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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
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: 0-23293
Warwick Community Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)		 06-1497903
(I.R.S. Employer
Identification No.)
18 Oakland Avenue, Warwick, New York
(Address of principal executive offices)		 10990-0591
(Zip code)
(845) 986-2206
(Registrant's telephone number, including area code)

            Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days.

                        Yes   X  No    

            Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

YES  X  NO    

            As of November 14, 2003, there were 4,515,724 shares of the registrant's common stock outstanding.

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FORM 10-Q
Warwick Community Bancorp, Inc.
INDEX

Page
Number
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements --- Unaudited

Consolidated Statements of Financial Condition at
September 30, 2003 and December 31, 2002		           4

Consolidated Statements of Income for the three months
and nine months ended September 30, 2003 and 2002		           5

Consolidated Statement of Changes in Equity for
the nine months ended September 30, 2003 and 2002		           6

Consolidated Statements of Cash Flows for the nine
months ended September 30, 2003 and 2002		           7

Notes to Unaudited Consolidated Financial Statements      8-13

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations		    13-22

Item 3. Quantitative and Qualitative Disclosures about Market Risk         22

Item 4. Controls and Procedures         23

PART II --- OTHER INFORMATION

Item 1. Legal Proceedings         23

Item 2. Changes in Securities         23

Item 3. Defaults Upon Senior Securities         23

Item 4. Submission of Matters to a Vote of Security Holders         23

Item 5. Other Information         23

Item 6. Exhibits and Reports on Form 8-K    23-24

Signature Page         25

Exhibit Index



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Statements contained in this Form 10-Q which are not historical facts are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, general economic conditions; changes in interest rates, deposit flows, loan demand, real estate values and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; other economic, competitive, governmental, regulatory or technological factors affecting the Company's operations, pricing, products and services; and other risks detailed in documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements made by us are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intention of management as of the date made and are not guarantees of future performance. We expressly disclaim any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.



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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements - Unaudited

WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

September 30, 2003
 December 31, 2002
(Dollars in thousands)
ASSETS
Cash on hand and in banks $  75,458  $  59,667 
Securities:
      Available-for-sale, at fair value 316,069  208,787 
      Held-to-maturity, at amortized cost (fair value of $3,626 at
      September 30, 2003 and $2,812 at December 31, 2002)
3,618 
2,810 
          Total securities 319,687 
 211,597 
Residential real estate loans, net 113,261  235,156 
Residential real estate loans held for sale 2,823  4,794 
Multi family and commercial real estate loans, net 154,833  152,521 
Consumer loans, net 44,538  52,115 
Commercial business loans, net 23,202 
 24,619 
          Total loans 338,657  469,205 
Allowance for loan losses (4,922)
 (4,932)
          Total loans, net 333,735 
 464,273 
Accrued interest receivable 3,076  3,381 
Federal Home Loan Bank stock 9,375  11,200 
Bank premises ∓ equipment, net 9,478  9,266 
Other real estate owned, net 99  1,145 
Bank owned life insurance 12,611  12,064 
Goodwill and other intangible assets 2,454  2,609 
Other assets 5,781 
 6,036 
          Total assets $771,754 
 $781,238 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Time $103,897  $117,253 
Money market 70,910  70,081 
Savings and NOW 252,804  223,737 
Non-interest-bearing checking 65,792 
 55,604 
          Total depositor accounts 493,403  466,675 
Mortgagors' escrow funds 1,000  3,368 
Accrued interest payable 1,314  1,523 
Federal Home Loan Bank advances 187,495  216,495 
Other liabilities 13,324 
 12,069 
          Total liabilities 696,536 
 700,130 
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 5,000,000 authorized; none
       issued 		---  --- 
Common stock, $.01 par value; 15,000,000 shares authorized;
       6,702,465 and 6,632,814 shares issued as of September 30, 2003
       and December 31, 2002, respectively; 4,536,191 and 4,833,407
       shares outstanding as of September 30, 2003 and December 31,
       2002, respectively		 67  66 
Additional paid-in capital 66,461  64,518 
Retained earnings 50,933  47,855 
Accumulated other comprehensive income, net (455) 585 
Unallocated ESOP common stock (3,441) (4,069)
Unearned RRP common stock (1,132)
 (1,488)
112,433  107,467 
Treasury stock (2,166,274 and 1,799,407 shares at September 30,
       2003 and December 31, 2002, respectively)		 (37,215)
 (26,359)
          Total stockholders' equity 75,218 
 81,108 
          Total liabilities and stockholders' equity $771,754 
 $781,238 

See accompanying Notes to Unaudited Financial Statements.



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WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


For the Three Months
Ended September 30,
 For the Nine Months
Ended September 30,
2003
 2002
 2003
 2002
(In thousands, except per share amounts)
Interest Income:
       Interest on loans $6,346  $  9,902  $21,299  $28,417 
       Interest and dividends on securities 2,640  2,841  8,343  9,546 
       Interest on federal funds sold ---  ---  ---  20 
       Interest on short-term money market instruments 56 
 12 
 238 
 91 
               Total interest income 9,042 
 12,755 
 29,880 
 38,074 
Interest Expense:
       Time deposits 609  842  2,075  2,702 
       Money market deposits 174  355  681  1,111 
       Savings and NOW deposits 618  1,098  2,607  3,120 
       Mortgagors' escrow deposits 17  30  43  66 
       Borrowed funds 2,654 
 3,132 
 8,225 
 9,678 
               Total interest expense 4,072 
 5,457 
 13,631 
 16,677 
               Net interest income 4,970 
 7,298 
 16,249 
 21,397 
Provision for Loan Losses --- 
 (533)
 (90)
 (988)
       Net interest income after provision for loan losses 4,970 
 6,765 
 16,159 
 20,409 
Non-Interest Income:
       Service and fee income 1,612  1,462  4,482  3,894 
       Gain on securities transactions ---  104  352  345 
       Net gain on sale of loans 130  78  397  224 
       Other income 221 
 196 
 497 
 1,428 
               Total non-interest income 1,963 
 1,840 
 5,728 
 5,891 
Non-Interest Expense:
       Salaries and employee benefits 2,557  2,448  7,696  7,866 
       FDIC insurance 24  20  64  60 
       Occupancy 514  528  1,575  1,608 
       Data processing 349  273  995  860 
       Advertising 44  82  197  175 
       Professional fees 317  216  769  840 
       Other 756 
 803 
 2,343 
 2,323 
               Total non-interest expense 4,561 
 4,370 
 13,639 
 13,732 
       Income before provision for income taxes 2,372  4,235  8,248  12,568 
Provision for Income Taxes 904 
 1,633 
 3,117 
 4,993 
       Net income $1,468 
 $2,602 
 $  5,131 
 $  7,575 
Weighted Average:
       Common shares 4,243  4,605  4,319  4,595 
       Dilutive stock options 201 
 204 
 204 
 178 
4,444 
 4,809 
 4,523 
 4,773 
Earnings per Share:
       Basic $  0.35 
 $    0.56 
 $    1.19 
 $    1.65 
       Diluted $  0.33 
 $    0.54 
 $    1.13 
 $    1.59 

See accompanying Notes to Unaudited Financial Statements.


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WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)


Common
Stock
 Additional
Paid In
Capital
 Retained
Earnings
 Accumulated Other
Comprehensive
Income (Loss), net
 Unallocated
Common Stock
Held by ESOP
 Unearned
Common Stock
Held by RRP
 Treasury
Stock
 Comprehensive
Income (Loss)
(In thousands)
BALANCE, December 31, 2001 $66 $63,681 $39,739  $(822) $(4,900) $(2,001) $(21,760)
     Net Income, January 1, 2002 -
     September 30, 2002		 --- --- 7,575  ---  ---  ---  ---  $7,575 
     Unrealized appreciation on
     securities available-for-sale, net		 --- --- ---  2,259 ---  ---  ---  2,259 
     Comprehensive income(loss) --- --- ---  ---  ---  ---  $9,834 
     Purchase of treasury stock --- --- ---  ---  ---  ---  (1,357)
     Allocation of ESOP stock --- 425 ---  ---  621  ---  --- 
     Cash dividends paid --- --- (996) ---  ---  ---  --- 
     Stock option plan. --- 65 ---  ---  ---  ---  --- 
     Earned portion of RRP ---
 129
 --- 
 --- 
 --- 
 389 
 --- 
BALANCE, September 30, 2002 $66
 $64,300
 $46,318 
 $1,437 
 $(4,279)
 $(1,612)
 $(23,117)
BALANCE, December 31, 2002 $66 $64,518 $47,855  $585  $(4,069) $(1,488) $(26,359)
     Net Income, January 1, 2003 -
     September 30, 2003		 --- --- 5,131  ---  ---  ---  ---  $5,131 
     Unrealized depreciation on
     securities available-for-sale, net		 --- --- ---  (1,040) ---  ---  ---  (1,040)
     Comprehensive income --- --- ---  ---  ---  ---  ---  $4,091 
     Purchase of treasury stock --- --- ---  ---  ---  ---  (10,860)
     Allocation of ESOP stock --- 649 ---  ---  628  ---  --- 
     Cash dividends paid --- --- (2,053) ---  ---  ---  --- 
     Stock option plan. 1 1,168 ---  ---  ---  ---  4 
     Earned portion of RRP ---
 126
 --- 
 --- 
 --- 
 356 
 --- 
BALANCE, September 30, 2003 $67
 $66,461
 $50,933 
 $(455)
 $(3,441)
 $(1,132)
 $(37,215)

See accompanying Notes to Unaudited Financial Statements.


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WARWICK COMMUNITY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Nine Months
Ended September 30,
2003
 2002
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $     5,131  $     7,575 
Adjustments to reconcile net income to net cash used in operating activities:
     Depreciation 626  698 
     Amortization of intangibles 155  155 
     Amortization (accretion) of discount on investment securities 4,121  (1,131)
     Net increase in accrued interest receivable 305  87 
     Net (increase) decrease in BOLI and other assets 754  430 
     Provision for loan losses 90  988 
     Net gain on sales of loans (397) (224)
     Net gain on curtailment of the defined benefit pension plan ---  (817)
     Mortgage loans funded (61,424) (27,649)
     Mortgage loans sold 63,861  26,668 
     Net gain on sales of securities (352) (345)
     Net decrease in accrued interest payable (209) (521)
     Net increase (decrease) in accrued expenses and other liabilities 1,255 
 1,494 
Total reconciliation adjustments 8,785 
 (167)
     Net cash provided by operating activities 13,916 
 7,408 
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities 4,796  34,137 
Purchases of securities (269,563) (66,231)
Proceeds from sale of securities available-for-sale 2,280  33,317 
Principal repayments from mortgage-backed securities 148,672  39,018 
Redemption of Federal Home Loan Bank capital stock 1,825  4,460 
Purchase of commercial loan portfolio (3,097) (58,910)
Net decrease in loans 133,219  53,208 
Purchases of fixed assets, net (861)
 (235)
     Net cash provided by ( used in) investing activities 17,271 
 38,764 
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 26,728  20,731 
Net (decrease) increase in escrow deposits (2,368) (1,239)
Net decrease in borrowed funds (29,000) (69,290)
Dividends on common stock (2,053) (996)
Purchase of treasury stock (10,860) (1,357)
Stock options exercised 1,173  65 
ESOP allocation 628  621 
Earned portion of RRP. 356 
 389 
     Net cash used in financing activities (15,396)
 (51,076)
     Net increase (decrease) in cash 15,791  (4,904)
Cash and Cash Equivalents, beginning of year 59,667 
 25,766 
Cash and Cash Equivalents, end of period $  75,458 
 $ 20,862 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for-
     Interest on deposits and borrowed funds $13,840  $17,198 
     Income taxes 4,885  4,979 

See accompanying Notes to Unaudited Financial Statements.



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WARWICK COMMUNITY BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

             Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the December 31, 2002 Annual Report on Form 10-K, filed on March 31, 2003.

             Basis of Presentation

             The accompanying unaudited consolidated financial statements include the accounts of Warwick Community Bancorp, Inc. ("Parent Company"), its savings bank subsidiary, The Warwick Savings Bank ("Warwick Savings"), and its commercial bank subsidiary, The Towne Center Bank ("Towne Center") and its title business subsidiary, Hardenburgh Abstract Company of Orange County, Inc. ("Hardenburgh"). The consolidated financial statements of the Parent Company and its subsidiaries (collectively, the "Company") conform to generally accepted accounting principles and reporting practices followed by the banking industry. All significant intercompany balances and transactions are eliminated in consolidation.

             The unaudited consolidated financial statements included herein reflect all normal recurring adjustments which are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. The results of operations for the nine months ended September 30, 2003 are not necessarily indicative of the results of operations that may be expected for the entire year ending December 31, 2003.

             Earnings Per Share

             Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period, adjusted for the unallocated portion of the shares held by the Warwick Community Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") in accordance with American Institute of Certified Public Accountants ("AICPA") Statement of Position 93-6, "Employers Accounting for Employee Stock Ownership Plans," and unearned shares held by the Recognition and Retention Plan of Warwick Community Bancorp, Inc. ("RRP"). Diluted earnings per share, which reflects the potential dilution that could occur if outstanding stock options were exercised and resulted in the issuance of common stock that then shared in the earnings of the Company, is computed by dividing net income by the weighted average number of common shares and dilutive instruments.


For the Three Months Ended
September 30,
 For the Nine Months Ended
September 30,
2003
 2002
 2003
 2002
(In thousands, except per share amounts)
Net income $1,468 $2,602 $5,131 $7,575
Basic weighted-average common shares outstanding 4,243 4,605 4,319 4,595
Plus: Dilutive stock options 201
 204
 204
 178
Diluted weighted-average common shares outstanding 4,444
 4,809
 4,523
 4,773
Net income per common share:
Basic $  0.35
 $  0.56
 $  1.19
 $  1.65
Diluted $  0.33
 $  0.54
 $  1.13
 $  1.59



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             Stock-Based Compensation

             At September 30, 2003, the Company had stock-based employee compensation plans, including a stock option plan. The Company accounts for this stock option plan under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"), and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under the plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation.


For the Three
Months Ended
September 30,
 For the Nine
Months Ended
September 30,
2003
 2002
 2003
 2002
(In thousands, except per share amounts)

Net income, as reported $1,468 
 $2,602
 $5,131 
 $7,575 
Add: Stock-based compensation expense
included in reported net income, net of
related tax effects		 68  77  216  233 
Deduct: Total stock-based compensation
expense determined under fair
value based method for all awards, net of
related tax effect		 (234)
 (225)
 (706)
 (686)
Pro forma net income $1,302 
 $2,454 
 $4,641 
 $7,122 
Earnings per share:
     Basic-as reported $  0.35 
 $  0.56 
 $  1.19 
 $  1.65 
     Basic-pro forma $  0.31 
 $  0.53 
 $  1.07 
 $  1.55 
     Diluted- as reported $  0.33 
 $  0.54 
 $  1.13 
 $  1.59 
     Diluted-pro forma $  0.29 
 $  0.51 
 $  1.03 
 $  1.49 

             There are 406,467 options that are currently exercisable. The fair value of each option was estimated on the date granted using the Black-Scholes option pricing model. The fair value of the options granted in 2003 and 2002 was estimated to be $10.67 and $7.25, respectively. The following weighted-average assumptions were used for grants in 2003 and 2002: risk free interest rate of 3.23% and 4.49%; expected dividend yield of 2.0%; expected life of five years; and expected volatility of 45.44% and 28.75%.

             Comprehensive Income

             Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income includes revenues, expenses, gains and losses that, under accounting principles generally accepted in the United States of America, are included in comprehensive income but excluded from net income. Comprehensive income and accumulated other comprehensive income are reported net of related income taxes. Accumulated other comprehensive income for the Company consists solely of unrealized holding gains or losses on available for sale securities and an adjustment for the minimum pension liability.

             New Accounting Pronouncements

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN




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45"). FIN 45 addresses disclosures to be made by a guarantor in its financial statements about its obligations under guarantees. The interpretation also requires the recognition, at estimated fair value, of a liability by the guarantor at the inception of certain guarantees issued or modified after December 31, 2002. This recognition requirement did not have a material impact on the Company's consolidated financial statements.

             FASB Interpretation No.46, "Consolidation of Variable Interest Entities," was issued in January 2003. The Interpretation provides guidance on the identification of entities controlled through means other than voting rights. The Interpretation specifies how a business enterprise should evaluate its interests in a variable interest entity to determine whether to consolidate that entity. A variable interest entity must be consolidated by its primary beneficiary if the entity does not effectively disperse risks among the parties involved. Adoption of this interpretation as of January 1, 2003 did not have a significant effect on the Company's consolidated financial statements.

             Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," ("SFAS No. 149") was issued on April 30, 2003. The Statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133. This Statement is in effect for contracts entered into or modified after September 30, 2003. The adoption of this Statement is not expected to have a significant effect on the Company's consolidated financial statements.

             Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity," ("SFAS No. 150") was issued in May 2003. SFAS No. 150 requires instruments within its scope to be classified as a liability (or, in some cases, as an asset). SFAS No. 150 is generally effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 (i.e. July 1, 2003 for calendar year entities). For financial instruments created before June 1, 2003 and still existing at the beginning of the interim period of adoption, transition generally should be applied by reporting the cumulative effect of a change in an accounting principle by initially measuring the financial instruments at fair value or other measurement attributes of the Statement. The adoption of SFAS No. 150 as of July 1, 2003 did not have a significant effect on the Company's consolidated financial statements.




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2.           Loan Portfolio Composition

             The following table sets forth the composition of the Company's loan portfolio in dollar amounts and percentage of the portfolio at the dates indicated.

At September 30, 2003
 At December 31, 2002
Amount
 Percent
of Total
 Amount
 Percent
of Total
(Dollars in thousands)
Real Estate Loans:
One- to four-family $113,424  33.57% $232,045 49.53%
One-to four-family held for sale 2,823  0.84     4,794 1.02    
One-to four-family construction ---  ---     3,441 0.74    
Multi family and commercial real estate 150,951  44.68     144,124 30.76    
Construction and development 3,595 
 1.06    
 8,061
 1.72    
     Total real estate loans 270,793 
 80.15    
 392,465
 83.77    
Commercial business loans 23,182 
 6.86     24,567
 5.24    
Consumer loans:
 Automobile 18,695  5.53     25,616  5.47    
 Home equity 24,012  7.11     24,695  5.27    
 Other consumer loans 1,195 
 0.35    
 1,183 
 0.25    
     Total consumer loans 43,902 
 12.99    
 51,494 
 10.99    
     Total loans 337,877  100.00%
 468,526  100.00%
 Premiums and deferred loan costs, net 780  679 
Allowance for loan losses (4,922)
 (4,932)
     Total loans, net $333,735 
 $464,273 



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3.          Non-Performing Assets

             The following table sets forth information regarding non-accrual loans, other past due loans and other real estate owned at the dates indicated.


September 30,
2003
 December 31,
2002
(Dollars in thousands)
Non-accrual loans:
    One- to four-family $2,578    $1,279   
Multi family and commercial real estate ---    422   
    Commercial business loans ---    84   
    Consumer loans 29   
 ---   
Total non-accrual loans 2,607    1,785   
Accruing loans delinquent 90 days or more:
    Multi-family and commercial real estate ---    114   
    Commercial business loans ---   
 141   
Total ---   
 255   
Total non-performing loans 2,607   
 2,040   
Foreclosed real estate:
    One- to four-family 99    209   
    Multi family and commercial real estate ---   
 936   
Total 99   
 1,145   
Total non-performing assets $2,706   
 $3,185   
Non-performing loans to total loans 0.77% 0.44%
Total non-performing assets to total assets 0.35% 0.41%



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4.          Allowance for Loan Losses

             The following table sets forth the activity in the Company's allowance for loan losses at and for the periods indicated.


Nine Months Ended
September 30,
 Year Ended
December 31,
2003
 2002
 2002
(Dollars in thousands)
Allowance for loan losses:
Balance at beginning of period $4,932    $3,650    $3,650   
Charge-offs:
        Commercial business 111    ---    56   
        Consumer loans 18   
 38   
 37   
        Total charge-offs 129   
 38   
 93   
Recoveries:
        Commercial business 7    ---     ---   
        Consumer loans 22   
 22   
 37   
        Total recoveries 29   
 22   
 37   
Provision for loan losses 90   
 988   
 1,338   
Balance at end of Period $4,922   
 $4,622   
 $4,932   
Ratio of net charge-offs during the period to
average loans outstanding		 0.02% ---    .01%
Ratio of allowance for loan losses to total loans
at end of period		 1.46% 0.88% 1.06%
Ratio of allowance for loan losses to non-
performing loans		 188.80% 194.85% 241.76%


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

General

             Warwick Community Bancorp, Inc. is a bank holding company incorporated in September 1997 under the laws of the State of Delaware and is registered under the Bank Holding Company Act of 1956, as amended ("BHCA"). The Parent Company elected to become a financial holding company under the BHCA in October 2000. The primary business of the Parent Company is the operation of its wholly owned subsidiaries, Warwick Savings, Towne Center and Hardenburgh, its title insurance agency subsidiary. Presently, the only significant assets of the Parent Company are the capital stock of Warwick Savings, Towne Center and Hardenburgh, the note evidencing the loan the Parent Company made to the ESOP to allow the ESOP to purchase 8% of the Parent Company's common stock issued in the Parent Company's initial public offering, and the investments acquired with the net proceeds of the offering retained by the Parent Company. While the following discussion of financial condition and results of operations includes the collective results of the Parent Company and its subsidiaries, this discussion reflects primarily Warwick Savings' activities. Unless otherwise disclosed, the information presented herein reflects the financial condition and results of operations of the Parent Company and its subsidiaries on a consolidated basis, and as used herein the term "Company" refers to the Parent Company and its subsidiaries collectively.




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Critical Accounting Policies and Estimates

             "Management's Discussion and Analysis of Financial Condition and Results of Operation" is based upon the Company's consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Note 1 of the Company's Audited Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, and filed with the SEC, contains a summary of the Company's significant accounting policies. Management believes the Company's policy with respect to the methodology for the determination of the allowance for loan losses involves a high degree of complexity and requires management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. Changes in these judgments, assumptions or estimates could materially impact results of operations. This critical policy and its application is periodically reviewed with the Board of Directors.

             The allowance for loan losses is based upon management's evaluation of the adequacy of the allowance, including an assessment of known and inherent risks in the portfolio, giving consideration to the size and composition of the loan portfolio, actual loan loss experience, level of delinquencies, detailed analysis of individual loans for which full collectibility may not be assured, the existence and estimated net realizable value of any underlying collateral and guarantees securing the loans, and current economic and market conditions. Although management uses the best information available, the level of the allowance for loan losses remains an estimate which is subject to significant judgment and short-term change. Various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require the Company to make additional provisions for loan losses based upon information available to them at the time of their examination. Furthermore, the majority of the Company's loans are secured by real estate in the states of New York and New Jersey. Accordingly, the collectibility of a substantial portion of the carrying value of the Company's loan portfolio is susceptible to changes in local market conditions and may be adversely affected should real estate values decline or the New York and New Jersey areas experience adverse economic shock. Further adjustments to the allowance for loan losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company's control.

Financial Condition

             For the nine-month period ended September 30, 2003, total assets of the Company decreased $9.5 million from $781.2 million at December 31, 2002 to $771.8 million at September 30, 2003. This decrease in total assets was primarily attributable to a $130.5 million, or 27.8%, decrease in total loans, in particular, a $121.9 million decrease in one-to four- family real estate loans resulting from very high loan prepayments. Partially offsetting this decrease was the $108.1 million, or 51.1% increase in total securities. The increase in the Company's securities portfolio was the result of the reinvestment of the significant cash flows from loan prepayments primarily into shorter duration investment securities rather than long-term fixed-rate residential loans and securities.

             Deposits increased $26.7 million, or 5.7%, from $466.7 million at December 31, 2002 to $493.4 million at September 30, 2003. The Company remains a deposit-driven financial institution with emphasis on core deposit accumulation and retention as a basis for sound growth and profitability. The Company believes its record of sustaining core deposit growth is reflective of the Company's retail approach to banking which emphasizes convenient branch locations, extended hours of operation, quality service and active marketing.




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             Borrowed funds, comprised primarily of advances from the FHLBNY, decreased $29.0 million, to $187.5 million at September 30, 2003 from $216.5 million at December 31, 2002. The decrease in borrowings was funded primarily with proceeds received from loan prepayments and from increased deposits as discussed above.

             Total stockholders' equity decreased by $5.9 million, or 7.3%, from $81.1 million at December 31, 2002 to $75.2 million at September 30, 2003. The decrease in total stockholders' equity was primarily attributable to the repurchases of 366,867 shares of the Company's outstanding common stock during the first nine months of 2003 at a total cost of $10.8 million. Also contributing to the decrease in stockholders' equity were the payments of quarterly cash dividends to shareholders amounting to $2.1 million, which dividends were paid on February 14, 2003, May 9, 2003 and August 8, 2003. On October 22, 2003, the Company declared a dividend on its common stock of $0.15 per share of common stock. The dividend was paid on November 12, 2003 to stockholders of record on November 1, 2003. The decrease in stockholders' equity was partially offset by net income of $5.1 million for the nine months ended September 30, 2003 and the exercise of 69,651 stock options over that same time period, which increased stockholders' equity by $1.2 million.

Analysis of Net Interest Income

             Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

             Average Balance Sheets. The following table shows average balances, interest earned or paid, and average interest rates for the periods indicated. Such yields and costs were derived by dividing interest income or expense by the average balance of assets or liabilities, respectively, for the periods shown. The yields include deferred fees and discounts, which are considered yield adjustments. Average balances were computed based on month-end balances. Average balances on available-for-sale securities are computed on fair value. Management believes the use of average monthly balances instead of average daily balances does not have a material effect on the information presented.




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Three Months Ended September 30,
2003
 2002
Average
Balance
 Interest
 Average
Yield/
Cost
 Average
Balance(1)
 Interest
 Average
Yield/
Cost
Assets: (Dollars in thousands)
Interest-earning assets:
One-to four-family loans, net $138,419 $2,367 6.84% $298,687 $5,350 7.16%
Multi family and commercial real estate loans, net 157,267 2,927 7.44    155,407 2,991 7.70   
Commercial business loans, net 24,502 314 5.13    30,944 470 6.08   
Consumer loans, net 45,007 738 6.56    60,766 1,091 7.18   
Mortgage-backed securities 154,837 885 2.29    81,542 1,211 5.94   
Collateralized mortgage obligations 131,302 884 2.69    34,816 480 5.51   
Interest earning accounts at banks 25,439 56 0.88    2,926 12 1.64   
Investment securities 70,538
 871
 4.94    83,585
 1,150
 5.50   
Total interest-earning assets 747,311 9,042
 4.84    748,673 12,755
 6.81   
Non-interest earning assets 45,115
 40,418
Total assets $792,426
 $789,091
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings and NOW deposits $252,723 618 0.98% $200,962 1,098 2.19%
Mortgagor's escrow deposits 3,535 17 1.92    5,684 30 2.11   
Money market accounts 71,995 174 0.97    75,809 355 1.87   
Time deposits 105,210
 609
 2.32    112,312
 842
 3.00   
Total deposits 433,463 1,418 1.31    394,767 2,325 2.36   
Borrowed funds 203,570
 2,654
 5.21    243,142
 3,132
 5.15   
Total interest-bearing liabilities 637,033 4,072
 2.56    637,909 5,457
 3.42   
Non-interest bearing liabilities 81,754
 69,067
Total liabilities 718,787 706,976
Stockholders' equity 73,639
 82,115
Total liabilities and stockholders'
equity
$792,426
$789,091
Net interest income/interest rate spread $4,970
 2.28%
 $7,298
 3.39%
Net interest-earning assets/net
interest margin
$110,278
2.66%
$110,764
3.90%
Ratio of interest-earning assets to
interest-bearing liabilities
117.31%
117.36%

(1)  Certain reclassifications have been made to escrow and non-interest bearing deposits.


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Nine Months Ended September 30,
2003
 2002
Average
Balance
 Interest
 Average
Yield/
Cost
 Average
Balance(1)
 Interest
 Average
Yield/
Cost
Assets: (Dollars in thousands)
Interest-earning assets:
One-to four-family loans, net $179,712 $  9,251 6.86% $313,917 $16,834 7.15%
Multi family and commercial real estate
loans, net		 154,922 8,611 7.41    115,230 6,407 7.41   
Commercial business loans, net 27,056 1,091 5.38    33,591 1,585 6.29   
Consumer loans, net 47,008 2,346 6.65    65,772 3,591 7.28   
Mortgage-backed securities 168,093 4,216 3.34    89,076 4,101 6.14   
Collateralized mortgage obligations 83,187 1,618 2.59    14,809 715 6.64   
Federal funds sold --- --- ---    1,450 20 1.84   
Interest earning accounts at banks 31,534 238 1.01    7,153 91 1.70   
Investment securities 65,935
 2,509
 5.07    106,446
 4,730
 5.92   
Total interest-earning assets 757,447 29,880
 5.26    747,444 38,074
 6.79   
Non-interest earning assets 44,355
 41,748
Total assets $801,802
 $789,192
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings and NOW deposits $245,377 2,607 1.42% $190,335 3,120 2.19%
Mortgagor's escrow deposits 3,111 43 1.84    4,245 66 2.07   
Money market deposits 79,107 681 1.15    77,718 1,111 1.91   
Time deposits 109,122
 2,075
 2.54    112,515
 2,702
 3.20   
Total deposits 436,717 5,406 1.65    384,813 6,999 2.43   
Borrowed funds 211,058
 8,225
 5.20    256,924
 9,678
 5.02   
Total interest-bearing liabilities 647,775 13,631
 2.81    641,737 16,677
 3.46   
Non-interest bearing liabilities 77,361
 68,521
Total liabilities 725,136 710,258
Stockholders' equity 76,666
 78,934
Total liabilities and stockholders'
equity
$801,802
$789,192
Net interest income/interest rate spread $16,249
 2.45%
 $21,397
 3.33%
Net interest-earning assets/net
   interest margin
$109,672
2.86%
$105,707
3.82%
Ratio of interest-earning assets to
   interest-bearing liabilities
116.93%
116.47%

(1)  Certain reclassifications have been made to escrow and non-interest bearing deposits.


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             Rate/Volume Analysis. The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume) and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.


Three Months Ended
September 30, 2003
Compared to
Three Months Ended
September 30, 2002
 Nine Months Ended
September 30, 2003
Compared to
Nine Months Ended
September 30, 2002
Increase (Decrease) in Net
Interest Income Due to
 Increase (Decrease) in Net
Interest Income Due to
Volume
 Rate
 Net
 Volume
 Rate
 Net
(In thousands) (In thousands)
Interest-earning assets:
One-to four-family loans, net $(2,871) $    (112) $(2,983) $(7,197) $    (386) $(7,583)
Multi family and commercial real
   estate loans, net		 36  (100) (64) 2,207  (3) 2,204 
Commercial business loans, net (98) (58) (156) (308) (186) (494)
Consumer loans, net (283) (70) (353) (1,024) (221) (1,245)
Mortgage-backed securities 1,089 (1,415) (326) 3,638  (3,523) 115 
Collateralized mortgage obligations 1,330 (926) 404  3,301  (2,398) 903 
Federal funds sold ---  ---  ---  (20) ---  (20)
Interest earning accounts at banks 92  (48) 44  310  (163) 147 
Investment securities (180)
 (99)
 (279)
 (1,800)
 (421)
 (2,221)
          Total (884)
 (2,829)
 (3,713)
 (893)
 (7,301)
 (8,194)
Interest-bearing liabilities:
Savings and NOW deposits 283  (763) (480) 902  (1,415) (513)
Mortgagor's escrow deposits (11) (2) (13) (18) (5) (23)
Money market deposits (18) (163) (181) 20  (450) (430)
Time deposit (53) (180) (233) (81) (546) (627)
Borrowed funds (510)
 32 
 (478)
 (1,728)
 275 
 (1,453)
          Total (309)
 (1,076)
 (1,385)
 (905)
 (2,141)
 (3,046)
Net change in net interest income $   (575)
 $(1,753)
 $(2,328)
 $        12 
 $(5,160)
 $(5,148)


Comparison of Operating Results for the Three Months Ended September 30, 2003 and 2002

             General. For the three months ended September 30, 2003, the Company recognized net income of $1.5 million, or $0.33 per diluted share, as compared to net income of $2.6 million, or $0.54 per diluted share, for the three months ended September 30, 2002, which represents a $1.1 million, or 43.6%, decrease. For the third quarter ended September 30, 2003, annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 0.74% and 7.97%, respectively. The ROAA and ROAE for the corresponding quarter of 2002 were 1.32% and 12.67%, respectively.




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             Interest Income. Interest income amounted to $9.0 million for the three months ended September 30, 2003, as compared to $12.7 million for the three months ended September 30, 2002. This decrease of $3.7 million, or 29.1%, reflects the impact of the Federal Reserve Bank's interest rate reductions, which led to a significant increase in one-to four-family mortgage loan and mortgage-backed securities prepayments that were reinvested at lower yields. The Company chose to reinvest these funds primarily in agency mortgage-backed securities and agency collateralized mortgage obligations at relatively lower yields rather than in long-term fixed-rate residential mortgages in order to manage its exposure to rising rates. Interest income earned by the Company's mortgage-backed securities portfolio was also lower because of increased amortization of those securities' purchase premiums that was attributable to the increased prepayment levels discussed earlier. The Company's interest income is expected to be adversely affected in the fourth quarter by the suspension of dividends paid on the Company's Federal Home Loan Bank of New York capital stock. The dividend paid on that stock for the quarter ended September 30, 2003 amounted to $135,000.

             Interest Expense. Total interest expense for the three-month period ended September 30, 2003 decreased from $5.5 million to $4.1 million, a decrease of $1.4 million, or 25.4%, as compared to the same three-month period one year earlier. The average rate paid on interest-bearing liabilities declined 86 basis points to 2.56% for the three-month period ended September 30, 2003 as compared to 3.42% for the comparable period in 2002. The decrease in the average rate paid resulted both from a shift in the deposit mix from relatively higher cost certificates of deposit toward relatively lower cost transaction accounts and a reduction in the rate paid on deposits and borrowings.

             Net Interest Income. Net interest income for the three months ended September 30, 2003 decreased $2.3 million, or 31.9%, to $5.0 million compared to $7.3 million for the three months ended September 30, 2002, primarily as a result of the decrease in the average balance of one-to four-family mortgage loans coupled with a decrease of 197 basis points in the average yield earned on total interest earning assets. These decreases were only partially offset by the decrease in the cost of interest bearing liabilities. Interest rate spread decreased to 2.28% from 3.39%, and the net interest margin was 2.66% and 3.90%, respectively, for the three-month periods ended September 30, 2003 and 2002.

             Provision for Loan Losses. The provision for loan losses for the three months ended September 30, 2003 decreased $533,000 compared to the three months ended September 30, 2002. The decrease in the provision was a result of the decline in total loans, as well as management's assessment of the loan portfolio and its assessment of the local economy and market conditions and the adequacy of the allowance for loan losses.

             Non-Interest Income. Non-interest income, net, increased $123,000 to $2.0 million for the three months ended September 30, 2003, from $1.8 million for the three months ended September 30, 2002. During the third quarter of 2003, service and fee income increased 10.3% to $1.6 million, which resulted primarily from increased fees from the Company's title insurance company and from increased fees attributable to sales and services provided to a growing customer base.

             Non-Interest Expense. Non-interest expense totaled $4.6 million for the three month period ended September 30, 2003 as compared to $4.4 million for the same period in 2002. This reflects the Company's continued focus on expense containment while pursing its branch expansion efforts. Salaries and employee benefits expense increased $109,000 for the three months ended September 30, 2003 as compared to the three months ended September 30, 2002 due primarily to increased compensation expense attributable to the opening of the Company's seventh full-service Warwick Savings' branch in Goshen, New York in June of this year. Reduced pension costs that resulted from the curtailment of the Company's defined benefit pension plan only partially offset the increase in salary expense. Professional fees increased $101,000 for the three months ended September 30, 2003 as compared to the same period in 2002 primarily as a result of additional cost associated with our title insurance company.




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             Provision for Income Taxes. The $729,000 decrease in the provision for income taxes for the three-month period ended September 30, 2003, as compared to the three-month period ended September 30, 2002, was primarily attributable to the 44.0% decrease in pre-tax income. The applicable tax rates for the third quarter of 2003 and 2002 were 38.11% and 38.56%, respectively.

Comparison of Operating Results for the Nine Months Ended September 30, 2003 and 2002

             General. For the nine months ended September 30, 2003, the Company recognized net income of $5.1 million, or $1.13 per diluted share, as compared to net income of $7.6 million, or $1.59 per diluted share, for the nine months ended September 30, 2002, which represents a $2.5 million, or 32.3%, decrease. For the nine months ended September 30, 2003, annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 0.85% and 8.92%, respectively. The ROAA and ROAE for the corresponding period of 2002 were 1.28% and 12.80%, respectively.

             Interest Income. Interest income amounted to $29.9 million for the nine months ended September 30, 2003, as compared to $38.1 million for the nine months ended September 30, 2002. This decrease of $8.2 million, or 21.5%, reflects the impact of the Federal Reserve Bank's interest rate reductions which led to a significant increase in one-to four-family mortgage loans and mortgage-backed securities prepayments that were reinvested at lower yields. The Company chose to reinvest these funds primarily in agency mortgage-backed securities and agency collateralized mortgage obligations at relatively lower yields rather than in long-term fixed-rate residential mortgages in order to manage its exposure to rising rates. Interest income earned by the Company's mortgage-backed securities portfolio was also lower because of increased amortization of those securities' purchase premiums that was attributable to the increased prepayment levels discussed earlier.

             Interest Expense. Total interest expense for the nine-month period ended September 30, 2003 decreased from $16.7 million to $13.6 million, a decrease of $3.1 million, or 18.3%, as compared to the same nine-month period one year earlier. The average rate paid on interest-bearing liabilities declined 65 basis points to 2.81% for the nine-month period ended September 30, 2003 as compared to 3.46% for the comparable period in 2002. The decrease in the average rate paid resulted both from a shift in the deposit mix from relatively higher cost certificates of deposit toward relatively lower cost transaction accounts and a reduction in the rate paid on deposits and borrowings.

             Net Interest Income. Net interest income for the nine months ended September 30, 2003 decreased $5.1 million, or 24.0%, to $16.2 million compared to the nine months ended September 30, 2002, primarily as a result of the $134.2 million decrease in the average balance of one-to four-family mortgage loans coupled with a decrease of 153 basis points in the average yield earned on total interest earning assets and was only partially offset by the decrease in the cost of interest bearing liabilities. Interest rate spread decreased to 2.45% from 3.33%, and the net interest margin was 2.86% and 3.82%, respectively, for the nine-month periods ended September 30, 2003 and 2002.

             Provision for Loan Losses. The provision for loan losses for the nine months ended September 30, 2003 decreased $898,000, or 90.9%, to $90,000 compared to the nine months ended September 30, 2002. The decrease in the provision was a result of the decrease in the loan portfolio, as well as management's assessment of the loan portfolio, the local economy and market conditions and the adequacy of the allowance for loan losses.

             Non-Interest Income. Non-interest income, net, for the nine months ended September 30, 2003 and 2002 totaled $5.7 million and $5.9 million, respectively. The nine months ended September 30, 2002 included an $817,000 one-time gain recorded in other income as a result of the Company's curtailment of its defined benefit pension plan in 2002. Service and fee income increased for the nine months ended September 30, 2003




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primarily as a result of increased fees from the Company's title insurance company and from increased fees attributable to sales and services provided to a growing customer base.

             Non-Interest Expense. Non-interest expense for the nine months ended September 30, 2003 remained relatively flat when compared to the same period in 2002, reflecting the Company's continued focus on expense containment. Salaries and employee benefits expense decreased $170,000 for the nine months ended September 30, 2003 as compared to nine months ended September 30, 2002. Data processing expense increased for the nine months ended September 30, 2003 as compared to September 30, 2002 from the increase in core deposits serviced and costs incurred with the pending upgrade of Towne Center Bank's computer platform.

             Provision for Income Taxes. The decrease in the provision for income taxes to $3.1 million for the nine-month period ended September 30, 2003, as compared to the nine-month period ended September 30, 2002, was primarily attributable to the 34.4% decrease in pre-tax income. The applicable tax rates for the nine months of 2003 and 2002 were 37.79% and 39.72%, respectively. The lower marginal tax rate resulted primarily from an increase in tax exempt income as a percentage of total income during 2003 as compared to 2002.

Liquidity and Capital Resources

             An important component of the Company's asset/liability structure is the level of liquidity available to meet the needs of its customers. The Company's Board of Directors has established general guidelines for the maintenance of prudent levels of liquidity. The Company's Asset/Liability Management Committee continually monitors the amount and source of available liquidity.

             Liquidity is managed using a combination of customer deposits, cash and short-term interest-earning assets, mortgage loans held for sale, investment securities held as available for sale and borrowings from the FHLBNY.

             At September 30, 2003, the Company's total approved loan commitments outstanding totaled $62.5 million. Certificates of deposit scheduled to mature in one year or less at September 30, 2003 totaled $82.4 million. Based on historical experience, management believes that a significant portion of such deposits will remain with the Company.

             At September 30, 2003, the Company had cash and due from banks of $75.5 million and securities available for sale of $316.1 million. Management believes these amounts, together with the Company's borrowing capabilities, to be more than adequate to meet its short-term cash needs.

Regulatory Capital Position

             The Company's primary regulator, the Federal Reserve Board (the "Federal Reserve") which regulates bank holding companies, has issued guidelines classifying and defining bank holding company capital into the following components: (1) Tier I capital, which includes tangible stockholders' equity for common stock and certain perpetual preferred stock, and (2) Tier II capital, which includes a portion of the allowance for loan losses and preferred stock that does not qualify as Tier I capital. The risk-based capital guidelines require financial institution holding companies to maintain specific defined credit risk factors (risk-adjusted assets). As of September 30, 2003, the minimum Tier I and combined Tier I and Tier II capital ratios required by the Federal Reserve for capital adequacy were 4% and 8%, respectively.

             Warwick Savings and Towne Center are subject to minimum regulatory capital requirements imposed by the Federal Deposit Insurance Corporation ("FDIC"), which requirements are, as a general matter, based on the amount and composition of an institution's assets. Insured institutions in the strongest financial and managerial condition, with a rating of 1 (the highest examination rating of the FDIC under the Uniform




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Financial Institutions Rating System) are required to maintain Tier 1 capital of not less than 3.0% of total assets (the "leverage capital ratio"). For all other banks, the minimum leverage capital ratio is 4.0%, unless a higher leverage capital ratio is warranted by the particular circumstances or risk profile of the institution.

             The following table shows Warwick Savings' regulatory capital positions and ratios at September 30, 2003.


Actual
 For Capital Adequacy
Purposes
 To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
Amount
 Percent
 Amount
 Percent
 Amount
 Percent
Total Capital
   (to risk-weighted assets)		 $62,084 17.20% $28,869 8.00% $36,087 10.00%
Tier 1 Capital
   (to risk-weighted assets)		 57,502 15.93    14,435 4.00    21,652 6.00   
Tier 1 Capital
   (to average assets)		 57,502 7.70    29,875 4.00    37,343 5.00   

             The following table shows the Parent Company's regulatory capital positions and ratios as of September 30, 2003.


Actual Capital
 For Capital Adequacy
Purposes
 To Be Well
Capitalized
Amount
 Percent
 Amount
 Percent
 Amount
 Percent
Total Capital
   (to risk-weighted assets)		 $78,309 19.79% $31,658 8.00% $39,572 10.00%
Tier 1 Capital
   (to risk-weighted assets)		 73,255 18.51    15,829 4.00    23,743 6.00   
Tier 1 Capital
   (to average assets)		 73,255 9.27    31,599 4.00    N/A N/A   


Item 3.  Quantitative And Qualitative Disclosures About Market Risk

             Quantitative and qualitative disclosure about market risk is presented at December 31, 2002 in the Company's Annual Report on Form 10-K, which was filed with the SEC on March 31, 2003. There have been no material changes in the Company's market risk at September 30, 2003 as compared to December 31, 2002. The Company's most significant form of market risk is interest rate risk, as the majority of its assets and liabilities are sensitive to changes in interest rates. As noted in Item 2, Management's Discussion and Analysis, the decrease in the Company's net interest income is due, in part, to the relative changes in yield and cost of the Company's assets and liabilities as a result of the decreasing market interest rates in 2002 and into 2003. Should market interest rates increase, the cost of interest-bearing liabilities may increase faster than the rates on interest-earning assets. Conversely, should market interest rates fall significantly below current levels, the Company's net interest margin may also be negatively impacted. Market risk is reviewed quarterly by the Company's Asset Liability Committee.




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Item 4.  Controls and Procedures

             An evaluation of the Company's disclosure controls and procedures (as defined in Rule13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")) as of September 30, 2003, was carried out under the supervision and with the participation of the Company's Chief Executive Officer, Chief Financial Officer and several other members of the Company's senior management. The Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures as currently in effect are effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to the Company's management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. There have been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the quarter ended September 30, 2003, that have materially effected, or are reasonably likely to materially affect, our internal control over financial reporting.

             The Company intends to continually review and evaluate the design and effectiveness of its disclosure controls and procedures and to improve its controls and procedures over time and to correct any deficiencies that it may discover in the future. The goal is to ensure that senior management has timely access to all material financial and non-financial information concerning the Company's business. While the Company believes the present design of its disclosure controls and procedures is effective to achieve its goal, future events affecting its business may cause the Company to modify its disclosure controls and procedures.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in legal proceedings incurred in the normal course of business. In the opinion of management, none of these proceedings are expected to have a material effect on the consolidated financial position or results of operations of the Company.

Item 2. Changes 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

(a) Exhibits

See Index to Exhibits.



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(b) Reports on Form 8-K

On July 25, 2003, the Company filed a Form 8-K, dated July 25, 2003, with the SEC of the Company's earnings release for the quarterly period June 30, 2003.

On July 25, 2003, the Company filed a Form 8-K, dated July 25, 2003, with the SEC stating that its Chairman and CEO will be speaking at an investor conference on July 30, 2003.

On September 25th, the Company filed a Form 8-K, dated September 25, 2003 with the SEC that the Company had been advised of the suspension of dividends by the Federal Home Loan Bank of NY.



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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.



Warwick Community Bancorp, Inc.
(Registrant)
Date: November 14, 2003 By: /s/ Fred G. Kowal
Fred G. Kowal
Chairman and Chief Executive Officer
    (Duly Authorized Officer)
Date: November 14, 2003 By: /s/ Arthur W. Budich
Arthur W. Budick
Senior Vice President and Chief Financial Officer
    (Principal Financial Officer)



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INDEX TO EXHIBITS


Exhibit
Number
 Document

3.1 Certificate of Incorporation of Warwick Community Bancorp, Inc. (11)

3.2 Bylaws of Warwick Community Bancorp, Inc., as amended (11)

4.1 Certificate of Incorporation of Warwick Community Bancorp, Inc. (11)

4.2 Bylaws of Warwick Community Bancorp, Inc., as amended (11)

4.3 Form of Stock Certificate of Warwick Community Bancorp, Inc. (1)

4.4 Rights Agreement between Warwick Community Bancorp, Inc. and Registrar and Transfer Company, dated as of October 17, 2000, as amended by Amendment No. One to the rights Agreement dated September 17, 2002 (6)

4.5 Form of Right Certificate (7)

4.6 Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock of Warwick Community Bancorp, Inc. (7)

10.1 Employment Agreement by and between Warwick Community Bancorp, Inc. and Fred G. Kowal (8)

10.2 Amendment No. 1 to the Employment Agreement by and between Warwick Community Bancorp, Inc. and Fred G. Kowal (10)

10.3 Employment Agreement by and between Warwick Community Bancorp, Inc. and Ronald J. Gentile (2)

10.4 First Amendment to Employment Agreement by and between Warwick Community Bancorp, Inc. and Ronald J. Gentile (4)

10.5 Employment Agreement by and between Warwick Community Bancorp, Inc. and Arthur W. Budich (2)

10.6 First Amendment to Employment Agreement by and between Warwick Community Bancorp, Inc. and Arthur W. Budich (4)

10.7 Recognition and Retention Plan of Warwick Community Bancorp, Inc. (3)

10.8 First Amendment to the Recognition and Retention Plan of Warwick Community Bancorp, Inc. (5)



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10.9 Second Amendment to the Recognition and Retention Plan of Warwick Community Bancorp, Inc. (8)

10.10 Trust Agreement between Warwick Community Bancorp, Inc. and Orange County Trust Company for the Recognition and Retention Plan of Warwick Community Bancorp, Inc. (2)

10.11 Stock Option Plan of Warwick Community Bancorp, Inc. (3)

10.12 First Amendment to the Stock Option Plan of Warwick Community Bancorp, Inc. (5)

10.13 Form of Amended Stock Option Agreement for Directors under the Stock Option Plan of Warwick Community Bancorp, Inc (9)

10.14 Form of Amended Stock Option Agreement for Employees under the Stock Option Plan of Warwick Community Bancorp, Inc.(9)

10.15 Benefit Restoration Plan of The Warwick Savings Bank (1)

10.16 Grantor Trust Agreement by and between The Warwick Savings Bank and HSBC Bank USA for the Benefit Restoration Plan of The Warwick Savings Bank (2)

10.17 Change in Control Severance Plan of Warwick Community Bancorp, Inc. and Affiliates (9)

11.1 Statement re: Computation of per share earnings (See the Statement of Income and Note 2 of the Notes to Unaudited Consolidated Financial Statements in this report on Form 10-Q).

31.1 Rule 13a-14(a) Certification of Chief Executive Officer

31.2 Rule 13a-14(a) Certification of Chief Financial Officer

32 Section 1350 Certifications.

  1. Incorporated herein by reference to the Exhibits to the Company's Registration Statement on Form S-1, filed on September 19, 1997, Registration No. 333-36021.

  2. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1998.

  3. Incorporated herein by reference to the Company's definitive Proxy Statement for the Special Meeting of Shareholders held on June 24, 1998.

  4. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K for the transition period from June 30, 1998 to December 31, 1998.

  5. Incorporated herein by reference to the Company's definitive Proxy Statement for the Special Meeting of Shareholders held on April 20, 1999.

  6. Incorporated herein by reference to the Exhibits to the Company's Registration Statement on Form 8-A, filed on October 18, 2000.

  7. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

  8. Incorporated herein by reference to the Exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.

  9. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

  10. Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.

  11. Incorporated herein by reference to the Exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002.




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