<PAGE> 1


                                  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, 2001        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 4, 2001, there were 26,159,057 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, 2001 and June 30, 2000.......................................   3

Consolidated Statements of Operations
for the three and nine months ended March 31, 2001 and 2000...............   4

Consolidated Statements of Changes in Stockholders' Equity
for the nine months ended March 31, 2001 and 2000.........................   5

Consolidated Statements of Cash Flows
for the nine months ended March 31, 2001 and 2000.........................   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.

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


                                       2

<PAGE> 3
<TABLE>
<CAPTION>
                                       RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                     (In Thousands, Except Share and Per Share Amounts)

                                                                                              MARCH 31,           JUNE 30,
                                                                                                2001                2000
                                                                                           ---------------     ---------------
                                                                                            (Unaudited)
                                          ASSETS
<S>                                                                                       <C>                   <C>
Cash and due from banks                                                                   $     53,156          $   47,684
Federal funds sold                                                                              33,000                   -
Securities held to maturity:
     Mortgage-backed and mortgage-related securities                                            55,054              57,161
             (estimated market value of $54,998 and $54,068, respectively)
Securities available for sale:
     Investment securities                                                                     270,494             257,485
     Mortgage-backed and mortgage-related securities                                           962,524             707,446
Mortgage loans:
     1-4 family                                                                                799,064             842,350
     Multifamily                                                                               703,007             549,151
     Commercial real estate                                                                    117,548             108,532
     Construction                                                                               79,108              65,603
                                                                                          ------------          ----------
Total mortgage loans                                                                         1,698,727           1,565,636
Other loans                                                                                     23,970              21,478
     Plus:    Deferred loan costs, net                                                           3,484               1,392
     Less:    Allowance for loan losses                                                        (19,050)            (14,698)
                                                                                          ------------          ----------
Loans, net                                                                                   1,707,131           1,573,808
Federal Home Loan Bank stock                                                                    50,055              38,873
Banking premises and equipment, net                                                             29,779              26,115
Accrued interest receivable                                                                     22,531              18,170
Other real estate owned                                                                             16                 509
Goodwill                                                                                        70,085              43,324
Other assets                                                                                   102,220             110,646
                                                                                          ------------          ----------
    TOTAL ASSETS                                                                          $  3,356,045          $2,881,221
                                                                                          ============          ==========

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits                                                                           $    239,751          $  207,894
Savings, N.O.W. and Money market accounts                                                    1,050,659             888,706
Certificates of deposit                                                                        899,292             693,276
                                                                                          ------------          ----------
          Total deposits                                                                     2,189,702           1,789,876
Borrowings                                                                                     814,704             773,690
Accrued expenses and other liabilities                                                          22,099              11,245
                                                                                          ------------          ----------
          Total liabilities                                                                  3,026,505           2,574,811
                                   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
   issued; 26,540,535 and 28,001,472  shares outstanding,
   at March 31, 2001 and June 30, 2000, respectively.                                              327                 327
Additional paid-in-capital                                                                     329,911             329,718
Retained earnings-substantially restricted                                                     161,310             145,231
Unallocated common stock held by
   Employee Stock Ownership Plan ("ESOP")                                                      (28,953)            (30,249)
Unearned compensation MRP Stock                                                                (10,541)            (13,147)
Treasury stock, at cost, 6,196,599 and 4,735,662 shares
   at March 31, 2001 and June 30, 2000, respectively.                                         (114,924)            (82,541)
Accumulated other comprehensive income:
   Net unrealized loss on securities available for sale, net of tax                             (7,590)            (42,929)
                                                                                          ------------          ----------
          Total stockholders' equity                                                           329,540             306,410
                                                                                          ------------          ----------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $  3,356,045          $2,881,221
                                                                                          ============          ==========

                      See accompanying notes to unaudited consolidated financial statements.
</TABLE>

                                                         3


<PAGE> 4
<TABLE>
<CAPTION>

                                        RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                                             CONSOLIDATED STATEMENTS OF OPERATIONS
                                      (In Thousands, Except Share and Per Share Amounts)

                                                                             FOR THE                         FOR THE
                                                                       THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                            MARCH 31,                       MARCH 31,
                                                                  ------------------------------   -----------------------------
                                                                           (Unaudited)                     (Unaudited)
                                                                      2001            2000            2001             2000
                                                                  -------------   --------------   ------------    -------------
<S>                                                                    <C>              <C>           <C>               <C>
INTEREST INCOME:
   Loans                                                               $35,085          $29,470       $103,622          $83,563
   Debt and equity securities                                            6,712            6,062         20,224           18,643
   Mortgage-backed and mortgage-related securities                      15,842           13,546         43,836           41,817
   Federal funds sold and interest-earning bank balances                   307               58            689              305
                                                                  -------------   --------------   ------------    -------------
       Total interest income                                            57,946           49,136        168,371          144,328
                                                                  -------------   --------------   ------------    -------------
INTEREST EXPENSE:
   Deposits                                                             19,751           13,946         56,739           39,873
   Borrowed funds                                                       10,987           11,390         32,631           32,805
                                                                  -------------   --------------   ------------    -------------
       Total interest expense                                           30,738           25,336         89,370           72,678
                                                                  -------------   --------------   ------------    -------------
   Net interest income                                                  27,208           23,800         79,001           71,650
   Provision for loan losses                                               300              300            900              900
                                                                  -------------   --------------   ------------    -------------
   Net interest income after provision for loan losses                  26,908           23,500         78,101           70,750
                                                                  -------------   --------------   ------------    -------------
NON-INTEREST INCOME:
   Fee income                                                            2,783            2,323          8,656            7,435
   Net gain on sale of securities and loans                                 70               24             67              734
   Other                                                                   812              812          2,451            2,366
                                                                  -------------   --------------   ------------    -------------
       Total non-interest income                                         3,665            3,159         11,174           10,535
                                                                  -------------   --------------   ------------    -------------
NON-INTEREST EXPENSE:
   Salaries and employee benefits                                        7,751            6,871         22,956           20,877
   Occupancy costs                                                       1,926            1,559          5,282            4,560
   Computer service fees                                                 1,602            1,391          4,631            4,180
   Advertising                                                             700              467          1,771            1,386
   FDIC insurance premiums                                                 129               99            329              337
   Other                                                                 1,872            1,717          5,796            5,184
                                                                  -------------   --------------   ------------    -------------
      Total general and administrative expense                          13,980           12,104         40,765           36,524
  Amortization of goodwill and other intangibles                         1,226              821          3,558            2,456
                                                                  -------------   --------------   ------------    -------------
       Total non-interest expense                                       15,206           12,925         44,323           38,980
                                                                  -------------   --------------   ------------    -------------
   Income before income taxes                                           15,367           13,734         44,952           42,305
   Provision for income taxes                                            5,486            4,925         16,103           15,359
                                                                  -------------   --------------   ------------    -------------
  NET INCOME                                                           $ 9,881          $ 8,809        $28,849          $26,946
                                                                  =============   ==============   ============    =============
  EARNINGS PER SHARE:
              Basic                                                    $  0.41          $  0.34        $  1.20          $  0.99
              Diluted                                                  $  0.40          $  0.34        $  1.16          $  0.98

                          See accompanying notes to unaudited consolidated financial statements.
</TABLE>

                                                       4
<PAGE> 5
<TABLE>
<CAPTION>

                                 RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                       (In Thousands, Except Share Data)

                                                            RETAINED      ACCUMULATED   UNALLOCATED
                                              ADDITIONAL    EARNINGS         OTHER       COMMON     UNEARNED
                                     COMMON     PAID-IN   SUBSTANTIALLY  COMPREHENSIVE  STOCK HELD COMPENSATION  TREASURY
                                      STOCK     CAPITAL    RESTRICTED    INCOME/(LOSS)   BY ESOP   ON MRP STOCK   STOCK     TOTAL
                                      -----     -------    ----------    -------------   -------  ------------   -------    -----
<S>                                 <C>         <C>        <C>           <C>           <C>         <C>          <C>        <C>
BALANCE AT JUNE 30, 2000            $   327     $329,718   $ 145,231     $   (42,929)  $ (30,249)  $ (13,147)   $ (82,541) $306,410

Comprehensive income:
   Net income                           --            --      28,849              --          --           --          --    28,849
   Net unrealized gain on
     certain securities, net of tax     --            --          --          35,339          --           --          --    35,339
                                                                                                                            --------
Comprehensive income                                                                                                         64,188
                                                                                                                            --------
Common stock repurchased (1,502,707
   shares)                              --            --          --              --          --           --     (33,146)  (33,146)
Treasury stock issued for
   options exercised (41,770 shares)    --          (175)         --              --          --           --         763       588
Allocation of ESOP and MRP stock        --           368          --              --       1,296        2,606          --     4,270
Cash dividends paid on common stock     --            --     (12,770)             --          --           --          --   (12,770)
                                    ------      --------   ----------    ------------  ----------  -----------  ---------- ---------
BALANCE AT MARCH 31, 2001           $  327      $329,911   $  161,310    $    (7,590)  $ (28,953)  $  (10,541)  $(114,924) $329,540
                                    ======      ========   ==========    ============  ==========  ===========  ========== =========

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

                             See accompanying notes to unaudited consolidated financial statements.
</TABLE>

                                                     5


<PAGE> 6
<TABLE>
<CAPTION>

                                         RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                         (In Thousands)
                                                                                                                FOR THE
                                                                                                           NINE MONTHS ENDED
                                                                                                               MARCH 31,
                                                                                                      -----------------------------
                                                                                                              (Unaudited)
                                                                                                          2001             2000
                                                                                                      -------------    ------------
<S>                                                                                                   <C>               <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                             $   35,844        $  26,957

CASH FLOWS FROM INVESTING ACTIVITIES:
     Increase in loans receivable, net                                                                  (274,494)        (362,886)
     Loans sold                                                                                            3,118           87,346
     Investment securities available for sale:
          Sales and redemptions                                                                           52,091           67,772
          Purchases                                                                                      (42,598)         (38,538)
     Mortgage-backed and mortgage-related securities held to maturity:
          Principal collected                                                                              2,108                -
     Mortgage-backed and mortgage-related securities available for sale:
          Sales and redemptions                                                                          428,606           14,542
          Principal collected                                                                             81,403           92,420
          Purchases                                                                                     (379,832)         (39,585)
    Purchases of Federal Home Loan Bank of New York stock, net                                            (9,044)          (5,485)
    Net addition to banking premises and equipment                                                          (615)          (1,241)
    Proceeds from sales of other real estate owned                                                           444              377
    Cash and cash equivalents acquired in South Jersey Financial Corp., acquisition, net                  13,382                -
                                                                                                      -------------    ------------
               Net cash used in investing activities                                                    (125,431)        (185,278)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in deposits                                                                             157,963          127,434
    Decrease in securities sold under repurchase agreements                                                    -          (79,000)
    Net increase in borrowings from the Federal Home Loan Bank                                            15,424          146,700
    Cash dividends paid on common stock                                                                  (12,770)         (10,224)
    Net proceeds from issuance of common stock upon exercise
       of stock options                                                                                      588              463
    Purchase of treasury shares                                                                          (33,146)         (49,871)
                                                                                                      -------------    ------------
               Net cash provided by financing activities                                                 128,059          135,502
                                                                                                      -------------    ------------
     Net increase/(decrease) in cash and cash equivalents                                                 38,472          (22,819)
     Cash and cash equivalents at beginning of period                                                     47,684           73,548
                                                                                                      -------------    ------------
     Cash and cash equivalents at end of period                                                       $   86,156        $  50,729
                                                                                                      =============    ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
     Interest on deposits and borrowed funds                                                          $   90,404        $  72,752
     Income taxes                                                                                          7,214           12,464

NON-CASH INVESTING ACTIVITIES:
    Securitization of mortgage loans                                                                  $  273,210        $       -
    Additions to other real estate owned, net                                                                106               88
    Additions to banking premises and equipment                                                               90                -

                          See accompanying notes to unaudited  consolidated financial statements.
</TABLE>

                                                     6

<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, 2001
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 2000 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 23,843,517 and 24,815,482 shares, for the third quarter
of fiscal 2001,  respectively.  For the nine months ended March 31, 2001,  basic
and diluted  weighted-average  common  shares  were  24,106,621  and  24,854,318
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.



                                       7

<PAGE> 8



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 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 March 27, 2001, New York Community  Bancorp,  Inc. and the Company  announced
the signing of a definitive agreement under which the two companies will combine
in a merger-of-equals.  The transaction, which will be tax-free to the Company's
shareholders, is expected to close in the third quarter of calendar 2001 pending
shareholder and regulatory approval. Under the terms of the agreement, which has
been  unanimously  approved by the Boards of  Directors of both  companies,  the
Company will merge into New York Community  Bancorp.  Shareholders  will receive
1.02 shares of New York  Community  Bancorp  common  stock in exchange  for each
share of the Company's common stock. On the  announcement  date, the transaction
was valued at approximately  $802 million.  On a pro-forma basis, as of December
31, 2000, the combined  companies had total assets of $8.8 billion;  deposits of
$5.7 billion and total stockholders' equity of $1.1 billion.

On February 27,  2001,  the Company  announced  that it has reached a definitive
agreement  with  Summit  Bancorp  ("Summit")  and  FleetBoston  Financial  Corp.
("Fleet"), to acquire five Summit branch offices located in Atlantic County, New
Jersey.  The  acquisition of these  branches will occur in conjunction  with the
government-mandated  divestiture of deposits and loans following Summit's merger
with Fleet. Under the terms of the agreement, Richmond will assume approximately
$200 million in deposits and acquire $40 million in small  business and consumer
loans.  Richmond will operate the Summit commercial  banking offices through its
South Jersey Bank division. In a separate transaction, Richmond has entered into
a definitive  agreement with Fleet to acquire  Fleet's branch offices located on
Staten Island, New York. Under the terms of this agreement, Richmond will assume
approximately $100 million in deposits,  of which 70% are core deposits (demand,
money market and savings) and acquire $21 million in small business and consumer
loans.

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

On April  18,  2001,  the  Company  announced  that its Board of  Directors  had
authorized a quarterly cash dividend for the fiscal quarter ended March 31, 2001
in the amount of $0.18 per common share. The dividend will be payable on May 23,
2001, to shareholders of record on May 7, 2001.



                                       8

<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").

SOUTH JERSEY FINANCIAL CORPORATION, INC.

At the close of business on July 31, 2000, the Company completed its acquisition
of South  Jersey  Financial  Corporation,  Inc.  ("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 in a transaction  which was accounted for as a
purchase.  The cost of the acquisition was approximately $68.0 million for which
South Jersey  shareholders  received $20 per share in cash for each  outstanding
share of common stock of South Jersey. The excess of cost over the fair value of
net assets acquired ("goodwill") in the transaction was $28.0 million,  which is
being amortized on a straight-line basis over 20 years.

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.


                                       9


<PAGE> 10



FINANCIAL CONDITION

Total assets increased by $474.8 million, or 16.5%, to $3.4 billion at March 31,
2001 from June 30, 2000. The increase in overall assets was primarily due to the
completion  of the  South  Jersey  acquisition  with  and  into  the  Bank and a
significant  increase in deposit  inflows.  As of the  acquisition  date,  South
Jersey had total  assets of  approximately  $314.7  million,  total  deposits of
$240.9 million and total equity of $47.7 million.

The Bank continues to experience  increased loan growth,  and for the nine month
period ended March 31, 2001, gross loans receivable increased by $135.6 million,
or 8.5% on a non-annualized basis, to $1.7 billion,  compared to $1.6 billion at
June 30, 2000. The increase in gross loans was due primarily to  originations of
$409.3 million  generated  during the nine month period ended March 31, 2001 and
$142.3 million of loans acquired through the acquisition of South Jersey, offset
by  the  sale  of  $3.1  million  of  one-  to   four-family   mortgage   loans,
securitizations of $272.8 million of one- to four-family  mortgage loans and net
amortization and prepayments of $140.1 million. As part of the Company's plan to
diversify its loan portfolio and reduce its  dependency on  residential  one- to
four-family  mortgage  loans,  during the first  quarter  of fiscal  2001 and in
conjunction  with the  South  Jersey  acquisition,  the Bank  securitized  $61.7
million of one- to  four-family  mortgage  loans  acquired from the South Jersey
acquisition in exchange for a like amount of FHLMC pass-through securities,  and
recorded these securities in the Bank's securities portfolio.  Additionally,  in
the third quarter of fiscal 2001,  the Bank  securitized  an  additional  $211.1
million of one- to  four-family  mortgage loans in exchange for a like amount of
FNMA pass-through securities, recorded these securities in the Bank's securities
portfolio  and  subsequently  sold  approximately  $69.4  million of the related
securities.  Loan  originations  for the nine month  period ended March 31, 2001
were primarily comprised of multifamily and one- to four-family  mortgage loans.
Multifamily  mortgage loan originations during the nine month period ended March
31, 2001 totaled $191.4 million,  bringing the total  multifamily loan portfolio
to  $703.0  million,  or 41.2% of net  loans at March 31,  2001.  Total  one- to
four-family  loan  production for the nine month period ended March 31, 2001 was
$166.2 million.

Mortgage-backed and mortgage-related  securities increased by $253.0 million, or
33.1%,  from $764.6  million at June 30, 2000 to $1.0 billion at March 31, 2001.
The increase in mortgage-backed and  mortgage-related  securities were primarily
the result of the  aforementioned  securitizations  of $272.8 million of one- to
four-family mortgage loans into FHLMC and FNMA pass-through securities,  as well
as $70.0 million of mortgage-backed  and  mortgage-related  securities  acquired
from the South Jersey acquisition,  offset in part by the sale of $428.6 million
of  mortgage-backed  and  mortgage-related  securities and net  amortization and
prepayments of $81.4 million.

Investment  securities at March 31, 2001 totaled $270.5 million,  an increase of
$13.0 million, or 5.1%, compared to $257.5 million at June 30, 2000.

Total  liabilities  at March 31, 2001 were $3.0  billion,  an increase of $451.7
million,  or 17.5%, from $2.6 billion at June 30, 2000. Total deposits increased
by $399.8 million,  or 22.3%,  to $2.2 billion at March 31, 2001.  Excluding the
South Jersey  acquisition,  total deposits increased by $158.9 million, or 8.9%,
to $1.9 billion at March 31, 2001.  The Bank's core  deposits  increased  $193.8
million,  or  17.7%,  at March 31,  2001 to $1.3  billion,  resulting  in a core
deposit to total  deposit  ratio of  approximately  58.9%.  The  increase in the
Bank's core deposits was primarily


                                       10


<PAGE> 11



attributable to a $31.9 million increase in demand deposits and a $162.0 million
increase in savings, N.O.W. and Money market accounts. The Bank also experienced
an increase of $206.0 million,  or 29.7%, in certificates of deposit from $693.3
million at June 30, 2000 to $899.3  million at March 31,  2001.  The increase in
overall deposits was primarily the result of $240.9 million of deposits acquired
through the South Jersey  acquisition and an increase in certificates of deposit
which  was  primarily  attributable  to  increased  marketing  of  such  deposit
products.

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, 2001 and
June 30,  2000,  the Bank had total  borrowings  of $814.7  million  and  $773.7
million,  respectively.  In connection  with the South Jersey  acquisition,  the
Company  acquired  $27.6  million of borrowed  funds.  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 increased by $23.1 million to $329.5 million at March
31,  2001 from  $306.4  million  at June 30,  2000.  The  overall  increase  was
primarily  due to earnings  reported  for the nine month  period ended March 31,
2001 of $28.8 million,  a $35.3 million increase in the fair value on securities
available  for sale,  net of tax and the  amortization  of $3.9  million for the
unallocated   and  unearned  shares  of  common  stock  held  by  the  Company's
stock-related  benefit  plans.  These  increases  were  offset,  in  part by the
repurchase of 1.5 million shares of the Company's  common stock and year to date
cash dividends paid of $12.8 million.

NON-PERFORMING ASSETS

Non-performing loans totaled $10.7 million, or 0.6% of total loans, net at March
31, 2001, as compared to $4.7 million, or 0.3% of total loans, at June 30, 2000.
At March 31, 2001, the Bank's real estate owned  consisted of foreclosed  assets
totaling  $16,000,  which at such  date  was comprised of a one- to  four-family
property.

At  March  31,  2001,  the  Bank  had  $3.9  million  of  assets  designated  as
"Substandard,"  consisting of 27 loans, no assets  classified as "Doubtful," and
four consumer loans classified as "Loss," respectively.

Non-accrual  loans totaled $10.7 million as of March 31, 2001, which included 48
one- to  four-family  loans,  with an aggregate  balance of $4.5 million,  seven
non-residential  loans totaling $1.5 million,  seven construction loans totaling
$3.2 million and 10 commercial loans totaling $1.5 million.

For the nine month  periods ended March 31, 2001 and 2000,  the  Company's  loan
loss provision remained unchanged at $900,000.  The Company's allowance for loan
losses  totaled  $19.1  million at March 31, 2001 and $14.7  million at June 30,
2000,  which  represents a ratio of allowance for loan losses to  non-performing
loans of 178.4% and 311.5%, 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, 2001 is adequate
and sufficient reserves are presently  maintained to cover potential losses. For
the nine  month  period  ended  March 31,  2001,  the  Company  experienced  net
charge-offs of $86,706.


                                       11


<PAGE> 12


COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2001
AND 2000

GENERAL.  The Company  reported net income for the third quarter ended March 31,
2001 of $9.9  million,  or diluted  earnings per share of $0.40,  an increase of
17.7% as compared to the $8.8 million,  or diluted  earnings per share of $0.34,
reported for the same period last year.

INTEREST INCOME. The Company reported total interest income of $57.9 million for
the third  quarter  ended  March 31,  2001,  representing  an  increase  of $8.8
million,  or 17.9%,  as  compared to the same  period in 2000.  The  increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning  assets of $338.2  million and a 35 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 assets
acquired from South Jersey, as well as deposit inflows.

Interest income on loans increased $5.6 million,  or 19.1%, to $35.1 million for
the third  quarter  ended  March 31,  2001,  as  compared  to the $29.5  million
reported  for the  comparable  period in 2000.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $207.2  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed acquisition,  and
an increase in the average yield on the overall loan  portfolio to 7.88% for the
third  quarter ended March 31, 2001, as compared to 7.49% for the same period in
2000.

Interest income on debt and equity securities increased $650,000, or 10.7%, from
$6.1 million for the third quarter ended March 31, 2000, to $6.7 million for the
same period in 2001.  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 49 basis  point  increase in the
average yield on the debt and equity portfolios.

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$2.3 million,  or 16.9%, from $13.5 million reported for the third quarter ended
March 31, 2000, to $15.8 million for the same period in 2001.  This increase was
due  primarily to an increase in the average  yield on the  mortgage-backed  and
mortgage-related securities portfolio to 6.81% for the third quarter ended March
31, 2001, as compared to 6.54% for the same period in 2000.

INTEREST EXPENSE.  Interest expense increased $5.4 million, or 21.3%, from $25.3
million for the third  quarter  ended March 31, 2000,  to $30.7  million for the
third   quarter   ended  March  31,  2001.   The  average  cost  of  the  Bank's
interest-bearing  liabilities  increased  from 4.3% for the third  quarter ended
March 31, 2000,  to 4.5% for the third  quarter  ended March 31, 2001.  Interest
expense on deposits increased $5.8 million, or 41.6%, from $13.9 million for the
third quarter ended March 31, 2000, to $19.8 million for the third quarter ended
March 31, 2001. The increase  reflects a $392.2 million  increase in the average
balance of interest-bearing deposits, primarily attributable to a $242.0 million
increase in the average  balance of certificates of deposit and a $150.1 million
increase  in the average  balance of money  market,  savings and N.O.W.  deposit
accounts.  This increase is primarily  attributable to deposits acquired through
the completed South Jersey  acquisition.  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.



                                       12

<PAGE> 13



Interest  expense on borrowed  funds for the third  quarter ended March 31, 2001
was $11.0  million,  a decrease of  $403,000  as  compared to the $11.4  million
reported  in the same  period in 2000.  The  decrease  in  interest  expense  on
borrowed funds is  attributable to a decrease in the average balance of borrowed
funds of $10.0 million as well as a 13 basis point  decrease 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, 2001, the
Bank had $814.7 million of borrowings outstanding, an increase of $41.0 million,
or 5.3%, as compared to the $773.7 million of borrowings  outstanding as of June
30, 2000.  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-backed
and  mortgage-related  securities.  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 three
month periods ended March 31, 2001 and 2000 were $300,000. The provision for the
third quarter ended March 31, 2001 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, 2001 was $3.6  million,  as compared to the $3.1 million  reported for
the same period in 2000. The increased level of non-interest income is primarily
due to an overall increase in deposit fee income,  fee income generated from the
South Jersey  acquisition,  and advisory fee income from our investment in Peter
B. Cannell & Co. Inc.

NON-INTEREST  EXPENSE.  Non-interest expense totaled $15.2 million for the third
quarter ended March 31, 2001, an increase of $2.3 million, or 17.6%, as compared
to the  $12.9  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 South Jersey acquisition.

INCOME  TAXES.  The  Company's  effective  consolidated  tax rate for the  third
quarter  ended March 31, 2001,  was 35.7% as compared to 35.9%  reported for the
comparable period in 2000. 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, 2001
AND 2000

GENERAL.  The Company  reported net income for the nine month period ended March
31, 2001 of $28.8  million,  or core  diluted  earnings  per share of $1.16,  an
increase of 19.6% as compared  with $0.97 core  earnings per share  reported for
the same period last year.  Core earnings for the nine


                                       13


<PAGE> 14



month  periods  ended  March 31,  2001 and 2000  excludes  net gains on sales of
securities and loans of $67,000 and $734,000, respectively.

INTEREST  INCOME.  The Company  reported total interest income of $168.4 million
for the nine month  period  ended March 31,  2001,  representing  an increase of
$24.0 million, or 16.7%, as compared to the same period in 2000. The increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning  assets of $303.0  million and a 34 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 assets
acquired from South Jersey, as well as deposit inflows.

Interest income on loans  increased  $20.1 million,  or 24.0%, to $103.6 million
for the nine month period ended March 31, 2001, as compared to the $83.6 million
reported  for the  comparable  period in 2000.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $394.0  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed  acquisition,  as
well as an increase in the average yield on the overall loan  portfolio to 7.82%
for the nine month  period  ended March 31,  2001,  as compared to 7.56% for the
same period in fiscal 2000.

Interest income on debt and equity securities  increased $1.6 million,  or 8.5%,
from $18.6  million for the nine month  period  ended March 31,  2000,  to $20.2
million for the same period in 2001.  This increase is mainly  attributable to a
66 basis point increase in the average yield on the debt and equity portfolio.

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$2.0 million,  or 4.8%,  from $41.8  million  reported for the nine month period
ended  March 31,  2000,  to $43.8  million  for the same  period  in 2001.  This
increase  was  due  primarily  to an  increase  in  the  average  yield  on  the
mortgage-backed and mortgage-related  securities portfolio to 6.79% for the nine
month period  ended March 31, 2001,  as compared to 6.50% for the same period in
2000.

INTEREST EXPENSE. Interest expense increased $16.7 million, or 23.0%, from $72.7
million for the nine month period ended March 31, 2000, to $89.4 million for the
nine  month  period  ended  March  31,  2001.  The  average  cost of the  Bank's
interest-bearing  liabilities  increased  from 4.21% for the nine  month  period
ended March 31,  2000,  to 4.49% for the nine month period ended March 31, 2001.
Interest  expense on deposits  increased  $16.9  million,  or 42.3%,  from $39.9
million for the nine month period ended March 31, 2000, to $56.7 million for the
nine month period ended March 31, 2001.  The increase  reflects a $354.9 million
increase  in  the  average  balance  of  interest-bearing  deposits,   primarily
attributable to a $226.4 million increase in the average balance of certificates
of deposit and a $128.5 million increase in the average balance of money market,
savings and N.O.W. deposit accounts. This increase can be primarily attributable
to deposits acquired through the recently completed South Jersey acquisition. 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,
2001 was $32.6 million,  a decrease of $174,000 as compared to the $32.8 million
reported  in the same  period in 2000.  The  decrease  in  interest  expense  on
borrowed funds was primarily  attributable  to a decrease in the average balance
of borrowed  funds of $6.2  million,  offset in part,  by an increase in average
cost of one basis point from the nine month  period  ended March 31,  2000.  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,


                                       14


<PAGE> 15



2001,  the Bank had $814.7  million of  borrowings  outstanding,  an increase of
$41.0  million,  or 5.3%,  as  compared  to the  $773.7  million  of  borrowings
outstanding as of June 30, 2000. 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-backed and  mortgage-related  securities.  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, 2001 and 2000 were $900,000. The provision for the
nine month period ended March 31, 2001 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 nine month period ended
March 31, 2001 was $11.1 million,  as compared to the $9.8 million  reported for
the same period in 2000. The increased level of non-interest income is primarily
due to an overall  increase in deposit fee income,  loan  prepayment  fees,  fee
income generated from the South Jersey acquisition, and advisory fee income from
our  investment  in Peter B. Cannell & Co. Inc. Net gains  reported for the nine
month period ended March 31, 2000,  were  primarily due to net gains of $734,000
from the sale of equity and investment securities.

NON-INTEREST  EXPENSE.  Non-interest  expense totaled $44.3 million for the nine
month period ended March 31, 2001,  an increase of $5.3  million,  or 13.7%,  as
compared to the $39.0  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 South Jersey acquisition.

INCOME TAXES. The Company's  effective  consolidated tax rate for the nine month
period  ended March 31,  2001,  was 35.8% as compared to 36.3%  reported for the
comparable period in 2000. 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.



                                       15


<PAGE> 16



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 nine
month  periods  ended  March 31,  2001 and 2000,  the Bank's  loan  originations
totaled  $409.3  million  and  $472.6   million,   respectively.   Purchases  of
mortgage-backed,  mortgage-related  and  investment  securities  totaled  $431.5
million and $83.6  million for the nine month  periods  ended March 31, 2001 and
2000, 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,  2001,  the Bank  experienced  a net  increase  in total
deposits of $399.8  million to $2.2 billion,  or 22.3%,  as compared to the $1.8
billion at June 30,  2000.  Deposit  flows are affected by the level of interest
rates, products offered by local competitors and other factors.

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 placed a greater level of emphasis on the
utilization of borrowed funds to fund asset growth. In this regard, at March 31,
2001, the Bank had total borrowings of $814.7 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 $202.9 million at March 31, 2001, and were comprised of
$84.6  million  in  one- to  four-family  loan  commitments,  $14.7  million  in
commercial  real estate loan  commitments,  $52.9 million in  construction  loan
commitments, $14.9 million in commercial loan commitments, $26.1 million in home
equity loan  commitments,  $4.5 million in multifamily loan commitments and $5.2
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,
2001, totaled $693.1 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, 2001, the Bank exceeded all of its regulatory capital  requirements
with a leveraged  capital level of $231.6 million,  or 6.8% of adjusted  assets,
which is above the required level of $136.6 million, or 4.0% of adjusted assets,
and risk-based  capital of $250.7 million,  or 14.1% of adjusted  assets,  which
exceeds the required level of $142.7 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, 2001, cash, due from banks and federal funds sold totaled $86.2 million,  or
2.6% of total assets.

FORWARD-LOOKING STATEMENT

This Report on Form 10-Q contains certain forward-looking  statements within the
meaning of the federal securities laws. The Company intends such forward-looking
statements  to be  covered by the safe  harbor  provisions  for  forward-looking
statements  contained  in the  Private  Securities  Reform  Act of 1995,  and is
including  this  statement  for  purposes  of  these  safe  harbor   provisions.
Forward-looking statements,  which are based on certain assumptions and describe
future  plans,


                                       16


<PAGE> 17


strategies and expectations of the Company,  are generally  identified by use of
the words "believe," "expect," "intend," "anticipate," "estimate," "project," or
similar  expressions.  The  Company's  ability to predict  results or the actual
effect of future plans or  strategies  is  inherently  uncertain.  Factors which
could have a material  adverse  effect on the  operations of the Company and the
subsidiaries  include,  but are not limited  to,  changes  in:  interest  rates,
general economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and the
Federal  Reserve  Board,  the quality or  composition  of the loan or investment
portfolios,  demand for loan products,  deposit flows,  competition,  demand for
financial  services in the Company's  market area and accounting  principles and
guidelines.  These risks and  uncertainties  should be  considered in evaluating
forward-looking  statements  and  undue  reliance  should  not be placed on such
statements.  Further  information  concerning  the  Company  and  its  business,
including   additional  factors  that  could  materially  affect  the  Company's
financial results, is included in the Company's other filings with the SEC.

Readers are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date of the Report.  Except as required by applicable
law  or   regulation,   the  Company   undertakes   no   obligation   to  update
forward-looking  statements to reflect events that occur after the date on which
such statements have been made.







                                       17


<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, 2000 in Item 7a. to the Company's Form 10-K, filed with the SEC on September
28, 2000.  There have been no material  changes in the Company's  market risk at
March 31, 2001 as compared to June 30, 2000.  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,  2001,  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,  2001,  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  $686.4  million,  representing  a
one-year  interest  sensitivity  gap as a percentage of total assets of (20.5%).
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 at June 30,  2000.  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, 2001,  compared to June 30, 2000, and the projected
changes  continue to fall within the Board of Directors'  approved limits at all
levels of potential interest rate volatility.





                                       18


<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 27,  2001,
                  by and between New York Community Bancorp. Inc. and Richmond
                  County Financial Corp.*
           3.1    Certificate of Incorporation of Richmond County Financial
                  Corp.**
           3.2    Bylaws of Richmond County Financial Corp.*
          10.1    Stock Option  Agreement,  dated as of March 27, 2001, by and
                  between New York Community Bancorp. Inc., as issuer, and
                  Richmond County Financial Corp., as grantee*
          11.0    Statement re: Computation of Per Share Earnings.

            *     Incorporated  by  reference  from the Form 8-K  filed on
                  March 28, 2001.
           **     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
         -------------------

         1.   Form 8-K  filed on March 9, 2001 reporting definitive agreements
              with Summit Bancorp and FleetBoston Financial Corp. to acquire
              branch offices of each institution.

         2.   Form 8-K filed on March 28, 2001 regarding the merger with New
              York Community Bancorp. Inc.




                                       19



<PAGE> 20



                                  Exhibit Index
                                  -------------


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


11.0      Statement re: Computation of Per Share Earnings












                                       20





<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 11, 2001                    By:      /s/ Michael F. Manzulli
                                                --------------------------------
                                                Michael F. Manzulli
                                                Chairman of the Board and
                                                Chief Executive Officer


Date:  May 11, 2001                     By:     /s/ Thomas R. Cangemi
                                                --------------------------------
                                                Thomas R. Cangemi
                                                Executive Vice President, Chief
                                                Financial Officer and Treasurer








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