meet its short-term cash needs.

**Regulatory Capital Position**

Warwick Savings, Warwick Commercial  and Towne Center are subject to minimum regulatory
capital requirements imposed by the Federal Deposit Insurance Corporation ("FDIC"), which
requirements are, as a general matter, based on the amount and composition of an institution's assets.
Insured institutions in the strongest financial and managerial condition, with a rating of 1 (the highest
examination rating of the FDIC under the Uniform Financial Institutions Rating System) are required to
maintain Tier 1 capital of not less than 3.0% of total assets (the "leverage capital ratio").  For all other
banks, the minimum leverage capital ratio is 4.0%, unless a higher leverage capital ratio is warranted by
the particular circumstances or risk profile of the institution.

At June 30, 2002, the Parent Company exceeded the minimum regulatory capital guidelines
imposed by the Federal Reserve Board, which are substantially similar to the requirements of the FDIC,
with a Tier 1 capital level of $77.4 million, or 9.95% of average assets, which is well above the required
level of $31.1 million, or 4% of average assets.  The Parent Company's ratio of Tier 1 capital to risk-weighted assets of 15.79% at June 30, 2002 is also well above the required level of 4%.  The Parent
Company's ratio of total capital to risk-weighted assets is 16.68%, which is well above the required level
of 8%.  In addition, Warwick Savings', Warwick Commercial  and Towne Center's capital ratios qualify
each of them to be treated as "well capitalized" for regulatory purposes.  The following table shows
Warwick Savings' regulatory capital positions and ratios at June 30, 2002.

---

|                                            | Actual  | For Capital AdequacyPurposes | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions
|------------------------------------------- | ------- | ---------------------------- | --------------------------------------------------------------
|                                            | Amount  | Percent                      | Amount                                                        
|Total Capital
   (to risk-weighted assets)  | $66,809 | 14.50%                       | $36,848                                                       
|Tier 1 Capital
   (to risk-weighted assets) | 62,815  | 13.64                        | 18,424                                                        
|Tier 1 Capital   (to average assets)        | 62,815  | 8.35                         | 30,084                                                        

The following table shows the Warwick Commercial's regulatory capital positions and ratios as of June
30, 2002.

|                                           | Actual | For Capital AdequacyPurposes | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions
|------------------------------------------ | ------ | ---------------------------- | --------------------------------------------------------------
|Total Capital   (to risk-weighted assets)  | $3,046 | 104.35%                      | $ 234                                                         
|Tier 1 Capital   (to risk-weighted assets) | 3,046  | 104.35                       | 117                                                           
|Tier 1 Capital   (to average assets)       | 3,046  | 23.28                        | 523                                                           

The following table shows the Towne Center's regulatory capital positions and ratios as of June 30, 2002.

|                                        | Actual | For Capital AdequacyPurposes | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions
|--------------------------------------- | ------ | ---------------------------- | --------------------------------------------------------------
|Total Capital(to risk-weighted assets)  | $8,996 | 26.08%                       | $2,760                                                        
|Tier 1 Capital(to risk-weighted assets) | 8,573  | 24.85                        | 1,380                                                         
|Tier 1 Capital(to average assets)       | 8,573  | 19.58                        | 1,751                                                         

**Item 3. Quantitative And Qualitative Disclosures About Market Risk**

Quantitative and qualitative disclosure about market risk is presented at December 31, 2001 in
the Company's Annual Report on Form 10-K, which was filed with the Commission on March 15, 2002.
There have been no material changes in the Company's market risk at June 30, 2002 as compared to
December 31, 2001.

---

**PART II - OTHER INFORMATION**

|**Item 1.** | **Legal Proceedings**                                                                                                                                                       
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           
|            | Not applicable.                                                                                                                                                             
|           
|**Item 2.** | **Changes in Securities**                                                                                                                                                   
|           
|            | Not applicable.                                                                                                                                                             
|           
|**Item 3.** | **Defaults upon Senior Securities**                                                                                                                                         
|           
|            | Not applicable.                                                                                                                                                             
|           
|**Item 4.** | **Submission of Matters to a Vote of Security Holders**                                                                                                                     
|           
|            | Information relating to the Company's annual meeting of Shareholders held on April 16,
2002 was reported in the Registrant's Form 10-Q for the quarter ended March 31, 2002.
|           
|**Item 5.** | **Other Information**                                                                                                                                                       
|           
|            | Not applicable.                                                                                                                                                             
|           
|**Item 6.** | **Exhibits and Reports on Form 8-K**                                                                                                                                        
|           
|            | (a)   Exhibits                                                                                                                                                              
|           
|            | See Index to Exhibits                                                                                                                                                       
|           
|            | (b)   Reports on Form 8-K                                                                                                                                                   
|           
|            | Form 8-K, dated May 30, 2002, announcing the dismissal of Arthur Andersen LLP as the
Company's independent accountants.                                                     
|           
|            | Form 8-K/A, dated June 3, 2002, engaging the firm of KPMG LLP as independent
certified public accountants for the fiscal year ending December 31, 2002.                     

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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.

|                       | **Warwick Community Bancorp, Inc.**                                                                                         
|---------------------- | ----------------------------------------------------------------------------------------------------------------------------
|                       | (Registrant)                                                                                                                
|                      
|                      
|                      
|Date:  August 12, 2002 | By:   /S/ FRED G. KOWAL
        Fred G. Kowal
        Chairman and Chief Executive Officer
        (Duly Authorized Officer)
|                       |                                                                                                                             
|                       |                                                                                                                             
|                       |                                                                                                                             
|                       |                                                                                                                             
|Date:  August 12, 2002 | By:   /S/ ARTHUR W. BUDICH                                                                                                  
|                       | Arthur W. Budich
        Senior Vice President and Chief Financial Officer
        (Principal Financial Officer)            

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CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned hereby
certifies that the accompanying report fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all
material respects, the financial condition and results of operations of Warwick Community Bancorp, Inc.

|Date:  August 12, 2002 | /S/ FRED G. KOWAL                                                 
|---------------------- | ------------------------------------------------------------------
|                       | Fred G. Kowal
Chairman and Chief Executive Officer                
|                      
|                      
|                      
|                      
|Date:  August 12, 2002 | /S/ ARTHUR W. BUDICH                                              
|                       | Arthur W. Budich
Senior Vice President and Chief Financial Officer

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**INDEX TO EXHIBITS**

|             
|-------------
|ExhibitNumber
|             
|3.1          
|             
|3.2          
|             
|4.1          
|             
|4.2          
|             
|4.3          
|             
|4.4          
|             
|4.5          
|             
|4.6          
|             
|10.1         
|             
|10.2         
|             
|10.3         
|             
|10.4         
|             
|10.5         
|             
|10.6         
|             
|10.7         
|             
|10.8         
|             
|10.9         

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|10.10 | Recognition and Retention Plan of Warwick Community Bancorp, Inc. (3)                                                                                                           
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|10.11 | First Amendment to the Recognition and Retention Plan of Warwick Community
Bancorp, Inc. (5)                                                                                    
|     
|10.12 | Second Amendment to the Recognition and Retention Plan of Warwick Community
Bancorp, Inc. (8)                                                                                   
|     
|10.13 | Trust Agreement between Warwick Community Bancorp, Inc. and Orange County
Trust Company for the Recognition and Retention Plan of Warwick Community
Bancorp, Inc.(2)            
|     
|10.14 | Stock Option Plan of Warwick Community Bancorp, Inc. (3)                                                                                                                        
|     
|10.15 | First Amendment to the Stock Option Plan of Warwick Community Bancorp, Inc. (5)                                                                                                 
|     
|10.16 | Form of Amended Stock Option Agreement for Directors under the Stock Option Plan
of Warwick Community Bancorp, Inc. (9)                                                         
|     
|10.17 | Form of Amended Stock Option Agreement for Employees under the Stock Option
Plan of Warwick Community Bancorp, Inc. (9)                                                         
|     
|10.18 | Benefit Restoration Plan of Warwick Community Bancorp, Inc. (1)                                                                                                                 
|     
|10.19 | Grantor Trust Agreement by and between The Warwick Savings Bank and HSBC
Bank USA for the Benefit Restoration Plan of The Warwick Savings Bank (2)                              
|     
|10.20 | The Warwick Savings Bank Outside Directors' Stock Plan (8)                                                                                                                      
|     
|10.21 | Change in Control Severance Plan of Warwick Community Bancorp, Inc. and
Affiliates (9)                                                                                          
|     
|10.22 | Voluntary Retainer Stock and Deferred Compensation Plan for Directors (10)                                                                                                      
|     
|11.1  | Statement re: Computation of per share earnings (See the Statement of Income and
Note 2 to the Notes to Unaudited Consolidated Financial Statements in this report on
Form 10-Q)

1. Incorporated herein by reference to the Exhibits to the Company's Registration Statement on
Form S-1, filed on September 19, 1997, Registration No. 333-36021.
2. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K
for the fiscal year ended May 31, 1998.
3. Incorporated herein by reference to the Company's definitive Proxy Statement for the Special
Meeting of Shareholders held on June 24, 1998.
4. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K
for the transition period from June 30, 1998 to December 31, 1998.25
5. Incorporated herein by reference to the Company's definitive Proxy Statement for the Special
Meeting of Shareholders held on April 20, 1999.
6. Incorporated herein by reference to the Exhibits to the Company's Registration Statement on
Form 8-A, filed on October 18, 2000.
7. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000.
8. Incorporated herein by reference to the Exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
9. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2001.
10. Incorporated herein by reference to the Company's definitive Proxy Statement for the Special
Meeting of Shareholders held on April 16, 2002.

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**CERTIFICATION OF PERIODIC REPORT**

I, Fred G. Kowal, CEO of Warwick Community Bancorp, Inc. and I, Arthur W. Budich, CFO of Warwick
Community Bancorp, Inc.(the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:

|(1) | the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30,
2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C.78m or 78o(d); and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.                                                                                           

Dated:     August 8, 2002

_________________________
Fred G. Kowal CEO

_________________________
Arthur W. Budich CFO