UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-QSB

(Mark One)

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

For the quarterly period ended             September 30, 2000
                                ----------------------------------

                                       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     0-29770
                                             -------


                            WEST ESSEX BANCORP, INC.
-------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


      UNITED STATES                                       22-3597632
-------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                      Identification Number)


417 Bloomfield Avenue, Caldwell, New Jersey                 07006
-------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)


Issuer's telephone number, including area code           973-226-7911
                                               --------------------------------



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

         3,996,991  shares of common  stock,  par value  $0.01 par  share,  were
outstanding as of October 31, 2000.



Transitional Small Business Disclosure Format (check one):

         Yes [_]                 No  [X]



<PAGE>



                            WEST ESSEX BANCORP, INC.

                                   FORM 10-QSB

                    For the Quarter Ended September 30, 2000


                                      INDEX



<TABLE>
<CAPTION>

                                                                                                    Page
                                                                                                   Number
                                                                                                -------------
<S>         <C>      <C>                                                                            <C>
PART I               FINANCIAL INFORMATION

                     Financial Statements                                                             1
            Item 1.

                          Consolidated Statements of Financial Condition at
                           September 30, 2000 and December 31, 1999 (Unaudited)                       2


                          Consolidated Statements of Income for the Three and
                           Nine Months Ended September 30, 2000 and 1999 (Unaudited)                  3


                          Consolidated Statements of Comprehensive Income for the Three
                           and Nine Months Ended September 30, 2000 and 1999 (Unaudited)              4


         Consolidated Statements of Cash Flows for the
                           Nine Months Ended September 30, 2000 and 1999 (Unaudited)                5 - 6


                          Notes to Consolidated Financial Statements                                  7

            Item 2.  Management's Discussion and Analysis or Plan
                          of Operation                                                              8 - 15



PART II              OTHER INFORMATION


Item 1.                   Legal Proceedings                                                          16

Item 2.                   Changes in Securities                                                      16

Item 3.                   Defaults Upon Senior Securities                                            16

Item 4.                   Submission of Matters to a Vote of Security Holders                        16

Item 5.                   Other Information                                                          16

Item 6.                  Exhibits and Reports on Form 8-K                                            16

SIGNATURES                                                                                           17

</TABLE>

<PAGE>



                            WEST ESSEX BANCORP, INC.
                          PART I. FINANCIAL INFORMATION
                               September 30, 2000
                  ---------------------------------------------


ITEM 1.  FINANCIAL STATEMENTS

Certain information and footnote  disclosures  required under generally accepted
accounting  principles  have  been  condensed  or  omitted  from  the  following
consolidated  financial  statements pursuant to the rules and regulations of the
Securities and Exchange Commission.  West Essex Bancorp,  Inc. (the "Registrant"
or the "Company") believes that the disclosures presented are adequate to assure
that the information  presented is not misleading in any material respect. It is
suggested  that  the  following  consolidated  financial  statements  be read in
conjunction  with the  year-end  consolidated  financial  statements  and  notes
thereto  included in the  Registrant's  Annual  Report on Form 10-K for the year
ended December 31, 1999.

The results of operations  for the three and nine month periods ended  September
30, 2000, are not  necessarily  indicative of the results to be expected for the
entire fiscal year.





                                       1.


<PAGE>



                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                              September 30,         December 31,
                                                                                                  2000                  1999
                                                                                             --------------       ----------------
<S>                                                                                             <C>                    <C>
Assets

Cash and amounts due from depository institutions                                               $ 1,690,417            $ 5,728,992
Interest-bearing deposits in other banks                                                         3,487,693               7,016,853
                                                                                                 ----------              ---------

       Total cash and cash equivalents                                                            5,178,110             12,745,845

Securities available for sale                                                                     2,931,250              2,923,750
Investment securities held to maturity                                                           41,652,028             41,582,003
Mortgage-backed securities held to maturity                                                     119,595,154            121,223,315
Loans receivable                                                                                165,601,408            153,276,187
Real estate owned                                                                                   601,595                899,738
Premises and equipment                                                                            2,617,688              2,737,456
Federal Home Loan Bank of New York stock                                                          3,558,400              3,272,700
Accrued interest receivable                                                                       2,345,781              2,005,563
Excess of cost over assets acquired                                                               4,198,772              4,643,348
Other assets                                                                                      2,998,003              2,996,932
                                                                                                 ----------              ---------

       Total assets                                                                          $ 351,278,189           $ 348,306,837
                                                                                             ==============          =============

Liabilities and Stockholders' Equity

Liabilities

Deposits                                                                                      $ 235,162,743          $ 234,977,812
Borrowed money                                                                                   65,498,093             64,340,115
Advance payments by borrowers for taxes and insurance                                               946,634              1,044,140
Other liabilities                                                                                   836,884                834,824
                                                                                                   --------                -------

       Total liabilities                                                                        302,444,354            301,196,891
                                                                                               ------------            -----------

Stockholders' Equity

Preferred stock (par value $.01), 1,000,000 shares
  authorized; no shares issued or outstanding                                                             -                      -
Common stock (par value $.01), 9,000,000 shares authorized;
  shares issued 4,197,233; shares outstanding 3,996,991 (2000)
  and 4,054,357 (1999)                                                                               41,972                 41,972
Additional paid-in capital                                                                       17,325,618             17,332,133
Retained earnings - substantially restricted                                                     35,115,037             33,054,528
Common stock acquired by Employee Stock Ownership
  Plan ("ESOP")                                                                                  (1,068,356)            (1,178,874)
Unearned Incentive Plan stock                                                                      (561,887)              (655,549)
Treasury stock, at cost; 200,242 shares (2000) and
  142,876 shares (1999)                                                                          (1,975,149)            (1,436,550)
Accumulated other comprehensive loss - Unrealized
  loss on securities available for sale, net of income taxes                                        (43,400)               (47,714)
                                                                                                   --------               --------

       Total stockholders' equity                                                                48,833,835             47,109,946
                                                                                                -----------             ----------

       Total liabilities and stockholders' equity                                             $ 351,278,189          $ 348,306,837
                                                                                             ==============          =============
</TABLE>


See notes to consolidated financial statements.

                                       2.

<PAGE>

                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
         --------------------------------------------------------------
                                   (Unaudited)



<TABLE>
<CAPTION>


                                                               Three Months Ended September 30,     Nine Months Ended September 30,
                                                               -------------------------------    ----------------------------------
                                                                   2000                1999             2000               1999
                                                               -----------        ------------      ------------      --------------
<S>                                                            <C>                <C>               <C>                <C>
Interest income:
     Loans                                                     $  3,144,119       $  2,846,394      $  9,127,078       $  8,361,153
     Mortgage-backed securities                                   2,070,154          1,983,390         6,224,492          5,784,316
     Investment securities                                          777,468            780,689         2,307,908          2,385,411
     Other interest-earning assets                                   95,917            135,089           308,149            484,675
                                                               ------------       ------------      ------------       ------------

             Total interest income                                6,087,658          5,745,562        17,967,627         17,015,555
                                                               ------------       ------------      ------------       ------------

Interest expense:
     Deposits                                                     2,420,648          2,141,585         6,824,251          6,465,838
     Borrowed money                                                 973,986            871,114         2,883,127          2,375,866
                                                               ------------       ------------      ------------       ------------

             Total interest expense                               3,394,634          3,012,699         9,707,378          8,841,704
                                                               ------------       ------------      ------------       ------------

Net interest income                                               2,693,024          2,732,863         8,260,249          8,173,851
Provision for loan losses                                                --                 --                --                 --
                                                               ------------       ------------      ------------       ------------

Net interest income after provision for loan losses               2,693,024          2,732,863         8,260,249          8,173,851
                                                               ------------       ------------      ------------       ------------

Non-interest income:
     Fees and service charges                                        94,831             95,157           286,602            279,913
     Gain on sale of securities available for sale                       --                 --                --              34,515
     Other                                                           27,550             32,347           121,550            143,518
                                                               ------------       ------------      ------------       ------------

             Total non-interest income                              122,381            127,504           408,152            457,946
                                                               ------------       ------------      ------------       ------------

Non-interest expenses:
     Salaries and employee benefits                                 813,440            791,576         2,473,749          2,381,871
     Net occupancy expense of premises                               79,832             87,359           261,224            267,910
     Equipment                                                      181,286            160,821           534,191            488,844
     (Gain) loss on real estate owned                               (29,516)            11,250          (196,286)            29,905
     Amortization of intangibles                                    148,192            148,192           444,576            444,576
     Miscellaneous                                                  405,576            452,399         1,282,755          1,491,859
                                                               ------------       ------------      ------------       ------------

             Total non-interest expenses                          1,598,810          1,651,597         4,800,209          5,104,965
                                                               ------------       ------------      ------------       ------------

Income before income taxes                                        1,216,595          1,208,770         3,868,192          3,526,832
Income taxes                                                        393,585            425,378         1,344,445          1,258,168
                                                               ------------       ------------      ------------       ------------

Net income                                                     $    823,010       $    783,392      $  2,523,747       $  2,268,664
                                                               ============       ============      ============       ============
Net income per common share:
     Basic                                                     $       0.21       $       0.20      $       0.65       $       0.56
     Diluted                                                           0.21               0.19              0.65               0.56
                                                               ============       ============      ============       ============

Weighted average number of common shares
outstanding:
     Basic                                                        3,843,058          4,009,842         3,853,610          4,048,571
     Diluted                                                      3,859,311          4,017,888         3,859,028          4,051,253
                                                               ============       ============      ============       ============
</TABLE>



See notes to consolidated financial statements.

                                       3.

<PAGE>

                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>



                                                                              Three Months Ended        Nine Months Ended
                                                                                 September 30,             September 30,
                                                                           ----------------------    -------------------------
                                                                             2000        1999            2000         1999
                                                                           ---------    ---------    -----------   -----------
<S>                                                                        <C>          <C>          <C>           <C>
Net income                                                                 $ 823,010    $ 783,392    $ 2,523,747   $ 2,268,664
                                                                           ---------    ---------    -----------   -----------

Other comprehensive income (loss) -
     Unrealized holding gains (losses) on securities available for sale,
          net of income taxes of $(5,173), $10,232, $(2,425) and               9,205      (18,207)         4,314      (185,956)
          $104,511, respectively

     Reclassification adjustment for realized gains on securities
          available for sale, net of income taxes of $12,418 in 1999              --           --             --       (22,097)
                                                                           ---------    ---------    -----------   -----------

Total other comprehensive income (loss)                                        9,205      (18,207)         4,314      (208,053)
                                                                           ---------    ---------    -----------   -----------

Comprehensive income                                                       $ 832,215    $ 765,185    $ 2,528,061   $ 2,060,611
                                                                           =========    =========    ===========   ===========
</TABLE>


See notes to consolidated financial statements.


                                       4.

<PAGE>

                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        ----------------------------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                        Nine Months Ended September 30,
                                                                                       --------------------------------
                                                                                            2000               1999
                                                                                       -------------     --------------
<S>                                                                                     <C>                <C>
Cash flows from operating activities:
      Net income                                                                        $  2,523,747       $  2,268,664
      Adjustments to reconcile net income
       to net cash provided by operating activities:
           Depreciation and amortization of premises and equipment                           196,516            177,193
           Net accretion of premiums, discounts and deferred loan fees                      (306,759)          (120,303)
           Amortization of intangibles                                                       444,576            444,576
           (Gain) on sale of securities available for sale                                        --            (34,515)
           (Gain) on sale of real estate owned                                              (234,635)                --
           (Increase) in accrued interest receivable                                        (340,218)          (181,073)
           (Increase) decrease in other assets                                                (3,496)           178,582
           Increase in interest payable                                                        1,266             69,179
           Increase in other liabilities                                                      56,582            198,712
           Amortization of Incentive Plan cost                                                93,662                 --
           ESOP shares committed to be released                                              104,813            105,327
                                                                                        ------------       ------------

               Net cash provided by operating activities                                   2,536,054          3,106,342
                                                                                        ------------       ------------

Cash flows from investing activities:
      Proceeds from sales of securities available for sale                                        --          5,021,875
      Purchases of securities available for sale                                                  --                 --
      Proceeds from maturities and calls of investment securities held to maturity           150,000         14,000,000
      Purchases of investment securities held to maturity                                         --        (21,044,969)
      Principal repayments on mortgage-backed securities held to maturity                 17,033,606         29,614,358
      Purchases of mortgage-backed securities held to maturity                           (15,337,689)       (42,457,596)
      Purchase of loans receivable                                                        (3,584,564)          (957,203)
      Net (increase) in loans receivable                                                  (8,887,709)       (11,296,975)
      Proceeds from sales of real estate owned                                               698,047                 --
      Proceeds from other payments received on real estate owned                                  --                 --
      Additions to premises and equipment                                                    (76,748)           (16,589)
      Purchase of Federal Home Loan Bank of New York stock                                  (285,700)          (571,700)
                                                                                        ------------       ------------

               Net cash (used in) investing activities                                   (10,290,757)       (27,708,799)
                                                                                        ------------       ------------

Cash flows from financing activities:
      Net increase (decrease) in deposits                                                    141,750         (4,376,306)
      Net increase in short-term borrowed money                                            5,800,000         11,000,000
      Proceeds of long-term borrowed money                                                        --         15,000,000
      Repayment of long-term borrowed money                                               (4,642,022)        (5,332,512)
      Net (decrease) increase in advance payments by borrowers for taxes
        and insurance                                                                        (97,506)            14,815
      Purchase of treasury stock                                                            (552,016)        (1,845,684)
      Cash dividends paid                                                                   (463,238)          (407,388)
                                                                                        ------------       ------------

               Net cash provided by financing activities                                     186,968         14,052,925
                                                                                        ------------       ------------

Net (decrease) in cash and cash equivalents                                               (7,567,735)       (10,549,532)
Cash and cash equivalents - beginning                                                     12,745,845         16,371,431
                                                                                        ------------       ------------

Cash and cash equivalents - ending                                                      $  5,178,110       $  5,821,899
                                                                                        ============       ============
</TABLE>



See notes to consolidated financial statements.

                                       5.

<PAGE>



                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        ----------------------------------------------------------------
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                       Nine Months Ended September 30,
                                                                       -------------------------------
                                                                          2000              1999
                                                                        ---------        ----------
<S>                                                                    <C>               <C>
Supplemental disclosure of cash flow information:
 Cash paid during the year for:
      Income taxes                                                     $1,285,980        $  948,400
                                                                       ==========        ==========

      Interest                                                         $9,706,112        $8,772,525
                                                                       ==========        ==========

Supplemental schedule of noncash investing activities:
      Loans receivable transferred to real estate owned                $  165,269        $  192,063
                                                                       ==========        ==========

      Issuance of treasury stock to fund Supplementary Employee
        Retirement Plan                                                $   12,607        $       --
                                                                       ==========        ==========
</TABLE>




See notes to consolidated financial statements.

                                       6.

<PAGE>

                    WEST ESSEX BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   PRINCIPLES OF CONSOLIDATION

The  consolidated  financial  statements  include  the  accounts  of West  Essex
Bancorp, Inc. (the "Company"), the Company's wholly owned subsidiary, West Essex
Bank (the "Bank") and the Bank's wholly owned  subsidiary,  West Essex Insurance
Agency,  Inc. The Company's business is conducted  principally through the Bank.
All significant  intercompany  accounts and transactions have been eliminated in
consolidation.


2.   BASIS OF PRESENTATION

The accompanying  unaudited  consolidated  financial statements were prepared in
accordance  with  instructions  for Form  10-QSB and  regulation  S-B and do not
include  information  or  footnotes  necessary  for a complete  presentation  of
financial  condition,  results of operations,  and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of management,
all adjustments  (consisting of normal  recurring  adjustments)  necessary for a
fair presentation of the consolidated  financial  statements have been included.
The results of operations for the three and nine months ended September 30, 2000
are not  necessarily  indicative  of the results  which may be expected  for the
entire fiscal year.


3.    STOCKHOLDERS' EQUITY

At September 30, 2000,  West Essex  Bancorp,  M.H.C.  ("MHC"),  a mutual holding
company,  owns 2,350,121 shares of Company common stock,  representing  58.8% of
all Company common stock outstanding.  During both 2000 and 1999, MHC waived its
right to receive cash  dividends on the shares of Company  common stock it owns.
The amounts of such waived  dividends were  approximately  $235,000 and $176,000
during the three months ended  September  30, 2000 and 1999,  respectively,  and
$470,000 and $529,000  during the nine months ended September 30, 2000 and 1999,
respectively.


4.   NET INCOME PER COMMON SHARE

Basic net income per common  share is  calculated  by dividing net income by the
weighted average number of shares of common stock outstanding,  adjusted for the
unallocated  portion of shares held by the ESOP in accordance  with the American
Institute of Certified Public  Accountants'  Statement of Position 93-6. Diluted
net income per share is calculated by adjusting the weighted  average  number of
shares of common stock  outstanding  to include the effect of  unallocated  ESOP
shares, unearned Incentive Plan shares and stock options, if dilutive, using the
treasury  stock  method.  As of and for the three and nine month  periods  ended
September 30, 1999, none of the potentially dilutive securities were included in
the computation of diluted net income per share as they were anti-dilutive.



                                       7.
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


Forward-Looking Statements

         This report  contains  certain  forward-looking  statements  within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"),  and Section 21F of the Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act").   The  Company  intends  such   forward-looking
statements  to be  covered by the safe  harbor  provisions  for  forward-looking
statements  contained  in the  Private  Securities  Reform  Act of 1995,  and is
including  this  statement  for  purposes  of  these  safe  harbor   provisions.
Forward-looking statements,  which are based on certain assumptions and describe
future  plans,  strategies  and  expectations  of  the  Company,  are  generally
identified  by use of the words  "believe,"  "expect,"  "intend,"  "anticipate,"
"estimate," "project," or similar expressions.  The Company's ability to predict
results  or the  actual  effect  of future  plans or  strategies  is  inherently
uncertain.  Factors which could have a material adverse effect on the operations
of the Company and its subsidiaries  include, but are not limited to, changes in
interest rates,  general economic  conditions,  legislative/regulatory  changes,
monetary and fiscal polices of the U.S.  Government,  including  policies of the
U.S.  Treasury and the Federal Reserve Board,  the quality or composition of the
loan  or  investment  portfolios,  demand  for  loan  products,  deposit  flows,
competition,  demand for  financial  services in the  Company's  market area and
accounting  principles and guidelines.  These risks and uncertainties  should be
considered in evaluating  forward-looking  statements and undue reliance  should
not be placed on such statements. Further information concerning the Company and
its business,  including  additional  factors that could  materially  affect the
Company's  financial  results,  is included in the  Company's  filings  with the
Securities and Exchange Commission (the "SEC").

         The  Company  does  not  undertake  - and  specifically  disclaims  any
obligation - to publicly  release the results of any revisions which may be made
to any  forward-looking  statements to reflect events or circumstances after the
date  of  such  statements  or to  reflect  the  occurrence  of  anticipated  or
unanticipated events.


Management's Discussion and Analysis or Plan of Operation
General

         The Company is the federally  chartered  stock holding company for West
Essex Bank, a federally chartered stock savings bank. The Company,  the Bank and
West Essex Bancorp,  M.H.C.,  a mutual holding company and majority owner of the
Company,  are  regulated by the Office of Thrift  Supervision  (the "OTS").  The
Company's and the Bank's  results of operations  are dependent  primarily on net
interest  income,   which  is  the  difference  between  the  income  earned  on
interest-earning assets,  primarily the loan and investment portfolios,  and the
cost of funds,  consisting of interest paid on deposits and borrowings.  Results
of  operations   are  also  affected  by  the  provision  for  loan  losses  and
non-interest expense.  Non-interest expense principally consists of salaries and
employee  benefits,  office  occupancy and equipment  expense,  amortization  of
intangibles,  advertising,  federal deposit insurance premiums, expenses of real
estate owned and other  expenses.  Results of operations are also  significantly
affected by general economic and competitive conditions, particularly changes in
interest rates, government policies and actions of regulatory authorities.



                                       8.
<PAGE>


Management Strategy

         The Company's current  strategic plan is to maintain  profitability and
its  well-capitalized  position to take advantage of future  expansion or growth
opportunities,  while managing growth,  maintaining  asset quality,  controlling
expenses and  reducing  exposure to credit and  interest  rate risk.  Management
seeks to accomplish  these goals by: (1) emphasizing its retail banking services
through  its  network of branch  offices,  which  includes  the  origination  of
one-to-four  family  mortgage  loans,  as well as commercial  real estate,  home
equity,  multi-family,  construction  and development and consumer loans, in the
communities it serves as market conditions  permit;  (2) enhancing  earnings and
offsetting the effects of the extreme  competition  for real estate loans in the
Bank's   market  area   primarily   through  the  purchase  of   adjustable-rate
mortgage-backed securities, which provide a source of liquidity, low credit risk
and low administrative cost as well as helping to manage interest rate risk; and
(3) continuing to monitor interest rate risk. Management has aggressively sought
to increase loan  originations  in recent years and was successful in increasing
loans  receivable,  net,  from $82.1  million  at  December  31,  1996 to $140.3
million,  $153.3 million and $165.6  million at December 31, 1998,  December 31,
1999  and  September  30,  2000,  respectively.  Management  was  successful  in
increasing loan  originations  primarily by increasing the amount of advertising
the Bank does in its primary  market area,  paying fees to mortgage  brokers who
send loan applicants to the Bank to whom the Bank originates loans and providing
cash  incentives to its mortgage  origination  and retail staff to increase loan
originations.  Competition,  however,  has remained intense in the Bank's market
area,   which  has  resulted  in  the  Company's  total   securities   portfolio
representing  a greater  percentage  of total assets than its loan  portfolio in
each of the last five years. Management believes that continuing to seek lending
opportunities,  as well as investing in mortgage-backed securities, the majority
of which are  adjustable-rate,  enables the Company to  effectively  control its
interest  rate risk while at the same time  enabling it to maintain a balance of
high  quality,  diversified  investments,   provide  collateral  for  short  and
long-term borrowings and lessen exposure to credit risk.


Comparison of Financial Condition at September 30, 2000 and December 31, 1999

         Total  assets were $351.3  million at September  30, 2000,  compared to
$348.3  million at December 31, 1999, an increase of $3.0 million,  or 0.9%. The
increase in assets was funded primarily by net income of $2.5 million.

         Cash and cash equivalents, primarily interest-bearing deposits with the
FHLB,  decreased  $7.5 million to $5.2 million at September  30, 2000 from $12.7
million at December 31, 1999. The decrease in cash and cash equivalents was used
primarily to fund loan purchases and originations.

         In the aggregate, mortgage-backed securities and investment securities,
including  available-for-sale  and  held to  maturity  issues,  totalled  $164.2
million at September 30, 2000, a decrease of $1.5 million,  or 0.9%, from $165.7
million at December 31, 1999. Mortgage-backed  securities, all of which are held
to maturity,  decreased  $1.6  million due to  repayments  exceeding  purchases.
Investment  securities  held to  maturity  and  securities  available  for  sale
reflected only marginal changes.

         Loans receivable increased by $12.3 million, or 8.0%, to $165.6 million
at September  30, 2000 from $153.3  million at December 31, 1999.  Such increase
was  primarily  funded  by  the  aforementioned   decreases  in  cash  and  cash
equivalents and securities and by a $1.2 million increase in borrowings.

         Deposits  totalled $235.2 million at September 30, 2000, an increase of
$185,000, or 0.1%, over the $235.0 million balance at December 31, 1999.


                                       9.

<PAGE>


         Borrowed  money  increased  $1.2 million,  or 1.9%, to $65.5 million at
September 30, 2000,  as compared to $64.3  million at December 31, 1999.  During
the nine months ended  September  30, 2000,  long-term  debt of $4.6 million was
repaid and short-term borrowings were increased by $5.8 million.

         Stockholders' equity increased $1.7 million, or 3.6%, to $48.8 million,
primarily due to the retention of net income.


Comparison of Operating Results for the Three Months Ended September 30, 2000
and 1999

         Net Income. Net income increased $40,000,  or 5.1%, to $823,000 for the
three months ended September 30, 2000,  compared with $783,000 for the same 1999
period.  The increase in net income  during the 2000 period  resulted  primarily
from decreases in non-interest expenses and income taxes of $53,000 and $32,000,
respectively,   partially  offset  by  decreases  in  net  interest  income  and
non-interest income of $40,000 and $5,000, respectively.

         Interest Income. Total interest income increased $342,000,  or 6.0%, to
$6.09 million for the three months ended  September 30, 2000, from $5.75 million
for the same 1999  period.  The increase  was the result of a $6.8  million,  or
2.1%,  increase in average  interest-earning  assets between the periods,  along
with an  increase  of 26 basis  points,  to 7.19%,  in the yield  earned on such
assets.  The increase in the average balance was the result of continued  strong
loan originations volume during the past twelve months while the increased yield
reflects  increased  market  interest  rates,  a shift in assets  toward  higher
yielding loans and upward adjustments in the yields on adjustable rate assets.

         Interest  income on loans  increased  by $298,000,  or 10.5%,  to $3.14
million  during the three months ended  September  30, 2000,  when compared with
$2.85  million for the same 1999  period.  The  increase  during the 2000 period
resulted from an increase of $12.2 million,  or 7.9%, in the average  balance of
loans outstanding, along with an 18 basis point increase, to 7.57%, in the yield
earned on the loan  portfolio.  The increased  average balance was the result of
strong  lending  volume.  The  increased  yield is the  result of  higher  rates
obtained on  originations  as well as upward  interest rate  adjustments  on the
Bank's adjustable-rate mortgage loans.

         Interest   on   mortgage-backed    securities,   all   of   which   are
held-to-maturity,  increased $87,000, or 1.5%, to $2.07 million during the three
months ended  September 30, 2000,  when compared with $1.98 million for the same
1999 period. The increase during the 2000 period resulted from an increase of 28
basis  points,  to 6.84%,  in yield.  The  average  balance  of  mortgage-backed
securities increased $253,000, or 0.2%, between the periods.

         Interest    earned   on   investment    securities,    including   both
available-for-sale and held-to-maturity issues, decreased by $4,000, or 0.5%, to
$777,000  during the three months ended  September  30, 2000,  when  compared to
$781,000 during the same 1999 period,  primarily due to a $1.8 million, or 4.0%,
decrease  in the  average  balance of such  assets,  which more than offset a 24
basis  point  increase to 6.96% in the yield  earned  thereon.  The  decrease in
average  balance was the result of calls and maturities of securities  exceeding
purchases  thereof.  The  increase  in yield was the result of the higher  rates
available on securities  purchased  and  increasing  yields on  adjustable  rate
investments due to higher market interest rate conditions.

         Interest on other interest-earning  assets decreased $39,000, or 28.9%,
to $96,000  during the three months  ended  September  30, 2000,  as compared to
$135,000  for the same 1999  period.  The decrease was due to a decrease of $3.8
million, or 35.8%, in the average balance of such assets,  partially offset by a
58 basis point increase in yield. The reduced usage of lower yielding short-term
deposits  in other banks was largely  responsible  for both the reduced  average
balance and increased yield.

                                       10.
<PAGE>


         Interest Expense.  Interest expense on deposits increased $278,000,  or
13.0%,  to $2.42 million during the three months ended  September 30, 2000, when
compared  to $2.14  million  during  the same 1999  period.  Such  increase  was
primarily  attributable to an increase of 51 basis points, to 4.41%, in the cost
of  interest-bearing  deposits,  as  the  average  balance  of  interest-bearing
deposits was little changed.  The increased cost is due to higher interest rates
paid on deposits,  particularly  certificates  of deposits.  The average cost of
certificates of deposit was 5.66% for the three months ended September 30, 2000,
as  compared  to  5.01%  for  the  same  1999   period.   The  average  cost  of
non-certificate  deposits  decreased  minimally  to 1.88 % for the three  months
ended September 30, 2000, as compared to 1.89% for the same prior year period.

         Interest expense on borrowed money increased by $103,000,  or 11.8%, to
$974,000  during the three months ended  September 30, 2000,  when compared with
$871,000  during the same 1999  period,  primarily  due to an  increase  of $5.8
million, or 9.6%, in the average balance of borrowings  outstanding,  along with
an 11 basis point  increase to 5.90% in the cost of borrowed  money.  During the
three months ended  September  30, 2000,  the Bank repaid  $352,000 in long-term
borrowings  having  an  average  interest  rate of  5.92%  and  incurred  no new
long-term  debt.  Short-term  borrowings  at  September  30, 2000 stood at $11.8
million  and  carried an average  interest  rate of 6.58%,  as compared to $13.0
million having an average rate of 6.44% at June 30, 2000.

         Net Interest Income. Net interest income decreased $40,000, or 1.5%, to
$2.69 million  during the three months ended  September 30, 2000,  when compared
with  $2.73  million  for the same  1999  period.  Such  decrease  was due to an
increase in total interest expense of $382,000,  partially offset by an increase
in total interest income of $342,000.  The net interest rate spread decreased to
2.44% in 2000 from 2.63% in 1999.  The  decrease  in the  interest  rate  spread
resulted  from an  increase of 45 basis  points in the cost of  interest-bearing
liabilities,  partially  offset  by a 26 basis  point  increase  in the yield on
interest-earning assets.  Additionally,  net interest income improved due to the
additional   income   generated   by  a  $6.8   million   increase   in  average
interest-earning  assets in  excess of the  increased  cost  incurred  by a $5.6
million increase in average interest-bearing liabilities.

         Provision for Loan Losses.  During the three months ended September 30,
2000 and  1999,  the Bank did not  record a  provision  for loan  losses  as the
existing  balance of the  allowance  for loan  losses was  considered  adequate.
During the three months ended  September  30, 2000,  loan  charge-offs  totalled
$2,000  and  there  were  no  recoveries.  There  were no  loan  charge-offs  or
recoveries  during the three months ended  September 30, 1999. The allowance for
loan losses is based on management's evaluation of the risk inherent in its loan
portfolio  and  gives  due  consideration  to  the  changes  in  general  market
conditions  and in the nature and volume of the Bank's loan  activity.  The Bank
intends to continue to provide for loan losses based on its  periodic  review of
the loan  portfolio  and general  market  conditions.  At September 30, 2000 and
1999,  loans  delinquent  ninety days or more  totalled  $96,000  and  $883,000,
respectively,  representing  0.06% and 0.57%,  respectively,  of total loans. At
September  30,  2000,  the  allowance  for loan losses  stood at $1.36  million,
representing 0.80% of total loans and 1419.8% of loans delinquent ninety days or
more.  At December  31,  1999,  the  allowance  for loan  losses  stood at $1.40
million, representing 0.90% of total loans and 176.8% of loans delinquent ninety
days or more.  At September  30, 1999,  the  allowance  for loan losses stood at
$1.40 million,  representing 0.91% of total loans and 158.6% of loans delinquent
ninety days or more. The Bank monitors its loan portfolio on a continuing  basis
and intends to continue to provide for loan losses  based on its ongoing  review
of the loan portfolio and general market conditions.

         The Bank has established a standardized  process to assess the adequacy
of the allowance for loan losses and to identify the risks  inherent in the loan
portfolio.  The process  incorporates  credit reviews and gives consideration to
areas of exposure such as concentrations of credit,  local economic  conditions,
trends in delinquencies,  collateral coverage, the composition of the performing
and  non-performing  loan  portfolios,  and  other  risks  inherent  in the loan
portfolio.

                                       11.

<PAGE>

         Specific allocations of the allowance for loan losses are identified by
individual loan based upon a detailed  credit review of each such loan.  General
loan loss  allowances  are allocated to pools of loans  categorized  by type and
assigned allowance  percentages which take into effect past charge-off  history,
industry averages and current trends and risks.  Finally, an unallocated portion
of the allowance is  maintained to account for the general  inherent risk in the
loan  portfolio,  known  circumstances  which are not addressed in the allocated
portion of the allowance (such as the increased  dependence on outside  mortgage
brokers for originations), and the necessary imprecision in the determination of
the allocation portion of the allowance.

         Management believes that, based on information currently available, the
allowance  for loan losses is  sufficient  to cover losses  inherent in the loan
portfolio at this time. However, no assurance can be given that the level of the
allowance  for loan losses will be  sufficient  to cover  future  possible  loan
losses or that future  adjustments  to the allowance for loan losses will not be
necessary  if  economic  and  other  conditions  differ  substantially  from the
economic and other conditions  considered by management to determine the current
level of the allowance for loan losses.  Management  may in the future  increase
the level of the  allowance  for loan losses as a percentage  of total loans and
non-performing  loans in the event it  increases  the level of  commercial  real
estate,  multifamily,  or  consumer  lending as a  percentage  of the total loan
portfolio.  In addition,  various  regulatory  agencies,  as an integral part of
their examination  process,  periodically  review the allowance for loan losses.
Such agencies may require the Bank to provide  additions to the allowance  based
upon judgments different from those of management.

         The  allowance  for  loan  losses   includes   specific,   general  and
unallocated  allowances  of $5,000,  $999,000  and  $359,000,  respectively,  at
September 30, 2000, as compared to $23,000, $986,000 and $356,000, respectively,
at June 30, 2000.

         Non-Interest Income.  Non-interest income decreased $6,000, or 4.7%, to
$122,000  during the three months ended September 30, 2000, from $128,000 during
the same 1999 period.

         Non-Interest  Expenses.  Non-interest expenses decreased by $53,000, or
3.2%, to $1.60 million  during the three months ended  September 30, 2000,  when
compared with $1.65 million  during the same 1999 period.  A primary  reason for
the  decrease was the improved  results of real estate owned  operations,  which
reflected a gain of $30,000  during the quarter  ended  September  30, 2000,  as
compared  to a  loss  of  $11,000  during  the  same  prior  year  quarter.  The
improvement  was the result of $39,000 in gains on property sales in the current
period  versus none in the prior  period.  Salaries and employee  benefits,  the
largest  component of  non-interest  expenses,  increased  $21,000,  or 2.7%, to
$813,000  during the three months ended September 30, 1999, from $792,000 during
the prior year quarter.  Miscellaneous  non-interest expenses decreased $46,000,
or 10.2%,  to $406,000  for the three  months ended  September  30,  2000,  from
$452,000  during the  comparable  prior year period due  primarily  to decreased
legal and FDIC insurance expenses and the lack of year 2000 remediation expenses
in the current year period. All other elements of non-interest  expense remained
little changed at $409,000 and $396,000  during the three months ended September
30, 2000 and 1999, respectively.

         Income Taxes. Income tax expense totalled $394,000,  or 32.4% of income
before  income  taxes,  during the three months  ended  September  30, 2000,  as
compared  to  $425,000,  or 35.2% of income  before  income  taxes,  during  the
comparable 1999 period.


Comparison of Operating Results for the Nine Months Ended September 30, 2000 and
1999

         Net Income. Net income increased  $255,000,  or 11.2%, to $2.52 million
for the nine months ended  September  30, 2000,  compared with $2.27 million for
the same 1999 period. The increase in net income during the 2000 period resulted
primarily  from an  $86,000  increase  in net  interest  income  and a  $305,000
decrease in non-interest expenses,  which were partially offset by a decrease in
non-interest income of $50,000 and an increase in income taxes of $86,000.

                                       12.
<PAGE>


         Interest Income. Total interest income increased $952,000,  or 5.6%, to
$17.97 million for the nine months ended September 30, 2000, from $17.02 million
for the same 1999  period.  The increase  was the result of a $9.8  million,  or
3.0%,  increase in average  interest-earning  assets between the periods,  along
with a 17 basis point  increase,  to 7.10%,  in the yield earned on such assets.
The  increase in the average  balance  was the result of  continued  strong loan
originations  volume during the past twelve  months,  while the increased  yield
reflects  increased  market  interest  rates,  a shift in assets  toward  higher
yielding loans and upward adjustments in rates on adjustable rate assets.

         Interest  income on loans  increased  by  $766,000,  or 9.2%,  to $9.13
million  during the nine months ended  September  30, 2000,  when  compared with
$8.36  million for the same 1999  period.  The  increase  during the 2000 period
resulted from an increase of $14.1 million,  or 9.5%, in the average  balance of
loans  outstanding,  which was  sufficient to offset a 3 basis point decrease to
7.51% in the yield earned on the loan portfolio.  The increased  average balance
was the result of strong lending volume.

         Interest   on   mortgage-backed    securities,   all   of   which   are
held-to-maturity,  increased $440,000, or 7.6%, to $6.22 million during the nine
months ended  September 30, 2000,  when compared with $5.78 million for the same
1999 period. The increase during the 2000 period resulted from an increase of 24
basis points,  to 6.71%,  in yield,  along with an increase of $4.5 million,  or
3.8%, in the average balance of mortgage-backed  securities. The increased yield
reflects  higher  market  interest  rates  and  upward  adjustments  of rates on
adjustable rate issues.

         Interest    earned   on   investment    securities,    including   both
available-for-sale and held-to-maturity  issues,  decreased by $78,000, or 3.3%,
to $2.31 million during the nine months ended  September 30, 2000, when compared
to $2.39  million  during the same 1999 period,  primarily  due to a decrease of
$3.2 million,  or 6.7%, in the average  balance of such assets,  which more than
offset a 24 basis point  increase to 6.90% in the yield earned.  The decrease in
average  balance was the result of calls and maturities of securities  exceeding
purchases  thereof.  The  increase  in yield was the result of the higher  rates
available on securities  purchased  and  increasing  yields on  adjustable  rate
issues.

         Interest on other interest-earning assets decreased $177,000, or 36.5%,
to $308,000  during the nine months ended  September  30,  2000,  as compared to
$485,000  for the same 1999  period.  The decrease was due to a decrease of $5.6
million, or 44.8%, in the average balance of such assets,  partially offset by a
77 basis point increase, to 5.91%, in yield. The reduced usage of lower yielding
short-term  deposits in other banks was responsible for both the reduced average
balance and increased yield.

         Interest Expense.  Interest expense on deposits increased $358,000,  or
5.5%, to $6.82  million  during the nine months ended  September 30, 2000,  when
compared  to $6.47  million  during  the same 1999  period.  Such  increase  was
primarily  attributable to an increase of 26 basis points, to 4.15%, in the cost
of  interest-bearing  deposits,  partially  offset by a $2.2  million,  or 1.0%,
decrease in the average balance  thereof.  The increase in cost is due to higher
interest  rates paid on  deposits,  particularly  certificates  of deposit.  The
average  cost of  certificates  of deposit was 5.35% for the nine  months  ended
September  30, 2000 as compared to 5.01% for the same 1999  period.  The average
cost of  non-certificate  deposits decreased to 1.85 % for the nine months ended
September 30, 2000, as compared to 1.90% for the same prior year period.

         Interest expense on borrowed money increased by $507,000,  or 21.3%, to
$2.88 million  during the nine months ended  September  30, 2000,  when compared
with $2.38  million  during the same 1999 period,  primarily due to increases of
$10.2 million, or 18.2%, in the average balance of borrowings outstanding and 15
basis points,  to 5.82%, in the cost of borrowed  money.  During the nine months
ended  September 30, 2000, the Bank repaid $4.6 million in long-term  borrowings
having  an  average  interest  rate  of  5.61%  and  incurred  no new  long-term
borrowings.  Short-term borrowings at September 30, 2000, totalled $11.8 million
at an average  rate of 6.58%,  as compared to $6.0  million at 5.80% at December
31, 1999.
                                       13.
<PAGE>


         Net Interest Income. Net interest income increased $86,000, or 1.1%, to
$8.26 million  during the nine months ended  September  30, 2000,  when compared
with  $8.17  million  for the same  1999  period.  Such  increase  was due to an
increase in total interest income of $951,000,  partially  offset by an increase
in total interest expense of $865,000. The net interest rate spread decreased to
2.57% in 2000 from 2.68% in 1999.  The  decrease  in the  interest  rate  spread
resulted  from an  increase of 28 basis  points in the cost of  interest-bearing
liabilities,  partially  offset  by a 17 basis  point  increase  in the yield on
interest-earning assets.  Additionally,  net interest income improved due to the
additional   income   generated   by  a  $9.8   million   increase   in  average
interest-earning  assets in excess of the  increased  cost  incurred  by an $8.0
million increase in average interest-bearing liabilities.

         Provision for Loan Losses.  During the nine months ended  September 30,
2000 and  1999,  the Bank did not  record a  provision  for loan  losses  as the
existing  balance of the  allowance  for loan  losses was  considered  adequate.
During the nine months ended September 30, 2000,  charge-offs  totalled  $37,000
and there were no recoveries.  During the nine months ended  September 30, 1999,
charge-offs  totalled $317,000,  including a $316,000  charge-off related to the
final  resolution  of a $694,000  construction  loan,  and  recoveries  totalled
$1,000. The allowance for loan losses is based on management's evaluation of the
risk inherent in its loan portfolio and gives due  consideration  to the changes
in general  market  conditions  and in the nature and volume of the Bank's  loan
activity.  The Bank  intends to continue to provide for loan losses based on its
periodic  review  of the  loan  portfolio  and  general  market  conditions.  At
September  30, 2000 and 1999,  loans  delinquent  ninety  days or more  totalled
$96,000 and $883,000, respectively,  representing 0.06% and 0.57%, respectively,
of total loans.  At September  30, 2000,  the allowance for loan losses stood at
$1.36 million, representing 0.80% of total loans and 1419.8% of loans delinquent
ninety days or more.  At December 31, 1999,  the allowance for loan losses stood
at $1.40  million,  representing  0.90%  of  total  loans  and  176.8%  of loans
delinquent  ninety days or more. At September  30, 1999,  the allowance for loan
losses stood at $1.40 million,  representing  0.91% of total loans and 158.6% of
loans delinquent  ninety days or more. The Bank monitors its loan portfolio on a
continuing basis and intends to continue to provide for loan losses based on its
ongoing review of the loan portfolio and general market conditions.

         The  allowance  for  loan  losses   includes   specific,   general  and
unallocated  allowances  of $5,000,  $999,000  and  $359,000,  respectively,  at
September 30, 2000, as compared to $50,000, $878,000 and $472,000, respectively,
at December 31, 1999,  and  $115,000,  $872,000 and $413,000,  respectively,  at
September 30, 1999.

         Non-Interest  Income.  Non-interest income decreased $50,000, or 10.9%,
to $408,000  during the nine months  ended  September  30, 2000,  from  $458,000
during the same 1999 period.  The 1999 period includes a gain of $35,000 related
to the sale of securities available for sale.

         Non-Interest Expenses.  Non-interest expenses decreased by $305,000, or
6.0%,  to $4.80  million  during the nine months ended  September  30, 2000 when
compared with $5.10 million  during the same 1999 period.  A primary  reason for
the decrease in non-interest expenses was a $226,000 improvement related to real
estate  operations,  which  reflected a $196,000  gain for the nine months ended
September 30, 2000, as compared to a $30,000 loss in the prior year period.  The
improved  results  are due to  $235,000  in  gains on real  estate  sales in the
current  period as  compared  to none in the prior  year  period.  Salaries  and
employee  benefits,  the largest component of non-interest  expenses,  increased
$92,000,  or 3.9%, to $2.47 million  during the nine months ended  September 30,
2000,   from  $2.38  million   during  the  prior  year  period.   Miscellaneous
non-interest  expenses decreased $209,000, or 14.0%, to $1.28 million during the
nine months  ended  September  30,  2000,  as  compared to $1.49  million in the
comparable  prior year period,  reflecting  decreased  legal and FDIC  insurance
expenses and the absence of year 2000  remediation  expenses in the current year
period.  All other elements of non-interest  expense  remained little changed at
$1.24 million and $1.20 million during the nine months ended  September 30, 2000
and 1999, respectively.

                                       14.
<PAGE>


         Income Taxes.  Income tax expense  totalled $1.34 million,  or 34.8% of
income before income taxes,  during the nine months ended September 30, 2000, as
compared to $1.26  million,  or 35.7% of income before income taxes,  during the
comparable 1999 period.


Liquidity and Capital Resources

         The  Company's and Bank's  primary  sources of funds on a long-term and
short-term  basis  are  deposits,  principal  and  interest  payments  on loans,
mortgage-backed and investment securities and FHLB borrowings. The Bank uses the
funds generated to support its lending and investment  activities as well as any
other demands for  liquidity  such as deposit  outflows.  While  maturities  and
scheduled amortization of loans are predictable sources of funds, deposit flows,
mortgage  prepayments  and the exercise of call features on debt  securities are
greatly   influenced  by  general  interest  rates,   economic   conditions  and
competition.  The Bank has  continued to maintain the required  levels of liquid
assets as defined by OTS regulations.  This requirement of the OTS, which may be
varied at the  direction  of the OTS  depending  upon  economic  conditions  and
deposit flows, is based upon a percentage of deposits and short-term borrowings.
The Bank's  currently  required  liquidity ratio is 4.0%. At September 30, 2000,
and December 31, 1999, the Bank's  regulatory  liquidity  ratios were 21.10% and
25.40%, respectively.

         At September 30, 2000, the Bank exceeded all of its regulatory  capital
requirements  with a tangible capital level of $39.5 million,  or 11.4% of total
adjusted assets, which is above the required level of 5.2 million, or 1.5%; core
capital of $39.5 million, or 11.4% of total adjusted assets,  which is above the
required  level of $13.9  million,  or 4.0%;  and  risk-based  capital  of $40.8
million, or 29.10% of risk-weighted assets, which is above the required level of
$11.2 million, or 8.0%.

         The  Company's  most liquid  assets are cash and cash  equivalents  and
securities  available  for sale.  The levels of these  assets are  dependent  on
operating,  financing, lending and investing activities during any given period.
At September 30, 2000, cash and cash  equivalents  and securities  available for
sale totalled $8.1 million, or 2.3% of total assets.

         The  Company,  through  its  Bank  subsidiary,  has  other  sources  of
liquidity if a need for additional funds arises,  including FHLB borrowings.  At
September 30, 2000,  the Bank had $65.5 million in borrowings  outstanding  from
the FHLB.  Depending on market  conditions,  the pricing of deposit products and
FHLB borrowings,  the Bank may continue to rely on FHLB borrowings to fund asset
growth.

         At  September  30, 2000,  the Bank had  commitments  to  originate  and
purchase  loans and fund  unused  outstanding  lines of credit  and  undisbursed
proceeds of construction mortgages totalling $13.2 million and no commitments to
purchase  securities.  The Bank  anticipates  that it will have sufficient funds
available  to meet its  current  commitments.  Certificate  accounts,  including
Individual  Retirement  Account accounts,  which are scheduled to mature in less
than one year from September 30, 2000, totalled $120.5 million. The Bank expects
that substantially all of the maturing  certificate accounts will be retained by
the Bank.

         At  September  30,  2000,  the Company  and the Bank had total  equity,
determined in accordance with generally accepted accounting principles, of $48.8
million and $43.6 million,  respectively,  or 13.9% and 12.5%, respectively,  of
total  assets.  The Bank's  regulatory  tangible  capital  at that  date,  which
excludes intangible assets of $4.2 million and unrealized securities losses, net
of deferred  income taxes of $43,000,  was  $39.5 million,  or 11.4% of adjusted
total assets.  An institution with a ratio of tangible capital to adjusted total
assets of greater than or equal to 5.0% is considered  to be  "well-capitalized"
pursuant to OTS regulations.


                                       15.
<PAGE>


                            WEST ESSEX BANCORP, INC.
                           PART II . OTHER INFORMATION
                               September 30, 2000


ITEM 1. Legal Proceedings

          The  Company  and the Bank are  parties  to various  litigation  which
          arises primarily in the ordinary course of business.  Included in this
          litigation are various claims and lawsuits involving the Bank, such as
          claims to enforce  liens,  condemnation  proceedings  on properties in
          which the Company and Bank hold security  interests,  claims involving
          the making  and  servicing  of real  property  loans and other  issues
          incident to the Bank's  business.  In the opinion of  management,  the
          ultimate  disposition  of such  litigation  should not have a material
          effect on the  consolidated  financial  position or  operations of the
          Company.


ITEM 2. Changes in Securities

          None.


ITEM 3. Defaults Upon Senior Securities

          None.


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

          None.

ITEM 5. Other Information

          None


ITEM 6. Exhibits and Reports on Form 8-K

(a)      Exhibits:

3.1      Charter of West Essex Bancorp, Inc.  *
3.2      Bylaws of West Essex Bancorp, Inc.  *
4.0      Form of Common Stock Certificate   *
11.0     Statement regarding computation of per share earnings
27.0     Financial Data Schedule

         *   Incorporated  herein  by  reference  into  this  document  from the
             Exhibits  to Form S-1  Registration  Statement  and any  amendments
             thereto, Registration No. 333-56729.

(b)      Reports on Form 8-K:

                  None


                                      16.

<PAGE>


                                   SIGNATURES




In accordance with the requirements of the Exchange Act, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.







                                       WEST ESSEX BANCORP, INC.


Date:    November 13, 2000             By  /s/ Leopold W. Montanaro
      ------------------------            ------------------------------------
                                          Leopold W. Montanaro
                                           President and Chief Executive Officer
                                            (Principal Executive Officer)



Date:    November 13, 2000             By: /s/ Dennis A. Petrello
      ------------------------             -------------------------------------
                                           Dennis A. Petrello
                                            Executive Vice President and
                                             and Chief Financial Officer
                                            (Principal Financial and
                                               Accounting Officer)





                                       17.