U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-QSB

(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2002

[  ] Transition report under Section 13 or l5(d) of the Exchange Act

For the transition period from  to _____

Commission file number 000-27481

Rome Bancorp, Inc.

(Exact Name of Small Business Issuer as Specified in its Charter)

Delaware			16-1573070

(State or Other Jurisdiction of					(I.R.S. Employer

Incorporation or Organization)					Identification No.)

100 West Dominick Street, Rome, NY 13440-5810

(Address of Principal Executive Offices)

(315) 336-7300

(Issuer

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)



Check whether the issuer:  (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 __

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Outstanding at

Class	May 10, 2002

Common Stock, par value $.01 			    2,909,773

Transitional Small Business Disclosure Format (check one):	Yes 	No X_





ROME BANCORP, INC.

FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2002



TABLE OF CONTENTS

|        |                       |                                                     | PAGE
|------- | --------------------- | --------------------------------------------------- | ----
|        |                       |                                                     |     
|PART I  | FINANCIAL INFORMATION | 3                                                  
|        |                       |                                                     |     
|        | ITEM 1.               | FINANCIAL STATEMENTS                                | 3   
|        | ITEM 2.               | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL   |     
|        |                       | CONDITION AND RESULTS OF OPERATIONS                 | 10  
|        |                       |                                                     |     
|PART II | OTHER INFORMATION     | 15                                                 
|        |                       |                                                     |     
|        | ITEM 1.               | LEGAL PROCEEDINGS                                   | 15  
|        | ITEM 2.               | CHANGES IN SECURITIES AND USE OF PROCEEDS           | 15  
|        | ITEM 3.               | DEFAULTS UPON SENIOR SECURITIES                     | 15  
|        | ITEM 4.               | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 15  
|        | ITEM 5.               | OTHER INFORMATION                                   | 15  
|        | ITEM 6.               | EXHIBITS AND REPORTS ON FORM 8-K                    | 15  

PART I  FINANCIAL INFORMATION

Item 1.  Financial Statements

ROME BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheet

March 31, 2002 and December 31, 2001

(in thousands, except share data)

|                                                             |                                                                     |                                                                  |                                           
|------------------------------------------------------------ | ------------------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------
|                                                             |                                                                     |                                                                  |                                           
|                                                             |                                                                     |                                                                  |                                           
|                                                             |                                                                     |                                                                  |                                           
|Assets                                                       |                                                                     |                                                                  |                                           
|                                                             |                                                                     |                                                                  |                                           
|Cash and due from banks                                      | $               5,478                                               |                                                                  | 6,027                                     
|Federal funds sold and other short-term investments          | 21,012                                                              |                                                                  | 17,895                                    
|                                                             | Total cash and cash equivalents                                     | 26,490                                                           |                                           
|Securities available for sale, at fair value                 | 43,821                                                              |                                                                  | 45,243                                    
|Securities held to maturity (fair value of $2,088 and $1,811 |                                                                     |                                                                  |                                           
|                                                             | at March 31, 2002 and December 31, 2001, respectively)              | 2,022                                                            |                                           
|Loans                                                        |                                                                     |                                                                  | 169,415                                   
|                                                             | Less: Allowance for loan loss                                       | 1,635                                                            |                                           
|                                                             |                                                                     | Net loans                                                        | 167,780                                   
|Premises and equipment, net                                  | 3,203                                                               |                                                                  | 3,195                                     
|Accrued interest receivable                                  | 1,494                                                               |                                                                  | 1,524                                     
|Other assets                                                 | 4,381                                                               |                                                                  | 4,220                                     
|                                                             |                                                                     | Total assets                                                     | 249,191                                   
|                                                             |                                                                     |                                                                  |                                           
|Liabilities & Equity                                         |                                                                     |                                                                  |                                           
|                                                             |                                                                     |                                                                  |                                           
|Liabilities                                                  |                                                                     |                                                                  |                                           
|                                                             | Deposits:                                                           |                                                                  |                                           
|                                                             |                                                                     | Non-interest bearing                                             | 25,638                                    
|                                                             |                                                                     | Savings                                                          | 83,756                                    
|                                                             |                                                                     | Money market                                                     | 7,291                                     
|                                                             |                                                                     | Time                                                             | 73,761                                    
|                                                             |                                                                     | Other interest bearing                                           | 2,509                                     
|                                                             |                                                                     |                                                                  | Total deposits                            
|                                                             | Due to broker                                                       | -                                                                |                                           
|                                                             | Borrowings                                                          | 16,264                                                           |                                           
|                                                             | Other liabilities                                                   | 4,134                                                            |                                           
|                                                             |                                                                     |                                                                  | Total liabilities                         
|                                                             |                                                                     |                                                                  |                                           
|Shareholders' equity                                         |                                                                     |                                                                  |                                           
|                                                             | Common Stock, $.01 par value; authorized: 5,000,000 shares;         |                                                                  |                                           
|                                                             |                                                                     | issued: 3,400,776 shares; outstanding 2,908,133 shares at        |                                           
|                                                             |                                                                     | March 31, 2002 and 2,948,845 shares at December 31, 2001         | 34                                        
|                                                             | Additional paid-in capital                                          | 10,344                                                           |                                           
|                                                             | Retained earnings                                                   | 32,026                                                           |                                           
|                                                             | Treasury stock, at cost (492,643 shares at March 31, 2002 and       |                                                                  |                                           
|                                                             |                                                                     | 451,931 shares at December 31, 2001)                             | (6,085)                                   
|                                                             | Accumulated other comprehensive income                              | 420                                                              |                                           
|                                                             | Unallocated shares of employee stock ownership plan (ESOP); 104,427 |                                                                  |                                           
|                                                             |                                                                     | shares at March 31, 2002 and 106,649 shares at December 31, 2001 | (731)                                     
|                                                             | Unearned compensation                                               | (170)                                                            |                                           
|                                                             |                                                                     |                                                                  | Total shareholders' equity                
|                                                             |                                                                     |                                                                  | Total liabilities and shareholders' equity

See accompanying notes to unaudited condensed consolidated financial statements.

ROME BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Income

For the Three Months Ended March 31, 2002 and 2001

(unaudited, in thousands, except share data)



|                           |                                   |                                                     | For the three months ended
|-------------------------- | --------------------------------- | --------------------------------------------------- | --------------------------
|                           |                                   |                                                     |                           
|                           |                                   |                                                     | 2002                      
|Interest income:           |                                   |                                                     |                           
|                           | Loans                             | $      3,201                                        |                           
|                           | Securities                        | 514                                                 |                           
|                           | Other short-term investments      | 85                                                  |                           
|                           |                                   | Total interest income                               | 3,800                     
|                           |                                   |                                                     |                           
|Interest expense:          |                                   |                                                     |                           
|                           | Deposits                          | 1,107                                               |                           
|                           | Borrowings                        | 276                                                 |                           
|                           |                                   | Total interest expense                              | 1,383                     
|                           |                                   |                                                     |                           
|                           |                                   | Net interest income                                 | 2,417                     
|                           |                                   |                                                     |                           
|Provision for loan losses  | 50                                |                                                     | -                         
|                           |                                   | Net interest income after provision for loan losses | 2,367                     
|                           |                                   |                                                     |                           
|Total non-interest income  | 213                               |                                                     | 249                       
|                           |                                   |                                                     |                           
|                           |                                   |                                                     |                           
|Non-interest expense:      |                                   |                                                     |                           
|                           | Salaries and employee benefits    | 1,037                                               |                           
|                           | Building, occupancy and equipment | 297                                                 |                           
|                           | Other                             | 552                                                 |                           
|                           |                                   | Total non-interest expense                          | 1,886                     
|                           |                                   |                                                     |                           
|                           |                                   |                                                     |                           
|                           |                                   | Income before income tax expense                    | 694                       
|Income tax expense         | 227                               |                                                     | 265                       
|                           |                                   | Net income                                          | 467                       
|                           |                                   |                                                     |                           
|Basic earnings per share   | $        0.17                     |                                                     | 0.18                      
|Diluted earnings per share | $        0.16                     |                                                     | 0.18                      



See accompanying notes to unaudited condensed consolidated financial statements.

ROME BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Shareholders

For the Three Months Ended March 31, 2002

(in thousands, except share data)





|                                           |                                   |                            |        |    |            |     |          |   |          |      | Accumulated   |    |             |   |              |      |      
|------------------------------------------ | --------------------------------- | -------------------------- | ------ | -- | ---------- | --- | -------- | - | -------- | ---- | ------------- | -- | ----------- | - | ------------ | ---- | -----
|                                           |                                   |                            |        |    | Additional |     |          |   |          |      | other         |    | Unallocated |   |              |      |      
|                                           |                                   |                            | Common |    | paid-in    |     | Retained |   | Treasury |      | comprehensive |    | ESOP        |   | Unearned     |      |      
|                                           |                                   |                            | stock  |    | capital    |     | earnings |   | stock    |      | income        |    | shares      |   | compensation |      | Total
|                                           |                                   |                            |        |    |            |     |          |   |          |      |               |    |             |   |              |      |      
|Balances at December 31, 2001              | $                34               |                            | 10,331 |    | 31,816     |     | (5,335)  |   | 448      |      | (747)         |    | (183)       |   | 36,364      
|Comprehensive income:                      |                                   |                            |        |    |            |     |          |   |          |      |               |    |             |   |             
|                                           | Net income                        | -                          |        | -  |            | 467 |          | - |          | -    |               | -  |             | - |              | 467 
|                                           | Other comprehensive income (loss) | -                          |        | -  |            | -   |          | - |          | (28) |               | -  |             | - |              | (28)
|                                           |                                   | Total comprehensive income |        |    |            |     |          |   |          |      |               |    |             |   |              |      | 439  
|Purchase of Treasury Stock (41,000 shares) |                                   |                            |        |    |            |     | (752)    |   |          |      |               |    |             |   | (752)       
|Exercise of stock options                  | -                                 |                            | (2)    |    | -          |     | 2        |   | -        |      | -             |    | -           |   | -           
|Amortization of Unearned Compensation      | -                                 |                            | -      |    | -          |     | -        |   | -        |      | -             |    | 13          |   | 13          
|Dividends paid ($0.09 per share)           | -                                 |                            | -      |    | (257)      |     | -        |   | -        |      | -             |    | -           |   | (257)       
|ESOP shares released for                   |                                   |                            |        |    |            |     |          |   |          |      |               |    |             |   |             
|                                           | allocation (2,222 shares)         | -                          |        | 15 |            | -   |          | - |          | -    |               | 16 |             | - |              | 31  
|                                           |                                   |                            |        |    |            |     |          |   |          |      |               |    |             |   |              |      |      
|Balances at March 31, 2001                 | $                34               |                            | 10,344 |    | 32,026     |     | (6,085)  |   | 420      |      | (731)         |    | (170)       |   | 35,838      









See accompanying notes to unaudited condensed consolidated financial statements.

ROME BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2002 and 2001

(unaudited, in thousands)



|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       | 2002  |  | 2001
|------------------------------------------------ | ---------------------------------------------------- | --------------------------------- | ------------------------------------------ | --------------------------------------------------- | -------------- | --------------- | ----- | ----- |  | ----
|Cash flows from operating activities:            |                                                      |                                   |                                            |                                                     |                |                
|                                                 | Net income                                           |                                   |                                            |                                                     |                | $           467 |       | 552  
|                                                 | Adjustments to reconcile net income to net cash      |                                   |                                            |                                                     |               
|                                                 |                                                      | provided by operating activities: |                                            |                                                     |                |                 |      
|                                                 |                                                      |                                   | Depreciation and amortization              |                                                     |                | 87              |       | 106  
|                                                 |                                                      |                                   | Provision for loan losses                  | 50                                                  |                | -              
|                                                 |                                                      |                                   | Net loss on sales of securities            | 5                                                   |                | -              
|                                                 |                                                      |                                   | Decrease in accrued interest receivable    | 30                                                  |                | 77             
|                                                 |                                                      |                                   | Net amortization (accretion) on securities |                                                     |                | 1               |       | (14) 
|                                                 |                                                      |                                   | Increase (decrease) in other liabilities   |                                                     |                | 69              |       | (23) 
|                                                 |                                                      |                                   | (Increase) decrease in other assets        |                                                     |                | (112)           |       | 295  
|                                                 |                                                      |                                   | Allocation of ESOP shares                  |                                                     |                | 31              |       | 23   
|                                                 |                                                      |                                   | Amortization of Unearned Compensation      |                                                     | 13             |                 | 13   
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|                                                 |                                                      |                                   |                                            | Net cash provided by operating activities           |                | 641             |       | 1,031
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|Cash flows from investing activities:            |                                                      |                                   |                                            |                                                     |                |                
|                                                 | Net (increase) decrease in loans                     |                                   |                                            |                                                     | (253)          |                 | 1,143
|                                                 | Proceeds from sales of securities available for sale |                                   | 990                                        |                                                     | -             
|                                                 | Proceeds from maturities and principal reductions of |                                   |                                            |                                                     |               
|                                                 |                                                      | securities available for sale     |                                            |                                                     |                | 2,731           |       | 4,216
|                                                 | Purchases of securities available for sale           |                                   |                                            | (3,287)                                             |                | (2,255)        
|                                                 | Purchases of securities held to maturity             |                                   |                                            | (430)                                               |                | -              
|                                                 | Proceeds from maturities and principal reductions of |                                   |                                            |                                                     |               
|                                                 |                                                      | securities held to maturity       |                                            |                                                     |                | 134             |       | 28   
|                                                 | Additions to premises and equipment                  |                                   |                                            | (95)                                                |                | (53)           
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|                                                 |                                                      |                                   |                                            | Net cash (used in) provided by investing activities | (210)          |                 | 3,079
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|Cash flows from financing activities:            |                                                      |                                   |                                            |                                                     |                |                
|                                                 | (Decrease) Increase in time deposits                 |                                   |                                            | (351)                                               |                | 877            
|                                                 | Increase in other deposits                           |                                   |                                            |                                                     | 4,090          |                 | 253  
|                                                 | Repayments of borrowings                             |                                   |                                            |                                                     | (593)          |                 | (555)
|                                                 | Purchase of treasury stock                           |                                   |                                            |                                                     | (752)          |                 | (424)
|                                                 | Dividends                                            |                                   |                                            |                                                     |                | (257)           |       | (214)
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|                                                 |                                                      |                                   |                                            | Net cash provided by (used in) financing activities |                |                 |       | (63) 
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|Net increase in cash and cash equivalents        |                                                      | 2,568                             |                                            | 4,047                                              
|Cash and cash equivalents at beginning of period |                                                      |                                   | 23,922                                     |                                                     | 20,800        
|                                                 |                                                      |                                   |                                            |                                                     |                |                 |       |       |  |     
|Cash and cash equivalents at end of period       |                                                      |                                   | $      26,490                              |                                                     | $       24,847

See accompanying notes to unaudited condensed consolidated financial statements.



|                                                  |                                            |  | 2002 |                 | 2001 
|------------------------------------------------- | ------------------------------------------ |  | ---- | --------------- | -----
|Supplemental disclosure of cash flow information: |                                            |  |      |                 |      
|                                                  | Non-cash investing activities:             |  |      |                 |      
|                                                  | Change in securities purchased not settled |  |      | $         (935) |      
|                                                  | Transfer of loans to real estate owned     |  |      | 30              |      
|                                                  | Cash paid during the period for:           |  |      |                 |      
|                                                  | Interest                                   |  |      |                 | 1,383
|                                                  | Income taxes                               |  |      |                 | 208  







ROME BANCORP, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

(1)	Basis of Presentation



The accompanying unaudited condensed consolidated financial statements include the accounts of Rome Bancorp, Inc. (the "Company") and The Rome Savings Bank (the "Bank"), a wholly-owned subsidiary of the Company, as of March 31, 2002 and December 31, 2001 and for the three-month periods ended March 31, 2002 and 2001.  All inter-company accounts and transactions have been eliminated in consolidation.  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  In the opinion of management the unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented.



Rome Bancorp, Inc. believes that the disclosures are adequate to make the information presented not misleading; however, the results for the periods presented are not necessarily indicative of results to be expected for the entire fiscal year.



The data in the condensed consolidated balance sheet for December 31, 2001 was derived from the Company's 2001 Annual Report on Form 10-KSB.  That data, along with the interim financial information presented in the condensed consolidated balance sheet, statements of income, statement of shareholders' equity and comprehensive income and statements of cash flows should be read in conjunction with the 2001 consolidated financial statements, including the notes thereto.



Amounts in the prior period's consolidated financial statements are reclassified when necessary to conform with the current period's presentation.





1. Earnings Per Share



The following summarizes the computation of earnings per share for the three-month periods ended March 31, 2002 and 2001 (in thousands, except share data):



|                                            | 2002             | 2001        
|------------------------------------------- | ---------------- | ------------
|Basic earnings per share:                   |                  |             
|Income available to common shareholders     | $            467 | $        552
|Weighted average basic shares outstanding   | 2,795            | 3,009       
|                                            |                  |             
|Basic earnings per share                    | $           0.17 | $    0.18   
|                                            |                  |             
|Diluted earnings per share:                 |                  |             
|Income available to common shareholders     | $          467   | 552         
|Weighted average basic shares outstanding   | 2,795            | 3,009       
|Effect of dilutive securities:              |                  |             
|Stock options                               | 63               | 45          
|Unearned compensation                       | 10               | 8           
|Weighted average diluted shares outstanding | 2,867            | 3,062       
|                                            |                  |             
|Diluted earnings per share                  | $           0.16 | $    0.18   

1. Other comprehensive Income (Loss)
2. Recent Accounting Pronouncements



The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142 on January 1, 2002.  SFAS No.142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142.  SFAS No. 142 requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment at least annually.



As of January 1, 2002, the Company had no unamortized goodwill or acquired intangibles; therefore, there was no impact of adopting these statements on the Company's financial statements.





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



Forward-Looking Statements



Statements included in this discussion and in future filings by Rome Bancorp, Inc. with the Securities and Exchange Commission, in Rome Bancorp, Inc. press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected.  Rome Bancorp, Inc. wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made.  The following important factors, among others, in some cases have affected and in the future could affect Rome Bancorp, Inc. actual results, and could cause Rome Bancorp, Inc. actual financial performance to differ materially from that expressed in any forward-looking statement:  (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which the Company is engaged; (6) competitors may have greater financial resources and developed products that enable such competitors to compete more successfully than the Company; and (7) adverse changes may occur in the securities markets or with respect to inflation.  The foregoing list should not be construed as exhaustive, and Rome Bancorp, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.



Comparison of Financial Condition at March 31, 2002 and December 31, 2001:



Total assets at March 31, 2002 were $249.2 million, an increase of $1.8 million from $247.4 million at December 31, 2001.  Securities available for sale decreased $1.4 million or 3.1% from $45.2 million at December 31, 2001 to $43.8 million at March 31, 2002.  The decrease in investments is due to funds from maturities and principal reductions of securities available for sale being temporarily placed in federal funds sold awaiting redeployment into more profitable assets.



Total deposits increased $3.7 million or 2.0% from $189.2 million to $193.0 million at March 31, 2002.  The increase in deposits is due to an increase in non-interest bearing, savings and money market deposits partially offset by a decrease in time and other interest bearing deposits. Savings deposits increased $3.0 million or 3.7% from $80.8 million at December 31, 2001 to $83.8 million at March 31, 2002 while money market increased $637,000 or 9.6% from $6.7 million at December 31, 2001 to $7.3 million at March 31, 2002.  Management attributes at least part of the increase in savings and money market deposits to the decline in the equity markets and consequent flight to safety perceived in insured deposit accounts.  Non-interest bearing deposits increased $716,000 or 2.9% from $24.9 million at December 31, 2001 to $25.6 million at March 31, 2002 primarily as a result of the Company's marketing efforts.  Time deposits decreased $351,000 or less than 1% to $73.8 million while other interest bearing deposits decreased $241,000 or 8.8% to $2.5 million as the Company de-emphasized these products in its product marketing efforts due to their higher cost.



Comparison of Operating Results for the Three-Month Periods Ended March 31, 2002 and 2001



General



Net income for the three-months ended March 31, 2002 was $467,000 or $0.16 per diluted share, representing a decrease of $85,000 or 15.4% compared to $552,000 or $0.18 per diluted share for the same period in 2001.  The decrease in net income resulted from a $50,000 provision for loan losses, a $36,000 decrease in non-interest income and $128,000 increase in non-interest expense, partially offset by a $91,000 increase in net-interest income and a $38,000 decrease in income tax expense.  The increase in net interest income was caused by a $609,000 decrease in total interest expense, partially offset by a $518,000 decrease in total interest income.



Earnings per share decreased 5.6% to $0.17 per basic share in comparison to $0.18 per basic share for the same period in 2001.  The decrease in earnings per share was the result of the aforementioned decrease in net income for the Company for the three months ended March 31, 2002 in comparison to the year earlier period partially offset by a decrease in the weighted average number of shares outstanding to 2,794,791 in comparison to 3,008,906 for the three months ended March 31, 2001 primarily as a result of the Company's stock repurchase program.



Interest Income



Interest income decreased from $4.3 million for the quarter ended March 31, 2001 to $3.8 million for the quarter ended March 31, 2002.  The decrease in interest income was principally due to the unprecedented decline in market interest rates last year.  Interest income on loans decreased $241,000 to $3.2 million for the quarter ended March 31, 2002 primarily reflecting a decrease in their average yield to 7.65% for the quarter ended March 31, 2002 in comparison to 8.35% for the quarter ended March 31, 2001.  Similarly, tax equivalent interest income on securities declined $125,000 from $697,000 for quarter ended March 31, 2001 to $572,000 for the quarter ended March 31, 2002 primarily as a result of a decline in their tax-equivalent yield from 5.87% for the quarter ended March 31, 2001 to 4.95% for the quarter ended March 31, 2002.  Lastly, interest income on federal funds sold and other interest bearing deposits declined $150,000 from $234,000 for the quarter ended March 31, 2001 to $84,000 for the quarter ended March 31, 2002 primarily reflecting a decline in their yield from 5.48% for the quarter ended March 31, 2001 to 1.75% for the quarter ended March 31, 2002.



Interest Expense



Interest expense decreased from $2.0 million for the quarter ended March 31, 2001 to $1.4 million for the quarter ended March 31, 2002.  Interest expense on deposits declined from $1.7 million for the quarter ended March 31, 2001 to $1.1 million for the quarter ended March 31, 2002 reflecting a decrease in their average cost from 4.23% for the quarter ended March 31, 2001 to 2.71% for the quarter ended March 31, 2002. The decline in their average cost was consistent with the aforementioned decline in market rates. Interest expense on borrowed funds declined from $323,000 for the quarter ended March 31, 2001 to $276,000 for the quarter ended March 31, 2002 as a result of a decline in average borrowings to $16.5 million for the quarter ended March 31, 2002 compared to $19.3 million for the quarter ended March 31, 2001.



Provision for Loan Losses



The Company made a $50,000 provision for loan losses for the three months ended March 31, 2002 in comparison to none for the same period in 2001.  Asset quality remains high with non-performing loans as a percent of loans of .42% as of March 31, 2002 in comparison to .45% at December 31, 2001 and the allowance for loan losses as a percent of non-performing loans of 229.6% at March 31, 2002 in comparison to 211.5% at December 31, 2001.



In determining the appropriate provision for loan losses, management considers the level of and trend in non-performing loans, the level of and trend in net loan charge-offs, the dollar amount and mix of the loan portfolio, as well as general economic conditions and real estate trends in the Company's market area, which can impact the inherent risk of loss in the Company's loan portfolio.



Non-interest Income and Non-interest Expense



The decrease in non-interest income was the result of a $5,000 loss on investments for the quarter ended March 31, 2002 in comparison to none for the same period in 2001 as well as a $31,000 decrease in service charges and fees from $249,000 for the quarter ended March 31, 2001 to $218,000 for the quarter ended March 31, 2002.   The decrease in service charges and fees was principally a result of a change in contracts with the Company's ATM service provider which resulted in both a decrease in non-interest income and expense.



Non-interest expense increased $128,000 to $1.9 million for the quarter ended March 31, 2002.  The increase in non-interest expense was the result of a $108,000 increase in salaries and employee benefits and a $53,000 increase in other corporate expenses partially offset by a $33,000 decrease in building occupancy and equipment expense.



The increase in salaries and employee benefits was principally the result of increases in the cost of the Company's defined benefit and employee stock ownership plan (ESOP) retirement plans.  The decrease in building occupancy and equipment expense was principally the result of a decline in the Company's energy cost as a result of the generally milder winter experienced in the first quarter of 2002 by comparison to the first quarter of 2001, as well as lower depreciation expense on the Company's equipment.  Finally, other corporate expenses increased principally as a result of expenses related to the introduction of several new products including internet banking, debit cards, and merchant processing for the Company's retail business customers.





Liquidity and Capital Resources



The Company's primary sources of funds consist of deposits, scheduled amortization and prepayments of loans and mortgage-backed securities, maturities of investments, interest bearing deposits at other financial institutions and funds provided from operations.  The Bank also has a written agreement with the Federal Home Loan Bank of New York that allows it to borrow up to $22.6 million.  At March 31, 2002, the Bank had no outstanding borrowings on this line of credit, but did have outstanding advances and an amortizing note totaling $16.3 million.



Loan repayments and maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of investment securities, and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions, and competition in the marketplace.  These factors reduce the predictability of the timing of these sources of funds.



The Company's primary investing activities include the origination of loans and to a lesser extent the purchase of investment securities.  For the three-month period ended March 31, 2002 the Company originated loans of approximately $10.0 million compared to approximately $6.0 million for the three-month period ended March 31, 2001.  Purchases of securities were $3.7 million for the three-month period ending March 31, 2002 and $2.3 million for the same period in 2001.



At March 31, 2002, the Company had loan commitments to borrowers of approximately $10.7 million, and available letters and lines of credit of approximately $5.9 million.  Total deposits were $193.0 million at March 31, 2002, an increase of $3.8 million from $189.2 million at March 31, 2001.



Time deposit accounts scheduled to mature within one year were $53.3 million at March 31, 2002.  Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain with the Company.  We are committed to maintaining a strong liquidity position; therefore, the Company monitors its liquidity position on a daily basis.  The Company anticipates that it will have sufficient funds to meet its current funding commitments.  The marginal cost of new funding however, whether from deposits or borrowings from the Federal Home Loan Bank, will be carefully considered as the Company monitors its liquidity needs.  Therefore, in order to minimize its cost of funds, the Company may consider additional borrowings from the Federal Home Loan Bank in the future.



At March 31, 2002, the Company and the Bank exceeded each of the applicable regulatory capital requirements.  The Company's and the Bank's leverage (Tier 1) capital at March 31, 2002 was $35.3 million and $33.8 million, respectively, or 14.3% and 13.7% of average assets, respectively.   In order to be classified as "well-capitalized" by the FDIC, the Bank is required to have leverage (Tier 1) capital of $12.2 million, or 5.0% of average assets. To be classified as a well-capitalized bank by the FDIC, the Bank must also have a total risk-based capital ratio of 10.0%. At March 31, 2002, the Bank had a total risk-based capital ratio of 20.9%.



The Company paid cash dividends of $0.09 and $.07 per share during the three-month periods ended March 31, 2002 and 2001, respectively.  During the three-month period ended March 31, 2002, the Company repurchased 41,000 shares of common stock at a cost of $752,000.



The Company does not anticipate any material capital expenditures, nor does it have any balloon or other payments due on any long-term obligations or any off-balance sheet items other than the commitments and unused lines of credit noted above.



Part II - OTHER INFORMATION



Item 1.	Legal Proceedings



None.



Item 2.	Changes in Securities and Use of Proceeds



None.



Item 3.	Defaults Upon Senior Securities



None.



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



None.



Item 5.	Other Information



None.



Item 6.	Exhibits and Reports on Form 8-K



(a)	None.

(b)	Reports on Form 8-K

None.