SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
For the quarterly period ended         December 31, 1996
                               ---------------------------------


                                  OR

X      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         0-18764
                                              --------------------

                               PULSE BANCORP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          NEW JERSEY                                       22-3016360
--------------------------------------------------------------------------------
(State or other jurisdiction                             (IRS Employer
of incorporation or organization)                     (Identification No.)



6 JACKSON ST.,   SOUTH RIVER, N.J.                              08882
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)



Registrant's telephone number, including area code       908-257-2400
                                                     -------------------


                                       N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


Indicate by check whether the registrant  (1) has filed all reports  required to
be  filed  by  Section  13 or 15(d) of the  Securities  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.
                      Yes       X                   No
                          --------------                ---------------

The  number of shares  outstanding  of each of the  issuer's  classes  of common
stock, as of the latest practicable date February 4, 1997
                                         ----------------

                      CLASS                   OUTSTANDING
                      -----                   -----------
           $1.00 par value common stock       3,061,048 Shares


<PAGE>




                         PULSE BANCORP, INC. AND SUBSIDIARIES



                                        Index


                                                                     Page Number

PART I - CONSOLIDATED  FINANCIAL INFORMATION

     Consolidated Statements of Financial Condition at September 30,
     1996 and December 31, 1996 (unaudited)                                 1

     Consolidated Statements of Income for the Three Months
     Ended December 31, 1995 and 1996 (unaudited)                           2

     Consolidated Statements of Cash Flows for the Three Months Ended
     December 31, 1995 and 1996 (unaudited)                                 3

     Notes to Consolidated Financial Statements                           4-6

     Managements Discussion and Analysis of Financial Condition and
     Results of Operations                                               7-10


PART II - OTHER INFORMATION                                             11-12

     SIGNATURES                                                            13



<PAGE>

                      PULSE BANCORP, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>

                                                                      September 30,      December 31,
                                                                          1996               1996
ASSETS                                                                                    (Unaudited)
------                                                                -------------------------------
<S>                                                                  <C>                <C>       
Cash and amounts due from depository institutions..................  $  4,249,883       $  3,377,115
Federal funds sold.................................................       500,000         10,550,000
                                                                     ------------       ------------
    Total cash and cash equivalents................................     4,749,883         13,927,115

Investment securities held to maturity; estimated fair value of
  $103,192,000 and $102,099,000, respectively......................   105,549,457        103,550,690
Mortgage backed securities held to maturity, net; estimated fair
  value of $162,617,000 and $171,430,000, respectively.............   164,091,984        172,091,469
Investment securities available for sale...........................    39,054,697         39,354,961
Mortgage-backed securities available for sale......................    40,255,064         39,230,818
Loans receivable, net..............................................   134,547,804        129,550,207
Premises & equipment, net..........................................     1,235,135          1,231,620
Real estate owned, net.............................................     2,232,624            136,800
Federal Home Loan Bank of New York stock, at cost..................     2,543,100          2,543,100
Interest receivable................................................     4,527,354          4,528,103
Other assets.......................................................     3,712,747          3,544,716
                                                                     ------------       ------------
     Total assets..................................................  $502,499,849       $509,689,599
                                                                     ============       ============


LIABILITIES AND
---------------
   STOCKHOLDERS' EQUITY
   --------------------
Liabilities:
Deposits...........................................................  $394,580,611       $401,428,553
Borrowings.........................................................    64,275,000         65,325,000
Advance payments by borrowers for taxes & insurance................       628,243            587,561
Other liabilities..................................................     4,557,461          2,743,062
                                                                     ------------       ------------
     Total liabilities.............................................   464,041,315        470,084,176
                                                                     ------------       ------------


Stockholders' Equity:
Preferred stock; authorized 5,000,000 shares; issued and
   outstanding - none..............................................             -                  -
Common stock; par value $1.00; authorized 10,000,000 shares;
   4,111,958 shares issued and 3,049,878 outstanding and
   4,112,128 shares issued and 3,050,048 outstanding,
   respectively....................................................     4,111,958          4,112,128
Paid in capital in excess of par value.............................    12,105,541         12,107,581
Retained earnings- substantially restricted........................    39,147,609         39,946,121
Unrealized (loss) gain on securities available for sale, net of tax      (229,074)           117,093
Treasury Stock; at cost; 1,062,080 common shares, respectively.....   (16,677,500)       (16,677,500)
                                                                     ------------       ------------
     Total stockholders' equity....................................    38,458,534         39,605,423
                                                                     ------------       ------------
     Total liabilities and stockholders' equity....................  $502,499,849       $509,689,599
                                                                     ============       ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                        1

<PAGE>


                      PULSE BANCORP, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                         December 31,
                                                                 -----------------------------
                                                                    1995               1996
                                                                 -----------------------------
Interest income:
<S>                                                              <C>                <C>       
   Loans ...................................................     $3,016,949         $2,919,887
   Mortgage-backed securities...............................      2,834,573          3,353,891
   Investments and other interest-earning assets............      1,992,995          2,569,124
                                                                 ----------         ----------
      Total interest income.................................      7,844,517          8,842,902
                                                                 ----------         ----------

Interest expense:
   Deposits.................................................      4,522,529          4,525,440
   Borrowings...............................................              -            961,643
                                                                 ----------         ----------
      Total interest expense................................      4,522,529          5,487,083
                                                                 ----------         ----------

Net interest income.........................................      3,321,988          3,355,819
                                                                 ----------         ----------
Net interest income after provision for loan losses.........      3,321,988          3,355,819
                                                                 ----------         ----------

Non-interest income:
   Other fees and service charges on loans..................         57,077             80,732
   Income (expense) from real estate operations.............         (5,104)            90,566
   Miscellaneous............................................         36,710             29,689
                                                                 ----------         ----------
      Total non-interest income.............................         88,683            200,987
                                                                 ----------         ----------

Non-interest expenses:
   Salaries and employee benefits...........................        595,017            653,699
   Occupancy expense........................................         70,966             76,747
   Equipment expense........................................        131,393            131,193
   Advertising..............................................         60,357             94,707
   Federal deposit insurance premium........................        226,353            176,844
   Miscellaneous............................................        251,468            322,973
                                                                 ----------         ----------
      Total non-interest expenses...........................      1,335,554          1,456,163
                                                                 ----------         ----------

Income before income taxes..................................      2,075,117          2,100,643
Income taxes................................................        751,634            768,372
                                                                 ----------         ----------
      Net income............................................     $1,323,483         $1,332,271
                                                                 ==========         ==========

Net income per common share and common stock equivalents....          $0.33              $0.43
                                                                 ==========         ==========

Dividends per common share..................................         $0.175             $0.175
                                                                 ==========         ==========

Weighted average number of common shares and common
   stock equivalents outstanding............................      3,952,885          3,130,615
                                                                 ==========         ==========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>



                                        2



                      PULSE BANCORP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                               Three Months Ended   
                                                                                                  December 31,
                                                                                          -----------------------------
                                                                                            1995               1996
                                                                                          -----------------------------
Cash flows from operating activities:
<S>                                                                                      <C>                <C>       
  Net income........................................................................      $1,323,483         $1,332,271
  Adjustments to reconcile net income to net cash provided by
     operating activities:
    Depreciation of premises and equipment..........................................          35,601             37,397
    Provision for losses on real estate owned.......................................               -             32,850
    Amortization of premiums, discounts and fees, net...............................         (86,737)           (36,628)
    Loss (gain) on sale of real estate owned........................................          28,301           (104,172)
    Increase in interest receivable.................................................         394,646                749
    (Increase) decrease in other assets.............................................         (17,487)           168,031
    Increase (decrease) in other liabilities........................................         381,080         (1,814,399)
                                                                                         -----------        -----------
      Net cash provided by operating activities.....................................       2,058,887           (383,901)
                                                                                         -----------        -----------

Cash flows from investing activities:
    Proceeds from maturities and calls of investment securities held to maturity....      36,000,000          7,000,000
    Purchase of investment securities held to maturity..............................     (20,979,670)        (5,000,000)
    Proceeds from principal repayments of investment securities available for sale..               -                  -
    Market value increase in investment securities available for sale...............               -           (295,321)
    Purchase of mortgage-backed securities held to maturity.........................     (15,345,600)       (12,587,646)
    Purchase of mortgage-backed securities available for sale.......................               -                  -
    Principal repayments on mortgage-backed securities held to maturity.............       5,282,609          4,581,594
    Principal repayments on mortgage-backed securities available for sale...........               -          1,023,635
    Net (increase) decrease in loans receivable.....................................      (1,674,153)         5,229,895
    Additions to premises and equipment.............................................         (22,633)           (33,882)
    Proceeds from sale of real estate owned.........................................          29,999          2,317,146
                                                                                         -----------        -----------
      Net cash provided by investing activities.....................................       3,290,552          2,235,421
                                                                                         -----------        -----------

Cash flows from financing activities:
    Net increase in deposits........................................................       6,364,140          6,847,942
    Net increase in borrowings......................................................               -          1,050,000
    Decrease in advance payments by borrowers
      for taxes and insurance.......................................................         (32,759)           (40,682)
    Issuance of common stock........................................................         110,500              2,210
    Cash dividends paid.............................................................        (675,995)          (533,758)
                                                                                         -----------        -----------
      Net cash provided by financing activities.....................................       5,765,886          7,325,712
                                                                                         -----------        -----------

Net increase in cash and cash equivalents...........................................      11,115,325          9,177,232
Cash and cash equivalents - beginning ..............................................       8,761,510          4,749,883
Cash and cash equivalents - ending..................................................     $19,876,835        $13,927,115
                                                                                         ===========        ===========
Supplemental schedule of non-cash investing activities:
      Transfer of loans receivable to real estate owned.............................        $628,000           $150,000
                                                                                         ===========        ===========
      Transfer of mortgage-backed securities and investments held to................
        maturity to available for sale..............................................     $58,764,618                  -
                                                                                         ===========        ===========
Cash paid during the period for:
      Income taxes..................................................................               -                  -
                                                                                         ===========        ===========
      Interest......................................................................     $ 3,328,263        $ 5,478,297
                                                                                         ===========        ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3

<PAGE>

                       PULSE BANCORP, INC. AND SUBSIDIARIES
                       Notes To Consolidated Financial Statements

1. PRINCIPLES OF CONSOLIDATION
------------------------------
The  consolidated  financial  statements  include the accounts of Pulse Bancorp,
Inc. (the "Corporation") and its wholly owned subsidiaries,  Pulse Savings Bank,
Pulse Insurance  Services,  Pulse Real Estate,  and Pulse  Investment,  Inc. The
Corporation'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-Q  and,  therefore,  do not  include
information or footnotes  necessary for a complete  presentation of consolidated
financial  condition,  results of operations,  and cash flows in conformity with
generally accepted accounting principles.  However, all adjustments,  consisting
only of normal recurring adjustments,  which, in the opinion of management,  are
necessary for fair presentation of the consolidated  financial statements,  have
been included. The results of operations for the three months ended December 31,
1996 are not necessarily indicative of the results which may be expected for the
entire fiscal year.

<TABLE>
<CAPTION>

3. LOANS RECEIVABLE, NET                                              September 30,       December 31,
------------------------                                                  1996                1996
                                                                      --------------------------------

Real Estate Mortgage:
<S>                                                                   <C>                <C>        
   One-to-four family................................................ $ 65,509,636       $ 65,781,473
   Multi family......................................................   28,190,149         22,795,965
   Commercial........................................................   29,882,549         29,948,427
                                                                      ------------       ------------
                                                                       123,582,334        118,525,865
                                                                      ------------       ------------

Construction Loans...................................................      125,000            140,000

Consumer:
   Home equity.......................................................   13,543,650         13,498,281
   Passbook or certificate...........................................      184,185            225,287
                                                                      ------------       ------------
                                                                        13,727,835         13,723,568
                                                                      ------------       ------------
        Total loans..................................................  137,435,169        132,389,433
                                                                      ------------       ------------

Less: Allowance for loan losses......................................    2,458,777          2,429,273
         Deferred loan fees and discounts............................      428,588            409,953
                                                                      ------------       ------------
                                                                         2,887,365          2,839,226
                                                                      ------------       ------------
                                                                      $134,547,804       $129,550,207
                                                                      ============       ============
</TABLE>

An analysis of the allowance for loan losses is as follows: 

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                               December 31,
                                                                       -------------------------------
                                                                           1995                1996
                                                                       -------------      -------------
<S>                                                                     <C>                <C>       
                       Balance-beginning.............................   $2,603,852         $2,458,777
                       Provisions charged to operations..............            -                  -
                       Losses charged to allowance...................      (85,152)           (29,504)
                                                                      ------------       ------------
                       Balance-ending................................   $2,518,700         $2,429,273
                                                                      ============       ============

</TABLE>

                                        4

<PAGE>



                      PULSE BANCORP, INC. AND SUBSIDIARIES
                   Notes To Consolidated Financial Statements



4. INVESTMENT SECURITIES
------------------------
<TABLE>
<CAPTION>

                                                                                      September 30, 1996
                                                                  ----------------------------------------------------------------
                                                                                    Gross            Gross           Estimated
                                                                    Carrying      Unrealized       Unrealized           Fair
Held To Maturity                                                      Value         Gains            Losses             Value
                                                                  ----------------------------------------------------------------
<S>                                                               <C>             <C>              <C>              <C>         
U.S. Government (including agencies)                              $104,949,486    $104,420         $2,483,349       $102,570,557
Obligations of state and political
    subdivisions                                                       599,971      21,789                  -            621,760
                                                                  ------------    --------         ----------       ------------
                                                                  $105,549,457    $126,209         $2,483,349       $103,192,317
                                                                  ============    ========         ==========       ============

Available For Sale
U.S. Government Agency Debentures                                 $ 39,813,748    $ 12,500         $  771,551       $ 39,054,697
                                                                  ------------    --------         ----------       ------------
                                                                  $ 39,813,748    $ 12,500         $  771,551       $ 39,054,697
                                                                  ============    ========         ==========       ============

</TABLE>


<TABLE>
<CAPTION>

                                                                                       December 31, 1996
                                                                  ----------------------------------------------------------------
                                                                                   Gross             Gross           Estimated
                                                                     Carrying   Unrealized         Unrealized           Fair
Held To Maturity                                                      Value        Gains             Losses             Value
                                                                  ----------------------------------------------------------------
<S>                                                               <C>             <C>              <C>              <C>         
U.S. Government (including agencies)                              $102,950,712    $177,453         $1,652,114       $101,476,051
Obligations of state and political
     subdivisions                                                      599,978      23,022                  -       $    623,000
                                                                  ------------    --------         ----------       ------------
                                                                  $103,550,690    $200,475         $1,652,114       $102,099,051
                                                                  ============    ========         ==========       ============

Available For Sale
U.S. Government Agency Debentures                                 $ 39,818,691    $107,042         $  570,772       $ 39,354,961
                                                                  ------------    --------         ----------       ------------
                                                                  $ 39,818,691    $107,042         $  570,772       $ 39,354,961
                                                                  ============    ========         ==========       ============

</TABLE>




                                        5
<PAGE>


                      PULSE BANCORP, INC. AND SUBSIDIARIES
                   Notes To Consolidated Financial Statements


5. MORTGAGE-BACKED SECURITIES
-----------------------------
<TABLE>
<CAPTION>

                                                                                     September 30, 1996
                                                                  ----------------------------------------------------------------
                                                                                  Gross             Gross            Estimated
                                                                     Carrying   Unrealized        Unrealized            Fair
Held To Maturity                                                      Value        Gains            Losses              Value
                                                                  ----------------------------------------------------------------
<S>                                                               <C>           <C>                <C>              <C>         
Government National Mortgage Association                          $ 67,075,905  $  743,542         $  194,683       $ 67,624,764
Federal Home Loan Mortgage Corporation                              39,159,809     174,932            402,384         38,932,357
Federal National Mortgage Association                               21,470,218      95,144           $603,746         20,961,616
Collateralized mortgage obligations                                 36,386,052      10,191         $1,298,317         35,097,926
                                                                  ------------  ----------         ----------       ------------
                                                                  $164,091,984  $1,023,809         $2,499,130       $162,616,663
                                                                  ============  ==========         ==========       ============
Available For Sale
GNMA ARMs                                                         $ 39,848,435  $ 406,629          $        -       $ 40,255,064
                                                                  ------------  ----------         ----------       ------------
                                                                  $ 39,848,435  $ 406,629          $        -       $ 40,255,064
                                                                  ============  ==========         ==========       ============

</TABLE>

<TABLE>
<CAPTION>


                                                                                       December 31, 1996
                                                                  --------------------------------------------------------------
                                                                                  Gross             Gross            Estimated
                                                                    Carrying    Unrealized        Unrealized            Fair
Held To Maturity                                                      Value        Gains             Losses             Value
                                                                  --------------------------------------------------------------
<S>                                                               <C>           <C>                <C>              <C>         
Government National Mortgage Association                          $ 64,932,672  $1,032,807         $  134,844       $ 65,830,635
Federal Home Loan Mortgage Corporation                              37,636,491     316,109            346,315         37,606,285
Federal National Mortgage Association                               33,389,500     121,620         $  442,869         33,068,251
Collateralized mortgage obligations                                 36,132,806       6,924         $1,215,083         34,924,647
                                                                  ------------  ----------         ----------       ------------
                                                                  $172,091,469  $1,477,460         $2,139,111       $171,429,818
                                                                  ============  ==========         ==========       ============
Available For Sale
GNMA ARMs                                                         $ 38,586,944  $  643,874         $        -       $ 39,230,818
                                                                  ------------  ----------         ----------       ------------
                                                                  $ 38,586,944  $  643,874         $        -       $ 39,230,818
                                                                  ============  ==========         =========        ============
</TABLE>


6. NET INCOME PER COMMON SHARE
------------------------------

Net income per common share has been  calculated  based on the weighted  average
number of shares outstanding plus the shares that would be outstanding  assuming
the exercise of dilutive stock options, all of which are considered to be common
stock  equivalents.  The number of shares that would be issued from the exercise
of stock  options has been  reduced by the number of shares that could have been
purchased  from the proceeds at the average  price of the  Corporation's  common
stock.




                                       6



<PAGE>

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

FINANCIAL CONDITION

The  Corporation's  assets at December 31, 1996 totaled  $509.7  million,  which
represents  an  increase  of $7.2  million or 1.43% when  compared  with  $502.5
million at September  30, 1996.  Total  deposits at December 31, 1996  increased
$6.8 million or 1.74% to $401.4  million when  compared  with $394.6  million at
September  30,  1996.  Investment  securities  held to maturity  decreased  $2.0
million or 1.89% to $103.6  million at  December  31,  1996 when  compared  with
$105.6 million at September 30, 1996.  Investment  securities available for sale
increased  $0.3  million or 0.77% to $39.4  million at  December  31,  1996 when
compared to $39.1 million at September 30, 1996. Mortgage-backed securities held
to maturity increased by $8.0 million or 4.88% to $172.1 million at December 31,
1996 when  compared to $164.1  million at September  30,  1996.  The increase in
mortgage-backed securities held to maturity was primarily due to the purchase of
$12.6  million,  which more than offset  principal  repayments  of $4.6 million.
Mortgage-backed securities available for sale decreased $1.0 million or 2.54% to
$39.2  million at December 31, 1996  compared to $40.2  million at September 30,
1995.  Loans  receivable  decreased  $5.0 million or 3.71% to $129.6  million at
December 31, 1996 when  compared to $134.6  million at September  30, 1996.  The
decrease  was a result of loan  principal  repayments  of $9.5  million  and the
transfer of $150,000 of loans to real estate owned,  which more than offset loan
originations totaling $4.6 million.  Other liabilities decreased by $1.8 million
or 39.8% to $2.7  million at  December  31,  1996  compared  to $4.5  million at
September  30,  1996.  The  decrease was  primarily  due to the FDIC's  one-time
special  insurance  assessment  of $2.6  million that the Bank paid in November.
This  decrease was somewhat  offset by an increase in the Bank's  liability  for
income taxes of $0.8 million.

Other  assets  decreased  by $168,000  or 4.53%  during the three  months  ended
December 31, 1996. Real estate owned,  which consists of real estate acquired in
settlement of loans,  totaled $137,000 and $2.2 million at December 31, 1996 and
September 30, 1996,  respectively.  The decrease was a direct result of sales of
real estate  owned that  generated  proceeds  of $2.3  million and gains on such
sales of  $104,000,  which more than offset the transfer of $150,000 of loans to
other real estate  owned  during the period.  Stockholders'  equity  amounted to
$39.6  million and $38.5  million at December 31, 1996 and  September  30, 1996,
respectively.


Results of operations for three months ended December 31, 1996 and 1995

Net income was $1.3 million for both the three  months  ended  December 31, 1996
and 1995.  Increases to interest income and  non-interest  income were offset by
increases to both interest and non-interest  expenses.  Interest income on loans
during the three months ended  December 31, 1996  decreased  $97,000 or 3.22% to
$2.9 million  when  compared to $3.0  million  during the same 1995 period.  The
decrease  during the 1996 period resulted from a decrease in the average balance
of loans  outstanding,  along with a decrease in the  average  yield on the loan
portfolio.  Interest  on  mortgage-backed  securities  increased  by $519,000 or
18.32%  during the three months ended  December 31, 1996 when  compared with the
same 1995 period as a result of increased balances along with an increase in the
average yield earned on the portfolio.  Interest earned on investments and other
interest-earning  assets increased $576,000 or 28.91% to $2.6 million during the
three months ended  December 31, 1996 when  compared to $2.0 million  during the
same 1995 period. The increase during the 1996 period resulted primarily from an
increase in the

                                          7

<PAGE>



average balance of investments and other  interest-earning  assets  outstanding,
along  with  an  increase  in  the  yield  earned  on   investments   and  other
interest-earning assets.


Interest on deposits remained  unchanged at $4.5 million during the three months
ended  December  31,  1996 when  compared to the same 1995  period.  Interest on
borrowings  was $1.0  million  for the three  months  ended  December  31,  1996
compared  with  $-0- for the same 1995  period.  During  1996 the Bank  utilized
securities  sold under  repurchase  agreements  to fund both its Modified  Dutch
Auction and its asset growth strategy.

During the three months  ended  December 31, 1996 and 1995 the Bank did not make
any provisions for loan losses.  Although no provisions  were made as management
believes the levels of reserves were  adequate,  no assurances  can be made that
future  increases to the reserve will not be  necessary.  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 loan  activity.  At December 31, 1996
and September 30, 1996, the Bank's  non-performing  loans,  which includes loans
delinquent 90 days or more, totaled $2.1 million and $1.8 million, respectively.
Furthermore,  the level of loan delinquencies less than 90 days declined to $3.1
million at December 31, 1996 compared to $3.8 million at September 30, 1996. The
allowance  for loan losses  amounted to $2.4  million or 1.83% of total loans at
December  31,  1996 and $2.5  million or 1.79% of total loans at  September  30,
1996.

Non-interest income increased $112,000 to $201,000 during the three months ended
December 31, 1996 when  compared with $89,000  during the same 1995 period.  The
increase  during the 1996 period  resulted  from  increases  in income from real
estate  operations  and other fees and  service  charges on loans of $96,000 and
23,000,  respectively,  and was somewhat  offset by a decrease in  miscellaneous
income of $7,000.

Non-interest  expenses  increased  $121,000 or 9.03% to $1.46 million during the
three months ended December 31, 1996 when compared with $1.34 million during the
same 1995 period.  During the three months ended December 31, 1996, salaries and
employee benefits, advertising,  miscellaneous, and occupancy expenses increased
by $59,000, $34,000, $72,000, and $6,000,  respectively.  FDIC deposit insurance
decreased by $50,000 due to the lower  insurance rates in effect for the quarter
ending  December 31, 1996.  Beginning  January 1, 1996 the  insurance  rate will
further decrease to 6.4 basis point on SAIF- insured deposits, resulting in even
lower FDIC deposit insurance expense. The increase in miscellaneous  expense was
primarily  attributable  to a loan  expense of $76,000 the Bank paid in order to
protect it's security interest in a commercial real estate loan.

Income tax expense  totaled  $768,000 and $752,000 during the three months ended
December 31, 1996 and 1995,  respectively.  The increase  during the 1996 period
resulted primarily from a slight increase in income before income taxes.


Liquidity and Capital Resources

Liquidity is a measurement  of the Bank's  ability to generate  sufficient  cash
flow,  in  order  to meet all  current  and  future  financial  obligations  and
commitments  as they arise.  The Bank adjusts its  liquidity  levels in order to
meet  funding  needs for deposit  outflows,  payment of real  estate  taxes from
escrow accounts on

                                          8

<PAGE>



mortgage  loans,  repayments of borrowings,  when  applicable,  and loan funding
commitments.  The Bank also adjusts its liquidity  level as  appropriate to meet
its  asset/liability  objectives.  The  Bank's  primary  sources  of  funds  are
deposits,  amortization and prepayments of loan and mortgage- backed  securities
principal, maturities of investment securities, and funds provided by operations
and short and medium term  borrowings.  While  scheduled loan  amortization  and
maturing  investment  securities are a relatively  predictable  source of funds,
deposit flow and loan and  mortgage-backed  securities  prepayments  are greatly
influenced by market interest rates,  economic  conditions and competition.  The
Bank manages the pricing of its deposits to maintain a steady  deposit  balance.
In addition,  the Bank invests its excess funds in federal  funds and  overnight
deposits with the FHLB-NY which provides liquidity to meet lending requirements.
Federal  funds sold at December 31, 1996 and  September  30, 1996 totaled  $10.6
million and $0.5 million,  respectively.  The Bank's  liquidity,  represented by
cash  and  cash  equivalents,  is a  product  of its  operating,  investing  and
financing activities. These activities are summarized as follows:



<TABLE>
<CAPTION>

                                                    Three months ended December 31,
                                                           1995       1996
                                                            (In Thousands)

<S>                                                     <C>        <C>     
Cash and cash equivalents- beginning                    $  8,762   $  4,750
                                                        -------------------
Operating activities:
  Net income                                               1,323      1,332
  Adjustments to reconcile net
  income to net cash provided
   by (used in) operating activities                         736     (1,716)
                                                        -------------------
Net cash provided by (used in)operating activities         2,059       (384)

Net cash provided by investing activities                  3,290      2,235
 Net cash  provided by financing activities                5,766      7,326
                                                        -------------------
 Net increase in cash and
          cash equivalents                                11,115      9,177
                                                        -------------------
Cash and cash equivalents- ending                       $ 19,877   $ 13,927
                                                        ===================
</TABLE>


Cash was utilized by operating  activities  in the 1996 period and  generated by
operating  activities in the 1995 period. The primary use of cash from operating
activities  during  the  1996  period  was the  payment  of the  FDIC's  special
insurance  assessment of approximately $2.6 million.  The primary source of cash
from  operating  activities  during the 1995 period was net income.  The primary
sources  and  uses of  investing  activity  of the Bank  are  proceeds  from net
maturities and  repayments  and the purchase of investment  and  mortgage-backed
securities,  net loan  activity and from  borrowing.  Net loans  decreased  $5.2
million  during the three months ended December 31, 1996 compared to an increase
of $1.7  million  during the same 1995  period.  During the three  months  ended
December 31, 1996 and 1995,  purchases  of  mortgage-backed  securities  held to
maturity  totaled $12.6 million and $15.3 million,  respectively,  and principal
repayments totaled $4.6 million and $5.3 million, respectively. During the three
months ended December 31, 1996 and 1995, purchases of investment securities held
to maturity totaled $5.0 million and $21.0 million,

                                          9

<PAGE>



respectively,  and  maturities and calls totaled $7.0 million and $36.0 million,
respectively.  In addition to funding new loan  production  and the  purchase of
investment  and  mortgage-backed  securities  through  operations  and financing
activities,  these  activities  were also  funded  by  principal  repayments  on
existing loans and mortgage-backed  securities and also through short and medium
term borrowings.

The primary source of financing  activities during the 1996 and 1995 periods was
from an increase  in deposits  outstanding  amounting  to $6.8  million and $6.4
million, respectively. During the three months ended December 31, 1996 and 1995,
cash  dividends  of  $534,000  and  $676,000,  respectively,  were  paid  on the
Corporation's common stock.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.  Excess liquidity is generally  invested in short-term  investments,
such as federal funds and interest-bearing  deposits. If the Bank requires funds
beyond its ability to generate them internally,  borrowing agreements exist with
the FHLB-NY, which provides an additional source of funds.

The Bank  anticipates  that it will have sufficient  funds available to meet its
current  commitments  to  originate  loans and to purchase  mortgage-backed  and
investment  securities.  At December  31,  1996,  such  outstanding  commitments
amounted to $2.0  million.  Certificates  of deposit  scheduled to mature in one
year or less, at December 31, 1996, totaled $213.7 million.  Management believes
that a significant portion of such deposits will remain with the Bank.

The Bank is subject to regulatory capital  requirements  mandated by the Federal
Deposit Insurance Corporation ("FDIC"). The Bank is required to maintain minimum
regulatory capital ratios, defined by the FDIC as risk-based ratio capital (Tier
1 and Total) and  leverage  ratio  capital.  The  following  table  presents the
minimum  capital  requirement  ratios and the actual  ratios as of December  31,
1996:



                                  Requirement         Actual       Excess
                                  ---------------------------------------
         Risk-based Capital
                Tier 1               4.00%            24.42%       20.42%
                Total                8.00%            25.67%       17.67%

         Leverage ratio              4.00%             7.29%        3.29%








                                          10

<PAGE>





                       PULSE BANCORP, INC. AND SUBSIDIARY

                                     Part II


ITEM 1.  Legal Proceedings
--------------------------

          As indicated  under "Item 3. Legal  Proceedings"  of the  Registrant's
          Form 10-K for the year ended  September 30, 1996,  the  Registrant and
          its  subsidiary,  Pulse  Savings  Bank,  had filed  claims under their
          malpractice  insurance  coverage  to recover  losses  associated  with
          fictitious bridge loans, and a trial date of January 13, 1997 had been
          established for the litigation. At the court proceeding on January 13,
          1997,  the trial was  postponed  until March 17,  1997.  The case is a
          civil  action  in the  Superior  Court  of New  Jersey  Law  Division,
          Middlesex  County under the name Pulse Bancorp,  Inc. et al. v. Estate
          of Stephen J. Domenichetti et al. In addition to postponing the trial,
          the judge  provided the  defendants  three weeks,  until no later than
          February 5, 1997, to submit an expert's  report on the issues of legal
          malpractice and accounting malpractice. In addition, the judge ordered
          that a settlement conference be held on February 19, 1997. On February
          4, 1997,  the Bank was notified  that the trial was further  postponed
          until April 14, 1997 due to a scheduling conflict with the defendant's
          attorney.


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
------------------------------------------------------------

          At the annual  stockholders'  meeting  held on January 23,  1997,  the
          following matters were submitted to the stockholders:

          A. Election of three directors:
                                                      Votes           Votes
                                                       For           Withheld
                   (i)Mr. Benjamin S. Konopacki     2,198,406          98.5
                  (ii)Mr. George T. Hornyak,Jr.     2,193,006          98.2
                 (iii)Mr. Edwin A. Kolodziej        2,199,006          98.5

          The following directors' terms of office as a director continued after
the meeting:

                      Mr. Joseph Chadwick
                      Mr. Wayne A. Kronowski
                      Mr. Edwin A. Roginski



                                          11

<PAGE>




     B. The appointment of KPMG Peat Marwick LLP as independent auditors for the
     registrant's 1997 fiscal year was ratified.

     2,154,154 votes in favor; 75,558 against; 2400 abstaining

ITEM 5.  Other Materially Important Events
------------------------------------------

          Not applicable


ITEM 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

          A Form 8-K (Item 5), dated January 13, 1997,  was filed on January 22,
1997.






                                          12

<PAGE>








                                   SIGNATURES



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




                                  PULSE BANCORP, INC

Date: February 4, 1997        By: /s/ George T. Hornyak, Jr.
      ----------------            --------------------------
                                  George T. Hornyak, Jr.
                                  President
                                  Chief Executive Officer
                                  (Duly Authorized Officer)


Date: February 4, 1997         By: /s/ Thomas B. Konopacki
      ----------------            ------------------------
                                  Thomas B. Konopacki
                                  Executive Vice President
                                  Chief Financial Officer










                                          13