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 December 31, 1999    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
                                       -----      -----

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
common stock, as of the latest practicable date.

As of  February  10,  2000,  there were  28,965,239  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 December 31, 1999 and June 30, 1999..................................   3

Consolidated Statements of Operations
for the three and six months ended December 31, 1999 and 1998...........   4

Consolidated Statement of Changes in Stockholders' Equity
for the six months ended December 31, 1999 and 1998.....................   5

Consolidated Statements of Cash Flows
for the six months ended December 31, 1999 and 1998.....................   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 and Per Share Amounts)
<TABLE>
<CAPTION>

                                                                  DECEMBER 31,      JUNE 30,
                                                                     1999             1999
                                                                  ----------      ----------
                                                                  (Unaudited)
<S>                                                              <C>            <C>
                          ASSETS

Cash and due from banks ......................................   $    47,453    $    55,773
Federal funds sold ...........................................           900         17,775
Securities available for sale:
     Investment securities ...................................       267,682        297,611
     Mortgage-backed and mortgage-related securities .........       813,017        866,844
Mortgage loans:
     1-4 family ..............................................       906,776        853,103
     Multi-family ............................................       452,542        290,066
     Commercial real estate ..................................       108,135        107,280
     Construction ............................................        59,969         51,044
                                                                 -----------    -----------
Total mortgage loans .........................................     1,527,422      1,301,493
Other loans ..................................................        23,494         26,374
     Less: Unearned loan costs/(fees), net ...................            14           (455)
           Allowance for loan losses .........................       (14,396)       (13,885)
                                                                 -----------    -----------
Loans, net ...................................................     1,536,534      1,313,527
Federal Home Loan Bank stock .................................        43,435         38,388
Banking premises and equipment, net ..........................        26,933         27,353
Accrued interest receivable ..................................        16,793         15,568
Other real estate owned ......................................           617            997
Goodwill .....................................................        41,904         43,382
Other assets .................................................        95,667         82,877
                                                                 -----------    -----------
            TOTAL ASSETS .....................................   $ 2,890,935    $ 2,760,095
                                                                 ===========    ===========
              LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits ..............................................   $   180,698    $   169,007
Savings, N.O.W. and Money market accounts ....................       868,433        851,993
Certificates of deposit ......................................       628,197        598,470
                                                                 -----------    -----------
          Total deposits .....................................     1,677,328      1,619,470
Borrowings ...................................................       861,532        757,832
Accrued expenses and other liabilities .......................        10,302         12,582
                                                                 -----------    -----------
          Total liabilities ..................................     2,549,162      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; 30,409,339 and 31,662,839 shares
  outstanding, at December 31, 1999 and June 30, 1999,
  respectively ...............................................           327            327
Additional paid-in-capital ...................................       330,516        330,122
Retained earnings-substantially restricted ...................       134,239        122,784
Unallocated common stock held by
  Employee Stock Ownership Plan ("ESOP") .....................       (31,114)       (31,978)
Unearned compensation MRP Stock ..............................       (15,181)       (16,885)
Treasury stock, at cost, 2,327,795 and 1,074,295 shares
  at December 31, 1999 and June 30, 1999, respectively .......       (41,468)       (17,967)
Accumulated other comprehensive loss:
  Unrealized loss on securities available for sale, net of tax       (35,546)       (16,192)
                                                                 -----------    -----------
          Total stockholders' equity .........................       341,773        370,211
                                                                 -----------    -----------
            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......   $ 2,890,935    $ 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 Share and Per Share Amounts)
<TABLE>
<CAPTION>

                                                                FOR THE               FOR THE
                                                          THREE MONTHS ENDED     SIX MONTHS ENDED
                                                             DECEMBER 31,          DECEMBER 31,
                                                          --------------------   ------------------
                                                              (Unaudited)           (Unaudited)
                                                            1999       1998       1999      1998
                                                          ---------  ---------   --------  --------
<S>                                                        <C>        <C>        <C>       <C>
INTEREST INCOME:
   Loans                                                   $28,030    $16,033    $54,093   $29,761
   Debt and equity securities                                6,357      4,206     12,581     8,535
   Mortgage-backed and mortgage-related securities          14,025      8,825     28,271    18,079
   Federal funds sold and interest-earning bank balances        65         78        247       429
                                                          ---------  ---------   --------  --------
       Total interest income                                48,477     29,142     95,192    56,804
                                                          ---------  ---------   --------  --------
INTEREST EXPENSE:
   Deposits                                                 13,414      7,902     25,927    15,872
   Borrowed funds                                           10,801      5,729     21,415    10,358
                                                          ---------  ---------   --------  --------
       Total interest expense                               24,215     13,631     47,342    26,230
                                                          ---------  ---------   --------  --------
   Net interest income                                      24,262     15,511     47,850    30,574
   Provision for loan losses                                   300        600        600     1,350
                                                          ---------  ---------   --------  --------
   Net interest income after provision for loan losses      23,962     14,911     47,250    29,224
                                                          ---------  ---------   --------  --------
NON-INTEREST INCOME:
   Fee income                                                2,672      1,090      5,112     2,023
   Net gain on sale of securities and loans                      7      1,614        710     2,523
   Other                                                       780          8      1,554        10
                                                          ---------  ---------  ---------  --------
       Total non-interest income                             3,459      2,712      7,376     4,556
                                                          ---------  ---------  ---------  --------
NON-INTEREST EXPENSE:
   Salaries and employee benefits                            7,191      4,786     14,006     8,971
   Occupancy costs                                           1,514        721      3,001     1,631
   Computer service fees                                     1,395        834      2,789     1,640
   Advertising                                                 428        394        919       841
   FDIC insurance premiums                                     123         38        238        77
   Other                                                     1,732        948      3,467     2,115
                                                          ---------  ---------  ---------  --------
       Total general and administrative                     12,383      7,721     24,420    15,275
   Amortization of goodwill and other intangibles              818         79      1,635       157
                                                          ---------  ---------  ---------  --------
       Total non-interest expense                           13,201      7,800     26,055    15,432
                                                          ---------  ---------  ---------  --------

   Income before income taxes
                                                            14,220      9,823     28,571    18,348
   Provision for income taxes                                5,192      3,803     10,434     6,974
                                                          ---------  ---------  ---------  --------

NET INCOME                                                 $ 9,028    $ 6,020    $18,137   $11,374
                                                          =========  =========  =========  ========
EARNINGS PER SHARE:

  Basic                                                    $  0.33    $  0.27    $  0.65    $ 0.49
  Diluted                                                  $  0.33    $  0.27    $  0.65    $ 0.49
</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)
<TABLE>
<CAPTION>
                                                         Retained     Accumulated   Unallocated   Unearned
                                          Additional     Earnings        Other        Common       Common
                                Common     Paid-in    Substantially  Comprehensive  Stock Held    Stock Held  Treasury
                                Stock      Capital      Restricted    Income/(Loss)   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/(loss):
  Net income                         -           -       18,137              -              -            -          -     18,137
  Net unrealized loss on
   certain securities, net
     of tax                          -           -            -        (19,354)             -            -          -    (19,354)
                                                                                                                       ----------
Comprehensive loss                                                                                                        (1,217)
                                                                                                                       ----------
Adjustments                          -         624            -              -              -            -          -        624
Allocation of ESOP and MRP
   stock                             -          49            -              -            864        1,704          -      2,617
Common stock repurchased
   (1,276,717 shares)                -           -            -              -              -            -    (23,897)   (23,897)
Treasury stock issued for
  options exercised
    (23,217 shares)                  -        (279)           -              -              -            -        396        117
Cash dividends paid on
  common stock                       -           -       (6,682)             -              -            -          -     (6,682)
                              ---------------------------------------------------------------------------------------------------
Balance at December 31,1999    $   327   $ 330,516    $ 134,239      $ (35,546)     $ (31,114)   $ (15,181)  $(41,468) $ 341,773
                              ===================================================================================================

Balance at June 30, 1998       $   264   $ 254,307    $ 103,760      $   3,970      $ (33,706)   $       -   $      -  $ 328,595
Comprehensive income/(loss):
  Net income                         -           -       11,374              -              -            -          -     11,374
  Net unrealized loss on
   certain securities, net
    of tax                           -           -            -         (3,476)             -            -          -     (3,476)
                                                                                                                       ----------
Comprehensive income                                                                                                       7,898
                                                                                                                       ----------
Purchase of MRP stock                -           -            -              -              -      (16,118)         -    (16,118)
Allocation of ESOP and MRP
   stock                             -         (48)           -              -            864          537          -      1,353
Common stock repurchased
  (931,000 shares)                   -           -            -              -              -            -    (15,709)   (15,709)
Cash dividends paid on
  common stock                       -           -       (3,056)             -              -            -          -     (3,056)
                              ---------------------------------------------------------------------------------------------------
Balance at December 31, 1998   $   264   $ 254,259    $ 112,078      $     494      $ (32,842)   $ (15,581)  $(15,709) $ 302,963
                              ===================================================================================================
</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
                                                                                    SIX MONTHS ENDED
                                                                                       DECEMBER 31,
                                                                                   -------------------
                                                                                       (Unaudited)
                                                                                     1999         1998
                                                                                  ---------    ---------
<S>                                                                               <C>          <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES .....................................   $  15,163    $  11,524

CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in loans receivable, net ...........................................    (260,430)    (241,615)
  Loans purchased .............................................................           -       (1,500)
  Loans sold ..................................................................      37,313       15,300
  Investment securities available for sale:
    Sales and redemptions .....................................................      54,783       54,270
    Purchases .................................................................     (36,742)     (28,865)
  Mortgage-backed and mortgage-related securities available for sale:
    Sales and redemptions .....................................................      10,305       21,656
    Principal collected .......................................................      68,250      132,600
    Purchases .................................................................     (39,585)     (89,599)
  Purchases of Federal Home Loan Bank of New York stock .......................      (5,047)      (7,545)
  Net addition to banking premises and equipment ..............................        (678)      (1,885)
  Proceeds from sales of other real estate owned ..............................         377          134
                                                                                   --------    ---------
       Net cash used in investing activities ..................................    (171,454)    (147,049)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits ....................................................      57,858       42,153
  Decrease in securities sold under repurchase agreements .....................     (79,000)           -
  Increase in borrowings from the Federal Home Loan Bank ......................     182,700      144,000
  Cash dividends paid on common stock .........................................      (6,682)      (3,056)
  Net proceeds from issuance of common stock upon exercise
     of stock options .........................................................         117            -
  Purchase of MRP stock .......................................................           -      (16,118)
  Purchase of treasury shares .................................................     (23,897)     (15,709)
                                                                                   --------    ---------
       Net cash provided by financing activities                                    131,096      151,270
                                                                                   --------    ---------
  Net (decrease) increase in cash and cash equivalents ........................     (25,195)      15,745
  Cash and cash equivalents at beginning of period                                   73,548       57,884
                                                                                   --------    ---------
  Cash and cash equivalents at end of period ..................................   $  48,353    $  73,629
                                                                                   ========    =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest on deposits and borrowed funds .....................................   $  46,984    $  25,716
  Income taxes ................................................................      11,368        7,420

NON-CASH INVESTING ACTIVITIES:
  Additions to other real estate owned, net....................................   $       -    $      90
</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 six-month  periods ended  December 31,
1999 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 27,541,491 and 27,705,293 shares, for the second quarter
of fiscal 2000, respectively.  For the six months ended December 31, 1999, basic
and diluted  weighted-average  common  shares  were  27,810,711  and  28,060,626
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

<PAGE>8

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 December 21, 1999, the Company announced that it has completed its previously
announced fourth stock repurchase plan. The Company repurchased 1,596,332 shares
of its common stock, par value $.01 per share, in open market transactions at an
aggregate cost of approximately $29.6 million.

The Company also announced that it has received approval from the Superintendent
of the New York State Banking  Department to repurchase an additional  1,520,467
shares,  or 5% of the Company's  outstanding  common stock prior to February 18,
2000,  the second  anniversary of Richmond  County Savings Bank's  conversion to
stock form.

5. SUBSEQUENT EVENTS

On January 19,  2000,  the Board  authorized  the Company to commence  its sixth
stock repurchase plan of 1,444,444 shares,  or 5%, of the Company's  outstanding
stock.  The sixth stock  repurchase  plan will  commence on February  18,  2000,
following completion of the fifth stock repurchase plan.

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 January 19, 2000, the Company announced that its Board of Directors  declared
a quarterly  cash  dividend  of thirteen  cents  ($0.13) per common  share.  The
dividend is payable on March 10, 2000 to  shareholders of record on February 25,
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 $130.8 million,  or 4.7%, to $2.9 billion at December
31, 1999.  The increase in overall  assets was  primarily  due to an increase in
loans of $223.0 million, or 17.0%, offset in part by a decrease in federal funds
sold of $16.9 million. 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.

Mortgage-backed and  mortgage-related  securities decreased by $53.8 million, or
6.2%,  from $866.8  million at June 30, 1999 to $813.0  million at December  31,
1999.  Investment  securities  at December 31, 1999 totaled  $267.7  million,  a
decrease of $29.9 million, or 10.1%, compared to

<PAGE>10

$297.6  million at June 30, 1999.

The Bank continues to experience increased loan growth. For the six-month period
ended December 31, 1999, gross loans receivable  increased by $223.5 million, or
16.8%,  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 $342.3
million generated in the six-month period ended December 31, 1999, offset by the
sale of $37.3  million  of one- to  four-family  fixed rate  mortgage  loans and
scheduled  amortization  and  prepayments of $81.9.  Loan  originations  for the
six-month period ended December 31, 1999 were primarily comprised of multifamily
and one- to four-family  mortgage loans.  Multifamily mortgage loan originations
for the  six-month  period  ended  December  31, 1999  totaled  $167.4  million,
bringing the total  multifamily  loan portfolio to $452.5  million,  or 29.2% of
gross loans at quarter end.  Total one- to four-family  loan  production for the
six-month period ended December 31, 1999 was $134.6 million.

Total liabilities at December 31, 1999 were $2.5 billion,  an increase of $159.3
million,  or 6.7%, from $2.4 billion at June 30, 1999. Total deposits  increased
by $57.9 million, or 3.6%, to $1.7 billion at December 31, 1999. The Bank's core
deposits  increased  by $28.1  million,  or 2.8%,  at December  31, 1999 to $1.0
billion. The increase in the Bank's core deposits was primarily  attributable to
a $11.7 million  increase in total demand deposits and a $16.4 million  increase
in savings,  N.O.W. and Money market  accounts.  The Bank also  experienced  an
increase of $29.7  million,  or 5.0%,  in  certificates  of deposit  from $598.5
million at June 30, 1999 to $628.2 million at December 31, 1999.

Additionally, the Bank continues to place a level of emphasis on the utilization
of borrowed funds to fund asset growth. In this regard, at December 31, 1999 and
June 30,  1999,  the Bank had total  borrowings  of $861.5  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 $28.4  million to $341.8  million at
December 31, 1999 from $370.2 million at June 30, 1999. The overall decrease was
primarily due to the  repurchase of 1.3 million  shares of the Company's  common
stock,  year to date cash  dividends  paid of $6.7  million and a $19.4  million
decrease in the fair value on securities  available-for-sale,  net of tax. These
decreases  were offset by the earnings  reported for the six-month  period ended
December 31, 1999 of $18.1 million and the  amortization of $2.6 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 $6.4  million,  or 0.4% of total loans at December
31, 1999, as compared to $5.9 million, or 0.5% of total loans, at June 30, 1999.
At December 31,  1999,  the Bank's real estate  owned  consisted  of  foreclosed
assets  totaling  $617,000,  which at such date was  comprised  of three one- to
four-family properties and two commercial properties.

At  December  31,  1999,  the Bank had $3.7  million  of  assets  designated  as
"Substandard,"  consisting of 22 loans, no assets  classified as "Doubtful," and
11 consumer loans classified as "Loss,"

<PAGE>11

respectively.  At  December  31,  1999,  the  Bank had $2.7  million  of  assets
designated  as  "Special  Mention,"  consisting  of 42  loans  due to past  loan
delinquencies.

Non-accrual  loans totaled $6.4 million as of December 31, 1999,  which included
49 one- to four-family loans, with an aggregate balance of $3.9 million, and six
non-residential loans totaling $2.0 million, of which one loan is a $1.1 million
commercial mortgage on a mixed use property in Staten Island, New York. The loan
is secured by the property,  which was last  appraised in December 1996 for $1.4
million.

For the  six-month  period  ended  December 31, 1999,  the  Company's  loan loss
provision was $600,000 as compared to $1.4 million for the prior year's  period.
The Company's  allowance  for loan losses  totaled $14.4 million at December 31,
1999 and $13.9 million at June 30, 1999,  which  represents a ratio of allowance
for loan losses to non-performing loans of 226.3% 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 December 31, 1999 is adequate and  sufficient  reserves are  presently
maintained to cover potential  losses.  For the quarter ended December 31, 1999,
the Company experienced net charge-offs of $99,000.

COMPARISON OF OPERATING  RESULTS FOR THE THREE MONTHS ENDED  DECEMBER 31, 1999
AND 1998

General.  The Company  reported net income for the second quarter ended December
31, 1999 of $9.0 million, or diluted earnings per share of $0.33, an increase of
$3.0 million as compared to the $6.0 million,  or diluted  earnings per share of
$0.27,  reported for the second quarter ended  December 31, 1998.  Core earnings
for the second quarter ended December 31, 1999 increased  78.6% to a record $9.0
million,  or core  diluted  earnings  per share of $0.33,  as  compared  to $5.1
million,  or  core  diluted  earnings  per  share  of  $0.22,  reported  for the
comparable  quarter in 1998. Core earnings for the second quarter ended December
31, 1999 and 1998, excludes net gains on sales of securities and loans of $7,000
and a $1.6 million, respectively.

Interest Income. The Company reported total interest income of $48.5 million for
the second  quarter ended December 31, 1999,  representing  an increase of $19.3
million,  or 66.3%,  as  compared to the same  period in 1998.  The  increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning  assets of $1.0  billion and a 13 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 $12.0 million, or 74.8%, to $28.0 million for
the second  quarter  ended  December 31, 1999,  as compared to the $16.0 million
reported  for the  comparable  period in 1998.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $645.6  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans  acquired  through the recently  completed  acquisitions,
offset in part by a decrease in the average yield on the overall loan  portfolio
to 7.57% for the second  quarter  ended  December 31, 1999, as compared to 7.68%
for the same period in 1998.

Interest income on debt and equity securities  increased $2.2 million, or 51.1%,
from $4.2  million for the second  quarter  ended  December  31,  1998,  to $6.4
million for the same period in 1999. This increase is mainly attributable to the
growth in the average balance of debt and equity

<PAGE>12

securities,  primarily investments in financial bonds and FHLB stock, as well as
a 76 basis point increase in the average yield on the debt and equity portfolio.

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$5.2 million,  or 58.9%, from $8.8 million reported for the second quarter ended
December 31, 1998, to $14.0  million for the same period in 1999.  This increase
was due primarily to an increase in the average balance of  mortgage-backed  and
mortgage-related  securities of $307.4  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 6.50% for the second quarter ended December 31, 1999, as
compared to 6.36% for the same period in 1998.

Interest Expense. Interest expense increased $10.6 million, or 77.6%, from $13.6
million for the second quarter ended December 31, 1998, to $24.2 million for the
second  quarter  ended  December  31,  1999.  The  average  cost  of the  Bank's
interest-bearing  liabilities  decreased from 4.23% for the second quarter ended
December  31, 1998,  to 4.18% for the second  quarter  ended  December 31, 1999.
Interest expense on deposits increased $5.5 million, or 69.8%, from $7.9 million
for the second  quarter ended December 31, 1998, to $13.4 million for the second
quarter ended December 31, 1999. The increase reflects a $641.1 million increase
in the average balance of interest-bearing deposits, primarily attributable to a
$272.7 million  increase in the average balance of certificates of deposit and a
$300.7 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 quarter ended December 31, 1999 was
$10.8  million,  an  increase of $5.1  million as  compared to the $5.7  million
reported  in the same  period in 1998.  The  increase  in  interest  expense  on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $384.6  million,  offset in part by a two 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
December 31, 1999,  the Bank had $861.5  million of borrowings  outstanding,  an
increase of $103.7  million,  or 13.7%,  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-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 second
quarter  ended  December  31, 1999 was  $300,000,  as  compared to the  $600,000
reported  for the same period in the prior year.  The  provision  for the second
quarter ended December 31, 1999 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

<PAGE>13

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 second quarter ended
December 31, 1999 was $3.5 million, as compared to the $1.1 million reported for
the same period in 1998. 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
$744,000  of other  income.  Net gains  reported  for the second  quarter  ended
December 31, 1998, were primarily due to net gains of $1.6 million from the sale
of equity and investment securities.

Non-Interest Expense.  Non-interest expense totaled $13.2 million for the second
quarter  ended  December 31, 1999,  an increase of $5.4  million,  or 69.2%,  as
compared to the $7.8 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 second
quarter ended December 31, 1999, was 36.5% as compared to 38.7% reported for the
comparable period in 1998. 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 SIX MONTHS  ENDED  DECEMBER 31, 1999
AND 1998

General. The Company reported net income for the six-month period ended December
31, 1999 of $18.1 million,  or diluted  earnings per share of $0.65, an increase
of $6.8  million as compared to the $11.4  million  reported for the same period
last year.  Core  earnings  for the  six-month  period  ended  December 31, 1999
increased 77.4% to a record $17.7 million, or core diluted earnings per share of
$0.63, as compared to $10.0 million, or core diluted earnings per share of $0.42
reported for the same period last year.  Core earnings for the six-month  period
ended December 31, 1999 and 1998,  excludes net gains on sales of securities and
loans of $710,000 and $2.5 million, respectively.

Interest Income. The Company reported total interest income of $95.2 million for
the six-month period ended December 31, 1999,  representing an increase of $38.4
million,  or 67.6%,  as  compared to the same  period in 1998.  The  increase in
interest   income  was   attributable   primarily   to  the  growth  in  average
interest-earning assets of $1.1 billion and an eight 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.

<PAGE>14

Interest income on loans increased $24.3 million, or 81.8%, to $54.1 million for
the six-month  period ended  December 31, 1999, as compared to the $29.8 million
reported  for the  comparable  period in 1998.  This  increase was the result of
growth in the  average  balance  of loans  outstanding  of $649.6  million,  due
primarily to increased  originations of multifamily and one- to four-family real
estate loans and loans  acquired  through the recently  completed  acquisitions,
offset in part by a decrease in the average yield on the overall loan  portfolio
to 7.60% for the six-month  period ended December 31, 1999, as compared to 7.69%
for the same period in fiscal 1998.

Interest income on debt and equity securities  increased $4.0 million, or 47.4%,
from $8.5 million for the  six-month  period ended  December 31, 1998,  to $12.6
million for the same period in 1999. 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 51 basis  point
increase in the average yield on the debt and equity portfolio.

Interest income on mortgage-backed  and  mortgage-related  securities  increased
$10.2 million,  or 56.4%,  from $18.1 million  reported for the six-month period
ended  December 31,  1998,  to $28.3  million for the same period in 1999.  This
increase  was  due   primarily  to  an  increase  in  the  average   balance  of
mortgage-backed and mortgage-related securities of $314.3 million as a result of
the  investment  of  borrowed  funds and  mortgage-backed  and  mortgage-related
securities  acquired through the recently completed  acquisitions.  The yield on
the mortgage-backed and mortgage-related  securities remained unchanged at 6.47%
for the six-month periods ended December 31, 1999 and 1998.

Interest Expense. Interest expense increased $21.1 million, or 80.5%, from $26.2
million for the six-month  period ended  December 31, 1998, to $47.3 million for
the  six-month  period ended  December 31, 1999.  The average cost of the Bank's
interest-bearing liabilities decreased from 4.25% for the six-month period ended
December  31, 1998,  to 4.14% for the six-month period ended  December 31, 1999.
Interest  expense on deposits  increased  $10.1  million,  or 63.4%,  from $15.9
million for the six-month  period ended  December 31, 1998, to $25.9 million for
the six-month  period ended  December 31, 1999.  The increase  reflects a $626.0
million increase in the average balance of interest-bearing deposits,  primarily
attributable to a $265.0 million increase in the average balance of certificates
of deposit  and a $293.0  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 six-month  period ended December 31,
1999 was $21.4  million,  an increase of $11.1  million as compared to the $10.4
million reported in the same period in 1998. The increase in interest expense on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $422.6  million,  offset in part by a seven 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
December 31, 1999,  the Bank had $861.5  million of borrowings  outstanding,  an
increase of $103.7  million,  or 13.7%,  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

<PAGE>15

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
six-month  periods  ended  December  31,  1999 and 1998  was  $600,000  and $1.4
million,  respectively.  The provision for the second quarter ended December 31,
1999 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 six-month period ended
December 31, 1999 was $6.7 million, as compared to the $2.0 million reported for
the same period in 1998. 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
$1.5 million of other income. Net gains reported for the six-month periods ended
December 31, 1999 and 1998, were primarily due to net gains of $710,000 and $2.1
million from the sale of equity and investment securities, respectively.

Non-Interest  Expense.  Non-interest  expense  totaled  $26.1  million  for  the
six-month  period  ended  December 31, 1999,  an increase of $10.6  million,  or
68.8%,  as compared  to the $15.4  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 second
quarter ended December 31, 1999, was 36.5% as compared to 38.0% reported for the
comparable period in 1998. 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

<PAGE>16

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  six-month  periods  ended  December  31,  1999 and 1998,  the  Bank's  loan
originations totaled $196.2 million,  $342.3 million,  $118.9 million and $286.3
million,  respectively.  Purchases  of  mortgage-backed,   mortgage-related  and
investment  securities totaled $10.8 million,  $81.4 million,  $55.6 million and
$126.0  million for the three and six-month  periods ended December 31, 1999 and
1998, 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 and the net proceeds received from the Conversion. As of December 31, 1999,
the Bank  experienced a net increase in total  deposits of $57.9 million to $1.7
billion,  or 3.6%,  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.

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 December 31, 1999, the Bank had total  borrowings of $861.5 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 $153.4 million at December 31, 1999, were comprised of
$55.5  million  in  one-  to  four-family  loan  commitments,  $2.4  million  in
commercial  real estate loan  commitments,  $46.9 million in  construction  loan
commitments, $16.2 million in commercial loan commitments, $21.8 million in home
equity loan  commitments,  $6.2 million in multifamily loan commitments and $4.3
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 December 31,
1999, totaled $430.5 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  December  31,  1999,  the  Bank  exceeded  all  of  its  regulatory  capital
requirements  with a  leverage  capital  level  of  $261.7  million,  or 9.0% of
adjusted assets, which is above the required level of $116.2 million, or 4.0% of
adjusted assets, and risk-based capital of $276.1 million,  or 17.8% of adjusted
assets, which is above the required level of $123.9 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 December
31, 1999, cash, due from banks and federal funds sold totaled $48.4 million,  or
1.7% of total assets.

<PAGE>17

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 second
quarter were approximately  $30,000 and total expenses relative to the Year 2000
issue were approximately $250,000.

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 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
December  31, 1999 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 December 31, 1999,  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 December 31, 1999,  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  $331,253,  representing  a one-year
interest   sensitivity   gap  as  a  percentage  of  total  assets  of  (10.8%).
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,  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  December  31,  1999,  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
      --------
       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.                                                                Page
-----------                                                                ----
11.0    Statement re:  Computation of Per Share Earnings................     22

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:      February 14, 2000          By:     /s/ Michael F. Manzulli
                                              ----------------------------
                                               Michael F. Manzulli
                                               Chairman of the Board and
                                               Chief Executive Officer


Date:      February 14, 2000          By:     /s/ Thomas R. Cangemi
                                              ----------------------------
                                               Thomas R. Cangemi
                                               Senior Vice President, Chief
                                               Financial Officer and Treasurer