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    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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.

See notes to the condensed consolidated financial statements

See notes to the condensed consolidated financial statements.

The unrealized gain on available for sale securities, net of tax relates to Mechanical Technology Incorporated's ("MTI") investment in Beacon Power (see Note 4). Accumulated net unrealized gains (losses) related to available for sale securities are recorded as other comprehensive income. Decreases or increases in other comprehensive income are recorded as adjustments to stockholders' equity. Since First Albany Companies Inc.'s ("the Company's") investment in MTI is recorded under the equity method, the Company must record its proportionate share of MTI's other comprehensive income accordingly.

See notes to the condensed consolidated financial statement

See notes to the condensed consolidated financial statements

In 2002, the Company increased its investment in MTI by $2.4 million, increased comprehensive income by $1.0 million, increased paid-in-capital by $1.0 million and deferred income taxes by $0.4 million (See Note 4). In 2002, the Company entered into capital leases for office and computer equipment totaling approximately $0.7 million.

See notes to the condensed consolidated financial statements

FIRST ALBANY COMPANIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal, recurring adjustments necessary for a fair presentation of results for such periods. The results for any interim period are not necessarily indicative of those for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2001.

2.     Reclassification
Certain 2001 amounts have been reclassified to conform to the 2002 presentation.

3.     Earnings Per Common Share
Basic earnings per share have been computed based upon the weighted average number of common shares outstanding. Dilutive earnings per share has been computed based upon the weighted average common shares outstanding for all potentially dilutive common stock outstanding during the reporting period. The weighted average number of common shares and dilutive common equivalent shares were calculated for the three months and six months ended June 30:

For the six months ended June 30, 2002, the Company excluded approximately 0.1 million common equivalent shares in its computation of dilutive earnings per share because they were anti-dilutive.

For the three months and the six months ended June 30, 2001, the Company excluded approximately 0.6 million and 0.5 million common equivalent shares respectively, in its computation of dilutive earnings per share because they were anti-dilutive.

4.     Investments
First Albany Companies Inc. , the Parent Company, holds various investments in its portfolio. The following provides information regarding the Company's equity and other investments:

Equity Investment
At June 30, 2002 the Company owned 11,091,040 common shares (approximately 31% of the shares outstanding) of Mechanical Technology Incorporated (MTI). Shares of MTI are traded on the NASDAQ National Market System under the symbol MKTY. The Company's investment in MTI is recorded under the equity method because the Company owns more than 20% of MTI's common stock and has the ability therefore to exercise significant influence over MTI. The Company's investment in MTI has a book value of approximately $13.6 million, which included goodwill of approximately $0.3 million. At June 30, 2002 the aggregate market value of the Company's shares of MTI stock was $12.0 million. Under the equity method, the market value of MTI's stock is not included in the valuation of the Company's investment.

The Company sold approximately 663,000 shares of MTI common stock in the six months ended June 30, 2002 for approximately $2.0 million, realizing a gain of approximately $1.2 million. Related to the sale of the Company's equity investment in MTI, the Company has entered into a plan under Rule 10b5-1 under the Securities Act of 1933, dated December 27, 2001, to sell up to 1,400,000 shares of MTI common stock in 2002.

The following presents summarized financial information of MTI at:

MTI's shareholders' equity increased $0.1 million (excluding net loss of $5.3 million) during the three months ended March 31, 2002.

MTI's shareholders' equity increased $7.1 million (excluding net loss of $18.8 million) during the six month period ended March 31, 2002. This was comprised of an increase of $1.9 million in other shareholders' equity, primarily related to MTI's holdings in Plug and SatCon, and an increase of $5.2 million for comprehensive income related to unrealized gains on available for sale securities in Beacon. Decreases or increases in other comprehensive income are recorded as adjustments to shareholders' equity. Accordingly, the Company has recorded, as of June 30, 2002, its proportionate share of the $1.9 million increase in other shareholders' equity as an increase in its investment in MTI of $0.7 million and its proportionate share of MTI's comprehensive gain of $5.2 million as an increase in its investment in MTI of $1.7 million.

The Company's equity in MTI's earnings are recorded on a one-quarter-delay basis. For the three month period ended March 31, 2002, MTI reported a net loss of approximately $5.3 million. Accordingly, the Company recorded a loss on its investment in MTI of $1.7 million in the quarter ended June 30, 2002.

For the six month period ended March 31, 2002, MTI reported a net loss of approximately $18.8 million. This net loss included a non-cash charge (impairment losses) of $20.7 million associated with a decline in the market value of MTI's holdings - $13.1 million for holdings in Beacon and $7.6 million for holdings in SatCon. Accordingly, the Company has recorded a loss on its investment in MTI of $6.2 million for the six months ended June 30, 2002.

MTI's earnings report for the quarter ended June 30, 2002 was not released in time for the Company's filing of form 10-Q for the quarter ended June 30, 2002. As such, information on the Company's equity in MTI's earnings, recorded on a one quarter delay basis, is not available for reporting.

Other Investments
The Company's investment portfolio also includes interests in other publicly and privately held companies. Information regarding these other investments has been aggregated as follows for the six months ended June 30:

5.     Receivables from Customers
Receivables from customers include amounts due on cash and margin transactions. Securities owned by customers are held as collateral for receivables. Such collateral is not reflected in the financial statements. Included in receivables from customers are accounts of executive officers and directors which as of June 30, 2002, approximated $3.8 million and as of December 31, 2001 approximated $3.4 million.

6.     Receivables from Others
Amounts receivable from others consisted of the following at:

Proprietary securities transactions are recorded on trade date, as if they had settled. The related amounts receivable and payable for unsettled securities transactions are recorded net in Receivables or Payables to Others on the Statement of Financial Condition.

7.     Securities Owned And Sold But Not Yet Purchased
Securities owned and sold but not yet purchased consisted of the following at:

Securities not readily marketable include investment securities (a) for which there is no market on a securities exchange or no independent publicly quoted market, (b) that cannot be publicly offered or sold unless registration has been effected under the Securities Act of 1933, or (c) that cannot be offered or sold because of other arrangements, restrictions or conditions applicable to the securities or to the Company.

8.     Payables to Others
Amounts payable to others consisted of the following at:

Proprietary securities transactions are recorded on trade date, as if they had settled. The related amounts receivable and payable for unsettled securities transactions are recorded net in Receivables or Payables to Others on the Statement of Financial Condition.

9.     Notes Payable
Notes payable consist of a note for $1.6 million which is payable in monthly principal payments of $73,333 plus interest. The interest rate is 1.5% over the 30-day London InterBank Offered Rate ("LIBOR") (1.84% plus 1.50% at June 30, 2002). This note matures on April 1, 2004. A note for $8.2 million collateralized by 11,091,040 shares of Mechanical Technology Incorporated ("MTI") and approximately $1.0 million in cash (which is included in "Other assets" in the Condensed Consolidated Statement of Financial Condition), is payable in quarterly principal payments of $525,000 plus interest. Due to a decline in the market value of MTI, cash was used as collateral and an additional principal payment of $750,000 was made during June, 2002. The interest rate is fixed at 7% for the term of the loan. This loan matures September 1, 2006.

10.     Commitments and Contingencies
Commitments:As of June 30, 2002, the Company had a commitment through July 2011 to invest up to $18,342,000 in FA Technology Ventures, L.P. ("the Partnership"). The Company intends to fund this commitment from the sale of other investments, including the sale of a portion of its equity investment in Mechanical Technology Inc. ("MTI"), and operating cash flows. The Partnership's primary purpose is to provide a source of venture capital to enable privately owned businesses to expand, with a focus on businesses located in New York State, while providing market-rate investment returns consistent with risks of investing in venture capital. In addition to the Company, certain other limited partners of the Partnership are officers or directors of the Company.

The General Partner for the Partnership is FATV GP LLC. The General Partner is responsible for the management of the Partnership, including among other things, making investments for the Partnership. The members of the General Partnership are George McNamee, Chairman of the Company, First Albany Enterprise Funding, Inc. , a subsidiary of the Company, and other employees of the Company or its subsidiaries. Mr. McNamee is required under the Partnership agreement to devote a majority of his business time to the conduct of the affairs of the Partnership and any parallel funds. Subject to the terms of the Partnership Agreement, under certain conditions, the General Partner is entitled to share in the gains received by the Partnership in respect of its investment in a portfolio company. The General Partner has contracted with FA Technology Ventures Corporation (FATV), a wholly owned subsidiary of the Company, to act as an investment advisor to the General Partner. Certain individuals, including Mr. McNamee, who are partners in the General Partnership have established their own fund to invest at least $2,600,000 in parallel with the Partnership. This fund is managed by the General Partners and is not charged a management or override fee.

As of June 30, 2002, the Company had an additional commitment through July 2011 to invest up to $13,802,000 in parallel funds with the Partnership, which it intends to fund through current and future Employee Investment Funds ('EIF'). EIF are limited liability companies, established by the Company for the purpose of allowing employees to invest in private equity placements. The EIF are managed by FAC Management Corp. , which has contracted with FATV to act as an investment advisor with respect to funds invested in parallel with the Partnership. The Company anticipates that the commitment related to the EIF will be funded by employees; however, the Company must fund the full amount of the commitment regardless of whether it is successful in raising EIF.

Litigation:  In the normal course of business, the Company has been named a defendant, or otherwise has possible exposure, in several claims. Certain of these are class actions, which seek unspecified damages, which could be substantial. Although there can be no assurance as to the eventual outcome of litigation in which the Company has been named as a defendant or otherwise has possible exposure, the Company has provided for those actions most likely of adverse dispositions. Although further losses are possible, the opinion of management, based upon the advice of its attorneys and General Counsel, is that such litigation will not, in the aggregate, have a material adverse effect on the Company's liquidity or financial position, although it could have a material effect on quarterly or annual operating results in the period in which it is resolved.

Other:  The Company enters into underwriting commitments to purchase securities as part of its investment banking business. As of June 30, 2002, the Company had $34.9 million in underwriting commitments outstanding for which accordingly, the Company reduced its regulatory Net Capital (See Note 13) by $1.1 million. As of July 15, 2002, the securities related to all these commitments were sold.

In 1999, the Company acted as a placement agent for a $7.5 million bond issue. In July 2002, as a result of a dispute between the Company and the buyer of the bonds, the Company entered into an agreement which indemnified the buyer for up to $3.7 million of potential realized losses which might be incurred on the outstanding principal amount of the bonds and up to $0.5 million for related legal fees and $0.5 million for unpaid debt service. These bonds are collateralized by a first security interest in certain rights, titles and interests of the company for whom the bonds were issued. As of June 30, 2002, management has estimated the probable amount of the loss expected to be incurred and the Company has accordingly accrued a $1.3 million liability related to this agreement based upon current conditions. In entering into this agreement, the Company and the buyer of the bonds did not admit or concede to any liability, wrongdoing, misconduct or damages of any kind.

11.     Stockholders' Equity
In April, 2002, the Board of Directors declared the regular quarterly dividend of $0.05 per share for the first quarter ended March 31, 2002, along with a 5% stock dividend, payable on May 29, 2002 to stockholders of record on May 15, 2002.

In July, 2002, the Board of Directors declared the regular quarterly dividend of $0.05 per share for the second quarter ended June 30, 2002 payable on August 28, 2002 to stockholders of record on August 14, 2002.

In October 2000, the Board of Directors authorized a stock repurchase program of up to 1.5 million shares of its outstanding common stock. Under the program, the Company may periodically repurchase shares on the open market at prevailing market prices or in privately negotiated transactions from time to time. In April 2002, the Board of Directors extended the program through April 2003. Shares purchased under the program will be held in treasury and used for general corporate purposes. At June 30, 2002 the Company had repurchased approximately 635,000 shares pursuant to this program with an aggregate cost of $5.7 million.

12.     Benefit Plans
First Albany Companies Inc. has established several stock incentive plans through which eligible employees of the Company may be awarded stock options, stock appreciation rights and restricted common stock of the Company. The purpose of these stock incentive plans are to promote the interests of the Company, its subsidiaries and its shareholders by enabling the Company and its subsidiaries to attract, retain and motivate employees and officers or those who will become employees or officers of the Company and/or its subsidiaries, and to align the interest of those individuals with the Company's stockholders. To do this, these plans offer performance-based incentive awards and equity-based opportunities to provide such persons with a proprietary interest in maximizing the growth, profitability and overall success of the Company. During 2002, the Company increased the number of shares available for grants for both the 1999 Long Term Incentive Plan and the 2001 Long Term Incentive Plan by 800,000 shares and 400,000 shares, respectively. At June 30, 2002, the Company had approximately 700,000 shares available for awards under the 1999 Long Term Incentive Plan and 250,000 shares available for awards under the 2001 Long Term Incentive Plan.

13.     Net Capital Requirements
The Company's broker-dealer subsidiary, First Albany Corporation (the "Corporation"), is subject to the Securities and Exchange Commission's Uniform Net Capital Rule, which requires the maintenance of a minimum net capital. The Corporation has elected to use the alternative method permitted by the rule, which requires that the Corporation maintain a minimum net capital of 2 percent of aggregate debit balances arising from customer transactions as defined or $1 million, whichever is greater. As of June 30, 2002, the Corporation had aggregate net capital, as defined, of $25.0 million, which equaled 520.2 % of aggregate debit balances and $24.0 million in excess of required minimum net capital.

14.     Segment Analysis
The Company's reportable segments include First Albany Corporation, the Company's brokerage operations, which is comprised of Taxable Fixed Income, Municipal Fixed Income, Equity Capital Markets, Fixed Income-Other and Corporate-Other; Parent and Affiliates, and Discontinued Operations. The Company evaluates the performance of its segments and allocates resources to them based upon long-term contribution margin opportunities consistent with the growth strategy of the Company.

The Taxable Fixed Income segment includes institutional sales and trading of federal government and agency securities. The Municipal Fixed Income segment includes underwriting and institutional sales and trading of municipal securities. The Equity Capital Markets segment includes institutional sales and trading of equity securities, corporate finance advisory services and management and participation in underwritings. The Fixed Income-Other segment includes institutional sales and trading of fixed income middle markets and taxable municipal securities. The Corporate-Other segment includes stock loan borrow operations and other unallocated revenues and expenses. Unallocated expenses are comprised primarily of indirect operating costs to support operations.

The Parent and Affliates segment includes realized gains and losses, unrealized gains and losses and the equity in income and loss of affiliate from the Company's investment portfolio, asset management services of FA Technology Ventures and First Albany Asset Management. The Discontinued Operations segment includes the net revenues and expenses from the Company's Private Client Group which provided brokerage services to individual clients and was sold in August 2000.

Intersegment revenue has been eliminated for purposes of presenting net revenue so that all net revenue presented is from external sources. Interest revenue is allocated to the operating segments and is presented net of interest expense for purposes of assessing the performance of the business segment. Depreciation and amortization is allocated to the business segments. Total Net Revenue presented below differs from that presented in the financial statements as a result of the inclusion of the equity in income and loss of affiliate and sale of equity holdings as a component of the segment financial information.

Information concerning operations in these segments is as follows:

The financial policies of the Company's segments are the same as those described in the "Summary of Significant Accounting Policies" footnote. Asset information by segment is not reported since the Company does not produce such information. All assets are located in the United States of America. Prior period's financial information has been reclassified to conform to the current presentation.

15.     Discontinued Operations
In 2000, the Company sold assets of its Private Client Group, its retail brokerage branch network, to First Union Securities, a subsidiary of First Union Corp.In accordance with Accounting Principles Board Opinion No. 30 (APB 30), "Reporting the Results of Operations-Reporting the Effect of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions", the results of the Private Client Group have been reported separately as a discontinued operation for all periods presented.Components of amounts reflected in condensed consolidated statement of financial condition and condensed consolidated statement of operations are presented in the following tables:

The loss from discontinued operations are the result of legal costs related to the Private Client Group.

The following is management's discussion and analysis of certain significant factors, which have affected the Company's financial position and results of operations during the periods included in the accompanying condensed consolidated financial statements.

Business Environment

First Albany Companies Inc. (the Company) is the parent company of First Albany Corporation, First Albany Asset Management Corporation and FA Technology Ventures Corporation. First Albany Corporation provides investment banking services to corporate and public clients, and engages in market making and trading of corporate, government and municipal securities. The Company also provides venture capital and merchant banking to the investment and corporate communities, and asset management services to individuals and institutions.The investment banking and brokerage businesses generate revenues in direct correlation with the general level of trading activity in the stock and bond markets. The Company cannot control this level of activity, however many of the Company's costs are fixed. Therefore, the Company's earnings, like those of others in the industry, reflect the activity in the markets and can fluctuate accordingly.

Results of Operations

First Albany Corporation, the Company's investment banking and brokerage operations, had net revenues of $39.2 million for the second quarter ended June 30, 2002, compared to $32.9 million for the same period in 2001, an increase of 19%. First Albany Corporation's net revenues for the first six months of 2002 were $76.8 million, compared to $69.2 million for the same period in 2001, an increase of 11%. First Albany Corporation had net income, from continued operations of $1.5 million for the second quarter 2002, compared to net loss of $0.6 million for the same period in 2001 and net income from continuing operations for the six months of $2.3 million compared to a ($0.3) million net loss for the same period in 2001.

First Albany Companies Inc. had consolidated net revenues for the second quarter of $40.1 million, compared to $34.2 million for the same period in 2001, an increase of 17%. Consolidated net revenues for the first six months of 2002 were $78.3 million compared to $71.6 million for the same period in 2001, an increase of 9%. The Company reported a consolidated net income of $0.1 million for the second quarter 2002, compared to a net loss of $1.1 million for the same period in 2001, net income of $0.01 per diluted share compared to a net loss of ($0.13) per diluted share, respectively. The Company also reported a consolidated net loss for the first six months of ($1.9) million compared to ($1.1) million for the same period in 2001, or a consolidated net loss of ($0.21) per diluted share compared to ($0.12) per diluted share, respectively. The Company's net income included a $(1.7) million and ($6.2) million pre-tax non-operating equity loss from its equity investment in Mechanical Technology Inc. ("MTI") for the quarter and the six months ended June 30, 2002 respectively, compared to a pretax non-operating equity loss of ($1.0) million and ($1.0) million for the same periods in 2001. On a pro-forma basis, excluding the impact of the equity loss from MTI, the Company would have had consolidated net income of $1.2 million and net income of $0.12 per diluted share for the second quarter 2002 and consolidated net income of $1.9 million and net income of $0.21 per diluted share for the six months ended June 30, 2002.

The pre-tax contribution from the Corporate-Other segment decreased in both the quarter ending and six month period ending June 30, 2002. This decrease was primarily due to increased legal costs, increased occupancy costs related to office relocation and escalation charges, increased compensation related costs, and a decline in other revenues primarily attributed to net interest income and investment assets held by First Albany Corporation.

For information regarding the Company's reportable segments refer to Note 14-Segment Analysis.

The Parent Company's investment portfolio is accounted for at market value except for MTI, which is recorded under the equity method. The aggregate market value of the Company's investment portfolio decreased from $46.7 million at March 31, 2002, to $18.9 million at June 30, 2002, primarily as a result of a decrease in the market value of its investment in MTI. Shares of MTI are traded on the NASDAQ National System under the symbol MKTY. The Company accounts for the MTI investment under the equity method of accounting because it owns in excess of 20% (approximately 31%) of the shares outstanding and has the ability, therefore, to exercise significant influence over MTI. The Company does not recognize changes in the market value of this investment in the income statement. Changes in the value of those portions of the Company's investment portfolio accounted for at market value may impact the financial results of future periods either positively or negatively.

Three-Month Period Ended June 30, 2002

Commissions
Commissions revenue decreased $0.4 million or 9% primarily due to decreases in listed agency transactions.

Principal Transactions
Principal transactions increased $1.1 million or 5%. This amount was comprised of an increase in taxable fixed income securities of $0.7 million, an increase in equity securities of $0.9 million and a decrease in tax-exempt fixed income securities of $0.5 million.

Investment Banking
Investment banking revenues increased $4.9 million or 109% due to an increase in fixed income underwritings.

Net Interest Income
Net interest income increased $0.4 million or 50% due primarily to a decrease in interest rates for short-term bank loans.

Compensation and Benefits
Compensation and benefits increased by $1.4 million or 5% due primarily to an increase in net revenues offset by a reduction in compensation expense due to restructuring efforts in the firm's equity business.

Communications and Data Processing
Communications and data processing expense increased $0.5 million or 19% due primarily to an increase in market data related expenses and a greater number of equity securities transactions.

Occupancy and Depreciation
Occupancy and depreciation increased $0.5 million or 28% due partially to costs related to the firm's relocation of one of its offices.

Other
Other expense increased $0.9 million or 65% primarily due to an increase in legal costs. (See Note 10)

Equity in gains (losses) of affiliate
Equity in gains (losses) of affiliates decreased $0.8 million due to an increase in the net loss of Mechanical Technology Incorporated. (See Note 4)

Gain on Sale of Equity Holdings
Gain on sale of equity holdings increased $0.6 million due to the sale of approximately 313,000 shares of Mechanical Technology Incorporated (NASDAQ: MKTY).

Income Taxes
Income tax expense (benefit) increased $1.1 million due to a change in income (loss) before income taxes

Six-Month Period Ended June 30, 2002

Commissions
Commissions revenue decreased $1.5 million or 19% primarily due to decreases in listed agency transactions.

Investment Banking
Investment banking revenues increased $7 million or 83% due to an increase in fixed income underwritings. Investment Gains/(Losses)Investment gains (losses) increased $0.7 million due primarily to the investment portfolio held at First Albany Companies Inc. , the Parent Company.

Net Interest Income
Net interest income increased $0.8 million or 54% due primarily to a decrease in interest rates for short-term bank loans.

Compensation and Benefits
Compensation and benefits expense increased $1.6 million or 3% due primarily to an increase in net revenues offset by a reduction in compensation expense due to restructuring efforts in the firm's equity business.

Communications and Data Processing
Communications and data processing expense increased $0.7 million or 15% due primarily to an increase in market data related expenses and a greater number of equity securities transactions.

Occupancy and Depreciation
Occupancy and depreciation expense increased $0.8 million or 21% due partially to costs related to the firm's relocation of one of its offices.

Other
Other expense increased $1.1 million or 37% due primarily to an increase in legal costs. (See Note 10

Equity in gains (losses) of affiliate
Equity in gains (losses) of affiliates decreased $5.2 million due to an increase in the net loss of Mechanical Technology Incorporated. (See Note 4)

Gain on Sale of Equity Holdings
Gain on sale of equity holdings increased $1.2 million due to the sale of approximately 663,000 shares of Mechanical Technology Incorporated (NASDAQ: MKTY).

Income Taxes
Income tax expense (benefit) decreased $0.3 million due to a change in income (loss) before income taxes.

Liquidity and Capital Resources

A substantial portion of the Company's assets, similar to other brokerage and investment banking firms, are liquid, consisting of cash and assets readily convertible into cash. These assets are financed primarily by the Company's payables to brokers and dealers, securities loaned, bank lines of credit and customer payables. The level of assets and liabilities will fluctuate as a result of the changes in the level of positions held to facilitate customer transactions and changes in market conditions

At June 30, 2002 First Albany Corporation, a registered broker-dealer subsidiary of First Albany Companies Inc. , was in compliance with the net capital requirements of the Securities and Exchange Commission and had capital in excess of the minimum required

In April 2002, the Board of Directors declared the regular quarterly dividend of $0.05 per share for the first quarter ended March 31, 2002, along with a 5% stock dividend, both payable on May 29, 2002 to stockholders of record on May 15, 2002.

In July, 2002, the Board of Directors declared the regular quarterly dividend of $0.05 per share for the second quarter ended June 30, 2002 payable on August 28, 2002 to stockholders of record on August 14, 2002.

Related to the sale of the Company's equity investment in MTI, the Company has entered into a plan under Rule 10b5-1 under the Securities Act of 1933, dated December 27, 2001, to sell up to 1,400,000 shares of MTI common stock in 2002. As of June 30, 2002, the Company had sold approximately 663,000 shares at an average price of $3.09 per share. The Company owned 11,091,040 shares of MTI common stock as of June 30, 2002.

In October 2000, the Board of Directors authorized a stock repurchase program of up to 1.5 million shares of its outstanding common stock. Under the program, the Company may periodically repurchase shares on the open market at prevailing market prices or in privately negotiated transactions from time to time. In April 2002, the Board of Directors extended the program through April 2003. Shares purchased under the program will be held in treasury and used for general corporate purposes. At June 30, 2002 the Company had repurchased approximately 635,000 shares pursuant to this program with an aggregate cost of $5.7 million.

The Company enters into underwriting commitments to purchase securities as part of its investment banking business. As of June 30, 2002, the Company had $34.9 million in underwriting commitments outstanding for which accordingly the Company reduced its regulatory Net Capital (See Note 13) by $1.1 million. As of July 15, 2002, the securities related to all these commitments were sold.

In 1999, the Company acted as a placement agent for a $7.5 million bond issue. In July 2002, as a result of a dispute between the Company and the buyer of the bonds, the Company entered into an agreement which indemnified the buyer for up to $3.7 million of potential realized losses which might be incurred on the outstanding principal amount of the bonds and up to $0.5 million for related legal fees and $0.5 million for unpaid debt service. These bonds are collateralized by a first security interest in certain rights, titles and interests of the company for whom the bonds were issued. As of June 30, 2002, management has estimated the probable amount of the loss expected to be incurred and the Company has accordingly accrued a $1.3 million liability related to this agreement based upon current conditions. In entering into this agreement, the Company and the buyer of the bonds did not admit or concede to any liability, wrongdoing, misconduct or damages of any kind.

As of June 30, 2002, the Company had a commitment through July 2011 to invest up to $18,342,000 in FA Technology Ventures, L.P. (the "Partnership"). The Company intends to fund this commitment from the sale of other investments, including the sale of a portion of its equity investment in Mechanical Technology Inc. ("MTI"), and operating cash flows. The Partnership's primary purpose is to provide a source of venture capital to enable privately owned businesses to expand, with a focus on businesses located in New York State, while providing market-rate investment returns consistent with risks of investing in venture capital. In addition to the Company, certain other limited partners of the Partnership are officers or directors of the Company.

The General Partner for the Partnership is FATV GP LLC. The General Partner is responsible for the management of the Partnership, including among other things, making investments for the Partnership. The members of the General Partnership are George McNamee, Chairman of the Company, First Albany Enterprise Funding, Inc. , a subsidiary of the Company, and other employees of the Company or its subsidiaries. Mr. McNamee is required under the Partnership agreement to devote a majority of his business time to the conduct of the affairs of the Partnership and any parallel funds. Subject to the terms of the Partnership Agreement, under certain conditions, the General Partner is entitled to share in the gains received by the Partnership in respect of its investment in a portfolio company. The General Partner has contracted with FA Technology Ventures Corporation (FATV), a wholly owned subsidiary of the Company, to act as an investment advisor to the General Partner. Certain individuals, including Mr. McNamee, who are partners in the General Partnership have established their own fund to invest at least $2,600,000 in parallel with the Partnership. This fund is managed by the General Partners and is not charged a management or override fee.

As of June 30, 2002, the Company had an additional commitment through July 2011 to invest up to $13,802,000 in parallel funds with the Partnership, which it intends to fund through current and future Employee Investment Funds ("EIF"). EIF are limited liability companies, established by the Company for the purpose of allowing employees to invest in private equity placements. The EIF are managed by FAC Management Corp. , which has contracted with FATV to act as an investment advisor with respect to funds invested in parallel with the Partnership. The Company anticipates that the commitment related to EIF will be funded by employees; however, the Company must fund the full amount of the commitment regardless of whether it is successful in raising EIF.

Management believes that funds provided by operations and a variety of uncommitted bank lines of credit totaling $400 million, of which approximately $247 million was unused as of June 30, 2002, will provide sufficient resources to meet present and reasonably foreseeable short-term and long-term financial needs. Uncommitted lines of credits consist of credit lines that the Company has been advised are available but for which no contractual lending obligations exist. These uncommitted lines of credit are limited to financing securities eligible for collateralization including Company-owned securities and certain customer-owned securities purchased on margin, subject to certain regulatory formulas.

Part II-Other Information

Item 1. Legal Proceedings

In the normal course of business, the Company has been named a defendant, or otherwise has possible exposure, in several claims. Certain of these are class actions, which seek unspecified damages that could be substantial. Although there can be no assurance as to the eventual outcome of litigation in which the Company has been named as a defendant or otherwise has possible exposure, the Company has provided for those actions most likely to result in adverse dispositions. Although further losses are possible, the opinion of management, based upon the advice of its attorneys and General Counsel, is that such litigation will not, in the aggregate, have a material adverse effect on the Company's liquidity or financial position, although it could have a material effect on quarterly or annual operating results in the period in which it is resolved.

Item 4. Submission of matters to a vote of security holders.

A.  Annual meeting was held on May 22, 2002

B.  Elected as Directors: (There were no broker non-votes with respect to the election of Directors).

C.   Other matters voted on at the Annual Meeting
       1.   To consider and act upon a proposal to approve the adoption of the First Amendment to the First Albany Companies Inc. 1999 Long Term Plan

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

(b)  Reports on Form 8-K
     No Form 8K was filed during the quarter ended June 30, 2002.

(Exhibit 11)

(FIRST ALBANY COMPANIES INC.
COMPUTATION OF PER SHARE EARNINGS

Per share figures and shares outstanding have been restated for all dividends declared.

SIGNATURES

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