<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                
                                         

                                FORM 10-Q

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


         For the quarterly period ended  September 30, 1995           

                                      OR

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

           For the transition period from            to            
                                          -----------   -----------

                       Commission File Number:  O-17177

                             BSB Bancorp, Inc.   
                             -----------------
            (Exact name of registrant as specified in its charter)

               Delaware                        16-1327860        
               --------                        ----------
      (State or other jurisdiction of     (I.R.S. Employer Number)
                     incorporation or organization)

              58-68 Exchange Street, Binghamton, New York 13902  
              -------------------------------------------------
             (Address of principal executive offices) (Zip Code) 

      Registrant's telephone number, including area code: (607) 779-2552

                                      n/a
                                      ---
Former name, former address and former fiscal year, if changed since last report


  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 September 30, 1995:
4,206,623 shares of common stock, $0.01 par value.
<PAGE>
 
Item 1 - Financial Statements 

BSB BANCORP, INC.           
CONSOLIDATED STATEMENTS OF CONDITION                      (Dollars in Thousands)

<TABLE>
<CAPTION> 
                                                                  September 30,   December 31,
                                                                      1995           1994 
                                                                      ----           ----
<S>                                                             <C>             <C> 
ASSETS                                                              
 
Cash and due from banks                                         $       31,005  $      28,199 
Federal funds sold                                                           0         10,500 
                                                                --------------  -------------
 Total cash and cash equivalents                                        31,005         38,699 
Investment securities (market value $91,887 and $86,674)                91,422         86,686 
Mortgage-backed securities (market value $127,657 and $143,048)        127,331        143,177 
Mortgages held for sale                                                  3,562          1,782 
Loans:                                                              
 Commercial                                                            445,869        386,875 
 Consumer                                                              205,200        200,863
  Real estate                                                          295,399        277,344
                                                                --------------  -------------
      Total loans                                                      946,468        865,082 
Less:   Unearned discounts                                                 625          1,218 
        Allowance for possible credit losses                            15,758         15,847 
                                                                --------------  -------------
             Net loans                                                 930,085        848,017 
Bank premises and equipment                                              6,909          7,136 
Accrued interest receivable                                              8,565          7,697 
Other real estate                                                        2,989          3,234 
Intangible assets                                                        2,557          2,778 
Other assets                                                            16,249         20,202 
                                                                --------------  ------------- 
                                                                   $ 1,220,674    $ 1,159,408
                                                                ==============  =============
 
LIABILITIES & SHAREHOLDERS' EQUITY                                  
 
Due to depositors                                                 $    969,630   $    962,780 
Borrowings                                                             121,318         79,028 
Other liabilities                                                       14,440         10,730 
Commitments                                                         
   Shareholders' Equity:                                            
 
 Preferred Stock, par value $0.01 per share;                        
   authorized 5,000,000 shares; none issued                                  0              0 
 Common Stock, par value $0.01 per share;  authorized 
   10,000,000 shares; 4,840,142  shares and 4,820,617 shares issued         48             48 
   Additional paid-in capital                                           26,731         26,436 
   Undivided profits                                                    99,746         92,986 
   Unrealized depreciation in         
     securities available for sale, net                                 (1,034)        (5,546)
   Treasury stock, at cost:  633,519 and 528,419 shares                (10,205)        (7,054)
                                                                --------------  -------------
Total Shareholders' Equity                                             115,286        106,870 
                                                                --------------  -------------
                                                                   $ 1,220,674    $ 1,159,408 
                                                                ==============  =============
</TABLE> 

The accompanying notes are an integral part of the financial statements.

                                       1
<PAGE>
 
Item 1 - (continued) 

BSB BANCORP, INC.                              CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION> 
(Dollars in Thousands-Except Per Share Data)               Three Months Ended   Nine Months Ended
                                                               September 30,       September 30,
                                                            1995        1994      1995      1994 
                                                            ----        ----      ----      ----
<S>                                                       <C>        <C>       <C>       <C> 
Interest income:                                                      
 Interest and fees on loans                               $ 21,573   $ 17,680  $ 62,120  $ 50,663 
 Interest on mortgage-backed securities                      2,394      2,653     7,284     7,618 
 Interest on mortgages held for sale                            91         55       164       132 
 Interest on federal funds sold and                                   
     interest-bearing deposits                                   0        131        30       534 
 Interest and dividends on investment securities:                                   
     U.S. Government obligations                               742        683     2,214     1,534 
     State and municipal obligations                           105        109       317       382 
     Other debt obligations                                    284        311     1,075       790 
     Corporate stocks                                          224        219       572       599 
                                                          --------   --------  --------  -------- 
         Total interest income                              25,413     21,841    73,776    62,252 
Interest expense:                                                    
 Interest on savings deposits                                1,101      1,319     3,347     3,889 
 Interest on time accounts                                   7,085      5,858    20,880    16,452 
 Interest on money market deposit accounts                   2,680      1,698     7,827     4,144 
 Interest on NOW accounts                                      197        207       573       600 
 Interest on borrowed funds                                  1,671      1,030     4,810     2,945 
                                                          --------   --------  --------  -------- 
         Total interest expense                             12,734     10,112    37,437    28,030 
                                                          --------   --------  --------  -------- 
Net interest income                                         12,679     11,729    36,339    34,222 
Provision for credit losses                                  1,431        853     4,096     2,782 
                                                          --------   --------  --------  -------- 
Net interest income after provision for credit losses       11,248     10,876    32,243    31,440 
Gains (losses) on securities                                   104        193       (88)      354 
Gains (losses) on the sale of mortgages                       (189)       (23)     (127)     (817)
Non-interest income:                                                  
 Service charges on deposit accounts                           409        357     1,155     1,024 
 Credit card fees                                              583        423     1,547     1,141 
 Mortgage servicing fees                                       227        214       689       631 
 Fees and commissions-brokerage services                        85         80       241       258 
 Trust fees                                                    126        115       373       350 
 Other charges, commissions, and fees                          170        185       511       589 
                                                          --------   --------  --------  -------- 
         Total non-interest income                           1,600      1,374     4,516     3,993 
                                                          --------   --------  --------  -------- 
Non-interest expense:                                                
 Salaries, pensions and other employee benefits              3,016      3,229     9,138     8,960 
 Building occupancy                                            575        540     1,751     1,615 
 Computer service fees                                         215        181       626       534 
 Services                                                      400        436     1,436     1,358 
 FDIC insurance                                                (42)       516     1,035     1,501 
 Goodwill                                                       74         74       221        98 
 Interchange fees                                              420        312     1,074       784 
 Other real estate expenses                                    802         48     1,063        80
 Other expenses                                              1,282      1,284     4,221     3,749
                                                          --------   --------  --------  --------
        Total non-interest expense                           6,742      6,620    20,565    18,679 
                                                          --------   --------  --------  --------
Income before income taxes                                   6,021      5,800    15,979    16,291 
Provision for income taxes                                   2,394      2,285     6,405     6,455 
                                                          --------   --------  --------   --------
NET INCOME                                               $   3,627  $   3,515 $   9,574  $  9,836 
                                                          ========   ========  ========  ======== 
Earnings per share:                                      $    0.86  $    0.80 $    2.24 $    2.23 
                                                          ========   ========  ========  ======== 
Average shares outstanding                               4,213,014  4,387,019 4,265,366 4,408,570 

</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       2
<PAGE>
 
Item 1 - (continued) 

<TABLE>
<CAPTION> 
CONSOLIDATED STATEMENTS OF CASH FLOWS                                                    Nine Months Ended September 30,
Operating activities:                                                                      1995                 1994 
                                                                                           ----                 ----
<S>                                                                                    <C>                   <C> 
 Net income                                                                            $    9,574            $   9,836 
   Adjustments to reconcile net income to net cash provided by                                     
     operating activities:                                                     
       Provision for credit losses                                                          4,296                2,782 
       Realized loss (gain) on available for sale investment securities                        36                (133)
       Realized gain on available for sale mortgage-backed securities                       (149)                (221)
       Gains (losses) on sale of mortgages                                                    127                  817 
       Gain on sales and disposition of premises and equipment                                (3)                 (21)
       Depreciation and amortization                                                        1,025                  861 
       Net amortization (accretion) of premiums and discounts on investment securities       (55)                   17 
       Net amortization of premiums and discounts on mortgage-backed securities               113                  223 
       Net accretion of premiums and discounts on loans                                     (593)                 (97)
       Sales of loans originated for sale                                                  26,517               38,681 
       Net increase in loans originated for sale                                         (28,387)             (33,510)
       Decrease (increase) in other assets and liabilities                                  3,246              (6,371)
                                                                                        ---------           ---------
         Net cash provided by operating activities                                         15,747               12,864 
                                                                                        ---------           ---------
Investing activities:                                                                
 Proceeds from calls of held to maturity investment securities                                450                    0 
 Principal collected on held to maturity investment securities                                109                   91 
 Purchases of held to maturity investment securities                                      (1,151)              (2,515)
 Proceeds from calls of held to maturity mortgage-backed securities                            50                   78 
 Principal collected on held to maturity mortgage-backed securities                         1,738                4,281 
 Purchases of held to maturity mortgage-backed securities                                       0              (3,778)
 Proceeds from sales of available for sale investment securities                           37,635               71,821 
 Purchases of available for sale investment securities                                   (42,563)             (85,353)
 Principal collected on available for sale investment securities                               61                1,917 
 Proceeds from sales of available for sale mortgage-backed securities                      21,396               55,489 
 Purchases of available for sale mortgage-backed securities                              (13,181)             (75,127)
 Principal collected on available for sale mortgage-backed securities                      14,165               36,734 
 Net increase in longer-term loans                                                       (93,554)             (65,845)
 Proceeds from sales of loans                                                               8,212               12,493 
 Other                                                                                      (573)                (658)
                                                                                        ---------           ---------
         Net cash used in investing activities                                           (67,206)             (50,372)
                                                                                        ---------           ---------
Financing activities:                                                 
 Net increase (decrease) in demand deposits, NOW accounts, savings
   accounts, and money market deposit accounts (net of deposits acquired)               (12,097)                29,463 
 Net increase in time deposits (net of deposits acquired)                                 19,242                 3,627 
 Net increase in short-term borrowings (3 months)                                         42,450                59,887 
 Proceeds from long term borrowings                                                            0                25,000 
 Repayment of long-term borrowings                                                         (160)              (75,434)
 Proceeds from exercise of stock options                                                     295                   122 
 Purchases of treasury stock                                                             (3,151)               (1,230)
 Dividends paid                                                                          (2,814)               (2,512)
                                                                                        ---------           ---------
         Net cash provided by financing activities                                        43,765                38,923 
           Decrease (increase) in cash and cash equivalents                              (7,694)                 1,415 
Cash and cash equivalents at beginning of year                                            38,699                29,508 
                                                                                        ---------           ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $   31,005           $    30,923 
                                                                                        ---------           ---------
Supplemental disclosures of cash flow information:.                   
 Cash paid during the year for:
   Interest credited on deposits and paid on other borrowings                         $   37,321           $    28,775 
   Income taxes                                                                       $    6,729           $     7,036 
 Non-cash investing activity:                                         
   Securitization of mortgage loans and transfers to/or sales of other real estate    $    (245)           $    20,162 
   Unrealized appreciation (depreciation) in securities                               $    7,744           $  (10,011)
</TABLE> 

The accompanying notes are an integral part of the financial statements

                                       3
<PAGE>
 
Item 1 - (continued)

BSB BANCORP, INC.                                         
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY          


<TABLE>
<CAPTION> 
                                                                                              Unrealized
                                                                                             Depreciation
                                               Additional                                   In Marketable
Nine Months Ended                  Common       Paid-In        Undivided       Treasury         Equity
September 30,                       Stock       Capital         Profits         Stock         Securities      Total 
-----------------                  ------      ----------      ---------       --------     -------------     -----
                                                                  (Dollars In Thousands)
<S>                                <C>         <C>             <C>           <C>            <C>             <C> 
1994

Balance at December 31, 1993       $    48      $ 26,065        $ 83,580     $   (2,869)     $   2,362      $ 109,186 
Increase in unrealized                                               
    depreciation in available                                                       
    for sale securities                                                                         (5,834)        (5,834)
Net income                                                         9,836                                        9,836 
Stock options exercised                              122                                                          122 
Cash dividend paid on common                                                        
    stock ($0.57 per share)                                       (2,512)                                      (2,512)
Treasury stock purchased                                                         (1,230)                       (1,230)
                                   -------      --------        --------     ----------      ---------      ---------  
Balance at September 30, 1994      $    48      $ 26,187        $ 90,904     $   (4,099)     $  (3,472)     $ 109,568 
                                   =======      ========        ========     ==========      =========      =========  
                                                                     
                            
1995
                                    
Balance at December 31, 1994       $    48      $ 26,436        $ 92,986     $   (7,054)     $  (5,546)     $ 106,870 
Decrease in unrealized                                               
           depreciation in available                                                
                                    
    for sale securities                                                                          4,512          4,512 
Net income                                                         9,574                                        9,574 
Stock options exercised                              295                                                          295 
Cash dividend paid on common                                                        
                            
    stock ($0.66 per share)                                       (2,814)                                      (2,814)
Treasury stock purchased                                                         (3,151)                       (3,151)
                                   -------      --------        --------     ----------      ---------      ---------  
Balance at September 30, 1995      $    48      $ 26,731        $ 99,746      $ (10,205)     $  (1,034)     $ 115,286 
                                   =======      ========        ========     ==========      =========      =========  

</TABLE> 

The accompanying notes are an integral part of the financial statements.

                                       4
<PAGE>
 
Item 1 - (continued)

BSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 1995

(1)     In the opinion of management, the interim financial statements reflect
        all adjustments which are of a normal recurring nature necessary to a
        fair statement of the results for the interim periods presented. The
        December 31, 1994 data in the Consolidated Statements of Condition is
        derived from the consolidated financial state ments included in the
        Company's 1994 Annual Report to Shareholders. The accompanying unaudited
        in terim consolidated financial statements and related notes should be
        read in conjunction with the consolidated financial statements and
        related notes included in the Company's 1994 Annual Report to
        Shareholders. Cer tain reclassifications have been made to these
        statements to conform to current presentation.

(2)     Outstanding stock options were excluded from the weighted average number
        of shares because their dilutive effect is not material. Fully diluted
        earnings per common share have not been presented because it is not
        significantly different from primary earnings per share.

(3)     The Company adopted FAS 114, Accounting by Creditors for Impairment of a
        Loan , on January 1, 1995. Under the new standard, a loan is considered
        impaired, if based on current information and events, it is probable
        that the Company will be unable to collect the scheduled payments of
        principal or interest when due according to the contractual terms of the
        loan agreement. The measurement of impaired loans is generally based on
        the present value of expected future cash flows discounted at the
        historical effective interest rate, except that collateral-dependent
        loans are generally measured for impairment based on the fair value of
        the collateral. The adoption of FAS 114 did not result in a material
        impact on the provision for credit losses.

(4)     On October 23, 1995, the Board of Directors declared a three-for-two-
        stock split. The stock split is pay able on December 8, 1995 to
        shareholders of record at the close of business on November 21, 1995.
        The Board also extended the Company s stock repurchase program,
        announced April 25, 1995, to repurchase up to 215,000 shares of its
        common stock, of which 72,300 shares remain to be repurchased. Shares
        may be repurchased from time to time during the next six months in open
        market and unsolicited, negotiated transactions. Repurchases will be
        subject to availability and prices which are acceptable to the Company.

                                       5
<PAGE>
 
Item 1 - (continued)


(5)     Effective August 1, 1995, the Company s subsidiary, BSB Bank & Trust
        (formerly Binghamton Savings Bank), converted from a state-chartered
        savings bank to a state-chartered commercial bank. Under that change,
        the surplus fund, as required under the savings bank charter, was no
        longer needed.

(6)     Certain data for prior years has been reclassified to conform to the
        current year s presentation. These reclassifications had no effect on
        net income.

                                       6
<PAGE>
 
Item 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General
-------   

   BSB Bancorp, Inc. (the "Company"), the bank holding company for BSB Bank &
Trust Company (the "Bank"), earned net income of $3,627,000, or $0.86 per share,
for the quarter ended September 30, 1995, as compared to net income of
$3,515,000, or $0.80 per share, for the quarter ended September 30, 1994. On Au
gust 1, 1995, the Company affected the conversion of its wholly owned savings
bank subsidiary to a commercial bank and trust company charter. Although the
charter change is not expected to have a material impact on oper ations, the
Company believes the new corporate identity of the Bank is a better reflection
of the commercial focus of the Bank over recent years. All references to the
Company herein are intended to include the activities of the Bank, the Company's
wholly-owned subsidiary. Net income for the first nine months of 1995 totalled
$9,574,000, or $2.24 per share, compared to net income of $9,836,000, or $2.23
per share for the first nine months of 1994. The Board also announced a 36%
increase in the quarterly cash dividend. The dividend, ad justed for the stock
split, is $0.20 per share and is payable December 8, 1995 to shareholders of
record at the close of business on November 22, 1995.

   By action of the Board of Directors at its October meeting, William H.
Rincker was elected Chairman of the Board and Chief Executive Officer and Alex
S. DePersis was promoted to President and Chief Operating Officer; Mr. Rincker
and Mr. DePersis will hold the same positions at the Bank.

   The Bank is a stockholder of Nationar, a trust company jointly owned by over
60 savings banks through out New York State. The Bank also used Nationar as its
primary depository, check processor, and trust depos itory. In February 1995,
the Superintendent of Banks of New York State took possession and assumed the
operations of Nationar due to financial instability. The Company has charged off
its equity and debenture investments in Nationar ($218,000), and the Bank has
filed claims with the Banking Department to settle its demand deposit account
($1.3 million) and to retrieve certain securities held by Nationar in connection
with an overdraft line of credit ($1.0 million). Management does not believe the
final resolution of the claims will have a material impact upon the financial
statements of the Company.

Financial Condition
-------------------   

   During the first nine months of 1995, the Bank originated $91.0 million of
commercial loans, which contributed to a net increase in the commercial loan
portfolio from $386.9 million to $445.9 million. The interest rates on these
loans are generally tied to the Company's Prime Rate. Consumer loans increased
from $200.9 million to $205.2 million, and during this period, the Bank
originated $74.4 million in consumer loans and sold $2.4 million in student
loans. Real estate loans increased from $277.3 million at December 

                                       7
<PAGE>
 
Item 2 - (continued)

  31, 1994 to $295.4 million at September 30, 1995. During this period, the Bank
originated $76.9 million of real estate loans and sold $32.5 million. The Bank's
real estate loan originations included refinancing $8.7 million of residential
real estate loans during the first nine months of 1995.
   
   Total assets increased from $1,159.4 million at December 31, 1994 to $1,220.7
million at September 30, 1995. Total deposits increased from $962.8 million at
December 31, 1994 to $969.6 million at September 30, 1995. The Company's
borrowings increased from $79.0 million at December 31, 1994 to $121.3 million
at September 30, 1995, while cash and cash equivalents decreased from $38.7
million to $31.0 million at September 30, 1995, primarily in federal funds sold.
This decrease in federal funds sold and the increase in borrowings were used to
fund the growth in the Bank s loan and investment portfolios during the first
nine months of 1995. The Com pany's brokered deposits decreased from $40.0
million at December 31, 1994 to $20.0 million at September 30, 1995.

   Shareholders' equity increased from $106.9 million to $115.3 million during
the first nine months of 1995. This increase is a result of the Company's
earnings of $9.6 million, and a decrease of $4.5 million of unrealized
depreciation in investment securities available for sale, as required under SFAS
No. 115, "Accounting For Cer tain Investments in Debt and Equity Securities",
offset by cash dividends paid to shareholders of $2.8 million and repurchases of
outstanding Company stock totalling $3.2 million.

   
Results of Operations
---------------------   

   The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets, primarily loans and investments, and interest expense on interest-
bearing liabilities, primarily deposits and borrowings. The Company's operating
results also are affected by credit loss requirements, operating expenses, the
level of other income, including gains or losses on sale of mortgages and
securities, and other fees.

   The following tables set forth, for and at the periods indicated, information
regarding (i) the Company's average balance sheet, (ii) the total dollar amount
of interest income from interest-earning assets and the result ing average
yields, (iii) the total dollar amount of interest expense on interest-bearing
liabilities and the resul tant average cost, (iv) net interest income, (v)
interest rate margin and interest rate spread, (vi) net interest-earning assets,
(vii) net yield on interest-earning assets, and (viii) ratio of interest-earning
assets to interest-bearing liabilities. Average balances are based on daily or
month-end balances. No tax equivalent adjust ments were made.

                                       8
<PAGE>
 
Item 2 - (continued)
<TABLE>
<CAPTION> 
(Dollars in Thousands)                                                  Three Months Ended September 30,                   
                                                                    1995                               1994          
                                                                    ----                               ----
                                                    Average                Yield/     Average                   Yield/
                                                    Balance     Interest    Rate      Balance      Interest      Rate
                                                    -------     --------   ------     -------      --------     ------   
<S>                                              <C>           <C>         <C>      <C>           <C>           <C> 
Interest-earning assets:                                             
 Commercial loans                                $   421,318   $ 10,826    10.28%   $   358,145   $   7,978     8.91%
 Consumer loans                                      203,090      4,750     9.36        189,427       4,291     9.06
 Real estate loans                                   292,145      5,997     8.21        269,896       5,411     8.02
 Investment securities                                83,479      1,355     6.49         90,452       1,322     5.85
 Mortgage-backed securities                          130,188      2,394     7.36        157,649       2,653     6.73 
 Mortgages held for sale                               3,348         91    10.87          4,159          55     5.29
 Other interest-earning assets                             0          0     0.00         12,122         131     4.32
                                                  ----------   --------    -----    -----------   ---------     ---- 
   Total  interest-earning assets                  1,133,568   $ 25,413     8.97%     1,081,850    $ 21,841     8.08% 
                                                  ----------   --------    -----    -----------   ---------     ---- 
Non-interest-earning assets                           61,576                             53,289            
                                                  ----------                        -----------   
                      Total assets                $1,195,144                         $1,135,139      
                                                  ==========                         ==========      
Interest-bearing liabilities:                                                
   Deposits and mortgage escrow funds            $   958,449   $ 11,063     4.62%   $   929,918   $   9,082     3.91%
    Borrowings                                       108,026      1,671     6.19         84,516       1,030     4.87       
                                                  ----------   --------    -----    -----------   ---------     ----  
   Total interest-bearing liabilities              1,066,475   $ 12,734     4.78%     1,014,434    $ 10,112     3.99% 
                                                  ----------   --------    -----    -----------   ---------     ----  
Non-interest-bearing liabilities                      11,276                              8,612                        
                                                  ----------                        -----------   
   Total liabilities                               1,077,751                          1,023,046            
                                                  ----------                        -----------   
Shareholders' equity                                 117,393                            112,093            
                                                  ----------                        -----------   
   Total liabilities and shareholders' equity     $1,195,144                         $1,135,139      
                                                  ==========                         ==========      

Net interest income/net interest rate spread                   $ 12,679     4.19%                   $ 11,729    4.09%
                                                               ========     ====                    ========    ====    
Net earnings assets/net interest rate margin                   $ 67,093     4.47%                   $ 67,416    4.34%
                                                               ========     ====                    ========    ====
Ratio of interest-earning assets to
 interest-bearing liabilities                                               1.06X                               1.07X
                                                                            ====                                ====
<CAPTION> 
(Dollars in Thousands)                                                   Nine Months Ended September 30,                   
                                                                    1995                               1994          
                                                                    ----                               ----
                                                    Average                Yield/     Average                   Yield/
                                                    Balance     Interest    Rate      Balance      Interest      Rate
                                                    -------     --------   ------     -------      --------     ------   
<S>                                              <C>           <C>         <C>      <C>           <C>           <C>  
Interest-earning assets:                                            
 Commercial loans                                $   401,839   $ 30,529    10.13%    $  348,345     $ 21,749     8.32%
 Consumer loans                                      201,179     13,692     9.07        184,304       12,389     8.96
 Real estate loans                                   286,134     17,899     8.34        273,801       16,525     8.05
 Investment securities                                88,731      4,178     6.28         69,396        3,305     6.35
 Mortgage-backed securities                          138,813      7,284     7.00        156,741        7,618     6.48
 Mortgages held for sale                               2,023        164    10.81          4,296          132     4.10
 Other interest-earning assets                           589         30     6.79         18,608          534     3.83
                                                  ----------   --------    -----    -----------    ---------     ----  
   Total  interest-earning assets                  1,119,308   $ 73,776    8.79%     1,055,491     $ 62,252     7.86% 
                                                  ----------   --------    -----    -----------    ---------     ----  
Non-interest-earning assets                           59,364                             50,659         
                                                  ----------                        -----------                        

    Total assets                                  $1,178,672                         $1,106,150                        
                                                  ==========                        =========== 
Interest-bearing liabilities:                                       
 Deposits and mortgage escrow funds              $   948,403   $ 32,627     4.59%    $  903,876     $ 25,085     3.70%
   Borrowings                                        103,410      4,810     6.20         82,828        2,945     4.74
                                                  ----------   --------    -----    -----------    ---------     ----   
   Total interest-bearing liabilities              1,051,813   $ 37,437     4.75%       986,704     $ 28,030     3.79% 
                                                  ----------   --------    -----    -----------    ---------     ----   
Non-interest-bearing liabilities                      11,401                              9,144
                                                  ----------                        -----------
                  Total liabilities                1,063,214                            995,848      
                                                  ----------                        -----------
Shareholders' equity                                 115,458                            110,302            
                                                  ----------                        -----------
   Total liabilities and shareholders' equity     $1,178,672                         $1,106,150      
                                                  ==========                        ===========
Net interest income/net interest rate spread                   $ 36,339     4.04%                   $ 34,222     4.07%
                                                               ========     ====                    ========     ====
Net earnings assets/net interest rate margin                   $ 67,495     4.33%                   $ 68,787     4.32%
                                                               ========     ====                    ========     ====
Ratio of interest-earning assets to                                                     
    interest-bearing liabilities                                            1.06X                                1.07X
                                                                            ====                                 ====
</TABLE> 

                                       9
<PAGE>
 
Item 2 - (continued)

The following table presents changes in interest income and interest expense
attributable to (i) changes in volume (change in volume multiplied by old rate),
and (ii) changes in rate (change in rate multiplied by old volume). The net
change attributable to the combined impact of volume and rate has been allocated
proportionately to the change due to volume and the change due to rate.

<TABLE>
<CAPTION> 
                                     Three Months Ended September 30,   Nine Months Ended September 30,
                                               1995 Compared to 1994             1995 Compared to 1994
                                                  Increase (Decrease)               Increase (Decrease)
                                        Volume       Rate        Net        Volume      Rate       Net
                                        ------       ----        ---        ------      ----       ---
<S>                                   <C>         <C>         <C>        <C>          <C>       <C> 
                                                (Dollars in Thousands)         
Interest income on interest-                                         
   earning assets:                                                   
     Commercial loans                 $  1,523    $ 1,325     $ 2,848    $  3,640     $ 5,140   $  8,780 
     Consumer loans                        316        143         459       1,147         156      1,303 
     Real estate loans                     454        132         586         759         615      1,374                         
   Investment securities                  (467)       500          33         935         (62)       873 
     Mortgage-backed securities         (1,453)     1,194        (259)     (1,151)        817       (334)
     Other interest-earning assets        (785)       690         (95)     (1,174)        702       (472)
                                      --------    -------     -------    --------     -------    ------- 
          Total                       $   (412)   $ 3,984     $ 3,572    $  4,156     $ 7,368    $11,524 
                                      ========    =======     =======    ========     =======    ======= 
Interest expense on interest-                                             
 bearing liabilities:                                                
     Deposits                        $     286    $ 1,695    $  1,981     $ 1,286     $ 6,256    $ 7,542 
     Borrowings                            326        315         641         832       1,033      1,865 
                                      --------    -------     -------    --------     -------    ------- 
                                           612      2,010       2,622       2,118       7,289      9,407
                                      --------    -------     -------    --------     -------    ------- 
          Total                      $  (1,024)   $ 1,974    $    950     $ 2,038     $    79    $ 2,117 
                                      ========    =======     =======    ========     =======    =======
</TABLE> 

Interest Income
---------------

   The Company's interest income on earning assets increased from $21.8 million
for the three months ended September 30, 1994 to $25.4 million for the three
months ended September 30, 1995, and from $62.3 million to $73.8 million for the
nine months ended September 30, 1994 and 1995, respectively. This increase in
inter est income was primarily the result of an increase in the yield on earning
assets from 8.08% to 8.97% for the three months ended September 30, 1994 and
1995, respectively, and from 7.86% to 8.79% for the nine months ended September
30, 1994 and September 30, 1995, respectively. An increase in the average
balance of earn ing assets from $1,081.9 million for the quarter ended September
30, 1994 to $1,133.6 million for the quarter ended September 30, 1995, and from
$1,055.5 million for the nine months ended September 30, 1994 to $1,119.3
million for the nine months ended September 30, 1995 also contributed to this
increase in interest income. The yield on commercial loans went from 8.91% for
the third quarter of 1994 to 10.28% for the third quarter of 1995 and from 8.32%
for the first nine months of 1994 to 10.13% for the first nine months of 1995.
These yield increases primarily were due to increases in the Bank s Prime Rate
from 6.25% to 8.75% since March of 1994. Coupled with the Prime Rate increases,
the commercial loan average balance increased $63.2 million from the third
quarter of 1994 to $421.3 million

                                       10
<PAGE>
 
Item 2 - (continued)

for the third quarter of 1995, and from an average balance of $348.3 million for
the first nine months of 1994 to $401.8 million for the first nine months of
1995, an increase of $53.5 million. These rate and volume changes for the
commercial loan portfolio were the largest contributors to the increase in
interest income. With high levels of competition in the local lending market for
indirect auto and mobile home loans, the Company intends to continue to
emphasize the origination of these loans, which add to the Company s customer
base for potential business. This emphasis, as seen in the preceding tables, has
resulted in increases in average balances for consumer loans for the three-month
and nine-month periods ended September 30, comparing 1995 with 1994. This has
been joined by increases in yields to provide significant increases in interest
income. Real estate loans continue to contribute to interest income as average
balance increased $22.2 million to $292.1 million for the quarter ended
September 30, 1995 compared to quarter ended September, 1994. This period also
reflected an increase in yield from 8.02% to 8.21%. The nine-month period also
showed similar changes with an average balance increase from $273.8 million to
$286.1 million and a yield increase from 8.05% to 8.34%. Due to prepayments and
sales, the average balance of mortgage-backed securities decreased from $157.6
million to $130.2 million from the three months ended September 30, 1994 to the
three months ended September 30, 1995. This decrease in average balance was
almost entirely offset by an increase in yield from 6.73% for the quarter ended
September 30, 1994 to 7.36% for the quarter ended September 30, 1995. The nine-
month period reflected the same event as the average balance declined from
$156.7 million to $138.8 million and yields increased from 6.48% to 7.00% for
the nine-month periods ended September 30, 1994 and September 30, 1995. The
average balance of investment securities decreased from $90.5 million to $83.5
million, and the average yield increased from 5.85% to 6.49% from the three
months ended September 30, 1994 to the three months ended September 30, 1995.
The nine month comparison from September 30, 1994 to nine months ended September
30, 1995 reflected a large increase in the average balance from $69.4 million to
$88.7 million which resulted in a greater contribution to interest income even
though the yield for the nine-month period declined from 6.35% in 1994 to 6.28%
in 1995. Increases in interest income generated by real estate loans were
reflected for both the three-month and nine-month periods. This was caused
primarily by increased average balances from $269.9 million for the quarter
ended September 30, 1994 to $292.1 million for quarter ended September 30, 1995,
and from $273.8 million to $286.1 million for the nine-month period.
Contributions to interest income from other interest-earning assets, mainly
short-term cash equivalents, de creased as these assets were used to help fund
the growth in the loan portfolios.


Interest Expense
----------------

   Total interest expense increased by $2.6 million for the quarter ended
September 30, 1995 as compared to the same period in 1994. The average balance
of all interest-bearing liabilities increased from $1,014.4 million for the
quarter ended September 30, 1994 to $1,066.5 million for the quarter ended
September 30, 1995. This increase accompanies an increase in the average rate
paid on all interest-bearing liabilities from 3.99% to 4.78% during the
respective period. This reflects the overall economic interest rate increases
and their impact on the Bank s market rate-sensitive deposits and short-term
borrowings. One component of the 

                                       11
<PAGE>
 
Item 2 - (continued)

change in interest-bearing liabilities is the average balance of borrowings
increasing from $84.5 million for the three months ended September 30, 1994 to
$108.0 million for the three months ended September 30, 1995. The larger
borrowing balance complements the growth in deposits to principally fund the
growth in the consumer and commercial loan areas. This increase was coupled with
an increase in the rate paid on such borrowings from 4.87% to 6.19% during this
period. The average balance of deposits increased from $929.9 million dur ing
the three months ended September 30, 1994 to $958.4 million during the same
period in 1995. The increase in the average balance of deposits and the 71 basis
point increase in the average rate paid on such funds resulted in an increase in
interest paid on deposits from $9.1 million for the third quarter of 1994 to
$11.1 million for the third quarter of 1995. Total interest expense increased
from $28.0 million to $37.4 mil lion for the nine-month periods ended September
30, 1994 and 1995, respectively. This increase was due somewhat to the elevation
in the Bank s average balance in interest-bearing liabilities; the average
increased from $986.7 million to $1,051.8 million. A larger contributor to the
rise in interest expense was the increase in the average cost of interest-
bearing liabilities from 3.79% to 4.75% generated by the higher interest rate
environment.
   
Provision for Credit Losses
---------------------------   

   The provision for credit losses increased from $0.9 million to $1.4 million
for the quarters ended Septem ber 30, 1994 and September 30, 1995, respectively.
For the nine-month period ended September 30, 1994 to the nine-month period
ended September 30, 1995, the provision increased from $2.8 million to $4.1
million. The allowance for possible credit losses remained constant at $15.8
million as of September 30, 1995 com pared to December 31, 1994. See Non-
performing Loans and Other Real Estate Owned". Management considers this level
of reserves adequate to cover potential credit losses.
   
Non-interest Income
-------------------

   Non-interest income increased from $1.4 million for the three months ended
September 30, 1994 to $1.6 million for the three months ended September 30,
1995, an increase of approximately 16%. This increase resulted primarily from
growth in the credit card merchant and consumer base resulting in an increase in
fee income of approximately 38% for quarter ended September 30, 1995 compared
with quarter ended September 30, 1994 and approximately 36% for the nine months
ended September 30, 1995 compared with September 30, 1994. Service charges on
deposit accounts increased 15% from the quarter ended September 30, 1994 to the
quarter ended September 30, 1995 with similar increases for the nine-month
periods. Other non-interest income items remained relatively stable. The total
non-interest income increased from $4.0 million for the nine months ended
September 30, 1994 to $4.5 million for the same period in 1995.

Gains (Losses)  On Sale of Mortgages
------------------------------------

                                       12
<PAGE>
 
Item 2 - (continued)
   
   The practice of the Bank has been to sell or securitize long-term, fixed-rate
residential mortgage loans. As a result of this practice, the Bank sold $32.5
million of mortgage loans for the first nine months of 1995 as compared to
having securitized or sold $66.3 million for the first nine months of 1994. Of
the $69.5 million of residential mortgage loans originated in the first nine
months of 1995, $31.8 million were adjustable-rate loans which are maintained in
the portfolio of the Bank. The rise in interest rates during 1994 resulted in a
loss on sale of mortgages of $23,000 for the quarter ended September 30, 1994,
and $817,000 for the first nine months of 1994; loans were sold or marked-to-
market at rates higher than the origination rates. The first nine months of 1995
reflected a loss on sale of mortgages of $189,000 for the quarter ended
September 30, 1995 and a loss of $127,000 for the first nine months of 1995.
   
Non-interest Expense
--------------------
    
    Non-interest expense increased from $6.6 million to $6.7 million for the
quarters ended September 30, 1994 and 1995, respectively, and from $18.7 million
to $20.6 million for the nine months ended September 30, 1994 and 1995,
respectively. There were two items of note during the quarter that contributed
to fluctuations in non-interest expense. A recapitalization refund of $581,000
was received from the Federal Deposit Insur ance Corporation ( FDIC ). This
refund was based on the Bank Insurance Fund reaching a predetermined adequate
level of funding. This will result in lowered FDIC insurance assessments for the
fourth quarter for ward at an annual rate of 4 basis points per $100 of assessed
deposits compared to the 23 basis points previ ously charged.

     During the quarter ended September 30, 1995, approximately $800,000 of
other real estate expense ( ORE ) was recognized. This is in keeping with
management s policy to closely monitor and write down ORE properties as needed
based on management s estimate of their net realizable value (less costs to
dispose). See further discussion in "Non-performing Loans and Other Real Estate
Owned".   

Income Taxes
------------   

   The income tax expense was $2.3 million and $2.4 million for the quarters
ended September 30, 1994 and September 30, 1995, respectively. These taxes
decreased from $6.5 million to $6.4 million for the nine-month periods ended
September 30, 1994 and September 30, 1995, respectively.
   
Non-Performing Loans and Other Real Estate Owned ("ORE")
--------------------------------------------------------   

   When a borrower fails to make a scheduled payment on a loan, the Company
attempts to cure the defi ciency by contacting the borrower and seeking payment.
Contacts are generally made within five business days after the expiration of
the payment grace period, set forth in the loan contract. In most cases,
deficiencies are cured promptly. If a delinquency extends beyond 60 days, the
loan and payment histories are reviewed and legal proceedings may be instituted
to remedy the default. While the Company generally prefers to work with
borrowers to resolve such problems, the Company does initiate foreclosure
proceedings 

                                       13
<PAGE>
 


Item 2 - (continued)

or pursues other legal collection procedures, as necessary, to minimize any
potential loss. Once the Company takes legal title to the property, it is
classified as other real estate owned ("ORE") on the Statement of Condition.  

  Loans are placed on a non-accrual status when, in the judgment of management,
the probability of collec tion of interest is deemed to be insufficient to
warrant further accrual. Such loans include potential problem loans where known
information about possible credit problems of borrowers has caused management to
have serious doubts as to the ability of such borrowers to comply with the loan
repayment terms. When a loan is placed on non-accrual status, previously accrued
but unpaid, interest is deducted from interest income. The Company does not
accrue interest on loans greater than 90 days or more past due for the payment
of interest unless the value of the collateral and active collection efforts
ensure full recovery. The following table sets forth information regarding non-
performing loans which are 90 days or more overdue and other real estate owned
held by the Company at the dates indicated.

<TABLE>
<CAPTION> 
                                                                    September 30,    December 31,
                                                                        1995            1994
                                                                        ----            ----
                                                                       (Dollars In Thousands)
<S>                                                                 <C>              <C> 
Commercial real estate loans:                                                           
 Non-accrual loans                                                    $ 3,827         $ 2,286 
Commercial loans:                                                                             
    Non-accrual loans                                                   7,405           4,449 
Consumer loans:                                                                               
    Accruing loans 90 days overdue                                        326             109 
Residential real estate loans:                                                                
 Non-accrual loans                                                      1,322           1,037
                                                                      -------         -------
Total non-performing loans and accruing loans 90 days overdue         $12,880         $ 7,881 
                                                                      =======         =======
Total non-performing loans to total gross loans                          1.36%           0.91%
Total real estate acquired in settlement of                                       
 loans at net realizable value                                        $ 2,989         $ 3,234 
Total non-performing loans and real estate acquired in settlement     
 of loans at net realizable value to total assets                        1.30%           0.96%

</TABLE> 

   The Company has no troubled debt restructurings except as included in non-
accruing commercial loans. Total non-performing loans and other real estate
owned increased to $15.9 million, or 1.30% of total assets at September 30,
1995, compared to $11.1 million, or 0.96% of total assets at December 31, 1994.

   At December 31, 1994, 30 non-performing residential real estate loans
totalled $1.0 million. At Septem ber 30, 1995, non-performing residential real
estate loans totalled $1.3 million and included 39 loans.

   At December 31, 1994, non-performing commercial real estate loans totalled
$2.3 million, and included 5 loans ranging in size from $0.1 million to $1.4
million. At September 30, 1995, non-performing commercial real estate loans
increased to $3.8 million and consisted of 7 loans ranging in size from $61,000
to $2.0 mil lion. This increase reflects the balance of $2.0 million on a single
commercial real estate mortgage loan se cured by an office building which is
experiencing a high vacancy rate due to the loss of a major tenant. The Bank has
entered into a work-out arrangement with the borrower and established a loan
loss reserve 

                                       14
<PAGE>
 
Item 2 - (continued)

deemed adequate by management against the outstanding loan balance.

  Non-performing commercial loans at December 31, 1994 totalled $4.4 million and
included 40 individual loans ranging in size from $1,000 to $1.6 million. At
September 30, 1995, non-performing commercial loans increased to $7.4 million
and consisted of 45 individual loans ranging in size from $2,000 to $2.5
million. This increase primarily reflects the remaining balance of $2.5 million
on a real estate secured loan which was classified as non-performing by
management after recognition of a partial charge-off in the amount of $0.6
million taken during the first quarter of 1995. The loan and all other non-
performing loans have been inter nally risk-rated and loan loss reserves
established deemed adequate by management. 

  The Company's policy is to charge-off all consumer loans before they become
non-accrual. At December 31, 1994, the Company had $109,000 of loans greater
than 90 days past due on which it was accruing interest, as compared to $326,000
at September 30, 1995. As of each date, the only such loans were consumer loans.

  At September 30, 1995, the Bank had approximately $5.2 million of loans deemed
impaired under FAS 114. All of these loans have specific reserves of
approximately $1.6 million; $3.1 million of these loans have been written down
to their net realizable value by a write-off of $1.7 million.

  At December 31, 1994, ORE, which is defined to include property acquired by
foreclosure or by deed in lieu of foreclosure, totalled $3.2 million, which
consisted of 18 single-family residential properties with a book value totalling
$1.3 million and 8 local commercial real estate properties with a book value of
$1.9 million. At September 30, 1995, ORE totalled $3.0 million, which consisted
of 11 single-family residential properties to talling $0.7 million and 15 local
commercial real estate properties with a book value of $2.3 million. See "-
Provision for Credit Losses".

  Management reviews the adequacy of the allowance for possible credit losses
at least quarterly, applying projected loss ratios to the risk-ratings of loans
both individually and by category. The projected loss ratios incorporate such
factors as recent loss experience, current economic conditions and trends,
trends in past due and non-accrual amounts, the risk of characteristics of
various categories and concentrations of loans, transfer risks and other
pertinent factors.

                                       15
<PAGE>
 
Item 2 - (continued)


The following table summarizes activity in the Company s allowance for possible
credit losses during the periods indicated:

                                    Three Months Ended     Nine Months Ended
                                          September 30,         September 30,
                                        1995      1994        1995      1994 
                                        ----      ----        ----      ----
                                                (Dollars In Thousands)          
                                                                    
                                                          
Average gross loans outstanding        $933,141  $834,473   $906,004  $823,498 
                                       ========  ========   ========  ======== 
Allowance at beginning of period       $ 15,576  $ 15,883   $ 15,847  $ 15,234 
   
Charge-offs:                                                         
 
 Commercial real estate loans               614        92      1,640       110 
 Consumer loans                             237       181        760       572 
 Commercial loans                           579     1,077      2,289     2,275
   Residential real estate loans              0         1         57         1
                                       --------   -------   --------  -------- 
   Total loan charge-offs                 1,430     1,351      4,746     2,958 
Recoveries:                                                          
 
 Commercial real estate loans                14         4         23        32 
 Consumer loans                             106        72        256       249 
 Commercial loans                            61       516        266       638
   Residential real estate loans              0         0         16         0
                                       --------   -------   --------  -------- 
   Total recoveries                         181       592        561       919 
                                       --------   -------   --------  -------- 
Net charge-offs                           1,249       759      4,185     2,039 
                                       --------   -------   --------  -------- 
Provision for credit losses                                          
 charged to operating expenses            1,431       853      4,096     2,782 
                                       --------   -------   --------  -------- 
Allowance at end of period             $ 15,758   $15,977   $ 15,758  $ 15,977 
                                       ========  ========   ========  ========

Ratio of net charge-offs to:                                         
 Average gross loans                                                 
  outstanding (annualized)                 0.54%     0.36%      0.62%     0.33%
Ratio of allowance to:                                               
 Non-performing loans                    122.34%   176.33%    122.34%   176.33%
 Period-end loans outstanding              1.66%     1.90%      1.66%     1.90%

   During the third quarter of 1995, the Bank charged-off $0.3 million of an out
of state commercial real estate loan on a medical office building. For the first
nine months of 1995, the total charge-offs relating to this property have
totalled $1.2 million. This loan and the effect of a $0.5 million recovery
realized during the third quarter of 1994 are the primary factors that
contributed to the increase in the three-month period and nine-month period
charge-offs and provision for credit losses as shown in the above chart. The
allowance for possible credit losses decreased slightly to $15.8 million, or
1.66% of gross loans outstanding at September 30, 1995, from $16.0 million, or
1.90% of total gross loans outstanding at September 30, 1994. This decrease in
the allowance for credit losses resulted from the recognition of credit losses
against established loan loss re serves. Management considers the current level
of loan loss reserves adequate to cover potential credit losses.

                                       16
<PAGE>
 
Sources of Funds
----------------   

   Funding for the Company's assets is derived primarily from demand and time
deposits and long and short-term borrowings. The average balance of all 
interest-bearing liabilities increased from $986.7 million for the nine-month
period ended September 30, 1994 to $1,051.8 million for the same period ended
September 30, 1995, an increase of $65.1 million. In order to provide the
Company with alternative funding sources, the Board of Directors authorized the
Company to use up to $50.0 million of brokered deposits. The Company continued
utilizing this authorization in the nine months of 1995 and held brokered
deposits of $20.0 million at September 30, 1995 compared to $40.0 million at
September 30, 1994.
   
Liquidity and Capital Resources
-------------------------------
   
   A fundamental objective of the Company is to effectively manage its
liquidity. Prudent liquidity manage ment insures that the Company can meet all
of its contractual obligations, meet its customers' loan demands, fund all of
its operations and minimize the effects of interest rate fluctuation on
earnings.

   The Company's primary sources of funds have consisted of deposits,
amortization and prepayments of outstanding loans, bond maturities, and such
other sources as long and short-term borrowings including institu tional
repurchase agreements, sales of investment securities, loans, and mortgage-
backed securities. At Sep tember 30, 1995, the total of approved loan
commitments amounted to $38.7 million. Scheduled maturities of borrowings during
the next twelve months are $119.8 million. Savings certificates, which are
scheduled to mature during the next twelve months, totalled $337.9 million.
Management expects that a substantial portion of these maturing certificates
will remain on deposit with the Company. At September 30, 1995, the Company had
long-term borrowings of $1.5 million.

   At September 30, 1995, the Company's Tier I leverage ratio, as defined in
guidelines, was 9.46%, which exceeds the current requirements for the Company.
On September 30, 1995, the Company s total capital-to-risk-weighted assets
ratio, calculated under the Federal Reserve Board's risk-based capital
requirements, was 12.81%.

   The Company's book value per common share increased from $24.90 at December
31, 1994 to $27.41 at September 30, 1995.
   
Impact of Inflation and Changing Prices
---------------------------------------   

   The financial statements and related data presented herein have been prepared
in accordance with gener ally accepted accounting principles which require the
measurement of financial position and operating results in terms of historical
dollars, without considering changes in the relative purchasing power of money
over time due to inflation.

                                       17
<PAGE>
 
Item 2 - (continued)

   Unlike most industrial companies, virtually all of the assets and liabilities
of a financial institution are monetary in nature. As a result, interest rates
have a more significant impact on a financial institution's perfor mance than
the effects of general levels of inflation. Interest rates do not necessarily
move in the same direc tion or in the same magnitude as the price of goods and
services.
   
Market Prices and Related Shareholder Matters
---------------------------------------------

   The stock of the Company is listed on The Nasdaq Stock Market National Market
System under the sym bol "BSBN". As of September 30, 1995, the Company had 1,535
shareholders of record and 4,206,623 shares of outstanding common stock. The
number of shareholders does not reflect persons or entities who hold their stock
in nominee or "street" name through various brokerage firms.

   The following table sets forth the market price information as reported by
The Nasdaq Stock Market for the common stock.
   
                                                                 Cash 
                                        Price Range         Dividends 
1994                               High            Low      Per Share 
----                               ----            ---      ---------
First Quarter                    $25.00         $22.00          $0.19 
Second Quarter                    29.00          21.50           0.19 
Third Quarter                     29.50          26.75           0.19 
Fourth Quarter                    29.00          26.50           0.22 
                                                                      
                                                                      
1995                                                                  
----
First Quarter                    $29.25         $27.00          $0.22 
Second Quarter                    31.00          27.00           0.22 
Third Quarter                     32.00          30.00           0.22 

                                       18
<PAGE>
 
                          PART II - OTHER INFORMATION
                          ---------------------------


Item 1 -     Legal Proceedings
             -----------------
             Not applicable


Item 2 -     Change in Securities
             --------------------
             Not applicable


Item 3 -     Defaults upon Senior Securities
             -------------------------------
             Not applicable


Item 4 -     Submission of Matters to a Vote of Security Holders
             ---------------------------------------------------
             Not applicable                             


Item 5 -     Other Information
             -----------------
             Not applicable


Item 6 -     Exhibits and Reports on Form 8-K
             --------------------------------
             Not applicable

                                       19
<PAGE>
 
                                  SIGNATURES

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




                                BSB Bancorp, Inc.





Date:    11/14/95    By:   William H. Rincker
       ------------        ------------------
                           WILLIAM  H. RINCKER
                           Chairman of the Board and 
                           Chief Executive Officer
                     
                     
Date:    11/14/95    By:   Edward R. Andrejko
       ------------        ------------------
                           EDWARD R. ANDREJKO
                           Senior Vice President and
                           Chief Financial Officer

                                       20
<PAGE>
 
                                     INDEX
                                     -----



PART I.  FINANCIAL INFORMATION                                         PAGE
         ---------------------                                         ----

 Item 1:   Financial Statements

           Consolidated Statements of Condition
           September 30, 1995 and December 31, 1994                      1

           Consolidated Statements of Income Three Months 
           and Nine Months Ended September 30, 
           1995 and September 30, 1994                                   2     

           Consolidated Statements of Cash Flows
           Nine Months Ended September 30, 1995
           and September 30, 1994                                        3

           Consolidated Statements of Changes in 
           Shareholders' Equity Nine Months Ended
           September 30, 1995 and September 30, 1994                     4

           Notes to Consolidated Financial Statements                  5-6


 Item 2:   Management's Discussion and Analysis of Financial 
           Condition and Results of  Operations                       7-18



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

           Item 1-6                                                     19

           Signature Page                                               20