SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(MarkOne)

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

For the quarterly period ended               June 30, 1998
                               -------------------------------------------------

                                                  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      0-18764
                                                ------------------


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


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


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



Registrant's telephone number, including area code         732-257-2400
                                                   -----------------------------

                                       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 August 3, 1998
                                         --------------

              CLASS                              OUTSTANDING
              -----                              -----------
   $1.00 par value common stock                3,120,300 Shares


<PAGE>

                      PULSE BANCORP, INC. AND SUBSIDIARIES



                                      Index

<TABLE>
<CAPTION>
                                                                                                      Page Number
<S>            <C>                                                                                       <C>
PART I - CONSOLIDATED  FINANCIAL INFORMATION

               Consolidated Statements of Financial Condition at September 30,
               1997 and June 30, 1998 (unaudited)                                                             1

               Consolidated Statements of Income for the Three and Nine Months
               Ended June 30, 1997  and 1998 (unaudited)                                                      2

               Consolidated Statements of Cash Flows for the Nine Months Ended
               June 30, 1997  and 1998 (unaudited)                                                            3

               Notes to Consolidated Financial Statements                                                   4-6

               Managements Discussion and Analysis of Financial Condition and
               Results of Operations                                                                       7-12

               Quantitative and Qualitative Disclosures about Market Risk                                    12

PART II -      OTHER INFORMATION                                                                          13-14

               SIGNATURES                                                                                    15

</TABLE>
<PAGE>


                      PULSE BANCORP, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
                                                                                        September 30,      June 30,
                                                                                            1997             1998
ASSETS                                                                                                    (Unaudited)
------                                                                              ---------------------------------
<S>                                                                                    <C>              <C>          
Cash and amounts due from depository institutions ..................................   $   3,550,908    $   3,928,791
Federal funds sold .................................................................      11,925,000       31,300,000
                                                                                       ------------------------------
    Total cash and cash equivalents ................................................      15,475,908       35,228,791

Investment securities held to maturity; estimated fair value of
  $96,386,850 and $71,702,115, respectively ........................................      96,551,885       71,552,863
Mortgage backed securities held to maturity, net; estimated fair
  value of $163,645,986 and $127,010,424, respectively .............................     162,763,525      126,193,187
Investment securities available for sale ...........................................      60,741,955      111,838,330
Mortgage-backed securities available for sale ......................................      53,393,335       40,357,595
Loans receivable, net ..............................................................     127,310,525      146,680,537
Premises & equipment, net ..........................................................       1,322,718        2,148,512
Real estate owned, net .............................................................         136,491        1,338,999
Federal Home Loan Bank of New York stock, at cost ..................................       2,775,500        2,836,700
Interest receivable ................................................................       4,584,337        5,075,730
Other assets .......................................................................         959,530          850,721
                                                                                       ------------------------------
     Total assets ..................................................................   $ 526,015,709    $ 544,101,965
                                                                                       ==============================


LIABILITIES AND
---------------
   STOCKHOLDERS' EQUITY
   --------------------
Liabilities:
Deposits ...........................................................................   $ 411,020,719    $ 434,646,229
Borrowings .........................................................................      67,675,000       59,675,000
Advance payments by borrowers for taxes & insurance ................................         805,394          892,984
Other liabilities ..................................................................       3,308,037        2,988,115
                                                                                       ------------------------------
     Total liabilities .............................................................     482,809,150      498,202,328
                                                                                       ------------------------------


Stockholders' Equity:
Preferred stock; authorized 5,000,000 shares; issued and
   outstanding - none ..............................................................            --               --
Common stock; par value $1.00; authorized 10,000,000 shares;
   4,112,128 shares issued and 3,050,048 outstanding and
   4,182,380 shares issued and 3,120,300 outstanding,
   respectively ....................................................................       4,142,628        4,182,380
Paid in capital in excess of par value .............................................      12,293,206       12,755,740
Retained earnings- substantially restricted ........................................      42,676,884       44,940,852
Unrealized gain on securities available for sale, net of tax .......................         771,341          698,165
Treasury Stock; at cost; 1,062,080 common shares, respectively .....................     (16,677,500)     (16,677,500)
                                                                                        -----------------------------
     Total stockholders' equity ....................................................      43,206,559       45,899,637
                                                                                        -----------------------------
     Total liabilities and stockholders' equity.....................................    $526,015,709   $ 544,101,965
                                                                                        =============================
</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                     Nine Months Ended
                                                                    June 30,                                June 30,
                                                         --------------------------------------------------------------------
                                                             1997             1998                   1997            1998
                                                         --------------------------------------------------------------------
<S>                                                       <C>              <C>                    <C>             <C>       
Interest income:
   Loans ................................................ $2,678,398       $2,967,222             $8,386,290      $8,571,421
   Mortgage-backed securities............................  3,753,811        2,942,526             10,694,342       9,716,981
   Investments and other interest-earning assets.........  2,653,990        3,454,560              7,863,599       9,716,476
                                                         --------------------------------------------------------------------
      Total interest income..............................  9,086,199        9,364,308             26,944,231      28,004,878
                                                         --------------------------------------------------------------------

Interest expense:
   Deposits..............................................  4,734,047        4,950,323             13,836,004      14,537,383
   Borrowings............................................    913,435          895,245              2,804,324       2,991,584
                                                         --------------------------------------------------------------------
      Total interest expense.............................  5,647,482        5,845,568             16,640,328      17,528,967
                                                         --------------------------------------------------------------------

Net interest income......................................  3,438,717        3,518,740             10,303,903      10,475,911
                                                         --------------------------------------------------------------------
Net interest income after provision for loan losses......  3,438,717        3,518,740             10,303,903      10,475,911
                                                         --------------------------------------------------------------------

Non-interest income:
   Other fees and service charges on loans...............     79,734           76,672                222,990         216,509
   Gain (loss) from real estate operations...............      5,284          (21,286)                82,595         (27,374)
   Miscellaneous.........................................    113,079           20,001                156,112          60,691
                                                         --------------------------------------------------------------------
      Total non-interest income..........................    198,097           75,387                461,697         249,826
                                                         --------------------------------------------------------------------

Non-interest expenses:
   Salaries and employee benefits........................    690,984          755,782              2,015,781       2,239,002
   Occupancy expense.....................................     55,842          106,420                207,504         318,472
   Equipment expense.....................................    132,179          166,846                413,602         473,215
   Advertising...........................................    118,927           74,755                312,991         291,413
   Federal deposit insurance premium.....................     64,591           64,142                304,747         192,680
   Miscellaneous.........................................    270,799          238,694                878,332         810,332
                                                         --------------------------------------------------------------------
      Total non-interest expenses........................  1,333,322        1,406,639              4,132,957       4,325,114
                                                         --------------------------------------------------------------------

Income before income taxes...............................  2,303,492        2,187,488              6,632,643       6,400,623
Income taxes.............................................    825,000          784,000              2,391,372       2,272,756
                                                         --------------------------------------------------------------------
      Net income......................................... $1,478,492       $1,403,488             $4,241,271      $4,127,867
                                                         ====================================================================

Basic earnings per common share..........................      $0.48            $0.45                  $1.38           $1.33
                                                         ====================================================================
Diluted earnings per common share........................      $0.47            $0.43                  $1.35           $1.28
                                                         ====================================================================

Dividends per common share...............................     $0.175            $0.20                 $0.525           $0.60
                                                         ====================================================================

Diluted common shares outstanding........................  3,171,827        3,242,332              3,145,585       3,219,020
                                                         ====================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       2

<PAGE>
                                                              
                      PULSE BANCORP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                              Nine Months Ended
                                                                                                   June 30,
                                                                                   --------------------------------------
                                                                                          1997                   1998
                                                                                   --------------------------------------
<S>                                                                                  <C>                    <C>       
Cash flows from operating activities:
  Net income.......................................................................    $4,241,271             $4,127,867
  Adjustments to reconcile net income to net cash provided by
     operating activities:
    Depreciation of premises and equipment.........................................       110,973.               135,759
    Provision for losses on real estate owned......................................        32,850                -
    Amortization of premiums, discounts and fees, net..............................       (85,115)               (79,217)
    Gain on sale of real estate owned..............................................      (124,951)               -
    Increase in interest receivable................................................      (196,813)              (491,393)
    Decrease in other assets.......................................................     1,313,984                108,809
    Decrease in other liabilities..................................................      (829,088)              (319,922)
                                                                                   --------------------------------------
      Net cash provided by operating activities....................................     4,463,111              3,481,903
                                                                                   --------------------------------------

Cash flows from investing activities:
    Proceeds from maturities and calls of investment securities held to maturity...    13,002,500             42,010,000
    Purchase of investment securities held to maturity.............................   (10,000,000)           (17,000,000)
    Principal repayments of investment securities available for sale.......               -                   31,268,332
    Purchase of investment securities available for sale...........................       -                  (82,341,875)
    Purchase of mortgage-backed securities held to maturity........................   (35,089,594)            (1,007,187)
    Purchase of mortgage-backed securities available for sale......................   (19,960,979)               -
    Principal repayments on mortgage-backed securities held to maturity............    26,758,186             37,558,562
    Principal repayments on mortgage-backed securities available for sale..........     4,524,286             13,041,412
    Net decrease (increase) in loans receivable....................................    14,624,578            (21,310,045)
    Additions to premises and equipment............................................       (64,325)              (961,553)
    Proceeds from sale of real estate owned........................................     2,419,825                723,048
    Purchase of Federal Home Loan Bank of New York Stock...........................      (232,400)               (61,200)
                                                                                   --------------------------------------
      Net cash (used in) provided by investing activities..........................    (4,017,923)             1,919,494
                                                                                   --------------------------------------

Cash flows from financing activities:
    Net increase in deposits.......................................................    18,422,804             23,625,510
    Net decrease in borrowings.....................................................    (3,375,000)            (8,000,000)
    Increase in advance payments by borrowers
      for taxes and insurance......................................................        77,903                 87,590
    Issuance of common stock.......................................................       151,148                502,286
    Cash dividends paid............................................................    (1,606,788)            (1,863,900)
                                                                                   --------------------------------------
      Net cash provided by financing activities....................................    13,670,067             14,351,486
                                                                                   --------------------------------------

Net increase in cash and cash equivalents..........................................    14,115,255             19,752,883
Cash and cash equivalents - beginning .............................................     4,749,883             15,475,908
                                                                                   --------------------------------------
Cash and cash equivalents - ending.................................................   $18,865,138            $35,228,791
                                                                                   ======================================

Supplemental schedule of non-cash investing activities:
      Transfer of loans receivable to real estate owned............................      $208,500             $1,950,508
                                                                                   ======================================
Cash paid during the period for:
      Income taxes.................................................................    $1,000,000             $2,314,140
                                                                                   ======================================
      Interest.....................................................................   $16,580,635            $14,542,995
                                                                                   ======================================
</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 nine months ended June 30, 1998
are not  necessarily  indicative  of the results  which may be expected  for the
entire fiscal year.

3. LOANS RECEIVABLE, NET
------------------------
<TABLE>
<CAPTION>
                                                                                     September 30,              June 30,
                                                                                        1997                      1998
                                                                                     ------------------------------------
<S>                                                                                  <C>                    <C>        
Real Estate Mortgage:
   One-to-four family...........................................................       $77,761,695            $90,000,823
   Multi family.................................................................        15,088,127             13,093,075
   Commercial...................................................................        22,321,707             23,484,739
                                                                                ------------------------------------------
                                                                                       115,171,529            126,578,637
                                                                                ------------------------------------------

Construction Loans..............................................................           219,256                185,600

Consumer:
   Home equity..................................................................        14,348,020             21,925,631
   Passbook or certificate......................................................           229,173                189,010
                                                                                ------------------------------------------
                                                                                        14,577,193             22,114,641
                                                                                ------------------------------------------
        Total loans.............................................................       129,967,978            148,878,878
                                                                                ------------------------------------------

Less: Allowance for loan losses.................................................         2,357,396              1,980,743
         Deferred loan fees and discounts.......................................           300,057                217,598
                                                                                ------------------------------------------
                                                                                         2,657,453              2,198,341
                                                                                ------------------------------------------
                                                                                      $127,310,525           $146,680,537
                                                                                ==========================================
</TABLE>

<TABLE>
<CAPTION>

An analysis of the allowance for loan losses is as follows:                        Nine Months Ended
                                                                                        June 30,
                                                                                ------------------------------------------
                                                                                         1997                   1998
                                                                                         ----                   ----
<S>                                                                                     <C>                    <C>       
                     Balance-beginning..........................................        $2,458,777             $2,357,396
                     Provisions charged to operations...........................            -                      -
                     Losses charged to allowance................................          (101,381)              (376,653)
                                                                                ------------------------------------------
                     Balance-ending.............................................        $2,357,396             $1,980,743
                                                                                ==========================================
</TABLE>


                                        4
<PAGE>



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



4. INVESTMENT SECURITIES
------------------------ 
<TABLE>
<CAPTION>
                                                                 September 30, 1997
                                        -----------------------------------------------------------------------------------
                                                                    Gross                 Gross                Estimated
                                             Carrying             Unrealized            Unrealized                Fair
Held To Maturity                              Value                 Gains                 Losses                 Value
                                        -----------------------------------------------------------------------------------
<S>                                         <C>                     <C>                    <C>                 <C>        
U.S. Government (including agencies)        $95,954,388             $313,494               $503,532            $95,764,350
Obligations of state and political
    subdivisions                                597,497               25,003                   -                   622,500
                                        -----------------------------------------------------------------------------------
                                            $96,551,885             $338,497               $503,532            $96,386,850
                                        ===================================================================================

Available For Sale
U.S. Government Agency Debentures           $59,822,275             $333,264               $237,084            $59,918,455
Equity securities                               800,000               23,500                   -                   823,500
                                        -----------------------------------------------------------------------------------
                                            $60,622,275             $356,764               $237,084            $60,741,955
                                        ===================================================================================
</TABLE>


<TABLE>
<CAPTION>

                                                                     June 30, 1998
                                        -----------------------------------------------------------------------------------
                                                                     Gross                 Gross                Estimated
                                              Carrying             Unrealized            Unrealized                Fair
Held To Maturity                               Value                 Gains                 Losses                 Value
                                        -----------------------------------------------------------------------------------
<S>                                       <C>                     <C>                     <C>                <C>        
U.S. Government (including agencies)        $70,965,344             $209,734                $81,268            $71,093,810
Obligations of state and political              587,519               20,786                   -                   608,305
    subdivisions
                                        -----------------------------------------------------------------------------------
                                            $71,552,863             $230,520                $81,268            $71,702,115
                                        ===================================================================================

Available For Sale
U.S. Government Agency Debentures          $108,886,982             $613,689                $58,680           $109,441,991
Equity securities                             2,320,000               81,188                  4,849              2,396,339
                                        -----------------------------------------------------------------------------------
                                           $111,206,982             $694,877                $63,529           $111,838,330
                                        ===================================================================================
</TABLE>
                                        5
<PAGE>


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


5. MORTGAGE-BACKED SECURITIES 
------------------------------
<TABLE>
<CAPTION>
                                                                                 September 30, 1997
                                               ------------------------------------------------------------------------------------
                                                                             Gross                 Gross                Estimated
                                                     Carrying             Unrealized            Unrealized                Fair
Held To Maturity                                       Value                 Gains                 Losses                 Value
                                               ------------------------------------------------------------------------------------
<S>                                                <C>                   <C>              <C>                          <C>        
Government National Mortgage Association            $62,595,447           $1,404,217                  -                $63,999,664
Federal Home Loan Mortgage Corporation               35,726,553              409,980                265,291             35,871,242
Federal National Mortgage Association                30,556,079              182,409               $155,962             30,582,526
Collateralized mortgage obligations                  33,885,446                1,836               $694,728             33,192,554
                                               ------------------------------------------------------------------------------------
                                                   $162,763,525           $1,998,442             $1,115,981           $163,645,986
                                               ====================================================================================
Available For Sale
Government National Mortgage Association            $33,217,483             $774,300             $    -                $33,991,783
Federal Home Loan Mortgage Corporation                9,473,817              189,614                  -                  9,663,431
Federal National Mortgage Association                 9,616,497              121,624                  -                  9,738,121
                                               ------------------------------------------------------------------------------------
                                                    $52,307,797           $1,085,538             $    -                $53,393,335
                                               ====================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                                                          June 30, 1998
                                               ------------------------------------------------------------------------------------
                                                                             Gross                 Gross                Estimated
                                                      Carrying             Unrealized            Unrealized                Fair
Held To Maturity                                        Value                 Gains                 Losses                 Value
                                               ------------------------------------------------------------------------------------
<S>                                                 <C>                     <C>                     <C>                <C>        
Government National Mortgage Association            $47,783,762             $815,398                $35,915            $48,563,245
Federal Home Loan Mortgage Corporation               25,251,027              398,708                198,458             25,451,277
Federal National Mortgage Association                25,177,413              296,858                110,010             25,364,261
Collateralized mortgage obligations                  27,980,985                1,462                350,806             27,631,641
                                               ------------------------------------------------------------------------------------
                                                   $126,193,187           $1,512,426               $695,189           $127,010,424
                                               ====================================================================================
Available For Sale
Government National Mortgage Association            $24,397,515             $285,884                $37,823            $24,645,576
Federal Home Loan Mortgage Corporation                8,350,833              213,417                   -                 8,564,250
Federal National Mortgage Association                 7,149,711               57,160                 59,102              7,147,769
                                               ------------------------------------------------------------------------------------
                                                    $39,898,059             $556,461                $96,925            $40,357,595
                                               ====================================================================================
</TABLE>


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

The  Corporation  adopted  SFAS No.  128 (SFAS 128)  "Earnings  per Share" as of
December 31, 1997 and basic earnings per common share has been calculated  based
on the weighted average number of shares outstanding. Diluted earnings per share
includes  common  stock  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.  Earnings per share data for the three and nine months ending June
30, 1997 has been restated pursuant to the provisions of SFAS 128.

                                       6.

<PAGE>



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

The  Corporation  may from time to time make  written  or oral  "forward-looking
statements",  including statements  contained in the Corporation's  filings with
the Securities and Exchange Commission  (including this quarterly report on Form
10-Q and the  exhibits  thereto),  in its reports to  stockholders  and in other
communications  by  the  Corporation,  which  are  made  in  good  faith  by the
Corporation  pursuant to the "safe harbor"  provisions of the Private Securities
Litigation Reform Act of 1995.

These  forward-looking  statements  involve  risks  and  uncertainties,  such as
statements of the Corporation's plans, objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Corporation's  control).  The following  factors,  among
others, could cause the Corporation's financial performance to differ materially
from the plans, objectives,  expectations, estimates and intentions expressed in
such  forward-looking  statements:  the strength of the United States economy in
general  and the  strength  of the  local  economies  in which  the  Corporation
conducts operations;  the effect of, and changes in, trade,  monetary and fiscal
policies and laws, including interest rate policies of the Board of Governors of
the Federal  Reserve  System,  inflation,  interest  rate,  market and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the  Corporation  and the perceived  overall value of these products
and services by users,  including the features,  pricing and quality compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Corporation's  products and services;
the success of the  Corporation in gaining  regulatory  approval of its products
and services,  when required;  the impact of changes in financial services' laws
and  regulations  (including  laws  concerning  taxes,  banking,  securities and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and savings  habits;  and the success of the  Corporation  at managing the risks
involved in the foregoing.

The  Corporation  cautions that the foregoing  list of important  factors is not
exclusive.  The  Corporation  does not  undertake to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Corporation.

FINANCIAL CONDITION


The  Corporation's  assets  at June  30,  1998  totaled  $544.1  million,  which
represents  an  increase  of $18.1  million or 3.4% when  compared  with  $526.0
million at September 30, 1997.  Total deposits at June 30, 1998 increased  $23.6
million or 5.8% to $434.6 million when compared with $411.0 million at September
30, 1997.  Investment  securities  held to maturity  decreased  $25.0 million or
25.9% to $71.6  million at June 30,  1998 when  compared  with $96.6  million at
September 30, 1997.  Investment  securities  available for sale increased  $51.1
million  or 84.1% to $111.8  million  at June 30,  1998 when  compared  to $60.7
million at September  30, 1997.  The increase was a result of purchases of $82.3
million,   which  more  than  offset  principal  repayments  of  $31.2  million.
Mortgage-backed  securities held to maturity decreased by $36.6 million or 22.5%
to $126.2  million at June 30, 1998 when compared to $162.8 million at September
30,  1997.  The  decrease in  mortgage-backed  securities  held to maturity  was
primarily due to repayments of $37.6 million,  which more than offset  purchases
of $1.0 million.  Mortgage-backed  securities available for sale decreased $13.0
million or 24.4% to $40.4  million at June 30, 1998 compared to $53.4 million at
September 30, 1997.  The decrease in  mortgage-backed  securities  available for
sale  was  due to  principal  repayments  of  $13.0  million.  Loans  receivable
increased $19.4 million or 15.2% to $146.7 million at June

                                        7

<PAGE>



30, 1998 when compared to $127.3 million at September 30, 1997. The increase was
a result of loan  originations  of $29.8 million and the purchases of 1-4 family
loans  totaling $4.7  million,  which more than offset  principal  repayments of
$13.1  million,  along with the transfer of $2.0 million in loans to real estate
owned.  Other liabilities  decreased by $320,000 or 9.7% to $3.0 million at June
30, 1998  compared to $3.3  million at  September  30,  1997.  The  decrease was
primarily due to a decrease in the  Corporation's  income tax  liability.  Other
assets decreased $109,000 to $851,000 at June 30, 1998. Real estate owned, which
consists of real estate  acquired in settlement  of loans,  totaled $1.3 million
and $136,000 at June 30, 1998 and September 30, 1997, respectively. The increase
was due to three non-accrual  multi-family  mortgage loans totaling $2.0 million
that  transferred  during  the  period,  which  more than  offset two sales that
resulted  in  proceeds  of  approximately  $1.0  million.  Stockholders'  equity
amounted to $45.9  million and $43.2  million at June 30, 1998 and September 30,
1997, respectively.


Results of operations for three months ended June 30, 1998 and 1997

Net income decreased $75,000 or 5.1% to $1.40 million for the three months ended
June 30, 1998 compared to $1.48  million for the same 1997 period.  The decrease
was attributable to increases in interest and non-interest expenses,  along with
a decrease  in  non-interest  income,  which  more than  offset an  increase  in
interest income. Interest income on loans during the three months ended June 30,
1998  increased  $289,000 or 10.8% to $2.9 million when compared to $2.7 million
during the same 1997 period.  The increase  during the 1998 period resulted from
an increase in the average balance of loans outstanding,  which more than offset
a  decrease  in  the  average   yield  on  the  loan   portfolio.   Interest  on
mortgage-backed  securities  decreased  by  $811,000  or 21.7%  during the three
months ended June 30, 1998 when  compared  with the same 1997 period as a result
of decreased balances. Interest earned on investments and other interest-earning
assets increased $801,000 or 30.2% to $3.5 million during the three months ended
June 30, 1998 when  compared to $2.7 million  during the same 1997  period.  The
increase  during the 1998  period  resulted  primarily  from an  increase in the
average balance of investments and other interest-earning assets outstanding.


Interest on deposits  increased  $216,000 or 4.6% to $5.0  million for the three
months ended June 30, 1998 compared to $4.7 million  during the same 1997 period
primarily as a result of increased deposits outstanding.  Interest on borrowings
was $895,000 for the three months ended June 30, 1998 compared with $913,000 for
the same 1997  period.  The decrease was due to a decrease in the Bank's cost of
borrowing,  along with a lower average  balance  outstanding of securities  sold
under repurchase agreements during the 1998 period.

During the three  months  ended June 30, 1998 and 1997 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 June 30, 1998 and
September  30, 1997,  the Bank's  non-performing  loans,  which  includes  loans
delinquent 90 days or more, totaled $1.4 million and $1.7 million, respectively.
The allowance  for loan losses  amounted to $2.0 million or 1.35% of total loans
at June 30, 1998 and $2.4 million or 1.82% of total loans at September 30, 1997.

Non-interest  income  decreased  $123,000  or 61.9% to $75,000  during the three
months ended June 30,

                                        8

<PAGE>



1998 when  compared  with  $198,000  during the same 1997 period.  Miscellaneous
income and income from real estate operations  decreased by $93,000 and $26,000,
respectively.  The decrease in  miscellaneous  income was due to a settlement of
$100,000  the bank  recorded in the 1997  period in exchange  for the release of
its' first  mortgage  lein on a residential  property  which was deemed to be an
environmental hazard.

Non-interest expenses increased $73,000 or 5.5% to $1.4 million during the three
months ended June 30, 1998 when compared with $1.3 million  during the same 1997
period.  During the three  months  ended June 30,  1998,  salaries  and employee
benefits,  occupancy,  and equipment miscellaneous increased by $65,000, $51,000
and  $35,000,  respectively.  The  increase in salaries  and  employee  benefits
resulted from an increase in the number of full-time  equivalent  staff required
due to the addition of our East Brunswick office,  along with a general increase
in compensation  levels.  The increases in occupancy and equipment were also the
result of the additional branch office.

Income tax expense  totaled  $784,000 and $825,000 during the three months ended
June 30,  1998 and 1997,  respectively.  The  decrease  was  primarily  due to a
decrease in taxable income.

Results of operations for nine months ended June 30, 1998 and 1997

Net income decreased $113,000 or 2.7% to $4.13 million for the nine months ended
June 30, 1998 compared to $4.24  million for the same 1997 period.  The decrease
was  attributable to an increase in interest and  non-interest  expenses,  along
with a decrease in  non-interest  income,  which more than offset an increase in
interest income.  Interest income on loans during the nine months ended June 30,
1998  increased  $185,000 or 2.2% to $8.6 million when  compared to $8.4 million
during the same 1997 period.  The increase  during the 1998 period resulted from
an  increase  in  the  average  balance  of  loans   outstanding.   Interest  on
mortgage-backed  securities decreased by $977,000 or 9.1% during the nine months
ended  June 30,  1998 when  compared  with the same  1997  period as a result of
decreased  balances.  Interest earned on investments and other  interest-earning
assets  increased  $1.9 million or 23.6% to $9.7 million  during the nine months
ended June 30, 1998 when  compared to $7.9 million  during the same 1997 period.
The increase during the 1997 period  resulted  primarily from an increase in the
average balance of investments and other interest-earning assets outstanding.

Interest on deposits  increased  $701,000 or 5.1% to $14.5  million for the nine
months  ending June 30,  1998  compared  to $13.8  million  during the same 1997
period  primarily as a result of increased  deposits  outstanding  along with an
increase in the bank's cost of funds.  Interest on  borrowings  was $3.0 million
for the nine months ended June 30, 1998 compared  with$2.8  million for the same
1997 period. The increase
 was due to a higher  average  balance  outstanding  of  securities  sold  under
repurchase  agreements  during the 1997  period,  along with an  increase in the
Bank's cost of borrowing.

During the nine  months  ended June 30,  1998 and 1997 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 June 30, 1998 and
September  30, 1997,  the Bank's  non-performing  loans,  which  includes  loans
delinquent 90 days or more, totaled $1.4 million and $1.7 million, respectively.
The allowance  for loan losses  amounted to $2.0 million or 1.35% of total loans
at June 30, 1998 and $2.4 million or 1.82% of total loans at September 30, 1997.

                                        9

<PAGE>




Non-interest  income  decreased  $212,000 or 45.9% to  $250,000  during the nine
months  ended June 30, 1998 when  compared  with  $462,000  during the same 1997
period.  The decrease  during the 1998 period  resulted from decreases in income
from real estate operations, miscellaneous and other fees and service charges on
loans of $110,000, $95,000 and 6,000, respectively.  The decrease in income from
real estate  operations was mostly due to a gain of $119,000  recorded on a sale
during  the 1997  period.  The  decrease  in  miscellaneous  income was due to a
settlement  of $100,000 the bank recorded in the 1997 period in exchange for the
release of its' first  mortgage lein on a residential  property which was deemed
to be an environmental hazard.

Non-interest expenses increased $192,000 or 4.7% to $4.3 million during the nine
months ended June 30, 1998 when compared with $4.1 million  during the same 1997
period.  During the nine  months  ended June 30,  1998,  salaries  and  employee
benefits,  occupancy, and equipment increased by $223,000, $111,000 and $60,000,
respectively,  which more than offset  decreases to federal  deposit  insurance,
advertising  and  miscellaneous  expenses of  $112,000,  $68,000,  and  $22,000,
respectively.  The increase in salaries and employee  benefits  resulted from an
increase  in the  number  of  full-time  equivalent  staff  required  due to the
addition  of our  East  Brunswick  office,  along  with a  general  increase  in
compensation  levels.  Furthermore,  the  increases in occupancy  and  equipment
expenses  were also the result of the new  office.  The large  decrease  in FDIC
insurance expense was a direct result of the lower insurance  premiums that took
effect January 1, 1997 due to the  recapitalization  of the Savings  Association
Insurance Fund.

Income tax expense  totaled $2.3 million and $2.4 million during the nine months
ended June 30, 1998 and 1997, respectively.  The decrease was primarily due to a
decrease in taxable income.

Year 2000

The  Corporation  has a year 2000 committee in place that is comprised of senior
management  that is diligently  working towards the remediation of any year 2000
problems  with any of the Bank's  internal or  external  computer  systems.  All
automated  systems  have been  assessed  and all third party  vendors  have been
contacted for their  responses on the matter.  Any vendor not  responding to our
compliance  efforts will have their system  replaced  with one that is year 2000
certified in the quarter ending December 31, 1998.

Most of the critical data  processing of the Bank that could be impacted by this
problem is provided by a third party national service bureau. The service bureau
has advised the Bank that it  conducted a thorough  month-long  test of its core
software  system in May 1998 and has completed  all changes  necessary to ensure
its  ability to process in the year 2000 and beyond.  During the quarter  ending
September 30, 1998, the Bank expects to test in a live environment, operating on
a date in the year 2000, the  compatablity of the Bank's  internal  systems with
that of the service bureau's core system.

As of April 1998,  the Bank had  completed  replacing  all of its computers at a
cost of approximately  $100,000. The replacement of these machines was a project
that was anticipated in the normal course of business,  not just a result of the
year 2000.

The Bank continues to evaluate  appropriate courses of corrective action.  Based
on current  analysis,  the Bank does not expect  additional  expenses  to have a
material  effect on its financial  position or results of  operations.  However,
despite our best efforts,  factors  outside our control could  possibly weigh on
our ability to process data, possibly leading to an adverse impact on the Bank's
results of operations.


                                       10

<PAGE>



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 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 June 30, 1998 and September
30, 1997  totaled  $31.3  million and $11.6  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:



                                                     Nine months ended June 30,
                                                     --------------------------
                                                           1997       1998
                                                     --------------------------
                                                            (In Thousands)

Cash and cash equivalents- beginning                    $  4,750    $ 15,476
                                                        --------------------

Operating activities:
  Net income                                               4,241       4,128
  Adjustments to reconcile net
  income to net cash provided
   by operating activities                                   222        (646)
                                                        --------------------

Net cash provided by operating activities                  4,463       3,482

Net cash (used in) provided by investing activities       (4,018)      1,919
Net cash  provided by financing activities                13,670      14,352
                                                        --------------------
Net increase in cash and
               cash equivalents                           14,115      19,753
                                                        --------------------
Cash and cash equivalents- ending                       $ 18,865    $ 35,229
                                                        ====================



Cash was generated by operating activities during the 1998 and 1997 periods. The
primary  source of cash from  operating  activities  during both periods 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
increased $19.4 million during the nine months ended June 30, 1998 compared to a
decrease of $14.6  million  during the same 1997 period.  During the nine months
ended June 30, 1998 and 1997,  purchases of  mortgage-backed  securities totaled
$1.0 million and $55.1 million,  respectively,  and principal repayments totaled
$50.6 million and

                                       11

<PAGE>



$31.3  million,  respectively.  During the nine  months  ended June 30, 1998 and
1997,  purchases  of  investment  securities  totaled  $99.3  million  and $10.0
million,  respectively, and maturities and calls totaled $73.3 million and $13.0
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 1998 and 1997 periods was
from an increase in deposits  outstanding  amounting to $23.6  million and $18.4
million,  respectively.  Net borrowings  decreased $8.0 million and $3.4 million
during 1998 and 1997,  respectively.  During the nine months ended June 30, 1998
and 1997, cash dividends of $1.86 million and $1.61 million, 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 June 30, 1998, such outstanding  commitments amounted
to $39.3  million.  Certificates  of deposit  scheduled to mature in one year or
less,  at June 30, 1998,  totaled  $246.2  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 June 30, 1998:


                                        Requirement         Actual       Excess
                                        ----------------------------------------
          Risk-based Capital
                        Tier 1                4.00%         24.84%       20.84%
                        Total                 8.00%         26.01%       18.01%

                Leverage ratio                4.00%          7.69%        3.69%



Quantitative and Qualitative Disclosures about Market Risk

               Not applicable.





                                       12

<PAGE>

                       PULSE BANCORP, INC. AND SUBSIDIARY

                                     Part II

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

               Not applicable.

ITEM 2.  Changes in Securities
------------------------------

               Not applicable.

ITEM 3.  Defaults Upon Senior Securities
----------------------------------------

               Not applicable

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

               Not applicable

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

               On July 9, 1998 the  Corporation  signed a merger  agreement with
               First Source Bancorp, Inc. The merger is expected to occur during
               December 1998.  Following the merger,  the Corporation will cease
               to exist and  stockholders of the Corporation  will receive stock
               of First Source  Bancorp,  Inc. in exchange of their stock of the
               Corporation.  Additional information about the merger,  including
               the  method  of  determining  the  consideration  to be  paid  to
               stockholders of the Corporation, is contained in a Current Report
               on Form 8-K  filed by the  Corporation  with the  Securities  and
               Exchange Commission (the "Commission") during July 1998. Although
               the Merger Agreement  imposes certain  operating  restrictions on
               the Corporation  through the date of merger,  these restrictiions
               do not impede the  ability of the  Corporation  to function as an
               operating  company and the  Corporation  does not expect that its
               financial   condition,   liquidity  and  results  of  operations,
               including those of the Bank, will be materially impacted prior to
               the  merger  as a result  of these  restrictions.  The  merger is
               subject to regulatory non-objection and stockholder approval.


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

               (a) In addition to the exhibits  currently filed pursuant to Item
               601 of  Regulation  S-K, the  following  exhibits are being filed
               with this report. Exhibits 10.1, 10.2, and 10.3 supplant exhibits
               previously  filed under  identical  exhibit numbers in the Annual
               Report on Form 10-K for the fiscal year ended September 30, 1997.

               Exhibit 2.       Agreement   and   Plan  of   Merger  with  First
               ---------        Source Bancorp,  Inc.,  including a stock option
                                agreement (incorporated by reference to exhibits
                                99.2 and 99.3 of a  Current  Report  on Form 8-K
                                (Commission file number 0-18764), dated

                                       13

<PAGE>



                                July  9,  1998).   All  omitted   schedules  are
                                referenced  in the  text  of the  documents  and
                                correspond  to the  appropriate  sections of the
                                text.   Omitted   schedules  will  be  furnished
                                supplementally  to the Commission at the request
                                of the Commission.

               Exhibit 10.1.    Employment agreement with Benjamin S. Konopacki
               ------------

               Exhibit 10.2.    Employment agreement with George T. Hornyak, Jr.
               ------------

               Exhibit 10.3.    Employment agreement with Thomas Konopacki
               ------------

               Exhibit 10.8.    Employment agreement with Jeffrey M. Gostkowski
               ------------

               (b) Reports on Form 8-K.  None



                                       14

<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: 7/29/98                                  By:/s/George T. Hornyak, Jr.
     ---------                                 ---------------------------------
                                                  George T. Hornyak, Jr.
                                                  President
                                                  Chief Executive Officer
                                                  (Duly Authorized Officer)


Date: 7/29/98                                  By:/s/Thomas B. Konopacki
     ---------                                    ------------------------------
                                                  Thomas B. Konopacki
                                                  Executive Vice President
                                                  Chief Financial Officer










                                       15