As filed with the Securities and Exchange Commission on August 16, 1999

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended June 30, 1999

                                       OR

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

         For the transition period from ________________ to _______________

         Commission File Number: 0-23293


                         WARWICK COMMUNITY BANCORP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


        DELAWARE                                             06-1497903
(STATE OR OTHER JURISDICTION                                 (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                      18 OAKLAND AVENUE, WARWICK, NEW YORK   10990-0591
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (914) 986-2206
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing for the past 90 days.

                      Yes  X                            No
                          ---                              ---


         As of August 10, 1999, there were 6,169,221 shares of the registrant's
common stock outstanding.




<PAGE>



<TABLE>
<CAPTION>
                                    FORM 10-Q
                         WARWICK COMMUNITY BANCORP, INC.
                                      INDEX
                                                                                                            Page
PART I -- FINANCIAL INFORMATION                                                                            Number
-------------------------------                                                                            ------
<S>                                                                                                        <C>
Item 1.       Financial Statements -- Unaudited

              Consolidated Statements of Financial Condition at
              June 30, 1999 and December 31, 1998                                                             3

              Consolidated Statements of Income for the three and six months
               ended June 30, 1999 and 1998                                                                   4

              Consolidated Statement of Changes in Equity for
               the six months ended June 30, 1999                                                             5

              Consolidated Statements of Cash Flows for the six
               months ended June 30, 1999 and 1998                                                            6

              Notes to Unaudited Consolidated Financial Statements                                          7-9

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations                                                         10-19

Item 3.       Quantitative and Qualitative Disclosures about Market Risk                                     19

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

Item 1.       Legal Proceedings                                                                              19

Item 2.       Changes in Securities                                                                          19

Item 3.       Defaults Upon Senior Securities                                                                19

Item 4.       Submission of Matters to a Vote of Security Holders                                            19

Item 5.       Other Information                                                                              19

Item 6.       Exhibits and Reports on Form 8-K                                                               20

Signature Page                                                                                               21

Exhibit Index                                                                                                22
</TABLE>

================================================================================
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.
================================================================================



                                        2

<PAGE>

PART I --  FINANCIAL INFORMATION

Item 1.    Financial Statements -- Unaudited

<TABLE>
<CAPTION>
                                 WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                                    (Unaudited)


                                                                June 30, 1999        December 31, 1998
                                                                -------------        -----------------
                                                                      (Dollars in thousands)
<S>                                                             <C>                      <C>
                           ASSETS
  Cash on hand and in banks.................................... $  10,867                $  10,511
  Securities:
     Available-for-sale, at fair value.................... ....   177,999                  149,491
     Held-to-maturity, at amortized cost (fair value of $1,128
     at June 30, 1999 and $5,968 at December 31, 1998).........     1,132                    5,999
                                                                ---------                ---------
       Total securities........................................   179,131                  155,490
                                                                ---------                ---------
  Mortgage loans, net..........................................   224,483                  208,706
  Commercial loans.............................................    41,780                   35,293
  Consumer loans...............................................    24,373                   19,191
                                                                ---------                ---------
       Total loans.............................................   290,636                  263,190
  Allowance for loan losses....................................    (1,800)                  (1,727)
                                                                ----------               ---------
       Total loans, net........................................   288,836                  261,463
                                                                ---------                ---------
  Accrued interest receivable..................................     2,661                    2,506
  Federal Home Loan Bank stock.................................     7,417                    4,633
  Bank premises & equipment, net...............................     6,248                    6,173
  Other assets.................................................    11,026                    4,363
                                                                ---------                ---------
       Total assets............................................ $ 506,186                $ 445,139
                                                                =========                =========

             LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits:
  NOW and money market......................................... $  68,357                $  59,815
  Savings......................................................    86,593                   82,696
  Certificates of deposit......................................    73,213                   70,995
  Non-interest bearing checking................................    32,237                   33,380
                                                                ---------                ---------
       Total depositor accounts................................   260,400                  246,886
  Mortgage escrow funds........................................     2,715                    1,965
  Accrued interest payable.....................................       914                      736
  Securities sold under agreements to repurchase...............    15,910                   25,310
  FHLB advances................................................   142,850                   79,480
  Other liabilities............................................     7,969                    6,525
                                                                ---------                ---------
       Total liabilities.......................................   430,758                  360,902
                                                                ---------                ---------

                      STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value; 5,000,000 authorized; none
     issued....................................................        --                       --
  Common stock, $.01 par value; 15,000,000 shares authorized;
     6,606,548 shares issued; 6,169,221 and 6,606,548 shares
     outstanding as of June 30, 1999 and December 31, 1998,
     respectively..............................................        66                       66
  Additional paid-in capital...................................    63,093                   63,374
  Retained earnings............................................    31,401                   30,458
  Accumulated other comprehensive income, net..................    (2,217)                   1,727
  Unearned ESOP common stock...................................   (6,925)                   (7,208)
  Unearned RRP common stock....................................    (3,721)                  (4,180)
                                                                ---------                ---------
                                                                   81,697                   84,237
  Treasury stock                                                   (6,269)                       -
                                                                ---------                ---------
       Total stockholders' equity..............................    75,428                   84,237
                                                                ---------                ---------
       Total liabilities and stockholders' equity.............. $ 506,186                $ 445,139
                                                                =========                =========

            See accompanying Notes to Unaudited Financial Statements.
</TABLE>


                                        3

<PAGE>



<TABLE>
<CAPTION>
                            WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF INCOME
                                                 (Unaudited)


                                                          For the Three Months        For the Six Months
                                                             Ended June 30,             Ended June 30,
                                                      ---------------------------  --------------------------
                                                           1999          1998          1999         1998
                                                      -------------  ------------  -----------  -------------
                                                       (In thousands, except per   (In thousands, except per
                                                             share amounts)              share amounts)
<S>                                                       <C>          <C>          <C>        <C>
Interest Income:
  Interest on mortgage loans...........................   $ 3,927      $ 3,050      $ 7,772    $ 5,758
  Interest on other loans..............................     1,310        1,097        2,474      2,050
  Interest and dividends on securities.................     2,917        3,106        5,487      5,729
  Interest on federal funds sold.......................        --           --           --         70
  Interest on short-term money market instruments......         7            9           12         19
                                                          -------      -------      -------    -------
     Total interest income.............................     8,161        7,262       15,745     13,626
                                                          -------      -------      -------    -------

Interest Expense:
  Time deposits........................................       844          883        1,682      1,813
  Money market deposits................................       375          218          703        419
  Savings deposits.....................................       635          649        1,318      1,263
  Mortgagors' escrow deposits..........................        21           25           51         41
  Borrowed funds.......................................     1,897        1,158        3,455      1,851
                                                          -------      -------      -------    -------
     Total interest expense............................     3,772        2,933        7,209      5,387
                                                          -------      -------      -------    -------
     Net interest income...............................     4,389        4,329        8,536      8,239
                                                          -------      -------      -------    -------

Provision for Loan Losses............................        (125)        (125)        (250)      (250)
                                                          -------      -------      -------    -------
  Net interest income after provision for loan losses..     4,264        4,204        8,286      7,989
                                                          -------      -------      -------    -------

Other Income (Loss):
  Service and fee income...............................       736          547        1,386      1,105
  Securities transactions..............................       251          441          829        634
  Loan transactions....................................        15           20           46         37
  Other income or (loss)...............................      (203)          50         (104)        54
                                                          -------      -------      -------    -------
     Total other income, net..............................    799        1,058        2,157      1,830
                                                          -------      -------      -------    -------

Other Expenses:
  Salaries and employee benefits.......................     1,862        1,777        3,691      3,236
  ESOP benefits........................................       171           12          242        111
  BRP and RRP benefits.................................       203           39          405         84
  FDIC insurance.......................................         8            7           15         14
  Occupancy............................................       341          295          684        603
  Data processing......................................       240          198          487        360
  Advertising..........................................       105           41          239         62
  Professional fees....................................       283          131          364        332
  Other................................................       917          569        1,656      1,126
                                                          -------      -------      -------    -------
     Total other expenses.................................  4,130        3,069        7,783      5,928
                                                          -------      -------      -------    -------
  Income before provision for income taxes.............       933        2,193        2,660      3,891
Provision for Income Taxes...........................         413          895        1,141      1,600
                                                          -------      -------      -------    -------
  Net income...........................................   $   520      $ 1,298      $ 1,519    $ 2,291
                                                          =======      =======      =======    =======
Weighted Average:
  Common shares........................................     5,581        6,122        5,665      6,122
  Dilutive stock options...............................        --           --           --         --
                                                          -------      -------      -------    -------
                                                            5,581        6,122        5,665      6,122
                                                          =======      =======      =======    =======
Earnings per Share:
  Basic................................................   $  0.10      $  0.21      $  0.27    $  0.37
                                                          =======      =======      =======    =======
  Diluted..............................................   $  0.10      $  0.21      $  0.27    $  0.37
                                                          =======      =======      =======    =======

                             See accompanying Notes to Unaudited Financial Statements.
</TABLE>


                                        4

<PAGE>



<TABLE>
<CAPTION>
                                             WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                                                                  (Unaudited)

                                                                  Accumulated
                                          Additional                 Other       Unallocated     Unearned
                                 Common    Paid In    Retained   Comprehensive   Common Stock  Common Stock  Treasury  Comprehensive
                                  Stock    Capital    Earnings    Income, net    Held by ESOP   Held by RRP   Stock        Income
                                  -----    -------    --------    -----------    ------------  ------------  --------  -------------
                                                                          (In thousands)

<S>                               <C>     <C>         <C>           <C>           <C>           <C>          <C>       <C>
BALANCE, December 31,1997......   $ 66    $ 63,366    $ 27,382      $ 1,634       $ (6,259)      $    --     $    --
   Net Income, January 1, 1998-
   June 30, 1998.................   --          --       2,291           --             --            --          --      $ 2,291
   Unrealized appreciation on
   securities available-for-sale,
   net...........................   --          --          --         (227)            --            --          --         (227)
                                                                                                                          -------
   Comprehensive income..........   --          --          --           --             --            --                    2,064
                                                                                                                          =======
   Purchase of common stock by
   ESOP..........................   --          --          --           --         (1,563)           --          --
   Allocation of ESOP stock......   --          40          --           --            204            --          --
                                  ----    --------    --------      -------       --------       -------     -------
BALANCE, June 30, 1998.........   $ 66    $ 63,406    $ 29,673      $ 1,407       $ (7,618)      $    --     $    --
                                  ====    ========    ========      =======       ========       =======     =======

BALANCE, December 31, 1998.....   $ 66    $ 63,374    $ 30,458      $ 1,727       $ (7,208)      $(4,180)    $    --
   Net Income, January 1, 1999-
   June 30, 1999...............     --          --       1,519           --             --            --          --      $ 1,519
   Unrealized appreciation on
   securities available-for-sale,
   net...........................   --          --          --       (3,944)            --            --          --       (3,944)
                                                                                                                          -------
   Comprehensive income........     --          --          --           --             --            --          --      $(2,425)
                                                                                                                          =======
   Purchase of treasury stock..     --          --          --           --             --            --      (6,269)

   Allocation of ESOP stock....     --         (41)         --           --            283            --          --

   Cash dividends paid.........     --          --        (576)          --             --            --          --

   Earned portion of RRP.......     --        (240)         --           --             --           459          --
                                  ----    --------    --------      -------       --------       -------     -------
BALANCE, June 30, 1999.........   $ 66    $ 63,093    $ 31,401      $(2,217)      $ (6,925)      $(3,721)    $(6,269)
                                  ====    ========    ========      =======       ========       =======     =======

                             See accompanying Notes to Unaudited Financial Statements.
</TABLE>


                                                         5

<PAGE>


<TABLE>
<CAPTION>
                                 WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (Unaudited)

                                                                                For the Six Months
                                                                                   Ended June 30,
                                                                             --------------------------
                                                                                1999            1998
                                                                             -----------    -----------
                                                                                    (In thousands)
<S>                                                                          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income...........................................................        $ 1,519        $  2,291
Adjustments to reconcile net income to net cash used in operating
  activities:
  Depreciation...............................................................    319             225
  Accretion of discount on investment securities.............................   (589)           (997)
  Net (increase)/decrease in accrued interest receivable.....................   (155)           (487)
  Increase in mortgage servicing rights and other assets..................... (6,663)         (6,318)
  Provision for loan losses..................................................    250             250
  Net gain on sales of loans.................................................    (46)            (37)
  Net gain on sales of securities............................................   (829)           (634)
  Increase in accrued interest payable.......................................    178             377
  Increase/(decrease) in accrued expenses and other liabilities..............  1,444          (2,932)
                                                                             -------        --------
Total reconciliation adjustments............................................  (6,091)        (10,553)
                                                                             -------        --------
  Net cash provided by operating activities.................................  (4,572)         (8,262)
                                                                             -------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities............................  16,900          22,018
Purchases of securities..................................................... (83,059)       (109,071)
Proceeds from sale of trading securities and securities available-for-sale..  23,495          36,696
Principal repayments from mortgage-backed securities........................  13,038          11,380
Purchases of FHLBNY capital stock...........................................  (2,784)         (1,880)
Net increase in loans....................................................... (24,147)        (38,921)
Purchases of fixed assets, net..............................................    (365)           (131)
                                                                             -------        --------
  Net cash used in investing activities..................................... (56,922)        (79,909)
                                                                             -------        --------

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits.........................................  13,514          13,594
Net increase (decrease) in escrow deposits..................................     750           1,037
Net increase in borrowed funds..............................................  53,970          62,995
Dividends on common stock...................................................    (576)           (227)
Purchase of ESOP common stock...............................................      --          (1,563)
Purchase of treasury stock..................................................  (6,269)             --
ESOP allocation.............................................................     242             206
RRP allocation..............................................................     219              --
                                                                             -------        --------
  Net cash provided by financing activities.................................  61,850          76,042
                                                                             -------        --------
  Net increase (decrease) in cash .......................................... $   356        $(12,129)
                                                                             =======        ========

CASH AT BEGINNING OF PERIOD................................................. $10,511        $ 22,543
CASH AT END OF PERIOD.......................................................  10,867          10,414
                                                                             -------        --------
CHANGE IN CASH.............................................................. $   356        $(12,129)
                                                                             =======        ========

            See accompanying Notes to Unaudited Financial Statements.
</TABLE>


                                        6

<PAGE>

                         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. ("Company") and its wholly owned
subsidiary The Warwick Savings Bank ("Bank"). In July 1998, the Company changed
its fiscal year end from May 31st to December 31st, and, accordingly, the
accompanying unaudited consolidated financial statements have been prepared
based on the Company's new fiscal year end.

         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, 1999 are
not necessarily indicative of the results of operations that may be expected for
the entire year ending December 31, 1999. Certain information and note
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission.

         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 1998 Annual Report to Shareholders.

2.       EARNINGS PER SHARE

         The Company adopted SFAS No. 128, "Earnings per Share." Basic earnings
per share excludes dilution and is computed by dividing net income by the
weighted average number of 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 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

         The Company adopted Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income" ("SFAS No. 130") in 1998. All comparative
financial statements provided for earlier periods have been reclassified to
reflect application of the provisions of this statement.

         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 generally accepted accounting principles 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.



                                        7

<PAGE>

4.   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.

<TABLE>
<CAPTION>
                                                 At June 30, 1999      At December 31, 1998
                                               --------------------   ---------------------
                                                           Percent                Percent
                                                Amount     of Total    Amount     of Total
                                               --------   ---------   --------    --------
                                                           (Dollars in thousands)
<S>                                            <C>          <C>       <C>          <C>
Mortgage loans:
---------------
Conventional one- to four-family loans......   $186,461     64.16%    $166,466     63.25%
Mortgage loans held for sale................     10,850      3.73       13,737      5.22
VA and FHA loans............................        627      0.21          641      0.24
Home equity loans...........................     19,984      6.88       18,061      6.86
Residential construction loans..............     14,624      5.03       16,105      6.12
Undisbursed portion of construction loans...     (8,063)    (2.77)      (6,304)    (2.39)
                                               --------    ------     --------    ------
   Total mortgage loans.....................    224,483     77.24      208,706     79.30
                                               --------    ------     --------    ------

Consumer and other loans:
-------------------------
Commercial loans by type:
   Non-farm and non-residential.............     19,613      6.75       17,082      6.49
   One- to four-family residential..........      2,473      0.85        2,142      0.81
   Multi-family.............................      3,973      1.37        3,988      1.52
   Farm.....................................        810      0.28          996      0.38
   Acquisition, development and
    construction............................      5,327      1.83        4,339      1.65
   Term loans...............................        342      0.12          411      0.16
   Installment loans........................      3,964      1.36        2,435      0.94
   Demand loans.............................        438      0.15          853      0.32
   Time loans...............................        166      0.06           80      0.03
   SBA loans................................        235      0.08          328      0.12
   Lines-of-credit..........................      2,977      1.02        2,327      0.88
   Loans and draws disbursed................        855      0.29          194      0.07
   Non-accrual..............................        607      0.21          118      0.04
                                               -------     ------     --------    ------
   Total commercial loans...................     41,780     14.37       35,293     13.41
Automobile..................................     19,194      6.60       13,788      5.24
Student.....................................        230      0.08          332      0.13
Credit card.................................      1,154      0.40        1,296      0.49
Other consumer loans........................      3,795      1.31        3,775      1.43
                                               -------     ------     --------    ------
Total consumer loans                             24,373      8.39       19,191      7.29
                                               -------     ------     --------    ------
   Total consumer and other loans...........     66,153     22.76       54,484     20.70
                                               -------     ------     --------    ------
   Total loans..............................    290,636    100.00%     263,190    100.00%
                                                           ======                 ======
Allowance for loan losses.................       (1,800)                (1,727)
                                               --------               --------
   Total loans, net.........................   $288,836               $261,463
                                               ========               ========
</TABLE>


                                        8

<PAGE>



5.   NON-PERFORMING ASSETS

     The following table sets forth  information  regarding  non-accrual  loans,
other past due loans and other real estate owned at the dates indicated.


<TABLE>
<CAPTION>
                                                                      June 30,       December 31,
                                                                        1999            1998
                                                                   ---------------  -------------
                                                                       (Dollars in thousands)
<S>                                                                 <C>               <C>
Non-accrual mortgage loans delinquent more
than 90 days....................................................... $ 1,092           $   631

Non-accrual other loans delinquent more than 90 days...............     581                88
                                                                    -------           -------
Total non-accrual loans............................................   1,673               719
Total 90 days or more delinquent and still accruing................     277             1,362
                                                                    -------           -------
Total non-performing loans.........................................   1,950             2,081

Total foreclosed real estate, net of related allowance for losses..     518               371
                                                                    -------           -------
Total non-performing assets........................................ $ 2,468           $ 2,452
                                                                    =======           =======
Non-performing loans to total loans................................    0.68%             0.79%
Total non-performing assets to total assets........................    0.49%             0.55%
</TABLE>

6.   ALLOWANCE FOR LOAN LOSSES

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

                                                             At or For the Seven
                                          Six Months Ended      Months Ended
                                              June 30,          December 31,
                                         ------------------  ------------------
                                         1999       1998            1998
                                         -------- ---------  ------------------
                                                  (Dollars in thousands)
Allowance for loan losses:
--------------------------
Balance at beginning of period.......... $1,727     $1,372          $1,513
                                         ------     ------          ------
Charge-offs:
      Real estate mortgage loans........    157          0              30
      Commercial loans..................     25         51               5
      Consumer loans....................     27         29              64
                                         ------     ------          ------
      Total charge-offs.................    209         80              99

Recoveries:
      Real estate mortgage loans........     23          0               0
      Commercial loans..................      5          0               9
      Consumer loans....................      4         16              12
                                         ------     ------          ------
      Total recoveries..................     32         16              21

Provision for loan losses...............    250        250             292
                                         ------     ------          ------
Balance at end of Period................ $1,800     $1,558          $1,727
                                          =====      =====           =====

Ratio of net charge-offs during the
period to average loans outstanding.....   0.07%      0.03%           0.04%
Ratio of allowance for loan losses
to total loans at end of period.........   0.62%      0.71%           0.66%
Ratio of allowance for loan losses
to non-performing loans.................  92.33%    175.25%          82.99%



                                        9

<PAGE>

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

GENERAL

         Warwick Community Bancorp, Inc. ("Company"), headquartered in Warwick,
New York, 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. The Company is the bank holding company for The Warwick
Savings Bank ("Bank"), a New York State chartered stock savings bank. While the
following discussion of financial condition and results of operations includes
the collective results of the Company and the Bank, this discussion reflects
primarily the Bank's activities. Unless otherwise disclosed, the information
presented herein reflects the financial condition and results of operations of
the Company and the Bank on a consolidated basis.

FINANCIAL CONDITION

         For the six-month period ending June 30, 1999, total assets of the
Company increased $61.0 million, or 13.7%, from $445.1 million at December 31,
1998 to $506.2 million at June 30, 1999. This increase in total assets was
primarily attributable to a $27.4 million, or 10.4%, increase in total loans,
which increased from $263.2 million at December 31, 1998 to $290.6 million at
June 30, 1999, and a $23.6 million, or 15.2%, increase in total securities,
which increased from $155.5 million at December 31, 1998 to $179.1 million at
June 30, 1999. These increases resulted from continued growth in the loan
portfolio, particularly mortgage loans, and from the Bank's utilization of
additional wholesale leveraging transactions in order to enhance earnings. The
Federal Home Loan Bank of New York ("FHLBNY") stock portfolio increased by $2.8
million in conjunction with both the Company's larger asset size and the
utilization of such wholesale leveraging transactions.

         Deposits increased $13.5 million, or 5.5%, from $246.9 million at
December 31, 1998, to $260.4 million at June 30, 1999. This increase was
primarily attributable to an increase in NOW and money market accounts of $8.5
million, an increase of $3.9 million in savings accounts and an increase in
certificates of deposit of $2.2 million, partially offset by a decrease in
non-interest bearing accounts of $1.1 million.

         Borrowed funds, comprised primarily of securities sold under repurchase
agreements and FHLBNY advances, increased $54.0 million, from $104.8 million at
December 31, 1998 to $158.8 million at June 30, 1999. These increases were
primarily used in connection with the aforementioned wholesale leveraging
transactions which enabled the Company to bolster net interest income.

         Total stockholders' equity decreased by $8.8 million, or 10.4%, from
$84.2 million at December 31, 1998 to $75.4 million at June 30, 1999. The
decrease was primarily attributable to $6.3 million in open market purchases of
437,327 shares, or 6.62% of the Company's outstanding common stock in
conjunction with the Company's stock repurchase programs and the decline in
accumulated other comprehensive income of $3.9 million. The decrease in total
stockholders' equity was partially offset by net income of $1.5 million for the
six months ended June 30, 1999. Also contributing to the decrease in
stockholders' equity was the payment of quarterly cash dividends to shareholders
amounting to $576 thousand, which dividends were paid on March 30, 1999 and June
30, 1999.

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 tables set forth certain
information regarding the Company's average statements of financial condition
and its statements of income for the three months and six months


                                       10

<PAGE>

ended June 30, 1999 and 1998 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.

<TABLE>
<CAPTION>
                                                                         Three Months Ended June 30,
                                          ------------------------------------------------------------------------------------------

                                                             1999                                           1998
                                          --------------------------------------------  --------------------------------------------

                                                                           Average                                        Average
                                             Average                        Yield/          Average                        Yield/
                                             Balance        Interest         Cost           Balance        Interest         Cost
                                             -------        --------         ----           -------        --------         ----
                                                                           (Dollars in thousands)
<S>                                         <C>              <C>             <C>            <C>             <C>              <C>
Assets:
------
Interest-earning assets:
      Mortgage loans, net.................  $217,602         $3,927          7.22%          $163,276        $3,049           7.47%
      Consumer and other loans, net.......    60,943          1,310          8.60             45,183         1,097           9.71
      Mortgage-backed securities..........    82,687          1,429          6.91             93,106         1,661           7.14
      Federal funds sold..................        --             --            --                 --            --             --
      Interest earning accounts at banks..       528              7          5.30                614             9           5.86
      Investment securities...............    94,202          1,488          6.32             76,713         1,446           7.54
                                            --------         ------                         --------        ------
          Total interest-earning assets...   455,962          8,161          7.16            378,892         7,262           7.67
                                                             ------                                         ------
      Non-interest earning assets.........    27,430                                          22,809
                                            --------                                        --------
          Total assets.............         $483,392                                        $400,701
                                            ========                                        ========

Liabilities and retained earnings:
---------------------------------
Interest-bearing liabilities:
      Passbook accounts..................   $ 85,563         $  542          2.54%          $ 79,874        $  581           2.91%
      Escrow deposits.....................     2,150             21          3.91              2,055            25           4.87
      NOW accounts .......................    22,747             93          1.64             17,211            68           1.58
      Money market accounts...............    40,220            375          3.73             26,541           218           3.29
      Certificate accounts................    72,728            844          4.64             71,197           883           4.96
                                            --------         ------                         --------        ------
      Total deposits......................   223,408          1,875          3.36            196,878         1,775           3.61
      Borrowed funds......................   142,274          1,897          5.33             80,946         1,158           5.72
                                            --------         ------                         --------        ------
          Total interest-bearing
          liabilities.....................   365,682          3,772          4.13            277,824         2,933           4.22
                                                             ------                                         ------
Non-interest bearing liabilities..........    38,471                                          35,640
                                            --------                                        --------
          Total liabilities...............   404,153                                         313,464
Retained earnings.........................    79,239                                          87,237
                                            --------                                        --------
          Total liabilities and
          retained earnings...............  $483,392                                        $400,701
                                            ========                                        ========
Net interest income/interest rate spread..                   $4,389          3.03%                          $4,329           3.45%
                                                             ======        ======                           ======         ======
Net interest-earning assets/net
   interest margin........................  $ 90,280                         3.85%          $101,068                         4.57%
                                            ========                       ======           ========                       ======
Ratio of interest-earning assets to
  interest-bearing liabilities............                                 124.69%                                         136.38%
                                                                           ======                                          ======
</TABLE>



                                       11

<PAGE>

<TABLE>
<CAPTION>
                                                                          Six Months Ended June 30,
                                          ------------------------------------------------------------------------------------------

                                                             1999                                           1998
                                          --------------------------------------------  --------------------------------------------

                                                                           Average                                        Average
                                             Average                        Yield/          Average                        Yield/
                                             Balance        Interest         Cost           Balance        Interest         Cost
                                             -------        --------         ----           -------        --------         ----
                                                                           (Dollars in thousands)
<S>                                         <C>              <C>             <C>            <C>             <C>              <C>
Assets:
------
Interest-earning assets:
      Mortgage loans, net.................  $213,328        $ 7,772          7.29%          $152,470       $ 5,758           7.55%
      Consumer and other loans, net.......    58,156          2,474          8.51             43,117         2,050           9.51
      Mortgage-backed securities..........    78,191          2,690          6.88             85,700         3,103           7.24
      Federal funds sold..................        --             --            --              2,573            70           5.44
      Interest earning accounts at banks..       505             12          4.75                645            19           5.89
      Investment securities...............    90,271          2,797          6.20             71,786         2,626           7.32
                                            --------         ------                         --------        ------
         Total interest-earning assets....   440,451         15,745          7.15            356,291        13,626           7.65
                                                            -------                                         ------
      Non-interest earning assets.........    24,820                                          22,398
                                            --------                                        --------
         Total assets.....................  $465,271                                        $378,689
                                            ========                                        ========

Liabilities and retained earnings:
---------------------------------
Interest-bearing liabilities:
      Passbook accounts...................  $ 84,241        $ 1,140          2.71%          $ 77,925      $  1,134           2.91%
      Escrow deposits.....................     1,759             51          5.80              1,593            41           5.15
      NOW accounts .......................    21,949            178          1.62             16,365           129           1.58
      Money market accounts...............    38,418            703          3.66             25,644           419           3.27
      Certificate accounts................    72,229          1,682          4.66             72,530         1,813           5.00
                                            --------        -------                         --------      --------
      Total deposits......................   218,596          3,754          3.43            194,057         3,536           3.64
      Borrowed funds......................   129,320          3,455          5.34             64,562         1,851           5.73
                                            --------        -------                         --------      --------
         Total interest-bearing
         liabilities......................   347,916          7,209          4.14            258,619         5,387           4.17
                                                            -------                                       --------
Non-interest bearing liabilities..........    37,655                                          34,803
                                            --------                                        --------
         Total liabilities................   385,571                                         293,422
Retained earnings.........................    79,700                                          85,267
                                            --------                                        --------
         Total liabilities and
         retained earnings................  $465,271                                        $378,689
                                            ========                                        ========

Net interest income/interest rate spread..                  $ 8,536          3.01%                        $  8,239          3.48%
                                                            =======        ======                         ========        ======
Net interest-earning assets/net
   interest margin........................  $ 92,535                         3.88%          $ 97,672                        4.62%
                                            ========                        =====           ========                      ======
Ratio of interest-earning assets to
  interest-bearing liabilities............                                 126.60%                                        137.77%
                                                                           ======                                         ======
</TABLE>



                                       12

<PAGE>

         RATE/VOLUME ANALYSIS. The following table presents the extent to which
changes in interest rates and changes in the volume of interest-earning assets
and interest-bearing liabilities have affected the Company's interest income and
interest expense during the periods indicated. Information is provided in each
category with respect to (i) changes attributable to changes in volume (changes
in volume multiplied by prior rate), (ii) changes attributable to changes in
rate (changes in rate multiplied by prior volume) and (iii) the net change. The
changes attributable to the combined impact of volume and rate have been
allocated proportionately to the changes due to volume and the changes due to
rate.

<TABLE>
<CAPTION>
                                            Three Months Ended June 30, 1999              Six Months Ended June 30, 1999
                                                       Compared to                                    Compared to
                                            Three Months Ended June 30, 1998              Six Months Ended June 30, 1998
                                            --------------------------------              ------------------------------
                                                                                     Increase (Decrease) in
                                       Increase (Decrease) in Net                      Net Interest Income
                                         Interest Income Due to                             Due to
                                       --------------------------                    ----------------------
                                       Volume           Rate           Net           Volume        Rate           Net
                                       ------           ----           ---           ------        ----           ---
                                                  (In thousands)                             (In thousands)
<S>                                   <C>              <C>            <C>            <C>         <C>            <C>
Interest-earning assets:
-----------------------
Mortgage loans, net.................  $1,014           $(136)         $ 878          $2,298      $  (284)       $2,014
Consumer and other loans, net.......     383            (170)           213             715         (291)          424
Mortgage-backed securities..........    (186)            (46)          (232)           (272)        (141)         (413)
Federal funds sold..................      --              --             --             (70)          --           (70)
Interest earning accounts at banks..      (1)             (1)            (2)             (4)          (3)           (7)
Investment securities...............     330            (288)            42             676         (505)          171
                                      ------           -----          -----          ------       ------        ------
          Total.....................  $1,540           $(641)         $ 899          $3,343      $(1,224)       $2,119
                                      ------           -----          -----          ------       ------        ------

Interest-bearing liabilities:
----------------------------
Passbook accounts...................      40             (79)           (39)             92          (86)            6
Escrow accounts.....................       1              (5)            (4)              4            6            10
NOW accounts........................      22               3             25              44            5            49
Money market accounts...............     112              45            157             209           75           284
Certificates of deposit.............      19             (58)           (39)             (8)        (123)         (131)
Borrowed funds......................     878            (139)           739           1,857         (253)        1,604
                                      ------           -----          -----          ------       ------        ------
          Total.....................   1,072            (233)           839           2,198         (376)        1,822
                                      ------           -----          -----          ------       ------        ------

Net change in net interest income...  $  468           $(408)         $  60          $1,145       $ (848)       $  297
                                      ======           =====          =====          ======       ======        ======
</TABLE>

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND
1998

         GENERAL. For the three months ended June 30, 1999, the Company
recognized net income of $520 thousand, or $0.10 per share, as compared to net
income of $1.3 million, or $0.21 per share for the three months ended June 30,
1998. The decrease in net income was attributable to the 34.6% increase in other
expenses and the 24.5% decrease in other income, and was partially offset by the
53.9% decrease in the provision for income taxes and the 1.4% increase in net
interest income.

         INTEREST INCOME. Interest income amounted to $8.2 million for the three
months ended June 30, 1999, as compared to $7.3 million for the three months
ended June 30, 1998. This increase of $900 thousand, or


                                       13

<PAGE>



12.4%, was primarily the result of the increase of $877 thousand in interest
earned on the Company's mortgage loan portfolio, and the increase of $213
thousand in the amount of interest earned on other loans, partially offset by
the decrease of $189 thousand in the amount of interest and dividends earned on
securities, as compared to the respective totals earned over the three-month
period ended June 30, 1998.

         Although the average yield of the institution's mortgage loan portfolio
over the three months ended June 30, 1999 decreased from 7.47% to 7.22%, as
compared to the average yield realized over the three-month period ended June
30, 1998, mortgage loan interest income increased because of the $54.3 million
growth, or 33.3%, from $163.3 million to $217.6 million, in average mortgage
loan balances over the same time periods. The growth experienced resulted from
strong loan demand as home purchasers and existing homeowners capitalized on the
opportunities afforded by lower mortgage loan interest rates.

         The average balances of investment securities, including
mortgage-backed securities, at the end of the three-month period ended June 30,
1999 was $176.9 million, as compared to $169.8 million at the end of the
three-month period ended June 30, 1998, and the increase resulted largely from
the Bank's utilization of additional wholesale leverage transactions in order to
enhance earnings.

         INTEREST EXPENSE. Interest expense over the three-month period ended
June 30, 1999 on total interest-bearing deposits and borrowed funds increased by
$839 thousand when compared to the same three-month period one year earlier.
Over the same periods, the average balances of the institution's total
interest-bearing liabilities increased by $87.9 million, or 31.6%, from $277.8
million to $365.7 million, and the average balances of the institution's
borrowed funds increased by $61.3 million, or 75.8%. The increase in interest
expense was primarily the result of interest paid on deposits and borrowings
associated with funding the loan and securities growth.

         NET INTEREST INCOME. Net interest income for the three months ended
June 30, 1999 increased $60 thousand, or 1.4%, to $4.4 million compared to the
three months ended June 30, 1998. The interest rate spread dropped to 3.03% from
3.45%, and the net interest margin decreased to 3.85% from 4.57%, respectively,
for the three-month period ended June 30, 1999 compared to the three-month
period ended June 30, 1998. This reflects the lower interest rate environment
during the second quarter of 1999 as compared to the equivalent quarter in 1998.

         PROVISION FOR LOAN LOSSES. The provision for loan losses for the three
months ended June 30, 1999 and 1998 was $125 thousand. This provision is a
result of management's assessment of the loan portfolio, the level of the Bank's
allowance for loan losses and its assessment of the local economy and market
conditions.

         OTHER INCOME. Other income, net, for the three months ended June 30,
1999 totaled $799 thousand as compared to $1.1 million for the three months
ended June 30, 1998. This decrease was primarily attributable to the $332
thousand unrealized loss that was recognized upon the valuation of residential
mortgage loans held-for-sale at the lower of cost or market value in accordance
with the Financial Accounting Standards Board's ("FASB") Statement No. 65,
"Accounting for Certain Mortgage Banking Activities," and the $190 thousand
decrease in income derived from securities transactions. Partially offsetting
this decrease was a $189 thousand increase in service and fee income.

         OTHER EXPENSES. Total other expenses increased by $1.1 million for the
three-month period ended June 30, 1999 as compared to June 30, 1998. Other
expenses and professional fees increased $348 thousand and $152 thousand,
respectively, for the second quarter of 1999. The increase in other expenses was
primarily attributable to expenses related to the Company's planned expansion
into Bergen County, New Jersey, through the formation of The Towne Center Bank,
a New Jersey chartered commercial bank, as a subsidiary of the Company, and to
augmenting the Bank's market-share throughout and beyond the New York State
communities traditionally served by the Bank. Salaries and employee benefits
expense grew $85 thousand for the three months ended June 30, 1999. This is
primarily the result of additions to staff


                                                        14

<PAGE>



necessary to attract and service a growing number of loan account and deposit
account customers. ESOP benefits recognized for the second quarter of 1999 were
higher than the comparable prior period because of the increase in the number of
shares released as the ESOP loan is repaid. In addition, BRP and RRP benefits
expense increased by $164 thousand for the three months ended June 30, 1999, as
compared to the same period in 1998, as the RRP was not approved by the
Company's shareholders until June 1998 and 20% of the shares awarded under the
RRP vested in June 1999, resulting in the recognition of compensation expense by
the Company. Advertising expense and occupancy expense increased $64 thousand
and $46 thousand, respectively, for the three months ended June 30, 1999. Data
processing expense increased $42 thousand for the three months ended June 30,
1999, primarily due to the expense associated with becoming Year 2000 compliant.

         PROVISION FOR INCOME TAXES. The decrease in the provision for income
taxes for the three-month period ended June 30, 1999, as compared to the same
period ended June 30, 1998, was primarily attributable to the decrease of 57.5%
in pretax income.


COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998

         GENERAL. For the six months ended June 30, 1999, the Company recognized
net income of $1.5 million, or $0.27 per share, as compared to net income of
$2.3 million, or $0.37 per share for the six months ended June 30, 1998. The
decrease in net income was attributable to the 31.3% increase in other expenses
which was partially offset by the 28.7% decrease in the provision for income
taxes, the 17.9% increase in other income, and the 3.6% increase in net interest
income.

         INTEREST INCOME. Interest income amounted to $15.7 million for the six
months ended June 30, 1999, as compared to $13.6 million for the six months
ended June 30, 1998. This increase of $2.1 million, or 15.6%, was primarily the
result of the increase of $2.0 million in interest earned on the Company's
mortgage loan portfolio and the increase of $424 thousand in the amount of
interest earned on other loans, offset, somewhat, by a $242 thousand decrease in
interest and dividends earned on the securities portfolio and a decrease of $70
thousand in interest earned on federal funds sold.

         Although the average yield of the institution's mortgage loan portfolio
over the six months ended June 30, 1999 decreased from 7.55% to 7.29%, as
compared to the average yield realized over the six-month period ended June 30,
1998, mortgage loan interest income increased because of the $60.9 million
growth, or 39.9%, from $152.5 million to $213.3 million, in average mortgage
loan balances over the same time periods. The growth experienced resulted from
strong loan demand as home purchasers and existing homeowners capitalized on the
opportunities afforded by lower mortgage loan interest rates.

         The average balances of investment securities, including
mortgage-backed securities, at the end of the six-month period ended June 30,
1999 was $168.5 million, as compared to $157.5 million at the end of the
six-month period ended June 30, 1998, and the increase resulted largely from the
Bank's utilization of additional wholesale leverage transactions in order to
enhance earnings.

         INTEREST EXPENSE. Interest expense over the six-month period ended June
30, 1999 on total interest-bearing deposits and borrowed funds increased by $1.8
million when compared to the same six-month period one year earlier. Over the
same periods, the average balances of the institution's total interest-bearing
liabilities increased by $89.3 million, or 34.5%, from $258.6 million to $347.9
million, and the average balances of the institution's borrowed funds increased
by $64.8 million, or 100.3%. The increase in interest expense was primarily the
result of interest paid on deposits and borrowings associated with funding the
loan and securities growth.

         NET INTEREST INCOME. Net interest income for the six months ended June
30, 1999 increased $297 thousand, or 3.6%, to $8.5 million compared to the six
months ended June 30, 1998. The interest rate spread


                                       15

<PAGE>



dropped to 3.01% from 3.48%, and the net interest margin decreased to 3.88% from
4.62%, respectively, for the six-month period ended June 30, 1999 compared to
the six-month period ended June 30, 1998. This reflects the lower interest rate
environment during the second quarter of 1999 as compared to the equivalent
quarter in 1998.

         PROVISION FOR LOAN LOSSES. The provision for loan losses for the six
months ended June 30, 1999 and 1998 was $250 thousand. This provision is a
result of management's assessment of the loan portfolio, the level of the Bank's
allowance for loan losses and its assessment of the local economy and market
conditions.

         OTHER INCOME. Other income, net, for the six months ended June 30, 1999
totaled $2.2 million as compared to $1.8 million for the six months ended June
30, 1998. The increase of $281 thousand in the Company's service and fee income
resulted primarily from deposit and loan account growth, growth in the amount of
mortgage loans serviced and the new fee income associated with the Company's
debit card. Income from securities transactions increased by $195 thousand, or
30.8%, as compared to the same six-month period in 1998. The total for the
six-month period ended June 30, 1999 was adversely impacted by the
aforementioned $332 thousand unrealized loss that was recognized upon the
valuation of residential mortgage loans held-for-sale at the lower of cost or
market.

         OTHER EXPENSES. Total other expenses increased by $1.9 million for the
six-month period ended June 30, 1999 as compared to June 30, 1998. Accounting
for much of the increase in other expenses is salaries and employee benefits
expense, which grew $455 thousand for the six months ended June 30, 1999. This
is primarily the result of additions to staff necessary to attract and service a
growing number of loan account and deposit account customers. ESOP benefits
recognized for the first six months of 1999 were higher than the comparable
prior period because of the increase in the number of shares released as the
ESOP loan is repaid. In addition, BRP and RRP benefits expense increased by $321
thousand for the six months ended June 30, 1999, as compared to the same period
in 1998, as the RRP was not approved by the Company's shareholders until June
1998 and 20% of the shares awarded under the RRP vested in June 1999, resulting
in the recognition of compensation expense by the Company. Other expenses and
professional fees increased $530 thousand and $32 thousand, respectively, for
the six-month period ended June 30, 1999. These increases resulted primarily
from start-up expenses, including legal expenses and consulting fees, associated
with the formation of The Towne Center Bank. Data processing and occupancy
expense increased $127 thousand and $81 thousand, respectively, for the six
months ended June 30, 1999 and was attributable to the Company's town of
Wallkill branch relocation, the relocation of the Company's mortgage loan
origination and underwriting department and the expense associated with becoming
Year 2000 compliant. Advertising expense increased $177 thousand for the six
months ended June 30, 1999, as a result of the continued promotion of the Bank's
name in the highly competitive mortgage loan and commercial loan market.

         PROVISION FOR INCOME TAXES. The decrease in the provision for income
taxes for the six-month period ended June 30, 1999, as compared to the same
period ended June 30, 1998, was primarily attributable to the decrease of 31.6%
in pretax income.

LIQUIDITY AND CAPITAL RESOURCES

         Liquidity is managed from a composite of customer deposits, from cash
and short-term interest-earning assets, from mortgage loans held for sale, from
the investment securities portfolio held available for sale and from the
Company's ability to borrow from the FHLBNY. At June 30, 1999, management had
utilized $15.9 million in repurchase agreements and $142.9 million in FHLBNY
advances to augment the Company's earnings, and management intends to enter into
additional transactions in order to leverage the Company's capital base further.



                                       16

<PAGE>



         At June 30, 1999, the Company's total approved loan origination
commitments outstanding totaled $61.8 million. At the same time, the unadvanced
portion of residential construction loans totaled $8.1 million. Certificates of
deposit scheduled to mature in one year or less at June 30, 1999 totaled $66.5
million. Based on historical experience, management believes that a significant
portion of such deposits will remain with the Bank.

         At June 30, 1999, the Company had cash and due from banks of $10.9
million and securities available for sale of $178.0 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

         The Bank is 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, 1999, the Company exceeded the minimum regulatory capital
requirements imposed by the Federal Reserve Board, which are substantially
similar to the requirements of the FDIC, with a Tier 1 capital level of $77.6
million, or 16.07% of average assets, which is well above the required level of
$19.3 million, or 4% of average assets. The Company's ratio of Tier 1 capital to
risk-weighted assets of 29.39% at June 30, 1999 is also well above the required
level of 4%. The Company's ratio of total capital to risk- weighted assets is
30.19%, which is well above the required level of 8%. In addition, the Bank's
capital ratios qualify it to be treated as "well capitalized" for regulatory
purposes. The following table shows the Bank's regulatory capital positions and
ratios at June 30, 1999.


<TABLE>
<CAPTION>
                                         Actual Capital                Required Capital               Excess Capital

                                     Amount          Percent         Amount         Percent        Amount        Percent
                                     ------          -------         ------         -------        ------        -------
<S>                                  <C>              <C>            <C>             <C>           <C>            <C>
Total Capital..................
     (to risk-weighted assets)       $55,442          21.40%         $20,723         8.00%         $34,719        13.40%
Tier 1 Capital.................
     (to risk-weighted assets)        53,083          20.49           10,362         4.00           42,721        16.49
Tier 1 Capital.................
     (to average assets)              53,083          11.12           19,095         4.00           33,988         7.12
</TABLE>


OTHER MATTERS

         YEAR 2000 COMPLIANCE. The Year 2000 issue is the result of the
inability of certain computer systems to recognize the year 2000. Many existing
computer programs and systems were initially programmed with six digit dates
that provided only two digits to identify the calendar year in the date field
without considering the upcoming change in the century. As a result, such
programs and systems may recognize a date using "00" as the year 1900 instead of
the year 2000, which could result in system failures or miscalculations. Like
most financial service providers, the Company and its operations may be
significantly affected by the Year 2000 issue due to the nature of financial
information. Software, hardware and equipment both within and outside the
Company's direct control and with whom the Company electronically or
operationally interfaces (i.e., third party vendors providing data processing,
information


                                       17

<PAGE>



system management, maintenance of computer systems and credit bureau
information) are likely to be affected. Furthermore, if computer systems are not
adequately changed to identify the year 2000, many computer applications could
fail or create erroneous results. As a result, many calculations which rely upon
the date field information, such as interest, payment or due dates and other
operating functions, may generate results which could be significantly
misstated, and the Company could experience a temporary inability to process
transactions, send invoices or engage in similar normal business activities. In
addition, under certain circumstances, failure to adequately address the Year
2000 issue could adversely affect the viability of the Company's suppliers and
creditors and the creditworthiness of its borrowers. Thus, if not adequately
addressed, the Year 2000 issue could result in a material adverse impact upon
the Company's products, services and competitive condition and, therefore, its
results of operations, and could be deemed to imperil the safety and soundness
of the Bank.

         The FDIC, the Bank's primary federal regulator, along with the other
federal bank regulatory agencies, has published substantive guidance on the Year
2000 issue and has included Year 2000 compliance as a substantive area of
examination. These publications, in addition to providing guidance as to
examination criteria, have outlined requirements for the creation and
implementation of a compliance plan and target dates for testing and
implementation of corrective action. As a result of the oversight by and
authority vested in the federal bank regulatory agencies, a financial
institution that does not become Year 2000 compliant could be subject to
administrative remedies similar to those imposed on financial institutions
otherwise found not to be operating in a safe and sound manner, including
remedies available under prompt corrective action regulations.

         The Company has developed and is implementing a plan (the "Plan") to
address the Year 2000 issue and its effects on the Company. The Plan includes
five components which address issues involving awareness, assessment,
renovation, validation and implementation. The Company has completed the
awareness, assessment and renovation phases of the Plan. During the awareness
and assessment phases of the Plan, the Company inventoried all material
information systems and those of third-party vendors. As part of the Plan, the
Company has had formal communications with all of its significant suppliers to
determine the extent to which the Company is vulnerable to those third parties'
failure to remedy their own Year 2000 issue and has been following the progress
of those vendors with their Year 2000 compliance status. The Company is now
actively involved in the validation and implementation phases of the Plan. In
accordance with the regulatory guidelines issued by the federal banking
regulators, the Bank and the Company have completed testing of its mission
critical systems as of June 30, 1999 and believes it is now Year 2000 ready.

         Despite its best efforts to ensure Year 2000 compliance, it is possible
that one or more of the Company's internal or external systems may fail to
operate or to operate correctly, which could have a material adverse impact on
the operations of the Company or the Bank. At this time, while the Company
believes it has become Year 2000 compliant, the probability of such likelihood
cannot be determined. In the event that system failures related to the Year 2000
issue occur, the Company has developed contingency plans, which involve, among
other actions, utilization of an alternate service provider or alternate
products available through the current vendor.

         The Company has reviewed its customer base to determine whether they
pose significant Year 2000 risks. The Company's customer base consists primarily
of individuals who utilize the Company's services for personal, household or
consumer uses. Individually, such customers are not likely to pose significant
Year 2000 risks directly. It is not possible at this time to gauge the indirect
risks which could be faced if the employers of such customers encounter
unresolved Year 2000 issues.

         Monitoring and managing the Year 2000 issue will result in additional
direct and indirect costs to the Company. Direct costs include potential charges
by third party software vendors for product


                                       18

<PAGE>



enhancements, costs involved in testing software products for Year 2000
compliance and any resulting costs for developing and implementing contingency
plans for critical software products that are not enhanced. Indirect costs will
principally consist of time devoted by existing employees in monitoring software
vendor progress, testing enhanced software products and implementing any
necessary contingency plans. The Company estimates that total costs related to
the Year 2000 issue will not exceed $165,000. Both direct and indirect costs of
addressing the Year 2000 issue will be charged to earnings as incurred. To date,
over 80% of the total estimated costs associated with the Year 2000 have already
been expensed.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
           ----------------------------------------------------------

         Quantitative and qualitative disclosure about market risk is presented
at December 31, 1998 in the Company's Annual Report on Form 10-K, which was
filed with the Securities and Exchange Commission on March 31, 1999. There have
been no material changes in the Company's market risk at June 30, 1999 as
compared to December 31, 1998.



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

           Not applicable


ITEM 5.    OTHER INFORMATION
           -----------------

           Not applicable.




                                       19

<PAGE>



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

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

                  27.      Financial Data Schedule (submitted only with filing
                           in electronic format)

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

                           Not applicable.


                                       20

<PAGE>



                                   SIGNATURES


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




                                      WARWICK COMMUNITY BANCORP, INC.
                                      (Registrant)



Date: August 16, 1999                 By:  /s/ Ronald J. Gentile
                                           -------------------------------------
                                           Ronald J. Gentile
                                           President and Chief Operating Officer






Date: August 16, 1999                 By:  /s/ Arthur W. Budich
                                           -------------------------------------
                                           Arthur W. Budich
                                           Senior Vice President and
                                           Chief Financial Officer


                                       21

<PAGE>



                                  EXHIBIT INDEX

27.      Financial Data Schedule (submitted only with filing in electronic
         format)



                                       22