UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

For the quarterly period ended March 31, 2000       Commission File No. 0-23271

                       RICHMOND COUNTY FINANCIAL CORP.
            (Exact name of Registrant as specified in its charter)


                Delaware                               06-1498455
       (State of Incorporation)          (I.R.S. Employer Identification Number)


                              1214 Castleton Avenue
                        Staten Island, New York 10310
            (Address of principal executive offices) (Zip Code)

                                 718-448-2800
            (Registrant's telephone number, including area code)


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

                                    Yes  X      No
                                       -----      -----



As  of  May  10,  2000,  there  were  28,275,272  shares  of  the  common  stock
outstanding.

<PAGE>2


                                    FORM 10-Q
                         RICHMOND COUNTY FINANCIAL CORP.
                                     INDEX

                                                                          Page

PART I.  FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

Consolidated Statements of Financial Condition
at March 31, 2000 and June 30, 1999.....................................   3

Consolidated Statements of Operations
for the three and nine months ended March 31, 2000 and 1999.............   4

Consolidated Statement of Changes in Stockholders' Equity
for the nine months ended March 31, 2000 and 1999.......................   5

Consolidated Statements of Cash Flows
for the nine months ended March 31, 2000 and 1999.......................   6

Notes to Unaudited Consolidated Financial Statements....................   7

ITEM 2.  Management's Discussion and Analysis
of Financial Condition and Results of Operations........................   9

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk.....  18

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings..............................................  19

ITEM 2.  Changes in Securities and Use of Proceeds......................  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...............................  19

Exhibit Index...........................................................  20

Signature Page..........................................................  21

================================================================================

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 potential changes in
interest rates, competitive factors in the financial services industry,  general
economic  conditions,  the effect of new legislation and other risks detailed in
documents filed by the Company with the Securities and Exchange  Commission from
time to time.
================================================================================
<PAGE>3
                     RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           (In Thousands, Except Share Data)
<TABLE>
<CAPTION>
                                                                         MARCH 31,       JUNE 30,
                                                                           2000           1999
                                                                        -----------    -----------
                                                                        (Unaudited)
<S>                                                                     <C>            <C>

                          ASSETS

Cash and due from banks ............................................    $   50,729     $   55,773
Federal funds sold .................................................             -         17,775
Securities available for sale:
     Investment securities .........................................       252,096        297,611
     Mortgage-backed and mortgage-related securities ...............       780,397        866,844
Mortgage loans:
     1-4 family ....................................................       908,557        853,103
     Multi-family ..................................................       501,070        290,066
     Commercial real estate ........................................       109,016        107,280
     Construction ..................................................        62,525         51,044
                                                                         ---------     ----------
Total mortgage loans ...............................................     1,581,168      1,301,493
Other loans ........................................................        21,096         26,374
     Less: Unearned loan costs/(fees), net .........................         1,024           (455)
           Allowance for loan losses ...............................       (14,556)       (13,885)
                                                                         ---------     ----------
Loans, net .........................................................     1,588,732      1,313,527
Federal Home Loan Bank stock .......................................        43,873         38,388
Banking premises and equipment, net ................................        26,943         27,353
Accrued interest receivable ........................................        18,211         15,568
Other real estate owned ............................................           705            997
Goodwill ...........................................................        41,165         43,382
Other assets .......................................................        99,671         82,877
                                                                        ----------     ----------
            TOTAL ASSETS ...........................................    $2,902,522     $2,760,095
                                                                        ==========     ==========
              LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits ....................................................    $  204,004     $  169,007
Savings, N.O.W. and Money market accounts ..........................       878,543        851,993
Certificates of deposit ............................................       664,357        598,470
                                                                        ----------     ----------
          Total deposits ...........................................     1,746,904      1,619,470
Borrowings .........................................................       825,532        757,832
Accrued expenses and other liabilities .............................        13,152         12,582
                                                                        ----------     ----------
          Total liabilities ........................................     2,585,588      2,389,884

                     STOCKHOLDERS' EQUITY

Preferred stock, $.01 par value, 5,000,000 shares authorized;
none issued ........................................................             -              -
Common stock, $.01 par value, 75,000,000 shares authorized;
  32,737,134 shares issued; 28,913,272 and 31,662,839 shares
  outstanding at March 31, 2000 and June 30, 1999, respectively ....           327            327
Additional paid-in-capital .........................................       330,111        330,122
Retained earnings-substantially restricted .........................       139,506        122,784
Unallocated common stock held by
  Employee Stock Ownership Plan ("ESOP") ...........................       (30,681)       (31,978)
Unearned compensation MRP Stock ....................................       (14,016)       (16,885)
Treasury stock, at cost, 3,823,862 and 1,074,295 shares
  at March 31, 2000 and June 30, 1999, respectively.................       (67,016)       (17,967)
Accumulated other comprehensive loss:
  Unrealized loss on securities available for sale, net of tax .....       (41,297)       (16,192)
                                                                        ----------     ----------
          Total stockholders' equity ...............................       316,934        370,211
                                                                        ----------     ----------
              TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............    $2,902,522     $2,760,095
                                                                        ==========     ==========
</TABLE>

         See accompanying notes to unaudited consolidated financial statements.

<PAGE>4
                   RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
                                                                  FOR THE              FOR THE
                                                             THREE MONTHS ENDED    NINE MONTHS ENDED
                                                                  MARCH 31,            MARCH 31,
                                                            --------------------  ------------------
                                                                (Unaudited)          (Unaudited)
                                                              2000       1999       2000      1999
                                                            ---------  ---------  --------  --------
<S>                                                          <C>        <C>        <C>       <C>

INTEREST INCOME:
   Loans                                                     $29,470    $17,638    $83,563   $47,399
   Debt and equity securities                                  6,062      4,246     18,643    12,781
   Mortgage-backed and mortgage-related securities            13,546      8,844     41,817    26,923
   Federal funds sold and interest-earning bank balances          58        260        305       689
                                                            ---------  ---------  ---------  --------
       Total interest income                                  49,136     30,988    144,328    87,792
                                                            ---------  ---------  ---------  --------
INTEREST EXPENSE:
   Deposits                                                   13,946      7,769     39,873    23,641
   Borrowed funds                                             11,390      6,654     32,805    17,012
                                                            ---------  ---------  ---------  --------
       Total interest expense                                 25,336     14,423     72,678    40,653
                                                            ---------  ---------  ---------  --------
   Net interest income                                        23,800     16,565     71,650    47,139
   Provision for loan losses                                     300        600        900     1,950
                                                            ---------  ---------  ---------  --------
   Net interest income after provision for loan losses        23,500     15,965     70,750    45,189
                                                            ---------  ---------  ---------  --------
NON-INTEREST INCOME:
   Fee income                                                  2,323      1,332      7,435     3,355
   Net gain on sale of securities and loans                       24         81        734     2,604
   Other                                                         812        100      2,366       110
                                                            ---------  ---------  ---------  --------
       Total non-interest income                               3,159      1,513     10,535     6,069
                                                            ---------  ---------  ---------  --------
NON-INTEREST EXPENSE:
   Salaries and employee benefits                              6,871      5,197     20,877    14,168
   Occupancy costs                                             1,559        985      4,560     2,616
   Computer service fees                                       1,391        959      4,180     2,599
   Advertising                                                   467        354      1,386     1,195
   FDIC insurance premiums                                        99         54        337       131
   Other                                                       1,717      1,063      5,184     3,178
                                                            ---------  ---------  ---------  --------
       Total general and administrative                       12,104      8,612     36,524    23,887
   Amortization of goodwill and other intangibles                821        195      2,456       352
                                                            ---------  ---------  ---------  --------
       Total non-interest expense                             12,925      8,807     38,980    24,239
                                                            ---------  ---------  ---------  --------
   Income before income taxes                                 13,734      8,671     42,305    27,019
   Provision for income taxes                                  4,925      3,291     15,359    10,265
                                                            ---------  ---------  ---------  --------
NET INCOME                                                   $ 8,809    $ 5,380    $26,946   $16,754
                                                            =========  =========  =========  ========
EARNINGS PER SHARE:
   Basic                                                     $  0.34    $  0.24    $  0.99   $  0.73
   Diluted                                                   $  0.34    $  0.24    $  0.98   $  0.73
</TABLE>

    See accompanying notes to unaudited consolidated financial statements.

<PAGE>5


                RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                        (In Thousands, Except Share Data)
<TABLE>
<CAPTION>
                                                           RETAINED      ACCUMULATED    UNALLOCATED   UNEARNED
                                              ADDITIONAL   EARNINGS         OTHER         COMMON       COMMON
                                      COMMON   PAID-IN   SUBSTANTIALLY  COMPREHENSIVE   STOCK HELD   STOCK HELD  TREASURY
                                      STOCK    CAPITAL    RESTRICTED    (LOSS)/INCOME     BY ESOP      BY MRP     STOCK      TOTAL
                                     -----------------------------------------------------------------------------------------------

<S>                                  <C>      <C>         <C>           <C>             <C>          <C>         <C>       <C>

BALANCE AT JUNE 30, 1999             $   327  $ 330,122   $ 122,784     $ (16,192)      $ (31,978)   $ (16,885)  $(17,967) $370,211

Comprehensive income:
  Net income                               -          -      26,946             -               -            -          -    26,946
  Net unrealized loss on
     certain securities, net of tax        -          -           -       (25,105)              -            -          -   (25,105)
                                                                                                                           ---------
Comprehensive income                                                                                                          1,841
                                                                                                                           ---------
Adjustments                                -        624           -             -               -            -          -       624
Allocation of ESOP and MRP stock           -       (276)          -             -           1,297        2,869          -     3,890
Common stock repurchased
     (2,797,184 shares)                    -          -           -             -               -            -    (49,871)  (49,871)
Treasury stock issued for
  options exercised (47,617 shares)        -       (359)          -             -               -            -        822       463
Cash dividends paid on common stock        -          -     (10,224)            -               -            -          -   (10,224)
                                     -----------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2000            $   327  $ 330,111   $ 139,506     $ (41,297)      $ (30,681)   $ (14,016)  $(67,016) $316,934
                                     ===============================================================================================

BALANCE AT JUNE 30, 1998             $   264  $ 254,307   $ 103,760     $   3,970       $ (33,706)   $       -   $      -  $328,595

Comprehensive income:
  Net income                               -          -      16,754             -               -            -          -    16,754
  Net unrealized loss on
     certain securities, net of tax        -          -           -        (7,404)              -            -          -    (7,404)
                                                                                                                           ---------
Comprehensive income                                                                                                          9,350
                                                                                                                           ---------
Purchase of MRP stock                      -          -           -             -               -      (16,118)         -   (16,118)
Allocation of ESOP and MRP stock           -        (67)          -             -           1,296        1,237          -     2,466
Common stock repurchased
     (3,474,106 shares)                    -          -           -             -               -            -    (56,647)  (56,647)
Issuance of common stock for
  Ironbound Bankcorp                      14     25,851           -             -               -            -          -    25,865
Issuance of common stock for
  Bayonne Bancshares                      49     50,676           -             -               -       (2,820)    56,647   104,552
Cash dividends paid on common stock        -          -      (4,810)            -               -            -          -    (4,810)
                                     -----------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1999            $   327  $ 330,767   $ 115,704     $  (3,434)      $ (32,410)   $ (17,701)  $      -  $393,253
                                     ===============================================================================================
</TABLE>

      See accompanying notes to unaudited consolidated financial statements.

<PAGE>6

                  RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                              FOR THE
                                                                          NINE MONTHS ENDED
                                                                             MARCH 31,
                                                                        ---------------------
                                                                             (Unaudited)
                                                                           2000       1999
                                                                        ---------  ---------
<S>                                                                     <C>        <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES ............................  $  26,957  $  15,288

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net increase in loans receivable ...................................   (362,886)  (357,457)
  Loans purchased ....................................................          -     (1,500)
  Loans sold .........................................................     87,346     15,300
  Investment securities available for sale:
    Sales and redemptions ............................................     67,772     72,771
    Purchases ........................................................    (38,538)   (67,816)
  Mortgage-backed and mortgage-related securities available for sale:
    Sales and redemptions ............................................     14,542     34,726
    Principal collected ..............................................     92,420    199,663
    Purchases ........................................................    (39,585)  (202,888)
  Purchases of Federal Home Loan Bank of New York stock ..............     (5,485)   (11,990)
  Net addition to banking premises and equipment .....................     (1,241)    (3,559)
  Proceeds from sales of other real estate owned .....................        377        134
  Cash and cash equivalents acquired in Ironbound Bankcorp
     acquisition, net ................................................          -     40,434
  Cash and cash equivalents acquired in Bayonne Bancshares
     acquisition, net ................................................          -    124,413
                                                                        ---------  ---------
        Net cash used in investing activities ........................   (185,278)  (157,769)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits ...........................................    127,434     84,117
  Decrease in securities sold under repurchase agreements ............    (79,000)         -
  Increase in borrowings from the Federal Home Loan Bank .............    146,700    219,000
  Cash dividends paid on common stock ................................    (10,224)    (4,810)
  Net proceeds from issuance of common stock upon exercise
     of stock options ................................................        463          -
  Purchase of MRP stock ..............................................          -    (16,118)
  Purchase of treasury shares ........................................    (49,871)   (56,647)
                                                                        ---------  ---------
        Net cash provided by financing activities ....................    135,502    225,542
                                                                        ---------  ---------
  Net (decrease) increase in cash and cash equivalents ...............    (22,819)    83,061
  Cash and cash equivalents at beginning of period ...................     73,548     57,884
                                                                        ---------  ---------
  Cash and cash equivalents at end of period .........................  $  50,729  $ 140,945
                                                                        =========  =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest on deposits and borrowed funds ............................  $  72,752  $  39,058
  Income taxes .......................................................     12,464      8,125

NON-CASH INVESTING ACTIVITIES:
  Additions to other real estate owned, net ..........................  $      88  $      90
  Securitization of mortgage loans ...................................          -     78,495
</TABLE>

      See accompanying notes to unaudited consolidated financial statements.

<PAGE>7

                RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION
   ---------------------

The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts  of  Richmond  County  Financial  Corp.  (the  "Company"),  its  direct
wholly-owned  subsidiary,  Richmond  County  Savings Bank (the "Bank"),  and the
subsidiaries of the Bank.

The unaudited  consolidated  financial  statements  included  herein reflect all
normal recurring adjustments which are, in the opinion of management,  necessary
for a fair  presentation of the results for the interim periods  presented.  The
results of operations for the three and nine-month  periods ended March 31, 2000
are not necessarily indicative of the results of operations that may be expected
for the entire fiscal year.  Certain  information and note disclosures  normally
included in the  financial  statements,  prepared in accordance  with  generally
accepted accounting  principles,  have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC"). The
unaudited  consolidated  financial statements should be read in conjunction with
the audited consolidated  financial statements and notes thereto included in the
Company's 1999 Annual Report and Form 10-K.

2. EARNINGS PER SHARE
   ------------------

Basic  earnings per share  ("EPS") is  calculated  by dividing net income by the
weighted average number of common shares outstanding.  Diluted EPS is calculated
using the same method as basic EPS,  but reflects  potential  dilution of common
stock  equivalents.  Shares of common  stock held by the ESOP that have not been
allocated  to  participants'  accounts or are not  committed  to be released for
allocation and non-vested  1998 Management  Recognition  Plan (the "MRP") shares
are not considered to be outstanding for the calculation of basic EPS,  however,
a portion of such shares are  considered  in the  calculation  of diluted EPS as
common stock equivalents of basic EPS. Basic and diluted weighted-average common
shares  outstanding were 25,923,987 and 26,013,515 shares, for the third quarter
of fiscal 2000,  respectively.  For the nine months ended March 31, 2000,  basic
and diluted  weighted-average  common  shares  were  27,181,803  and  27,408,508
shares, respectively.

3. CONVERSION TO STOCK FORM OF OWNERSHIP
   -------------------------------------

On July 31, 1997, the Board of Trustees of the Bank  unanimously  adopted a Plan
of  Conversion  whereby the Bank would  convert from a New York State  chartered
mutual bank to a New York State chartered stock  institution with the concurrent
formation  of  a  holding   company,   Richmond  County   Financial  Corp.  (the
"Conversion").

The  Conversion  was  completed on February  18, 1998,  with the issuance by the
Company of 24,466,250 shares of common stock, at a price of $10.00 per share, in
an initial  public  offering.  The  Company  received  gross  proceeds  from the
Conversion of $244.7  million,  before the reduction from gross proceeds of $9.8
million for  estimated  conversion  related  expenses.  The Company  used $117.4
million, or 50% of the net proceeds, to purchase all of the outstanding stock of
the Bank.

Concurrent with the completion of the Conversion, an additional 1,957,300 shares
of  authorized  but  unissued  shares of common  stock were  contributed  by the
Company to the Richmond County Savings Foundation (the "Foundation"),  a private
foundation  dedicated to charitable  purposes

<PAGE>8

within the Bank's  communities  that it serves.  The Company recorded a one-time
charge  of  $19.6  million,  the full  amount  of the  contribution  made to the
Foundation  and a  corresponding  deferred tax benefit of $8.4  million,  in the
third quarter ended March 31, 1998. The  contribution  to the Foundation will be
fully tax deductible,  subject to an annual  limitation based upon the Company's
annual taxable income.

4. RECENT DEVELOPMENTS
   -------------------

On February 17, 2000,  the Company  announced  that it had  completed  its fifth
stock  repurchase plan of 5%, or 1,520,467 shares of the Company's common shares
outstanding.  Additionally,  as previously  announced,  after receiving approval
from the State of New York Banking  Department,  on January 19, 2000,  the Board
has  authorized  the Company to  commence  its sixth  stock  repurchase  plan of
1,444,444  shares, or 5%, of the Company's  outstanding  common stock. The sixth
stock repurchase plan commenced on February 18, 2000, the second  anniversary of
Richmond County Savings Bank's conversion to stock form.

The repurchases  will be made in unsolicited  purchases  pursuant to the federal
securities laws relating to activities by issuers having a distribution, subject
to the  availability of stock,  acceptable  pricing of the stock and such timing
limitations as may be applicable.

On March 15, 2000,  the Company and South  Jersey  Financial  Corporation,  Inc.
("South  Jersey")  entered into a definitive  agreement  pursuant to which South
Jersey,  the holding  company of South Jersey  Savings and Loan  Association,  a
community savings association which operates three full-service  banking offices
in the New Jersey  counties of Gloucester  and Camden,  will merge with a wholly
owned  subsidiary of the Company,  Richmond County  Acquisition,  Inc. Under the
terms of the agreement,  South Jersey shareholders will receive $20 per share in
cash for each  outstanding  share of  common  stock of South  Jersey.  The total
transaction  value is  estimated  to be $68.0  million.  As of  March  31,  2000
(unaudited), the total assets of South Jersey were $328.1 million, deposits were
$240.5 million and total stockholders' equity was $53.2 million. The acquisition
is subject to the  approval  of South  Jersey  shareholders,  as well as certain
regulatory  approvals.  The acquisition is expected to be completed in the third
quarter of calendar  year 2000,  and will be  accounted  for under the  purchase
method of accounting.

5. SUBSEQUENT EVENT
   ----------------

On April 18, 2000, the Company announced that its Board of Directors  declared a
quarterly cash dividend of fourteen cents ($0.14) per common share. The dividend
is payable on May 30, 2000 to shareholders of record as of May 10, 2000.

<PAGE>9

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

GENERAL

Richmond County Financial Corp. is a savings and loan holding company  regulated
by the  Office  of Thrift  Supervision.  The  primary  operating  subsidiary  of
Richmond County Financial Corp. is Richmond County Savings Bank (the "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
Richmond County Financial Corp. and the Bank (collectively the "Company"),  this
discussion  reflects the Bank's  activities  as the Company  currently  does not
engage in any significant  business  activities other than the management of the
Bank  and the  investment  of net  proceeds  from  the  Bank's  mutual  to stock
conversion, which occurred on February 18, 1998 (the "Conversion").

BAYONNE BANCSHARES, INC.

At the  close  of  business  on  March  22,  1999,  the  Company  completed  its
acquisition of Bayonne  Bancshares,  Inc.  ("Bayonne"),  the holding  company of
First Savings Bank of New Jersey,  SLA, a New Jersey State chartered savings and
loan association with four full service banking offices located in Bayonne,  New
Jersey in a transaction  which was accounted for as a purchase.  The cost of the
acquisition was  approximately  $118.5 million for which the Company issued 1.05
shares of its common stock for each  outstanding  share of Bayonne  common stock
for a total of 8,668,615  common shares,  of which 3,938,731  shares were issued
from its treasury  shares.  Options to purchase 683,577 shares of Bayonne common
stock  were also  converted  into  options  to  purchase  717,755  shares of the
Company's common stock.  The goodwill  attributable to the transaction was $28.8
million, which is being amortized on a straight line basis over 15 years.

IRONBOUND BANKCORP, NJ.

At the close of business on March 5, 1999, the Company completed its acquisition
of Ironbound Bankcorp, NJ ("Ironbound"),  the holding company of Ironbound Bank,
a New  Jersey  chartered  commercial  bank with three  full  service  commercial
banking  offices  located in the New Jersey  counties  of Union and Essex,  in a
transaction  which was accounted for as a purchase.  The cost of the acquisition
was approximately  $27.7 million.  The Company issued 1.463 shares of its common
stock  for each  outstanding  share of  Ironbound  common  stock  for a total of
1,458,842 common shares. The goodwill  attributable to the transaction was $15.3
million, which is being amortized on a straight line basis over 15 years.

FINANCIAL CONDITION

Total assets increased by $142.4 million,  or 5.2%, to $2.9 billion at March 31,
2000 from June 30, 1999.  The increase in overall assets was primarily due to an
increase in net loans of $275.2 million,  or 21.0%, offset in part by a decrease
in mortgage-backed and  mortgage-related  securities and investment  securities.
Mortgage-backed and  mortgage-related  securities decreased by $86.4 million, or
10.0%, from $866.8 million at June 30, 1999 to $780.4 million at March 31, 2000.
Investment  securities at March 31, 2000 totaled $252.1  million,  a decrease of
$45.5  million,  or 15.3%,  compared  to $297.6  million at June 30,  1999.  The
overall  increase in the level of assets was primarily the result of an increase
in borrowed  funds to fund growth in the  mortgage  loan  portfolio,  as well as
significant deposit inflows.

<PAGE>10

The Bank  continues to  experience  increased  loan growth.  For the  nine-month
period ended March 31, 2000, gross loans receivable increased by $274.4 million,
or 20.7%,  to $1.6  billion,  compared  to $1.3  billion at June 30,  1999.  The
substantial  increase in net loans was due primarily to  originations  of $472.6
million  generated  during the nine-months  ended March 31, 2000,  offset by the
sale of $85.8 million of one- to  four-family  mortgage  loans,  $1.6 million in
student loan sales and net amortization and prepayments of $109.3 million.  Loan
originations  for the  nine-month  period  ended March 31,  2000 were  primarily
comprised of multifamily  and one- to four-family  mortgage  loans.  Multifamily
mortgage  loan  originations  for the  nine-months  ended March 31, 2000 totaled
$217.6 million, bringing the total multifamily loan portfolio to $501.1 million,
or 31.3% of gross  loans at March  31,  2000.  Total  one- to  four-family  loan
production for the nine-months ended March 31, 2000 was $200.4 million.

Total  liabilities  at March 31, 2000 were $2.6  billion,  an increase of $195.7
million,  or 8.2%, from $2.4 billion at June 30, 1999. Total deposits  increased
by $127.4  million,  or 7.9%, to $1.7 billion at March 31, 2000. The Bank's core
deposits increased by $61.5 million, or 6.0%, at March 31, 2000 to $1.1 billion.
The increase in the Bank's core  deposits were  attributable  to a $35.0 million
increase  in total  demand  deposits  and a $26.6  million  increase in savings,
N.O.W. and money market accounts. The Bank also experienced an increase of $65.9
million,  or 11.0%,  in  certificates of deposit from $598.5 million at June 30,
1999 to $664.4 million at March 31, 2000.

Additionally, the Bank continues to place a level of emphasis on the utilization
of borrowed  funds to fund asset growth.  In this regard,  at March 31, 2000 and
June 30,  1999,  the Bank had total  borrowings  of $825.5  million  and  $757.8
million,  respectively.  The Bank may continue to increase such emphasis,  which
may  result in an  increase  in the  Bank's  overall  cost of funds.  The Bank's
current  strategy is to invest such borrowed  funds  primarily in mortgage loans
and  mortgage-backed  and  mortgage-related  securities  with similar  estimated
maturities.  This  strategy is intended to  incrementally  increase net interest
income, although it may have the effect of incrementally decreasing net interest
rate spread.

Total stockholders' equity decreased by $53.3 million to $316.9 million at March
31,  2000 from  $370.2  million  at June 30,  1999.  The  overall  decrease  was
primarily due to the  repurchase of 2.8 million  shares of the Company's  common
stock,  year to date cash  dividends  paid of $10.2  million and a $25.1 million
decrease in the fair value on securities  available-for-sale,  net of tax. These
decreases were offset by the earnings  reported for the nine-month  period ended
March 31, 2000 of $26.9  million and the  amortization  of $4.2  million for the
unallocated   and  unearned  shares  of  common  stock  held  by  the  Company's
stock-related benefit plans.

NON-PERFORMING ASSETS

Non-performing  loans totaled $5.0 million,  or 0.3% of total loans at March 31,
2000, as compared to $5.9 million,  or 0.5% of total loans, at June 30, 1999. At
March 31, 2000,  the Bank's real estate owned  consisted  of  foreclosed  assets
totaling $705,000,  which at such date was comprised of four one- to four-family
properties and two commercial properties.

At  March  31,  2000,  the  Bank  had  $2.5  million  of  assets  designated  as
"Substandard,"  consisting of 21 loans, no assets  classified as "Doubtful," and
four consumer loans classified as "Loss," respectively.

Non-accrual  loans totaled $5.0 million as of March 31, 2000,  which included 51
one- to four-family  loans, with an aggregate balance of $4.2 million,  and four
non-residential loans totaling

<PAGE>11

$800,000.

For the  nine-month  period  ended  March  31,  2000,  the  Company's  loan loss
provision was $900,000 as compared to $2.0 million for the prior year's  period.
The Company's  allowance for loan losses totaled $14.6 million at March 31, 2000
and $13.9  million at June 30, 1999,  which  represents a ratio of allowance for
loan  losses to  non-performing  loans of 289.2% and 237.1%,  respectively.  The
Company continues to increase its overall loan loss reserves due to the increase
in lending of all loan  products.  Management  believes the  allowance  for loan
losses at March 31, 2000 is  adequate  and  sufficient  reserves  are  presently
maintained to cover potential losses.  For the quarter ended March 31, 2000, the
Company experienced net charge-offs of $140,000.

COMPARISON OF OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
1999

General.  The Company  reported net income for the third quarter ended March 31,
2000 of $8.8  million,  or diluted  earnings per share of $0.34,  an increase of
$3.4 million or 63.7% as compared to the $5.4 million,  or diluted  earnings per
share of $0.24 reported for the same period last year.

Interest Income. The Company reported total interest income of $49.1 million for
the third  quarter  ended  March 31,  2000,  representing  an  increase of $18.1
million,  or 58.6%,  as  compared to the same  period in 1999.  The  increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning  assets of $948.4  million and a 25 basis point increase in the
average yield on  interest-earning  assets. The overall increase in the level of
interest-earning  assets was  primarily  the result of an  increase  in borrowed
funds to fund growth in the  mortgage  loan and  securities  portfolios,  assets
acquired from Bayonne and Ironbound, as well as deposit inflows.

Interest income on loans increased $11.8 million, or 67.1%, to $29.5 million for
the third  quarter  ended  March 31,  2000,  as  compared  to the $17.6  million
reported  for the  comparable  period in 1999.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $632.4  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed acquisitions. The
average yield on the overall loan portfolio  remained unchanged at 7.49% for the
third quarter ended March 31, 2000 and 1999.

Interest income on debt and equity securities  increased $1.8 million, or 42.8%,
from $4.2 million for the third  quarter  ended March 31, 1999,  to $6.1 million
for the same period in 2000. This increase is mainly  attributable to the growth
in the average balance of debt and equity securities,  primarily  investments in
financial  bonds and FHLB  stock,  as well as a 78 basis  point  increase in the
average yield on the debt and equity portfolio.

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$4.7 million,  or 53.2%,  from $8.8 million reported for the third quarter ended
March 31, 1999, to $13.5 million for the same period in 2000.  This increase was
due  primarily  to an  increase in the average  balance of  mortgage-backed  and
mortgage-related  securities of $263.6  million as a result of the investment of
borrowed funds and  mortgage-backed  and  mortgage-related  securities  acquired
through the recently completed  acquisitions.  Additionally,  interest income on
mortgage-backed  and  mortgage-related  securities  increased  as a result of an
increase  in the  average  yield  on the  mortgage-backed  and  mortgage-related
securities  portfolio to 6.54% for the third  quarter  ended March 31, 2000,  as
compared to 6.26% for the same period in 1999.

Interest Expense. Interest expense increased $10.9 million, or 75.7%, from $14.4
million for the

<PAGE>12

third quarter ended March 31, 1999, to $25.3 million for the third quarter ended
March 31,  2000.  The average  cost of the Bank's  interest-bearing  liabilities
increased  from 4.11% for the third  quarter  ended March 31, 1999, to 4.31% for
the third quarter ended March 31, 2000.  Interest expense on deposits  increased
$6.2 million,  or 79.5%, from $7.8 million for the third quarter ended March 31,
1999, to $13.9 million for the third quarter ended March 31, 2000.  The increase
reflects a $611.0 million  increase in the average  balance of  interest-bearing
deposits,  primarily  attributable  to a $277.5 million  increase in the average
balance of certificates of deposit and a $333.5 million  increase in the average
balance of money market, savings and N.O.W. deposit accounts.  This increase can
be primarily  attributable to the opening of two full-service banking facilities
and one  public  accommodation  office  on  Staten  Island,  the  opening  of an
Ironbound Bank divisional full-service banking facility in Union, New Jersey and
deposits acquired through the recently completed acquisitions.  In addition, the
Bank's   strategy  over  the  past  several  years  has  been  to  attract  more
certificates  of deposit  through the  offering  of  additional  certificate  of
deposit products and related marketing of commercial deposit accounts.

Interest  expense on  borrowed  funds for the  quarter  ended March 31, 2000 was
$11.4  million,  an  increase of $4.7  million as  compared to the $6.7  million
reported  in the same  period in 1999.  The  increase  in  interest  expense  on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $330.2  million  and a 21 basis point  increase in the average  cost on
borrowed  funds.  The Bank continues to place a greater level of emphasis on the
utilization  of borrowed  funds to fund asset  growth and to leverage the Bank's
capital  position to improve  returns on equity.  As of March 31, 2000, the Bank
had $825.5 million of borrowings  outstanding,  an increase of $67.7 million, or
8.9%, as compared to the $757.8 million of borrowings outstanding as of June 30,
1999. The Bank may continue to increase such emphasis on borrowed  funds,  which
may  result in an  increase  in the  Bank's  overall  cost of funds.  The Bank's
current  strategy is to invest such borrowed  funds  primarily in mortgage loans
and  mortgage-backed  and  mortgage-related  securities  with similar  estimated
maturities.  This  strategy is intended to  incrementally  increase net interest
income, although it may have the effect of incrementally decreasing net interest
rate spread.

Provision  for Loan Losses.  The Bank's  provision for loan losses for the third
quarter ended March 31, 2000 was $300,000,  as compared to $600,000 reported for
the same period in the prior year.  The  provision  for the third  quarter ended
March 31, 2000 was based on  management's  evaluation of its loan  portfolio and
real  estate  market  conditions.  In  particular,   management  considered  the
continued  growth in the portfolio,  the introduction of new lending products by
the Bank and the  seasoning  of such new  products,  as well as the level of its
non-performing  loans.  Management  believes,  based upon information  currently
available,  that its  allowance for loan losses is adequate to cover future loan
losses.  To the extent the Bank increases its  investment in multifamily  loans,
commercial  real estate,  commercial  and other loans,  which entail higher risk
than one- to  four-family  loans,  the Bank may decide to increase its allowance
for loan losses through  additional  loan loss  provisions,  which may adversely
affect net income. In addition,  if general economic  conditions and real estate
values  within  the  Bank's   primary   lending  area  decline,   the  level  of
non-performing  loans may  increase,  resulting  in larger  provisions  for loan
losses which, in turn, would also adversely affect net income.

Non-Interest  Income.  Exclusive  of net  gains  and  losses  from the  sales of
securities  and loans,  total  non-interest  income for the third  quarter ended
March 31, 2000 was $3.1  million,  as compared to the $1.4 million  reported for
the same period in 1999. The increased level of non-interest income is primarily
due to an overall increase in deposit fee income,  fee income generated from the
Bayonne and Ironbound acquisitions,  ATM fee income and advisory fee income from
our investment in Peter B. Cannell & Co. Inc. Additionally, the Bank purchased a

<PAGE>13

Bank Owned Life Insurance  Policy  ("BOLI"),  which accounted for  approximately
$739,000 of other income.

Non-Interest  Expense.  Non-interest expense totaled $12.9 million for the third
quarter ended March 31, 2000, an increase of $4.1 million, or 46.8%, as compared
to the $8.8  million  reported  for the  same  period  of the  prior  year.  The
increased  level of  non-interest  expense was mainly  attributable to increased
compensation  and employee  benefit  expenses,  goodwill  amortization and other
expenses associated with the Bayonne and Ironbound  acquisitions.  Additionally,
the Bank recognized increases in non-interest expenses as a result of the Bank's
opening of a public accommodation office and the opening of two new full service
branches in Staten Island and a full service branch in Union, New Jersey.

Income  Taxes.  The  Company's  effective  consolidated  tax rate for the  third
quarter  ended March 31, 2000,  was 35.8% as compared to 37.9%  reported for the
comparable period in 1999. The reduction of the Company's  effective tax rate is
primarily due to the Bank's utilization of various tax-planning strategies.

COMPARISON  OF OPERATING  RESULTS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND
1999

General.  The Company reported net income for the nine-month  period ended March
31, 2000 of $26.9 million,  or diluted  earnings per share of $0.98, an increase
of $10.2 million as compared to the $16.8  million  reported for the same period
last  year.  Core  earnings  for the  nine-month  period  ended  March 31,  2000
increased 74.9% to a record $26.5 million, or core diluted earnings per share of
$0.97, as compared to $15.1 million, or core diluted earnings per share of $0.65
reported for the same period last year. Core earnings for the nine-month  period
ended March 31, 2000 and 1999,  excludes  net gains on sales of  securities  and
loans of $734,000 and $2.6 million, respectively.

Interest  Income.  The Company  reported total interest income of $144.3 million
for the  nine-month  period  ended March 31, 2000,  representing  an increase of
$56.5 million, or 64.4%, as compared to the same period in 1999. The increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning  assets of $1.0  billion and a 17 basis  point  increase in the
average yield on  interest-earning  assets. The overall increase in the level of
interest-earning  assets was  primarily  the result of an  increase  in borrowed
funds to fund growth in the  mortgage  loan and  securities  portfolios,  assets
acquired from Bayonne and Ironbound, as well as deposit inflows.

Interest income on loans increased $36.2 million, or 76.3%, to $83.6 million for
the  nine-month  period ended March 31, 2000,  as compared to the $47.4  million
reported  for the  comparable  period in 1999.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $637.2  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed acquisitions. The
average yield on the overall loan  portfolio  remained  relatively  unchanged at
7.56%  and 7.55%  for the  nine-month  period  ended  March  31,  2000 and 1999,
respectively.

Interest income on debt and equity securities  increased $5.9 million, or 45.9%,
from $12.8  million for the  nine-month  period ended March 31,  1999,  to $18.6
million for the same period in 2000. This increase is mainly attributable to the
growth  in  the  average  balance  of  debt  and  equity  securities,  primarily
investments  in  financial  bonds and FHLB  stock,  as well as a 57 basis  point
increase in the average yield on the debt and equity portfolio.

<PAGE>14

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$14.9 million,  or 55.3%,  from $26.9 million reported for the nine-month period
ended  March 31,  1999,  to $41.8  million  for the same  period  in 2000.  This
increase  was  due   primarily  to  an  increase  in  the  average   balance  of
mortgage-backed and mortgage-related securities of $297.4 million as a result of
the  investment  of  borrowed  funds and  mortgage-backed  and  mortgage-related
securities  acquired through the recently completed  acquisitions and a 10 basis
point increase in the average yield on the mortgage-backed and  mortgage-related
securities portfolio.

Interest Expense. Interest expense increased $32.0 million, or 78.8%, from $40.7
million for the nine-month period ended March 31, 1999, to $72.7 million for the
nine-month  period  ended  March  31,  2000.  The  average  cost  of the  Bank's
interest-bearing  liabilities  remained  constant  at 4.20%  for the  nine-month
period  ended March 31, 2000 and 1999.  Interest  expense on deposits  increased
$16.2  million,  or 68.7%,  from $23.6 million for the  nine-month  period ended
March 31, 1999, to $39.9 million for the nine-month period ended March 31, 2000.
The  increase  reflects a $621.0  million  increase  in the  average  balance of
interest-bearing  deposits,  primarily attributable to a $269.2 million increase
in the average balance of certificates of deposit and a $288.3 million  increase
in the  average  balance of  savings  deposit  accounts.  This  increase  can be
primarily attributable to the opening of two full-service banking facilities and
one public  accommodation  office on Staten Island,  the opening of an Ironbound
Bank divisional  full-service banking facility in Union, New Jersey and deposits
acquired through the recently completed  acquisitions.  In addition,  the Bank's
strategy  over the past several years has been to attract more  certificates  of
deposit through the offering of additional  certificate of deposit  products and
related marketing of commercial deposit accounts.

Interest  expense on borrowed  funds for the  nine-month  period ended March 31,
2000 was $32.8  million,  an increase of $15.8  million as compared to the $17.0
million reported in the same period in 1999. The increase in interest expense on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $391.8  million and a four basis point  increase in the average cost on
borrowed  funds.  The Bank continues to place a greater level of emphasis on the
utilization  of borrowed  funds to fund asset  growth and to leverage the Bank's
capital  position to improve  returns on equity.  As of March 31, 2000, the Bank
had $825.5 million of borrowings  outstanding,  an increase of $67.7 million, or
8.9%, as compared to the $757.8 million of borrowings outstanding as of June 30,
1999. The Bank may continue to increase such emphasis on borrowed  funds,  which
may  result in an  increase  in the  Bank's  overall  cost of funds.  The Bank's
current  strategy is to invest such borrowed  funds  primarily in mortgage loans
and  mortgage-backed  and  mortgage-related  securities  with similar  estimated
maturities.  This  strategy is intended to  incrementally  increase net interest
income, although it may have the effect of incrementally decreasing net interest
rate spread.

Provision  for  Loan  Losses.  The  Bank's  provision  for loan  losses  for the
nine-month  periods ended March 31, 2000 and 1999 was $900,000 and $2.0 million,
respectively.  The provision for the nine-month  period ended March 31, 2000 was
based on  management's  evaluation of its loan  portfolio and real estate market
conditions.  In particular,  management  considered the continued  growth in the
portfolio,  the  introduction  of new  lending  products  by the  Bank  and  the
seasoning  of such new  products,  as well as the  level  of its  non-performing
loans. Management believes, based upon information currently available, that its
allowance for loan losses is adequate to cover future loan losses. To the extent
the Bank increases its investment in multifamily loans,  commercial real estate,
commercial  and other loans,  which entail higher risk than one- to  four-family
loans,  the Bank may decide to increase its  allowance  for loan losses  through
additional  loan loss  provisions,  which may  adversely  affect net income.  In
addition,  if general  economic  conditions  and real estate  values  within the
Bank's  primary  lending area  decline,  the level of  non-

<PAGE>15

performing  loans may increase,  resulting in larger  provisions for loan losses
which, in turn, would also adversely affect net income.

Non-Interest  Income.  Exclusive  of net  gains  and  losses  from the  sales of
securities and loans, total non-interest  income for the nine-month period ended
March 31, 2000 was $9.8  million,  as compared to the $3.5 million  reported for
the same period in 1999. The increased level of non-interest income is primarily
due to an overall increase in deposit fee income,  fee income generated from the
Bayonne and Ironbound acquisitions,  ATM fee income and advisory fee income from
our investment in Peter B. Cannell & Co. Inc. Additionally, the Bank purchased a
Bank Owned Life Insurance  Policy  ("BOLI"),  which accounted for  approximately
$2.2 million of other  income.  Net gains  reported for the  nine-month  periods
ended March 31, 2000 and 1999,  were  primarily due to net gains of $734,000 and
$2.6 million from the sale of equity and investment securities, respectively.

Non-Interest  Expense.  Non-interest  expense  totaled  $39.0  million  for  the
nine-month period ended March 31, 2000, an increase of $14.7 million,  or 60.8%,
as compared to the $24.2 million reported for the same period of the prior year.
The increased level of non-interest expense was mainly attributable to increased
compensation  and employee  benefit  expenses,  goodwill  amortization and other
expenses associated with the Bayonne and Ironbound  acquisitions.  Additionally,
the Bank recognized increases in non-interest expenses as a result of the Bank's
opening of a public accommodation office and the opening of two new full-service
branches in Staten Island and a full service branch in Union, New Jersey.

Income taxes. The Company's  effective  consolidated tax rate for the nine-month
period  ended March 31,  2000,  was 36.3% as compared to 38.0%  reported for the
comparable period in 1999. The reduction of the Company's  effective tax rate is
primarily due to the Bank's utilization of various tax-planning strategies.

LIQUIDITY AND CAPITAL RESOURCES

The Bank's  primary  sources of funds are deposits,  proceeds from the principal
and  interest  payments  on  loans,  mortgage-backed  and  mortgage-related  and
investment securities,  and to a significantly lesser extent,  proceeds from the
sale of fixed-rate mortgage loans to the secondary market.  While maturities and
scheduled amortization of loans and securities are predictable sources of funds,
deposit  outflows,  mortgage  prepayments  and  mortgage  loan sales are greatly
influenced by general interest rates, economic conditions and competition.

The primary investing  activities of the Bank are the origination of residential
one- to  four-family,  multifamily  and,  to a lesser  extent,  commercial  real
estate,  construction  and  development  and  other  loans and the  purchase  of
mortgage-backed and mortgage-related and investment securities. During the three
and  nine-month  periods  ended  March  31,  2000  and  1999,  the  Bank's  loan
originations totaled $130.3 million,  $472.6 million,  $142.5 million and $428.8
million,  respectively.  Purchases  of  mortgage-backed,   mortgage-related  and
investment  securities totaled $2.2 million,  $83.6 million,  $156.7 million and
$282.7  million for the three and  nine-month  periods  ended March 31, 2000 and
1999, respectively. These activities were funded primarily by deposit growth and
principal   repayments   and   prepayments   on   loans,   mortgage-backed   and
mortgage-related  securities  and  investment  securities  and advances from the
FHLB.  As of March  31,  2000,  the Bank  experienced  a net  increase  in total
deposits of $127.4  million to $1.7  billion,  or 7.9%,  as compared to the $1.6
billion at June 30,  1999.  Deposit  flows are affected by the level of interest
rates,  the interest rates and products  offered by local  competitors and other
factors.

<PAGE>16

The Bank  closely  monitors  its  liquidity  position on a daily  basis.  Excess
short-term  liquidity is invested in overnight  federal funds sold. In the event
the Bank should  require funds beyond its ability to generate  them  internally,
additional  sources of funds are available  through  repurchase  agreements  and
advances from the FHLB.  The Bank has recently begun to place a greater level of
emphasis on the  utilization  of borrowed  funds to fund asset  growth.  In this
regard, at March 31, 2000, the Bank had total borrowings of $825.5 million.  The
Bank may continue to increase such emphasis,  which may result in an increase in
the Bank's average cost of funds.

Loan  commitments  totaled $153.5  million at March 31, 2000,  were comprised of
$48.5  million  in  one-  to  four-family  loan  commitments,  $2.0  million  in
commercial  real estate loan  commitments,  $54.2 million in  construction  loan
commitments, $17.7 million in commercial loan commitments, $23.1 million in home
equity loan  commitments,  $3.5 million in multifamily loan commitments and $4.5
million in other loan  commitments.  In addition,  management  estimates that an
increased  level of loan  commitments  may arise as a result of the  Multifamily
Lending  Division.  Management  of  the  Bank  anticipates  that  it  will  have
sufficient funds available to meet its current loan commitments. Certificates of
deposit,  which are  scheduled  to  mature in less than one year from  March 31,
2000, totaled $490.2 million.  Based upon past experience and the Bank's current
pricing  strategy,  management  believes  that a  significant  portion  of  such
deposits will remain with the Bank.

At March 31, 2000, the Bank exceeded all of its regulatory capital  requirements
with a leverage  capital level of $239.8  million,  or 8.3% of adjusted  assets,
which is above the required level of $115.2 million, or 4.0% of adjusted assets,
and risk-based  capital of $254.4 million,  or 15.8% of adjusted  assets,  which
exceeds the required level of $128.8 million, or 8.0% of adjusted assets.

The  Company's  most liquid  assets are cash,  due from banks and federal  funds
sold.  The  levels  of these  assets  are  dependent  on the  Bank's  operating,
financing,  lending and investing  activities  during any given period. At March
31, 2000, cash, due from banks and federal funds sold totaled $50.7 million,  or
1.7% of total assets.

THE YEAR 2000 ISSUE

To date,  the  Company  has not  experienced  any data  processing  or  computer
problems  related to the Year 2000  issue.  The Company  has  maintained  formal
communications with all of its service providers, vendors, major fund providers,
major  borrowers and companies with which it has material  investments.  At this
time,  the Company is unaware of any  material  condition  that would impact its
ability to deliver accurate data processing  services,  although such conditions
may arise during  calendar  year 2000.  The  Company's  expenses,  for the third
quarter were approximately  $10,000 and total expenses relative to the Year 2000
issue were approximately $260,000.

FINANCIAL SERVICES LEGISLATION

Recent  legislation  designed  to  modernize  the  regulation  of the  financial
services  industry  expands the ability of bank  holding  companies to affiliate
with other types of financial services companies such as insurance companies and
investment banking companies.  However,  the legislation provides that companies
that acquire control of a single savings  association after May 4, 1999 (or that
filed an  application  for that purpose after that date) are not entitled to the
unrestricted  activities formerly allowed for a unitary savings and loan holding
company. Rather, these companies will have authority to engage in the activities
permitted "a financial  holding  company" under the new  legislation,  including
insurance  and  securities-related  activities,  and  the  activities  currently
permitted for multiple savings and loan holding companies,  but generally not

<PAGE>17

in  commercial  activities.   The  authority  for  unrestricted   activities  is
grandfathered  for  unitary  savings  and loan  holding  companies,  such as the
Company,  that  existed  prior  to May  4,  1999.  However,  the  authority  for
unrestricted  activities  would  not  apply to any  company  that  acquired  the
Company.

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

In  addition  to  historical  information,   this  Form  10-Q  includes  certain
forward-looking  statements  based  on  current  management  expectations.   The
Company's   actual  results  could  differ   materially  from  those  management
expectations.  Factors  that could  cause  future  results to vary from  current
management  expectations  include,  but are not  limited  to,  general  economic
conditions,  legislative and regulatory changes, monetary and fiscal policies of
the  federal  government,  changes in tax  policies,  rates and  regulations  of
federal,  state and local tax  authorities,  changes in interest rates,  deposit
flows,  the cost of  funds,  demand  for loan  products,  demand  for  financial
services,  competition,  changes in the quality or  composition of the Company's
loan and investment portfolios,  changes in accounting  principles,  policies or
guidelines,  and other economic,  competitive,  governmental  and  technological
factors  affecting the Company's  operations,  markets,  products,  services and
prices.

<PAGE>18

ITEM 3. QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK

ASSET AND LIABILITY MANAGEMENT AND THE MANAGEMENT OF INTEREST RATE RISK

Quantitative  and qualitative  disclosure about market risk is presented at June
30, 1999 in Item 7a. to the Company's Form 10-K, filed with the SEC on September
28, 1999.  There have been no material  changes in the Company's  market risk at
March 31, 2000 as compared to June 30, 1999.  The  following is an update of the
discussion provided therein.

General. The Company's largest component of market risk continues to be interest
rate risk. Substantially all of this risk continues to reside at the Bank level.
The Bank still is not subject to foreign  currency  exchange or commodity  price
risk.  At March 31,  2000,  neither  the  Company nor the Bank owned any trading
assets,  nor did they  participate in hedging  programs,  interest rate swaps or
other activities  involving the use of off-balance  sheet  derivative  financial
instruments.

Gap  Analysis.  At March  31,  2000,  the  Company's  estimated  one-year  "gap"
position, the difference between the amount of interest-earning  assets maturing
or  repricing  within  one year and  interest-bearing  liabilities  maturing  or
repricing  within  one year,  was a  negative  $406.1  million,  representing  a
one-year  interest  sensitivity  gap as a percentage of total assets of (14.0%).
Accordingly,  during a period of rising  interest rates,  the Company,  having a
positive  gap  position,  would be in a better  position  to  invest  in  higher
yielding  assets  which,  consequently,  may  result in the yield on its  assets
increasing  at a pace more  closely  matching  the  increase  in the cost of its
interest-bearing  liabilities  than if it had a negative gap. During a period of
falling  interest rates,  an institution  with a positive gap would tend to have
its  assets  repricing  at a faster  rate than one with a  negative  gap  which,
consequently,  may tend to  restrain  the growth of its net  interest  income or
result in a decrease in interest income.

Interest Rate Risk  Compliance.  The Company  continues to monitor the impact of
interest rate volatility upon net interest income and net portfolio value in the
same  manner  as June 30,  1999.  There  have  been no  changes  in the Board of
Directors approved limits of acceptable  variance in net interest income and net
portfolio value at March 31, 2000,  compared to June 30, 1999, and the projected
changes  continue to fall within the Board of Directors  approved  limits at all
levels of potential interest rate volatility.

<PAGE>19

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

ITEM 1. LEGAL PROCEEDINGS
-------------------------

The  Company is not  involved in any pending  legal  proceedings  other than the
routine  legal  proceedings  occurring in the ordinary  cause of business.  Such
routine  legal  proceeding  in the  aggregate,  are believed by management to be
immaterial to the Company's financial condition or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
-------------------------------------------------
        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.

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

(a)  EXHIBITS
     --------

      2.1   Agreement  and Plan of Merger,  dated as of March 15, 2000, by and
            among   Richmond   County   Financial   Corp.,   Richmond   County
            Acquisition, Inc. and South Jersey Financial Corporation, Inc.
      3.1   Certificate of Incorporation of Richmond County Financial Corp.*
      3.2   Bylaws of Richmond County Financial Corp.*
     11.0   Statement re: Computation of Per Share Earnings.
     27.0   Financial Data Schedule (EDGAR version only).

     *      Incorporated  by  reference  from the Form S-1  (Registration  No.
            333-37009), as amended, filed on October 2, 1997.


(b)   REPORTS ON FORM 8-K
      -------------------
      Not applicable.

<PAGE>20

                                  Exhibit Index
                                  -------------
Exhibit No.
-----------

  2.1  Agreement  and Plan of Merger,  dated as of March 15, 2000, by and among
       Richmond County Financial Corp.,  Richmond County Acquisition,  Inc. and
       South Jersey Financial Corporation, Inc.

 11.0  Statement re:  Computation of Per Share Earnings

 27.0  Financial Data Schedule

<PAGE>21

                                    SIGNATURE

      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.

                         RICHMOND COUNTY FINANCIAL CORP.
                                  (Registrant)

Date:      May 15, 2000                By:  /s/ Michael F. Manzulli
                                            -----------------------
                                                Michael F. Manzulli
                                                Chairman of the Board and
                                                Chief Executive Officer


Date:      May 15, 2000                By:  /s/ Thomas R. Cangemi
                                            -----------------------
                                                Thomas R. Cangemi
                                                Executive Vice President, Chief
                                                Financial Officer and Treasurer