SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

[X]      Annual  report  pursuant  to  section  13 or 15 (d)  of the  Securities
         Exchange Act of 1934

         For the fiscal year ended December 31, 1997
                                   -----------------

[ ]      Transition  report  pursuant  to section 13 or 15(d) of the  Securities
         Exchange Act of 1934
         For the transition period from              to             .
                                        ------------    ------------

Commission File No. 0-23194
                   First Savings Bancorp of Little Falls, Inc.
               --------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

New Jersey                                                       22-1284835
------------------------------------------                    -----------------
(State or Other Jurisdiction of Incorporation                  I.R.S. Employer
or Organization)                                              Identification No.

7 Center Avenue, Little Falls, New Jersey                           07424
-----------------------------------------                         ----------
(Address of Principal Executive Offices                           (Zip Code)

Issuer's Telephone Number, Including Area Code:                (973) 256-2100
                                                              ---------------

Securities registered under to Section 12(b) of the Exchange Act:  None
                                                                   ----

Securities registered under to Section 12(g) of the Exchange Act:

                     Common Stock, par value $1.00 per share
                     ---------------------------------------
                                (Title of Class)

         Check  whether  the issuer:  (1) has filed all  reports  required to be
filed by Section 13 or 15(d) of the  Exchange  Act during the past 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       .
      -----        ------

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year:   $794,112

         The  registrant's  voting  common  stock is not  regularly  or actively
traded in any established market.  Approximately 90% of the common stock is held
by affiliates. There is no non-voting common stock issued or outstanding.

         As of March 1, 1998,  there were issued and outstanding  440,100 shares
of common stock.

         Transition Small Business Disclosure Format (check one):
YES      NO   X
    ---      ---

                       DOCUMENTS INCORPORATED BY REFERENCE

         1.       Portions of the Annual Report to  Stockholders  for the Fiscal
                  Year ended December 31, 1997. (Part II)
         2.       Portions  of the Proxy  Statement  for the  Annual  Meeting of
                  Stockholders  for the Fiscal  Year ended  December  31,  1997.
                  (Part III)


<PAGE>



                                     PART I

         FIRST SAVINGS  BANCORP OF LITTLE FALLS,  INC. (THE  "COMPANY") MAY FROM
TIME TO  TIME  MAKE  WRITTEN  OR ORAL  "FORWARD-LOOKING  STATEMENTS",  INCLUDING
STATEMENTS  CONTAINED IN THE COMPANY'S  FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION  (INCLUDING  THIS  ANNUAL  REPORT  ON FORM  10-KSB  AND THE  EXHIBITS
THERETO),  IN ITS REPORTS TO  STOCKHOLDERS  AND IN OTHER  COMMUNICATIONS  BY THE
COMPANY,  WHICH  ARE MADE IN GOOD  FAITH BY THE  COMPANY  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 COMPANY'S PLANS,  OBJECTIVES,  EXPECTATIONS,  ESTIMATES AND
INTENTIONS,  THAT ARE SUBJECT TO CHANGE BASED ON VARIOUS IMPORTANT FACTORS (SOME
OF WHICH ARE BEYOND THE COMPANY'S CONTROL). THE FOLLOWING FACTORS, AMONG OTHERS,
COULD CAUSE THE COMPANY'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  COMPANY  CONDUCTS
OPERATIONS;  THE EFFECTS 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 COMPANY 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 COMPANY'S PRODUCTS AND SERVICES;  THE
SUCCESS OF THE  COMPANY 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 SAVING HABITS; AND THE SUCCESS OF THE COMPANY AT MANAGING THE RISKS INVOLVED
IN THE FOREGOING.

         THE COMPANY  CAUTIONS THAT THE FOREGOING  LIST OF IMPORTANT  FACTORS IS
NOT  EXCLUSIVE.  THE COMPANY 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 COMPANY.

Item 1.  Business
-----------------

General

         In March 1993,  First  Savings  Bancorp of Little  Falls,  Inc.,  a New
Jersey  Corporation,  (the "Company")  became a unitary savings and loan holding
company  upon the  completion  of the  reorganization  of First  Savings Bank of
Little Falls, F.S.B. ("First Savings" or the "Savings Bank") into

                                        1

<PAGE>



a holding company form of ownership.  At that time, the Company  acquired all of
the  outstanding  common stock of the Savings  Bank.  The Savings  Bank's common
stock was originally  issued in connection  with the Savings  Bank's  conversion
from mutual to stock form in September  1992. The principal asset of the Company
consists  of 100% of the issued and  outstanding  shares of common  stock of the
Savings  Bank.  At December  31,  1997,  the Company had total  assets of $178.1
million,  total deposits of $166.8 million and total stockholders equity of $9.9
million.

         The principal business of the Savings Bank is the acceptance of savings
deposits from the general  public and the  origination  and purchase of mortgage
loans  for  the  purpose  of  constructing,  financing  or  refinancing  one- to
four-family  residences  and the  purchase of  mortgage-backed  securities.  The
Savings Bank also originates home equity loans.

Competition

         The Savings  Bank's  primary market area consists of Bergen and Passaic
counties  in  northern  New Jersey,  and is one of many  financial  institutions
serving its market area. The competition  for deposit  products comes from other
insured financial institutions such as commercial banks, thrift institutions and
credit  unions in the Savings  Bank's  market  area.  Deposit  competition  also
includes a number of  insurance  products  sold by local  agents and  investment
products  such as mutual funds and other  securities  sold by local and regional
brokers.  Loan competition comes from other insured financial  institutions such
as commercial banks, thrift institutions and credit unions.

Lending Activities

         Loan  Portfolio  Data. Set forth below is selected data relating to the
composition of the Savings Bank's loan portfolio by type of loan as of the dates
indicated,   including  a   reconciliation   of  gross  loans  receivable  after
consideration of deferred loan origination fees and costs, net and allowance for
loan losses.







                                        2

<PAGE>

<TABLE>
<CAPTION>
                                                                      At December 31,
                                                    ----------------------------------------------------------
                                                             1997                              1996
                                                    ------------------------         -------------------------
                                                       $                %                $                %
                                                      ---              ---              ---              ---
<S>                                                 <C>               <C>            <C>                <C>
                                                                  (Dollars in Thousands)
Type of Loan Real estate loans:
  1-4 family..............................          $83,317            78.38%        $ 74,157            77.68%
  Other dwellings.........................            5,021             4.72            3,311             3.47
  Non-residential.........................            6,222             5.85            6,817             7.14
  Commercial loans........................            4,655             4.38            3,954             4.15
Consumer loans:
  Home equity.............................            4,399             4.14            4,681             4.90
  Savings account loans...................              629              .59              814              .85
  Home improvement loans..................            1,346             1.27            1,091             1.14
  Student loans...........................               91              .09              116              .12
  Other loans.............................              619              .58              527              .55
                                                   --------           ------          -------           ------
     Total gross loans....................          106,299           100.00%          95,468           100.00%
                                                   --------           ======          -------           ======
Less:
  Deferred loan origination fees
   and costs, net.........................             (236)                             (211)
  Allowance for loan losses...............             (596)                             (524)
                                                   --------                           -------
                                                       (832)                             (735)
                                                   --------                           -------
     Total loans, net.....................         $105,467                           $94,733
                                                   ========                           =======
</TABLE>

         Loan Maturity  Tables.  The following  table sets forth the contractual
maturity of the Savings  Bank's loan  portfolio at December 31, 1997.  The table
does not include  prepayments or scheduled  principal  repayments.  All mortgage
loans are shown as maturing based on contractual maturities.

<TABLE>
<CAPTION>
                                                                       Due after
                                                Due within             1 through             Due after
                                                  1 year                5 years               5 years                 Total
                                                  ------                -------               -------                ------
                                                                                  (In Thousands)

<S>                                               <C>                    <C>                  <C>                  <C>
1-4 family and other dwellings.............       $  932                 $2,213               $85,193              $ 88,338
Non-residential............................        1,416                  4,303                   503                 6,222
Commercial and consumer....................          745                  2,981                 8,013                11,739
                                                  ------                 ------               -------              --------
                                                  $3,093                 $9,497               $93,709              $106,299
                                                  ======                 ======               =======              ========
</TABLE>




                                        3

<PAGE>



         The following table sets forth the dollar amount of all loans due after
December  31,  1998,  which  have  predetermined  interest  rates and which have
floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                                               Floating or
                                          Fixed Rates        Adjustable Rates         Total
                                                              (In Thousands)

<S>                                         <C>                 <C>                 <C>
1-4 family and other dwellings .......      $ 51,351            $ 36,055            $ 87,406
Non-residential ......................         1,238               3,568               4,806
Commercial and consumer ..............         2,352               8,642              10,994
                                            --------            --------            --------
    Total ............................      $ 54,941            $ 48,265            $103,206
                                            ========            ========            ========
</TABLE>

         One- to  Four-Family  Residential  Loans.  The Savings  Bank's  primary
lending activity consists of the origination of one- to four-family  residential
mortgage loans secured by property  located in the Savings Bank's primary market
areas.  Typically,  such  residences  are single  family homes that serve as the
primary  residence of the owner.   Additionally,  this loan category  includes a
relatively  small amount of loans  collateralized  by mixed use properties which
are primarily  residential,  but have some  commercial use as well.  The Savings
Bank  generally  originates   owner-occupied  one-  to  four-family  residential
mortgage  loans in  amounts up to 80% of the  lesser of the  appraised  value or
selling price of the  mortgaged  property  ("the loan to value  ratio")  without
requiring  mortgage  insurance.  When a loan  origination is over $300,000,  the
maximum  loan to value ratio is reduced to 70%. The maximum loan amount for such
loans is handled on a case by case basis. First Savings also originates mortgage
loans in an amount up to 90% of the  lesser of the  appraised  value or  selling
price of a mortgaged property,  however,  mortgage insurance is required for the
amount  in  excess  of  80%  of  such  value.   The  Savings   Bank   originates
adjustable-rate and fixed-rate mortgage loans which generally have terms between
15 and 30 years.

         During 1998, the Savings Bank plans to become a service seller of loans
with either the Federal Home Loan Mortgage Association  ("FHLMC") or the Federal
National Mortgage Association ("FNMA").  The Savings Bank will sell the majority
of  fixed-rate  30 year loans it  originates  and retain the  servicing of these
loans.  As of December 31, 1997, the Savings Bank had  applications on file with
both FHLMC and FNMA.

         The Savings Bank  requires  the  borrower to qualify for an  adjustable
rate  mortgage  loan at a rate  that is 2.75%  above the  interest  rate at loan
origination. The Savings Bank's adjustable rate loans generally reprice annually
with interest rate adjustment limitations of 2% per year and 6% over the life of
the loan.  The Savings Bank offers  adjustable-rate  mortgage loans with initial
interest rates set below the fully indexed rate.

         Adjustable-rate  mortgage  loans  decrease  the risks  associated  with
changes in interest rates by more closely reflecting these changes,  but involve
other risks because as interest rates increase,  the underlying  payments by the
borrower increase,  thus increasing the potential for default. At the same time,
the  marketability  of the underlying  collateral  may be adversely  affected by
higher interest  rates.  Upward  adjustment of the contractual  interest rate is
also limited by the adjustable-rate mortgage loan documents, thereby potentially
limiting their  effectiveness  during periods of rising  interest  rates.  These
risks have not had an adverse effect on the Savings Bank.

                                        4

<PAGE>

         Non-Residential Loans. The non-residential real estate loans consist of
multi-family  loans,  including  loans on apartment  complexes.  These loans are
generally  originated in amounts up to 80% of the appraised  value for a maximum
term of 20 years.

         Multi-family  loans generally provide higher interest rates than can be
obtained from  single-family  mortgage  loans.  Multi-family  lending,  however,
entails  significant  additional  risks when compared  with one- to  four-family
residential  lending.  For example,  multi-family loans typically involve larger
loan balances to single  borrowers or groups of related  borrowers,  the payment
experience on such loans  typically is dependent on the successful  operation of
the real estate project, and these risks can be significantly impacted by supply
and demand conditions in the market for multi-family residential units.

         Commercial Loans.  Commercial loans,  other than  non-residential  real
estate loans, consist of, among other things,  equipment loans and loans secured
by real estate, such as small office building loans. Loans secured by commercial
property may be in amounts up to 80% of the  appraised  value for a maximum term
of 25 years.

         Commercial lending entails  significant  additional risks when compared
with one- to four-family residential lending. For example, non-residential loans
typically  involve larger loan balances to single borrowers or groups of related
borrowers,  the payment  experience on such loans  typically is dependent on the
successful  operation  of the  project  and  these  risks  can be  significantly
impacted by the cash flow of the borrowers  and supply and demand  conditions in
the market for commercial office, retail and warehouse space.

         Consumer  Loans.  The Savings  Bank offers  consumer  loans in order to
provide a wider range of financial  services to its customers.  Savings  account
loans are  offered  subject  to a 90% loan to value  ratio and home  improvement
loans are offered subject to a 70% loan to value ratio.

         Loan Approval  Authority and  Underwriting.  Loans under $25,000 may be
approved by a loan officer.  Loans of $25,000 up to $500,000 must be approved by
the  Loan  Committee  which is  comprised  of the  Chairman  of the  Board,  the
President,  the loan  officer and mortgage  underwriter.  Loans for amounts over
$500,000 must be approved by the Board of Directors of the Savings Bank.

         Upon  receipt  of a  completed  loan  application  from  a  prospective
borrower,  a credit  report is  generally  ordered,  income  and  certain  other
information is verified and, if necessary,  additional financial  information is
requested.  An appraisal of the real estate  intended to be used as security for
the proposed  loan is obtained.  Appraisals  are obtained from  independent  fee
appraisers.  For real estate  loans,  the Savings  Bank  requires  either  title
insurance  or a title  opinion.  Borrowers  must also obtain  fire and  casualty
insurance  (for loans on property  located in a flood zone,  flood  insurance is
required) prior to the closing of the loan.

         Loan  Commitments.  The Savings  Bank  issues  written  commitments  to
prospective  borrowers  on  all  approved  real  estate  loans.  Generally,  the
commitment  requires  acceptance  within  60 days of the  date of  issuance.  At
December  31,  1997,  the  Savings  Bank had  $975,000 of  commitments  to cover
originations.  Management  believes  that  virtually  all of the Savings  Bank's
commitments will be funded.

         Loans to One Borrower.  Regulations limit  loans-to-one  borrower in an
amount equal to 15% of unimpaired  capital and unimpaired surplus of the Savings
Bank.  The  Savings  Bank  is  authorized  to lend  up to an  additional  10% of
unimpaired capital and unimpaired surplus if the loan is fully secured

                                        5

<PAGE>

by readily marketable collateral.  Savings banks are authorized to make loans to
one borrower,  for any purpose, in an amount up to $500,000.  The Savings Bank's
maximum  loan-to-one  borrower limit was approximately  $1.5 million at December
31, 1997. At December 31, 1997,  the aggregate  loans  outstanding  to our three
largest borrowers, in excess of $800,000, were approximately $939,000,  $881,000
and $836,000,  respectively.  These loans were secured loans and were within our
lending limit.

Non-Performing Assets

         Loan  Delinquencies.  Loans are  reviewed  on a  regular  basis and are
placed  on a  non-accrual  status  when,  in  the  opinion  of  management,  the
collection  of  additional  interest is  doubtful.  Residential  and  commercial
mortgage  loans are  placed on  non-accrual  status  when  either  principal  or
interest  is 90 days or more  past due and  management  considers  the  interest
uncollectible  or when  the  Savings  Bank  commences  foreclosure  proceedings.
Interest  accrued and unpaid at the time a loan is placed on non-accrual  status
is charged against interest income.

         Real estate  acquired by the Savings Bank as a result of foreclosure or
by deed in lieu of  foreclosure  is  classified as real estate owned until it is
sold. When property is acquired, it is recorded at the fair value at the date of
foreclosure less estimated costs of disposition.

         The following  table sets forth  information  regarding  non-performing
loans and real estate owned.

                                                                At December 31,
                                                             -------------------
                                                              1997         1996
                                                             ------       ------
                                                                (In Thousands)
Loans accounted for on a non-accrual basis:
Real estate loans:
  1-4 family .........................................       $1,450       $  476
  All other real estate loans ........................        1,027        1,076
  Commercial and consumer ............................          124           87
                                                             ------       ------
    Total non-accrual loans ..........................       $2,601       $1,639
                                                             ------       ------
Restructured loans:
  Real estate loans ..................................          406        1,313
                                                             ------       ------
Total non-accrual and restructured loans .............       $3,007       $2,952
                                                             ------       ------
Real estate owned, net ...............................        1,640        2,906
                                                             ------       ------
Total non-performing assets (1) ......................       $4,647       $5,858
                                                             ======       ======

------------------
(1)      In 1997 and 1996, there were no accruing loans which were contractually
         past 90 days or more.

         Interest income that would have been recorded on loans on a non-accrual
status,  under the original terms of such loans, would have totaled $292,000 for
the year ended December 31, 1997.  Actual income  recorded on these loans during
the year ended December 31, 1997 totaled $161,000.

         Classified Assets. OTS regulations provide for a classification  system
for problem assets of insured  institutions.  Under this classification  system,
problem  assets  of  insured   institutions  are  classified  as  "substandard,"
"doubtful," or "loss." An asset is considered  substandard if it is inadequately
protected

                                        6

<PAGE>

by the current net worth and paying capacity of the obligor or of the collateral
pledged, if any. Substandard assets include those characterized by the "distinct
possibility"  that the  insured  institution  will  sustain  "some  loss" if the
deficiencies  are not corrected.  Assets  classified as doubtful have all of the
weaknesses  inherent  in  those  classified  as  substandard,   with  the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable  and  improbable."  Assets  classified as loss are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the  establishment  of a specific loss reserve is not warranted.  Assets
may be designated  "special mention" because of potential weakness that does not
currently warrant classification in one of the aforementioned categories.

         When  an  insured  institution  classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem assets as loss, it is required either to establish a specific  allowance
for losses equal to 100% of that portion of the asset so classified or to charge
off such amount. An institution's  determination as to the classification of its
assets and the amount of its  valuation  allowances  is subject to review by the
OTS, which may order the  establishment  of additional  general or specific loss
allowances.  A portion of general loss allowances  established to cover possible
losses  related to assets  classified as substandard or doubtful may be included
in determining an institution's  regulatory  capital,  while specific  valuation
allowances for loan losses generally do not qualify as regulatory capital.

         In accordance  with its  classification  of assets policy,  the Savings
Bank regularly  reviews the problem assets in its portfolio to determine whether
any assets require classification in accordance with applicable regulations.  On
the basis of  management's  review of its assets,  at  December  31,  1997,  the
Savings Bank had classified $4.0 million of assets as substandard,  no assets as
doubtful, and $1.2 million of assets as special mention.

         Potential Problem Loans.

         Hazlett,  Gas Station/Car Wash, Fort Lee, New Jersey. The original loan
was made in the amount of $900,000 in March 1991 and is secured by a gas station
and car wash  facility.  As of December  31, 1997,  the loan had an  outstanding
balance of $881,000.  The loan has been restructured and is presently classified
as special mention.

         Real Estate Owned. The following is a summary of significant properties
in the Savings Bank's real estate owned portfolio as of December 31, 1997.

         Office  Building in Fairfield,  New Jersey (Chief Plaza).  The original
loan,  made in June 1989, on this three story office  building was in the amount
of $500,000 with a total loan  commitment of  $2,500,000.  In November 1997, the
property was appraised at $1,600,000. As of December 31, 1997, the book value of
this property was $1.5 million. The Company is planning to develop this property
into senior citizen housing.

         Allowance  for Loan Losses.  It is  management's  policy to provide for
estimated  losses on its loan portfolio.  Provisions for loan losses are charged
to earnings to bring the total  allowance for loan losses to a level  considered
appropriate by management based on historical experience, the volume and type of
lending  conducted  by the  Savings  Bank,  the  amount  of the  Savings  Bank's
classified  assets,  the status of past due  principal  and  interest  payments,
general economic conditions, particularly as they relate

                                        7

<PAGE>

to  the  Savings  Bank's  market  area,   and  other  factors   related  to  the
collectibility  of the Savings Bank's loan portfolio.  Management of the Savings
Bank assesses the  allowance for loan losses on a quarterly  basis and will make
provisions  for loan  losses as deemed  appropriate  by  management  in order to
maintain the adequacy of the allowance for loan losses. However, there can be no
assurance  that the  allowance  for loan losses will be adequate to cover losses
which may in fact be realized in the future and that  additional  provisions for
loan losses will not be required.

         The following table sets forth  information with respect to the Savings
Bank's  allowance  for  loan  losses  and  real  estate  owned  for the  periods
indicated.

                                                              At December 31,
                                                            -------------------
                                                            1997          1996
                                                            ----          -----
                                                              (In Thousands)
Allowance balances (at beginning of period) ..........     $  524       $  389
Provision:
  Real estate ........................................        101          142
  Commercial and consumer ............................         --
Charge-offs:
  Real estate ........................................         --           --
  Commercial and consumer ............................        (37)          (7)
                                                           ------       ------
Recoveries ...........................................          8           --
                                                           ------       ------
Allowance balance (at end of period) .................     $  596       $  524
                                                           ======       ======
Net loans charged off as a percent of average
  loans outstanding ..................................        .03%         .01%
Allowance as a percent of:
  Total loans ........................................        .56%         .55%
  Non performing loans ...............................      19.83%       17.75%


                                                            At December 31,
                                                       ------------------------
                                                        1997              1996
                                                       -------          -------
                                                            (In Thousands)

Total real estate owned, gross ...............         $ 1,675          $ 3,444
                                                       =======          =======
Allowance balances - beginning ...............         $   538          $   303
Provision ....................................              37              256
Charge-offs ..................................            (540)             (21)
                                                       -------          -------
Allowance balances - ending ..................         $    35          $   538
                                                       =======          =======



                                        8

<PAGE>



Analysis of the Allowance for Loan Losses

         The  following  table sets forth the  allocation  of the  allowance  by
category,  which  management  believes can be allocated  only on an  approximate
basis.  The  allocation  of the  allowance to each  category is not  necessarily
indicative  of future loss and does not  restrict  the use of the  allowance  to
absorb losses in any category:

<TABLE>
<CAPTION>

                                                  At December 31
                                  -----------------------------------------------------
                                        1997                        1996
                                       ------                       -----
                                                  (Dollars In Thousands)
                                              Percent of                   Percent of
                                             Loans in Each                Loans in Each
                                              Category to                  Category to
                                    $         Total Loans     $            Total Loans
                                   ---        -----------    ---           -----------

<S>                               <C>            <C>         <C>            <C>
Real estate ..............        $408            88.96%     $248            88.29%
Commercial ...............         107             4.38       247             4.15
Consumer .................          81             6.66        29             7.56
                                  ----           ------      ----           ------
      Total ..............        $596           100.00%     $524           100.00%
                                  ====           ======      ====           ======
</TABLE>



Investment Activities and Mortgage-Backed Securities

         General.  The Savings Bank is required  under  federal  regulations  to
maintain a minimum  amount of liquid  assets  which may be invested in specified
short-term  securities  and certain  other  investments.  The  Savings  Bank has
generally  maintained  a  liquidity  portfolio  well  in  excess  of  regulatory
requirements.  Liquidity levels may be increased or decreased depending upon the
yields on  investment  alternatives  and upon  management's  judgment  as to the
attractiveness  of the yields then available in relation to other  opportunities
and its expectation of future yield levels, as well as management's  projections
as to the  short-term  demand for funds to be used in the  Savings  Bank's  loan
origination and other activities.

         The Savings Bank's investment securities and mortgage-backed securities
portfolios at December 31, 1997 did not contain securities of any issuer with an
aggregate book value in excess of 10% of the Savings Bank's liquidity, excluding
those issued by the United States or its agencies.

         Mortgage-Backed  Securities.  To  supplement  lending  activities,  the
Savings  Bank  has  invested  in  mortgage-backed  securities.   Mortgage-backed
securities can serve as collateral for borrowings and, through repayments,  as a
source of liquidity.

         Mortgage-backed securities represent a participation interest in a pool
of single-family or other type of mortgages, the principal and interest payments
on which  are  passed  from the  mortgage  originators,  through  intermediaries
(generally   quasi-governmental   agencies)   that   pool  and   repackage   the
participation  interests in the form of  securities,  to  investors  such as the
Savings Bank. Such quasi-governmental  agencies,  which guarantee the payment of
principal and interest to investors,  primarily include FHLMC, FNMA,  Government
National  Mortgage  Association  ("GNMA"),  and  Small  Business  Administration
("SBA").


                                        9

<PAGE>



         Mortgage-backed  securities  typically are issued with stated principal
amounts and the securities are backed by pools of mortgages that have loans with
interest  rates  that  are  within  a range  and have  varying  maturities.  The
underlying pool of mortgages can be composed of either  fixed-rate  mortgages or
adjustable-rate  mortgage  loans.   Mortgage-backed   securities  are  generally
referred to as mortgage participation certificates or pass-through certificates.
As a result,  the interest rate risk  characteristics  of the underlying pool of
mortgages, (i.e., fixed-rate or adjustable-rate) as well as prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed  pass-through
security  is  equal  to the life of the  underlying  mortgages.  Mortgage-backed
securities  issued  by  FHLMC,  FNMA,  GNMA,  SBA  make  up a  majority  of  the
pass-through certificates market.

         Real Estate Mortgage Investment Conduits ("REMIC") are typically issued
by a special purpose entity, which may be organized in a variety of legal forms,
such as a trust, a corporation or a partnership.  The entity aggregates pools of
pass-through  securities or mortgage loans,  which are used to collateralize the
mortgage related securities.  Once combined,  the cash flows can be divided into
"tranches"  or  "classes"  of  individual  securities,   thereby  creating  more
predictable  average lives for each security  than the  underlying  pass-through
pools of  mortgage  loans.  Accordingly,  under  this  security  structure,  all
principal  paydowns  from the  various  mortgage  pools or  mortgage  loans  are
allocated to a mortgage-related  securities' class or classes structured to have
priority  until it has been paid off.  These  securities  generally  have  fixed
interest  rates,  and as a result,  changes in interest  rates  generally  would
affect the market value and possibly the  prepayment  rates of such  securities.
The characterization of a mortgage-related security as a REMIC relates solely to
the tax treatment of the mortgage  related  security under the Internal  Revenue
Code.

Investment Activities

         The  following  table sets forth the  carrying  value of the  Company's
investment  portfolio,  mortgage-backed  securities,  and Federal Home Loan Bank
("FHLB") stock at the dates indicated. At December 31, 1997, the market value of
the  investment  securities  that are held to maturity was $19.6 million and the
market value of investment securities available for sale was $31.2 million, with
a cost basis of $30.8 million.


                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                               At December 31,
                                                               ----------------
                                                                1997      1996
                                                               -------   ------

                                                                (In Thousands)
Investment Securities:

<S>                                                            <C>       <C>
U.S. government agency securities held to maturity .........   $19,644   $ 2,000
                                                               -------   -------

Atlantic Central Bank Stock (Common Stock) available for
sale .......................................................        30        --
                                                               -------   -------

Mortgage-backed securities available for sale (1):
  GNMA .....................................................    10,065    12,317
  FNMA .....................................................     2,121     3,641
  FHLMC ....................................................       681     1,655
  SBA ......................................................    16,409    19,894
  FNMA-REMIC ...............................................     1,920        --
                                                               -------   -------
     Total mortgage-backed securities available for sale ...    31,196    37,507
                                                               -------   -------
     Total available for sale ..............................    31,226    37,507
                                                               -------   -------

Mortgage-backed securities held to maturity:
  GNMA .....................................................        32        39
  FNMA .....................................................     1,540     1,809
  FHLMC ....................................................     7,843     9,957
  FHLMC - REMIC ............................................     1,000     1,000
                                                               -------   -------
                                                                10,415    12,805
                                                               -------   -------
FHLB - New York Stock ......................................     1,107       823
                                                               -------   -------
    Total ..................................................   $62,392   $53,135
                                                               =======   =======
</TABLE>


(1) Carried at market value.


                                       11

<PAGE>



         The  following  table sets forth  information  regarding  the scheduled
maturities,  carrying  values,  market value and weighted average yields for the
Savings Bank's investment  securities  portfolio at December 31, 1997. The table
does not take into  consideration  the effects of  scheduled  repayments  or the
effects of possible prepayments.

<TABLE>
<CAPTION>
                                                             As of December 31, 1997
                          ------------------------------------------------------------------------------------------------------
                                            More than One to More than Five to
                                            ---------------- -----------------
                           One Year or Less     Five Years        Ten Years     More than Ten Years  Total Investment Securities
                           ----------------     ----------        ---------     -------------------  ---------------------------
                          Carrying  Average  Carrying Average Carrying  Average Carrying Average    Carrying    Average   Market
                           Value     Yield    Value    Yield    Value    Yield    Value   Yield       Value      Yield    Value
                           -----     -----    -----    -----    -----    -----   -----    -----       -----      -----    -----
                                                            (Dollars In Thousands)

<S>                       <C>      <C>      <C>       <C>      <C>      <C>      <C>       <C>      <C>          <C>     <C>
U.S. government agency
  securities held to
  maturity................$1,000  7.87%     $ 2,000    6.98%   $ 7,000  7.11%    $9,644    7.59%    $19,644      7.37%   $19,619
Atlantic Central Bank
 Stock ...................    30  8.00           --      --         --    --         --      --          30      8.00         30
Mortgage-backed securities
available for sale:
  GNMA....................    --     --          --      --         --    --     10,065    6.99      10,065      6.99     10,065
  FNMA....................    --     --          --      --         --    --      2,121    6.42       2,121      6.42      2,121
  FHLMC...................    --     --          --      --         --    --        681    6.12         681      6.12        681

  SBA.....................    --     --       1,854    9.55      6,290  8.81      8,265    7.23      16,409      8.10     16,409
  FNMA - REMIC............    --     --          --      --         --    --      1,920    6.79       1,920      6.79      1,920
Mortgage-backed securities
  held for sale:
  GNMA....................    --     --          --      --         26  8.50          6   11.00          32      9.00         32

  FNMA....................    --     --       1,540    6.09         --    --         --      --       1,540      6.09      1,540
  FHLMC...................    --     --       7,843    6.32         --    --         --      --       7,843      6.32      7,866
  FHLMC - REMIC...........    --     --          --      --         --    --      1,000    7.25       1,000      7.25      1,000
FHLB - New York........... 1,107   6.25          --      --         --    --        --       --       1,107      6.25      1,107
                          ------   ----     -------    ----    -------  ----     -------   ----     -------      ----    -------
                          $2,137   7.03%    $13,237    6.85%   $13,316  7.92%    $33,702   7.16%    $62,392      7.25%   $62,390
                          ======   ====     =======    ====    =======  ====     =======   ====     =======      ====    =======
</TABLE>



                                       12

<PAGE>



Subsidiary Activity

         The Savings  Bank is  permitted to invest up to 2% of its assets in the
capital  stock of, or secured or unsecured  loans to,  subsidiary  corporations,
with an additional investment of 1% of assets when such additional investment is
utilized primarily for community development purposes.

         First Service Corporation

         First Service Corporation ("First Service") was formed in 1996 and is a
wholly-owned  subsidiary of the Savings Bank. The purpose of First Service is to
facilitate  the  licensing  of  representatives  of the  Savings  Bank  to  sell
annuities and insurance  products to the Savings Bank's  customers.  At December
31,  1997,  First  Service  provided  fees to the Savings  Bank in the amount of
$6,000 and had total assets of $33,000.

         Redeem, Inc.

         Redeem,  Inc.  ("Redeem")  was  formed  in  1993  and  is  wholly-owned
subsidiary of the Savings  Bank.  The purpose of Redeem is to hold title to real
estate owned  properties.  As of December 31, 1997,  Redeem,  Inc. does not hold
title to any property and has no loans outstanding from the Savings Bank. Redeem
has no significant assets or liabilities.

Sources of Funds

         General.  Deposits are the major source of the Savings Bank's funds for
lending and other investment  purposes.  In addition to deposits,  First Savings
derives  funds from  amortization  and  prepayment  of loan and  mortgage-backed
securities principal,  operations and, if needed,  advances from the FHLB of New
York.  Scheduled loan and mortgage-backed  securities principal repayments are a
relatively  stable source of funds,  while deposit inflows and outflows and loan
and  mortgage-backed  securities  prepayments  are  significantly  influenced by
general  interest  rates  and  market  conditions.  Borrowings  may be used on a
short-term  basis to compensate for reductions in the availability of funds from
other sources or on a longer term basis for general business purposes.

         Deposits.  Consumer and commercial  deposits are attracted  principally
from within the Savings  Bank's  primary  market area  through the offering of a
broad selection of deposit  instruments  including NOW, regular  savings,  money
market  deposit,   term  certificate   accounts   (including   negotiated  jumbo
certificates  in  denominations  of $100,000 or more) and individual  retirement
accounts.  Deposit account terms vary according to the minimum balance required,
the time periods the funds must remain on deposit and the interest  rate,  among
other factors.  The Savings Bank regularly evaluates the internal cost of funds,
surveys rates offered by competing institutions, reviews the Savings Bank's cash
flow  requirements  for lending and  liquidity  and  executes  rate changes when
deemed appropriate.  The Savings Bank does not obtain funds through brokers, nor
does it actively solicit funds outside of the State of New Jersey.

         Borrowings.  The  Savings  Bank,  if the need  arises,  may  rely  upon
advances  from the FHLB of New York to supplement  its supply of lendable  funds
and to meet deposit withdrawal requirements.  Advances from the FHLB of New York
are typically  secured by the Savings  Bank's stock in the FHLB and a portion of
the Savings Bank's mortgage-backed securities.


                                       13

<PAGE>



         The  following  table sets forth  certain  information  as the  Savings
Bank's short-term FHLB advances at the dates indicated.
                                                As of and for the Years Ended
                                                -----------------------------
                                                  1997                1996
                                                ---------          ----------
                                                   (Dollars In Thousands)
Maximum balance ............................     $   568             $12,600
Average balance ............................         305              10,767
Balance at end of period ...................         551                  --
Weighted average rate:
  at end of period .........................        6.70%                 --%
  during the period ........................        6.70%               5.50%



Employees

         As of December  31,  1997,  the  Savings  Bank had 40  full-time  and 5
part-time  employees.   The  employees  are  not  represented  by  a  collective
bargaining agreement. The Savings Bank believes its employee relations are good.

Regulation

         Set forth below is a brief  description of certain laws which relate to
the  regulation of the Company and the Savings Bank.  The  description  does not
purport  to be  complete  and is  qualified  in its  entirety  by  reference  to
applicable laws and regulations.

Company Regulation

         General.  The  Company is a unitary  savings and loan  holding  company
subject to regulatory  oversight by the OTS. As such, the Company is required to
register  and  file  reports  with  the OTS and is  subject  to  regulation  and
examination by the OTS. In addition,  the OTS has enforcement authority over the
Company and its non-savings association  subsidiaries,  should such subsidiaries
be formed,  which also permits the OTS to restrict or prohibit  activities  that
are determined to be a serious risk to the subsidiary savings association.  This
regulation  and  oversight  is  intended  primarily  for the  protection  of the
depositors  of the Savings Bank and not for the benefit of  stockholders  of the
Company.

         Qualified  Thrift  Lender Test.  As a unitary  savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the Savings Bank  satisfies  the Qualified  Thrift  Lender  ("QTL") test. If the
Company  acquires   control  of  another  savings   association  as  a  separate
subsidiary, it would become a multiple savings and loan holding company, and the
activities  of the Company and any of its  subsidiaries  (other than the Savings
Bank or any other  SAIF-insured  savings  association)  would become  subject to
restrictions applicable to bank holding companies unless such other associations
each also qualify as a QTL and were acquired in a supervisory  acquisition.  See
"Regulation of the Savings Bank -- Qualified Thrift Lender Test."


                                       14

<PAGE>



Regulation of the Savings Bank

         General. As a federally  chartered,  SAIF-insured  savings association,
the Savings  Bank is subject to  extensive  regulation  by the OTS and the FDIC.
Lending  activities  and other  investments  must  comply with  various  federal
statutory  and  regulatory  requirements.  The Savings  Bank is also  subject to
certain reserve requirements promulgated by the Federal Reserve Board.

         The OTS, in conjunction with the FDIC,  regularly  examines the Savings
Bank and prepares  reports for the  consideration of the Savings Bank's Board of
Directors on any deficiencies  that they find in the Savings Bank's  operations.
The Savings  Bank's  relationship  with its  depositors  and  borrowers  is also
regulated to a great extent by federal  law,  especially  in such matters as the
ownership  of savings  accounts  and the form and content of the Savings  Bank's
mortgage documents.

         The Savings Bank must file reports with the OTS and the FDIC concerning
its  activities  and financial  condition,  in addition to obtaining  regulatory
approvals  prior to entering into certain  transactions  such as mergers with or
acquisitions  of other savings  institutions.  This  regulation and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is intended  primarily for the protection of the SAIF and depositors.
The  regulatory  structure  also  gives  the  regulatory  authorities  extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes.  Any change in such  regulations,  whether by the OTS, the FDIC or the
Congress could have a material  adverse impact on the Company,  the Savings Bank
and their operations.

         Insurance of Deposit Accounts.  The Savings Bank's deposit accounts are
insured by the SAIF to a maximum of $100,000 for each insured member (as defined
by law and regulation). Insurance of deposits may be terminated by the FDIC upon
a finding that the institution has engaged in unsafe or unsound practices, is in
an unsafe or unsound  condition  to continue  operations,  or has  violated  any
applicable law, regulation,  rule, order or condition imposed by the FDIC or the
institution's  primary  regulator.   The  FDIC  may  also  prohibit  an  insured
depository institution from engaging in any activity the FDIC determines poses a
serious threat to the SAIF.

         The FDIC  charges an annual  assessment  for the  insurance of deposits
based on the risk a particular  institution poses to its deposit insurance fund,
depending upon the institution's risk  classification.  This risk classification
is based on an institution's  capital group and supervisory subgroup assignment.
In addition,  the FDIC is authorized to increase  deposit  insurance  rates on a
semi-annual  basis if it  determines  that such action is necessary to cause the
balance  in the  SAIF  to  reach  the  designated  reserve  ratio  of  1.25%  of
SAIF-insured  deposits  within a reasonable  period of time. The FDIC may impose
special  assessments  on SAIF members to repay  amounts  borrowed  from the U.S.
Treasury  or for any  other  reason  deemed  necessary  by the  FDIC.  Prior  to
September 30, 1996, savings  associations paid within a range of .23% to .31% of
domestic  deposits and the SAIF was  substantially  underfunded.  By comparison,
prior to September 30, 1996, members of the Savings Bank Insurance Fund ("BIF"),
predominantly  commercial banks,  were required to pay  substantially  lower, or
virtually no, federal deposit insurance premiums.

         Effective  September  30,  1996,  federal  law was revised to mandate a
one-time  special  assessment  on  SAIF  members  such  as the  Savings  Bank of
approximately  .657% of  deposits  held on March  31,  1995.  The  Savings  Bank
recorded a $845,000 pre-tax expense for this assessment at September 30, 1996.

                                       15

<PAGE>



Beginning January 1, 1997,  deposit insurance  assessments for SAIF members were
reduced to  approximately  .064% of deposits on an annual  basis;  this rate may
continue  through  the end of 1999.  During  this same  period,  BIF members are
expected to be annually assessed  approximately  .013% of deposits.  Thereafter,
assessments for BIF and SAIF members should be the same and the SAIF and BIF may
be merged.  It is expected that these  continuing  assessments for both SAIF and
BIF  members  will be used  to  repay  outstanding  Financing  Corporation  bond
obligations.  As a result of these changes,  beginning January 1, 1997, the rate
of deposit insurance assessed the Savings Bank substantially declined.

         Regulatory  Capital  Requirements.   OTS  capital  regulations  require
savings institutions to meet three capital standards: (1) tangible capital equal
to 1.5% of total adjusted  assets,  (2) a leverage ratio (core capital) equal to
at least 3% of total adjusted assets, and (3) a risk-based  capital  requirement
equal to 8.0% of total risk-weighted assets.

         Dividend and Other Capital  Distribution  Limitations.  OTS regulations
require the Savings Bank to give the OTS 30 days' advance notice of any proposed
declaration of dividends to the Company, and the OTS has the authority under its
supervisory powers to prohibit the payment of dividends to the Company.

         OTS regulations  impose  limitations upon all capital  distributions by
savings  institutions,  such  as  cash  dividends,  payments  to  repurchase  or
otherwise acquire its shares, payments to shareholders of another institution in
a cash-out  merger and other  distributions  charged against  capital.  The rule
establishes  three tiers of  institutions,  based primarily on an  institution's
capital  level.  An  institution  that  exceeds  all  fully  phased-in   capital
requirements  before  and  after  a  proposed  capital   distribution  ("Tier  1
institution")  and has not  been  advised  by the OTS that it is in need of more
than the normal  supervision can, after prior notice but without the approval of
the OTS, make capital  distributions during a calendar year equal to the greater
of (i) 100% of its net income to date during the  calendar  year plus the amount
that would reduce by one-half its "surplus  capital  ratio" (the excess  capital
over its fully phased-in capital  requirements) at the beginning of the calendar
year,  or (ii) 75% of its net income over the most recent four  quarter  period.
Any additional capital  distributions  require prior regulatory approval.  As of
December 31, 1997, the Savings Bank was a Tier 1  institution.  In the event the
Savings  Bank's  capital fell below its fully  phased-in  requirement or the OTS
notified  it that it was in need of more than  normal  supervision,  the Savings
Bank's ability to make capital  distributions could be restricted.  In addition,
the OTS could prohibit a proposed capital distribution by any institution, which
would otherwise be permitted by the regulation,  if the OTS determines that such
distribution would constitute an unsafe or unsound practice.

         Qualified  Thrift  Lender Test.  Savings  institutions  must meet a QTL
test. If the Savings Bank  maintains an  appropriate  level of Qualified  Thrift
Investments (primarily residential mortgages and related investments,  including
certain  mortgage-backed  securities) ("QTIs") and otherwise qualifies as a QTL,
it will continue to enjoy full borrowing  privileges  from the FHLB of New York.
The  required  percentage  of QTIs is 65% of  portfolio  assets  (defined as all
assets minus intangible  assets,  property used by the institution in conducting
its business and liquid assets equal to 10% of total assets). Certain assets are
subject to a  percentage  limitation  of 20% of portfolio  assets.  In addition,
savings associations may include shares of stock of the FHLBs, FNMA and FHLMC as
qualifying  QTIs. The method for measuring  compliance with the QTL test is on a
monthly  basis in nine out of every 12 months.  As of  December  31,  1997,  the
Savings Bank was in compliance with its QTL requirement.


                                       16

<PAGE>



         Federal Home Loan Bank System. The Savings Bank is a member of the FHLB
of New  York,  which  is one of 12  regional  FHLBs  that  administer  the  home
financing credit function of savings associations. Each FHLB serves as a reserve
or  central  bank for its  members  within  its  assigned  region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB  System.  It makes loans to members  (i.e.,  advances) in  accordance  with
policies and procedures  established by the Board of Directors of the FHLB. As a
member,  the Savings Bank is required to purchase and maintain stock in the FHLB
of  New  York  in an  amount  equal  to at  least  1% of  its  aggregate  unpaid
residential  mortgage loans, home purchase contracts,  or similar obligations at
the beginning of each year.

         Liquidity  Requirements.  All  savings  associations  are  required  to
maintain a daily balance of liquid  assets equal to a certain  percentage of the
sum of its daily balance of net  withdrawable  deposit  accounts and  borrowings
payable in one year or less.  The  liquidity  requirement  may vary from time to
time (between 4% and 10%) depending  upon economic  conditions and savings flows
of all savings  associations.  At December 31, 1997, the Savings Bank's required
liquid asset ratio was 4.00%.

         Federal  Reserve  System.   The  Federal  Reserve  Board  requires  all
depository  institutions to maintain  non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking  accounts) and non-personal time deposits.  The balances  maintained to
meet the reserve  requirements  imposed by the Federal Reserve Board may be used
to satisfy the liquidity  requirements  that are imposed by the OTS. At December
31, 1997,  the Savings Bank was in compliance  with these Federal  Reserve Board
requirements.

Item 2.  Description of Properties
----------------------------------

(a)      Properties.

         The Savings Bank conducts its business  through three  offices,  two of
which are  located  in  Passaic  County  and one of which is  located  in Bergen
County. The Savings Bank owns all of its properties.

(b)      Investment Policies.

         See "Item 1. Business"  above for a general  description of the Savings
Bank's investment policies and any regulatory or Board of Directors'  percentage
of  assets  limitations  regarding  certain  investments.   The  Savings  Bank's
investments are primarily  acquired to produce  income,  and to a lesser extent,
possible capital gain.

         (1)      Investments  in Real Estate or Interests  in Real Estate.  See
"Item 1. Business - Lending  Activities  and - Regulation of the Savings  Bank,"
and "Item 2. Description of Property."

         (2)      Investments in Real Estate Mortgages.  See "Item 1. Business -
Lending Activities and - Regulation of the Savings Bank."

         (3)      Investments in Securities of or Interests in Persons Primarily
Engaged in Real Estate  Activities.  See "Item 1. Business - Lending  Activities
and - Regulation of the Savings Bank."

(c)      Description of Real Estate and Operating Data.

         Not Applicable.


                                       17

<PAGE>



Item 3.  Legal Proceedings
--------------------------

         The  Savings  Bank,  from  time to time,  is a party to  routine  legal
proceedings,  which arise in the ordinary course of business.  In the opinion of
management,  such legal  proceedings  in the  aggregate  are  immaterial  to the
Savings Bank's financial condition or results of operations.

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year.

                                     PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
--------------------------------------------------------------------------------
Matters
-------

         The  Company's  common stock is not listed on any stock  exchange or on
the National  Association  of Securities  Dealers  Automated  Quotations  System
("Nasdaq").  Approximately 90% of the common stock is held by executive officers
and directors of the Company. The market for the common stock is illiquid,  with
few  purchases  and sales of stock.  The last  known  sale of the  common  stock
involved 1,055 shares at $10.00 a share on April 18, 1995.

         The  Company's  ability to pay dividends to  shareholders  is dependent
upon the earnings  from  investments  and dividends it receives from the Savings
Bank.  Accordingly,  restrictions  on the  Savings  Bank  ability  to  pay  cash
dividends  directly  affect the payment of cash  dividends by the  Company.  The
Savings  Bank may not  declare or pay a dividend  if the effect  would cause the
Savings Bank's  regulatory  capital to be reduced below the amount  required for
the  liquidation  account  established  in  connection  with the Savings  Bank's
conversion  from  mutual to stock form or the  regulatory  capital  requirements
imposed by the FDIC.

         Cash  dividends  of $1.00 per share  were  declared  in 1997.  The four
largest  shareholders  whose combined holdings exceed 90% of the total shares of
common stock outstanding  waived dividends due them. Cash dividends of $170,000,
in the aggregate,  were paid on preferred stock then  outstanding in 1996. There
are 440,100  common  shares  outstanding  which are held by 42 holders as of the
voting record date, March 15, 1998.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

         The  information  contained  in  the  section  captioned  "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.

Item  7.  Financial Statements
------------------------------

         The  Company's  consolidated  financial  statements  listed  in Item 13
herein are incorporated herein by reference.

Item  8.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------

         Not applicable.


                                       18

<PAGE>



                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons: Compliance
--------------------------------------------------------------------------------
with Section 16(a) of the Exchange Act.
--------------------------------------

         The information  contained under the sections  captioned "Section 16(a)
Beneficial Ownership Reporting  Compliance" and "I - Information with Respect to
Nominees for Director,  Directors Continuing in Office, and Executive Officers -
Election  of  Directors"  and  "  -  Biographical  Information"  in  the  "Proxy
Statement" is incorporated herein by reference.

Item 10.  Executive Compensation
--------------------------------

         The  information  contained  in the  section  captioned  "Director  and
Executive Officer Compensation" in the Proxy Statement is incorporated herein by
reference.

Item 11.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

         (a)      Security Ownership of Certain Beneficial Owners

                  Information  required by this item is  incorporated  herein by
                  reference  to the first  chart in the section  captioned  "I -
                  Information  with Respect to Nominees for Director,  Directors
                  Continuing  in Office,  and  Executive  Officers" in the Proxy
                  Statement.

         (b)      Security Ownership of Management

                  Information  required by this item is  incorporated  herein by
                  reference  to the first  chart in the section  captioned  "I -
                  Information  with Respect to Nominees for Director,  Directors
                  Continuing  in Office,  and  Executive  Officers" in the Proxy
                  Statement.

         (c)      Management  of  the  Registrant   knows  of  no  arrangements,
                  including  any  pledge  by any  person  of  securities  of the
                  Registrant,  the  operation of which may at a subsequent  date
                  result in a change in control of the Registrant.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

         The  information  required  by this  item  is  incorporated  herein  by
reference  to  the  section   captioned   "Certain   Relationships  and  Related
Transactions" in the Proxy Statement.

Item 13.  Exhibits, Financial Statements, and Reports on Form 8-K
-----------------------------------------------------------------

         (a) Listed below are all  financial  statements  and exhibits  filed as
part of this report.

                  (1)      The  consolidated  balance  sheets  of First  Savings
                           Bancorp of Little Falls,  Inc. and subsidiaries as of
                           December   31,   1997  and   1996  and  the   related
                           consolidated  statements  of  operations,  changes in
                           stockholders'  equity  and cash flows for each of the
                           years in the three year  period  ended  December  31,
                           1997,   together  with  the  related  notes  and  the
                           independent  auditors'  report of Radics & Co.,  LLC,
                           independent certified public accountants.

                  (2) Schedules omitted as they are not applicable.

                                       19

<PAGE>



                  (3)      Exhibits

         The following exhibits are filed as part of this report.

                  3(i)     Articles of Incorporation of First Savings Bancorp of
                           Little Falls, Inc.*
                  3(ii)    Bylaws of First  Savings  Bancorp  of  Little  Falls,
                           Inc.*
                  4(i)(a)  Specimen Stock Certificate - Common Stock*
                  10(i)    Employment     Agreement    with     Haralambos    S.
                           Kostakopoulos*
                  10(ii)   Shareholders' Agreement*
                  10(iii)  Investor Agreement*
                  13       Annual  Report to  Stockholders  for the fiscal  year
                           ended December 31, 1997
                  21       Subsidiaries of the Company (See Item 1.  Business )
                  27       Financial Data Schedule**

----------------
*        Incorporated  by  reference to the  registration  statement on Form S-4
         (File No. 33-61632), filed with the SEC on April 3, 1993.
**       Electronic filing only.

         (b)      Not applicable.



                                       20

<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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 as of March 31, 1998.

<TABLE>
<CAPTION>
<S>                                                           <C>

                                                              FIRST SAVINGS BANCORP OF
                                                              LITTLE FALLS, INC.


                                                              By:      /s/ Haralambos S. Kostakopoulos
                                                                       -------------------------------
                                                                       Haralambos S. Kostakopoulos
                                                                       President, Chief Executive
                                                                       Officer and Director (Duly
                                                                       Authorized Representative)
</TABLE>


         Pursuant to the  requirement  of the  Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities as of March 31, 1998.

<TABLE>
<CAPTION>


<S>                                                  <C>
By:      /s/ Haralambos S. Kostakopoulos             By:      /s/ Emanuel M. Kontkokosa
         ---------------------------------------              ----------------------------------
         Haralambos S. Kostakopoulos                          Emanuel M. Kontokosta
         President, Chief Executive Officer                   Chairman of the Board
           and Director
         (Principal Financial Officer)



By:      /s/ Brian McCourt                           By:      /s/ Frederick J. Tedeschi
         -----------------------------------                  ----------------------------------
         Brian McCourt                                        Frederick J. Tedeschi
         Vice President and Controller                        Vice Chairman of the Board
         (Principal Accounting Officer)



By:      /s/ Nikos P.Mouyiaris                       By:      /s/ Paul D. Oesterle, Jr.
         ----------------------------------                   ----------------------------------
         Nikos P. Mouyiaris                                   Paul D. Oesterle, Jr.
         Vice Chairman of the Board                           Director



By:      /s/ Anthony J. Sansiveri
         ----------------------------------
         Anthony J. Sansiveri
         Director

</TABLE>