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

                                    FORM 10-Q
(Mark One)

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

     For the quarterly period ended December 31, 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: 0-25191

                           Willow Grove Bancorp, Inc.
             (Exact name of registrant as specified in its charter)

          United States                                          23-2986192
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

           Welsh and Norristown Roads, Maple Glen, Pennsylvania 19002
                    (Address of principal executive offices)

                                 (215) 646-5405
              (Registrant's telephone number, including area code)


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

         YES  [ ]         NO  [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

     The Registrant had 5,143,487  shares of Common Stock issued and outstanding
as of February 16, 1999.




<PAGE>


                           WILLOW GROVE BANCORP, INC.

                                      INDEX

                                                                        Page No.
                                                                        --------
PART I   FINANCIAL INFORMATION

         Item 1.  Financial Statements (unaudited)                             3

                  Consolidated Statements of Financial Condition at 
                  December 31, 1998 and June 30, 1998                          3

                  Consolidated Statements of Operations -  For the Three
                  and Six-Month Periods Ended December 31, 1998                4

                  Consolidated Statements of Cash Flows - For the 
                  Six-Months Ended December 31, 1998 and 1997                  5

                  Notes to Financial Statements                                6

         Item 2.  Management's Discussion and Analysis                        11

         Item 3.  Quantitative and Qualitative Disclosures About
                  Market Risk                                                 18

PART II  OTHER INFORMATION

         Item 1:  Legal Proceedings                                           19

         Item 2:  Changes in Securities and Use of Proceeds                   19

         Item 3:  Defaults upon Senior Securities                             19

         Item 4:  Submission of Matters to a Vote of Security Holders         19

         Item 5:  Other Information                                           19

         Item 6:  Exhibits and Reports on Form 8-K                            20



                                        2

<PAGE>


                           Willow Grove Bancorp, Inc.
                 Consolidated Statements of Financial Condition
                                 (In Thousands)

<TABLE>
<CAPTION>
Assets                                                      December 31, 1998            June 30, 1998
--------------------------------------------------------  ---------------------  ---------------------
<S>                                                                  <C>                      <C>     
Cash and cash equivalents:
   Cash on hand and non-interest bearing
      deposits                                                         $2,738                   $2,932
   Interest-bearing deposits                                           16,892                   15,359
                                                             ----------------         ----------------
   Total cash and cash equivalents                                     19,630                   18,291
Assets available for sale:
   Securities (amortized cost of $75,260 and $47,984,
      respectively)                                                    75,487                   48,111
   Loans                                                                                        12,152
Loans (net of allowance for loan losses of
$2,895 and $2,665, respectively)                                      333,838                  315,705
Accrued income receivable                                               1,992                    2,109
Property and equipment, net                                             4,855                    4,772
Intangible assets                                                       2,155                    2,360
Other assets                                                            1,656                    1,874
------------------------------------------------------------------------------------------------------
   Total Assets                                                      $439,613                 $405,374
------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
------------------------------------------------------------------------------------------------------
Deposits                                                             $364,058                 $340,793
Federal Home Loan Bank advances                                        12,000                   21,000
Advance payments from borrowers for taxes                               3,107                    4,481
Accrued interest payable                                                  365                      389
Other liabilities                                                       2,254                    2,766
------------------------------------------------------------------------------------------------------
   Total Liabilities                                                 $381,784                 $369,429

Commitments and contingencies

Stockholders' equity:
   Common stock, $0.01 par value; (25,000,000
   authorized; 5,143,487 issued and 
   outstanding as of December 31, 1998)                                    50                     --
   Additional paid-in capital                                          22,295                     --
   Retained earnings                                                   37,136                   35,865
   Accumulated other comprehensive income                                 141                       80
   Unallocated common stock held by
      employee stock ownership plan (ESOP)                             (1,793)                    --
------------------------------------------------------------------------------------------------------
   Total Stockholders' Equity                                         $57,829                  $35,945
       Total Liabilities and Stockholders' Equity                    $439,613                 $405,374
------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to the consolidated financial statements


                                        3
<PAGE>


                           Willow Grove Bancorp, Inc.
                      Consolidated Statements of Operations
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                        For the Three Months Ended     For the Six Months Ended
                                                                December 31,                 December 31,
                                                          ----------------------         ---------------------
                                                            1998          1997             1998         1997
                                                          --------      --------         --------     --------
<S>                                                       <C>           <C>              <C>          <C>     
Interest and dividend income:                                                       
   Loans receivable                                       $  6,697      $  6,317         $ 13,445     $ 12,334
   Securities, primarily taxable                             1,058           762            1,914        1,588
--------------------------------------------------------------------------------------------------------------
     Total interest income                                   7,755         7,079           15,359       13,922
--------------------------------------------------------------------------------------------------------------
Interest expense:                                                                   
   Deposits                                                  3,955         3,659            7,695        7,233
   Borrowings                                                  180            87              395          178
   Advanced payment from borrowers                                                  
     for taxes                                                   5             6               12           15
--------------------------------------------------------------------------------------------------------------
     Total interest expense                                  4,140         3,752            8,102        7,426
--------------------------------------------------------------------------------------------------------------
Net interest income                                          3,615         3,327            7,257        6,496
Provision for loan losses                                      140            90              230          180
--------------------------------------------------------------------------------------------------------------
Net interest income after provision                                              
  for loan losses                                            3,475         3,237            7,027        6,316
--------------------------------------------------------------------------------------------------------------
Non-interest income:                                                                
   Service charges and fees                                    211           153              425          293
   Loss on sale of securities available                                      
     for sale                                                 --            --               --            (55)
   Gain (loss) on sale of loans available                                           
     for sale                                                   (1)           10               11            5
   Loan servicing income, net                                   69            34              142          114
--------------------------------------------------------------------------------------------------------------
     Total non-interest income                                 279           197              578          357
--------------------------------------------------------------------------------------------------------------
Non-interest expense:                                                               
   Compensation and employee benefits                        1,300         1,188            2,564        2,222
   Occupancy                                                   136           141              280          263
   Furniture and equipment                                      75            69              143          128
   Federal insurance premium                                    49            49              100           96
   Amortization of intangible assets                           103           103              205          205
   Data processing                                             105            83              200          165
   Advertising                                                 122           100              190          172
    Foundation expense                                         896             0              896            0
   Community enrichment                                          0            89              100          182
   Other expense                                               407           307              719          583
--------------------------------------------------------------------------------------------------------------
     Total non-interest expense                              3,193         2,129            5,397        4,016
--------------------------------------------------------------------------------------------------------------
Income before income taxes                                     561         1,305            2,208        2,657
Income taxes                                                   226           471              837          956
--------------------------------------------------------------------------------------------------------------
Net income                                                $    335      $    834         $  1,371     $  1,701
==============================================================================================================
</TABLE>

See accompanying notes to the consolidated finanical statments


                                        4

<PAGE>


                           Willow Grove Bancorp, Inc.
                      Consolidated Statements of Cash Flows
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                              For the Six Months Ended December 31,
                                                                              --------------------------------------
                                                                                     1998               1997
                                                                              -----------------    -----------------
<S>                                                                               <C>                <C>      
Net cash flows from operating activities:
   Net income                                                                       $1,371             $1,701 
   Adjustments to reconcile net income to net cash provided by
     operating activities:
     Depreciation                                                                      192                175
     Amortization of premium and accretion of discount, net                             42                (72)
     Amortization of intangible assets                                                 205                205
     Foundation expense                                                                896                 --
     Provision for loan losses                                                         230                180
     Gain on sale of loans available for sale                                          (11)                (5)
     Loss on sale of securities available for sale                                      --                 55
     Decrease in deferred loan fees                                                   (228)               (28)
     Decrease in accrued income receivable                                             117                123
     Decrease (increase) in other assets                                               485                (78)
     Decrease in accrued interest payable                                              (24)               (61)
     Deferred income tax expense (benefit)                                            (612)                --
     Increase (decrease) in other liabilities                                         (304)               339
     Originations and purchases of loans available for sale                         (2,865)           (10,477)
     Proceeds from sale of loans available for sale                                 15,028             15,768
--------------------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                                  $14,522             $7,825
--------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
     Net increase in loans                                                        ($18,137)          ($23,087)
     Purchase of securities available for sale                                      53,521            (23,546)
     Proceeds from maturities and calls of securities held to maturity                  --              3,999
     Proceeds from sales and calls of securities available for sale                 17,000             23,175
     Principal repayments of securities available for sale                           9,203              3,234
     Purchase of property and equipment, net                                          (275)              (842)
--------------------------------------------------------------------------------------------------------------
        Net cash used in investing activities                                     ($45,730)          ($17,067)
--------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
     Net increase in deposits                                                      $23,265            $14,350
     Net increase (decrease) in FHLB advances with
        original maturity less than 90 days                                          7,000                 --
     Net increase (decrease) in FHLB advances with original maturity
        greater than 90 days                                                            --              1,000
     Repayment of FHLB advances with original maturity greater
        than 90 days                                                                (2,000)                --
     Net increase (decrease) in advance payments from borrowers for
        taxes                                                                       (1,374)            (1,213)
     Proceeds from stock issuance, net                                              19,656                 --
--------------------------------------------------------------------------------------------------------------
     Net cash provided by financing activities                                      32,547            $14,137
--------------------------------------------------------------------------------------------------------------
     Net increase (decrease) in cash and cash equivalents                           $1,339             $4,895
Cash and cash equivalents:
     Beginning of period                                                           $18,291             $4,204
--------------------------------------------------------------------------------------------------------------
     End of period                                                                 $19,630             $9,099
--------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash and cash flow information:
     Interest paid                                                                  $8,126             $7,485
     Income taxes paid                                                              $1,190             $1,066
--------------------------------------------------------------------------------------------------------------
Noncash items:
     Change in unrealized gain (loss) on securities available for sale
           (net of taxes of $39 and $210 in 1998 and 1997, respectively)               $61               $342
</TABLE>

See accompanying notes to the consolidated financial statements



                                        5

<PAGE>



                           WILLOW GROVE BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Financial Statement Presentation

     The  accompanying   consolidated  financial  statements  were  prepared  in
accordance  with  instructions  to Form  10-Q,  and  therefore,  do not  include
information  or footnotes  necessary  for a complete  presentation  of financial
position,  results of  operations  and cash flows in conformity  with  generally
accepted  accounting  principles.  However,  all normal,  recurring  adjustments
which,  in the opinion of management,  are necessary for a fair  presentation of
financial statements,  have been included.  These financial statements should be
read in conjunction with the audited financial  statements and the notes thereto
for the period ended June 30, 1998 contained in the Company's  Prospectus  dated
November  12, 1998.  The results for the six months ended  December 31, 1998 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended June 30, 1999.  In  particular,  it is noted that during the  remainder of
fiscal 1999, the Company will be recording additional charges resulting from the
Reorganization as previously described in the Company's  registration  statement
on Form S-1, filed on September 18, 1998, as amended.  During the second quarter
of fiscal  year 1999 the  Company  recorded  a pre-tax  expense of  $896,000  in
conjunction with the formation of the Foundation.

2.   Summary of Significant Accounting Policies

     On December 23, 1998, Willow Grove Bancorp,  Inc. (the "Company") completed
the  reorganization  of Willow Grove Bank, a federally  chartered mutual savings
bank ("Willow  Grove" or the "Bank"),  into the federal mutual  holding  company
form of ownership,  whereby the Bank converted into a federally  chartered stock
savings bank as a wholly owned subsidiary of the Company, and the Company became
a majority-owned  subsidiary of Willow Grove Mutual Holding Company, a federally
chartered  mutual  holding  company  (the  "MHC")  (the  "Reorganization").   In
connection with the Reorganization, the Company sold 2,240,878 shares of Company
common stock,  par value $0.01 per share ("Company  Common Stock") at $10.00 per
share to total,  which net issuance costs  generated  proceeds of $21.4 million,
including  shares issed to the  employee  stock  ownership  plan  ("ESOP").  The
Company also issued  2,812,974  shares of Company Common Stock to the MHC. As an
integral  part  of the  Reorganization  and in  furtherance  of  Willow  Grove's
commitment to the communities that it serves,  Willow Grove and the Company have
established a charitable  foundation  known as The Willow Grove  Foundation (the
"Foundation")  and  have  contributed  89,635  shares  to  the  Foundation.  The
Foundation  will  provide  funding to support  charitable  causes and  community
development  activities which will complement Willow Grove's existing  community
activities.  In addition,  the Company  established an ESOP for the employees of
the Company  and the Bank which  became  effective  with the  completion  of the
Reorganization.

     Additional  information  regarding  the  Reorganization  is included in the
Company's  Registration  Statement on Form S-1 filed on September  18, 1998,  as
amended.


                                       6

<PAGE>


3.   Earnings Per Share

     Earnings per share for  quarters  current and prior to December 31, 1998 is
not meaningful,  as the Bank's  Reorganization  was not completed until December
23, 1998.

4.   Loan Portfolio

     The  Bank's  Loan  Portfolio  consisted  of  the  following  at  the  dates
indicated:

<TABLE>
<CAPTION>
                                                         December 31, 1998               June 30, 1998
                                                  ------------------------------   ---------------------------

                                                                     Percent of                     Percent of
                                                     Amount             Total         Amount           Total
                                                  -----------        -----------   -----------      ----------
                                                                       (Dollars in Thousands)      
<S>                                                <C>                 <C>         <C>                <C>   
Mortgage loans:
Single family residential                          $ 224,243            64.5%      $ 230,979           70.3%
Multi-family residential                              11,594             3.3           7,500            2.3
Commercial real estate                                34,664            10.0          24,478            7.4
Construction                                          17,170             4.9          13,627            4.2
Home equity                                           45,060            13.0          41,366           12.6
-----------------------------------------------------------------------------------------------------------
Total mortgage loans                               $ 332,731            94.2%      $ 317,950           96.8%
-----------------------------------------------------------------------------------------------------------
Non-mortgage consumer loans                        $   5,950             1.7%      $   4,930            1.5%
-----------------------------------------------------------------------------------------------------------
Commercial business loans                          $   9,237             2.7%      $   5,437            1.7%
-----------------------------------------------------------------------------------------------------------
Total loans receivable                             $ 347,918           100.0%      $ 328,317          100.0%
Less:
    Undisbursed portion of loan proceeds             (10,321)                         (8,855)
    Allowance for loan losses                         (2,895)                         (2,665)
    Deferred loan origination fees                      (864)                         (1,092)
-----------------------------------------------------------------------------------------------------------
    Loans receivable, net                          $ 333,838                       $  315,705
-----------------------------------------------------------------------------------------------------------
</TABLE>


                                        7
<PAGE>

5.   Securities

     The amortized cost of  available-for-sale  securities  and their  estimated
fair values at December 31, 1998 and June 30, 1998 are as follows:


<TABLE>
<CAPTION>
                                                               At December 31, 1998
                                     ------------------------------------------------------------------------
                                                                                                   Estimated
                                       Amortized          Unrealized           Unrealized            Fair
                                          Cost              Gains                Losses              Value
                                     --------------    ----------------      --------------       -----------
                                                              (Dollars in Thousands)
<S>                                     <C>                  <C>                <C>                   <C>    
Equity Securities:
   Mutual fund                           $8,010                                  ($39)                 $7,971
   Federal Home Mortgage
     Loan Corporation
     preferred stock                        100                                                           100
   Federal Home Loan
    Mortgage Corporation
     common stock                            89               $32                                         121
   Federal National
    Mortgage Association
     stock                                    8                21                                          29
   Federal Home Loan Bank
     of Pittsburgh stock                  2,733                                                         2,733
U.S. Government and
   government agency
   securities                            28,995                16                 (96)                 28,915
Mortgage-Backed securities:
   Federal Home Loan
    Mortgage Corporation                      2                                                             2
   Federal National Mortgage
    Association                          17,452               203                 (15)                 17,640
   Government National
    Mortgage Association                  3,771               106                                       3,877
Municipal security                          100                                    (1)                     99
Federal Home Loan Bank
   Certificates of Deposit               14,000                                                        14,000
-------------------------------------------------------------------------------------------------------------
   Total                                $75,260              $347               ($120)                $75,487
-------------------------------------------------------------------------------------------------------------
</TABLE>




                                       8

<PAGE>



<TABLE>
<CAPTION>
                                                                 At June 30, 1998
                                     ------------------------------------------------------------------------
                                                                                                   Estimated
                                       Amortized          Unrealized           Unrealized            Fair
                                          Cost              Gains                Losses              Value
                                     --------------    ----------------      --------------       -----------
                                                              (Dollars in Thousands)
<S>                                     <C>                  <C>                <C>                   <C>    
Equity Securities:
   Mutual fund                           $7,010                                      ($25)             $6,985
   Federal Home Mortgage
    Loan Corporation
    preferred stock                         100                $1                                         101
   Federal Home Loan
    Mortgage Corporation
    common stock                             89                 5                                          94
   Federal National
    Mortgage Association
    stock                                     8                16                                          24
   Federal Home Loan Bank
    of Pittsburgh stock                   2,733                                                         2,733
U.S. Government and
  government agency
  securities                             20,004                30                     (35)             19,999
Mortgage-Backed Securities:
   Federal Home Loan
    Mortgage Corporation                      3                                                             3
   Federal National Mortgage
    Association                          13,532               112                    (100)             13,544
   Government National
    Mortgage Association                  4,405               127                                       4,532
Municipal security                          100                                        (4)                 96
-------------------------------------------------------------------------------------------------------------
   Total                                $47,984              $291                   ($164)            $48,111
-------------------------------------------------------------------------------------------------------------
</TABLE>

6.   Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 133  "Accounting for
Derivative  Instruments and Hedging Activities." This Statement standardizes the
accounting for derivative instruments,  including certain derivative instruments
imbedded in other contracts, and those used for hedging activities, by requiring
that an entity  recognize  those items as assets or liabilities in the statement
of financial position and measure them at fair value. The Statement  categorized
derivatives  used for hedging  purposes as either fair value  hedges,  cash flow
hedges,  foreign currency fair value hedges,  foreign currency cash flow hedges,
or hedges  of  certain  foreign  currency  exposures.  The  Statement  generally
provides for matching of gain or loss recognition on the hedging instrument with
the  recognition  of the  changes  in the  fair  value  of the  hedged  asset or
liability  that are  attributable  to the hedged  risk,  so long as the hedge is
effective.  Prospective  application  of SFAS No. 133 is required for all fiscal
years beginning after June 15, 1999,  however earlier  application is permitted.
Currently,  the  Company  does not use any  derivative  instruments  nor does it
engage in any hedging activities. The Company has not yet determined the impact,
if  any,  of  this  Statement,   including  its  provisions  for  the  potential
reclassification of investment securities,  on earnings,  financial condition or
equity.

     In  October   1998,   the  FASB  issued  SFAS  No.  134   "Accounting   for
Mortgage-Backed  Securities  Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking  Enterprise."  This Statement  requires that
after the  securitization of a mortgage loan held for sale, an entity engaged in
mortgage banking  activities  classify any retained  mortgage-backed  securities
based on the ability and intent to sell or hold those investments, except that a
mortgage   banking   enterprise   must   classify   as  trading   any   retained
mortgage-backed  securities  that  it  commits  to sell  before  or  during  the
securitization process. This Statement is effective for the first fiscal quarter
beginning  after  December  15,  1998  with  earlier  adoption  permitted.  This
Statement provides a one-time opportunity for an enterprise to reclassify, based
on  the  ability  and  intent  on  the  date  of  adoption  of  this  Statement,
mortgage-backed   securities  and  other  beneficial  interests  retained  after
securitization of mortgage loans held for sale from the trading category, except
for those with  commitments  in place.  The Company has not yet  determined  the
impact, if any of this Statement,  including, if applicable,  its provisions for
the potential  reclassifications of certain investment securities,  on earnings,
financial condition or equity.



                                       9
<PAGE>

     In  October   1998,   the  FASB  issued  SFAS  No.  134   "Accounting   for
Mortgage-Backed  Securities  Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise."  The statement is effective for
all fiscal  quarters of all fiscal years  beginning  after January 1, 1999.  The
statement changes the way mortgage banking firms account for certain  securities
and other interests they retain after securitizing mortgage loans that were held
for sale.

     In management's  opinion SFAS No. 134 when adopted will not have a material
effect on the Company's financial statements.

7.   Comprehensive Income

     On July 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income." The  following  table  displays net income and the  components of other
comprehensive  income to arrive at total comprehensive  income. For the Company,
the only component of other comprehensive  income is the change in the estimated
fair value of investment securities available-for-sale.


                                           Three Months Ended   Six Months Ended
                                              December 31,        December 31,
                                            ----------------    ---------------
                                             1998      1997      1998     1997
                                            ------    ------    ------   ------
                                                  (Dollars in Thousands)      
Comprehensive income:
Net income ..............................   $  335    $  834    $1,371   $1,701
Other Comprehensive Income net of tax:
   Net change in unrealized gain (loss)
     on securities available-for-sale ...      (82)       (4)       61      206
   Less: Reclassification adjustments
     for losses included in net income ..       --        --        --      136
Other Comprehensive Income (loss)........      (82)       (4)       61      342
                                            ------    ------    ------   ------
Comprehensive Income: ...................   $  253    $  830    $1,432   $1,907
                                            ======    ======    ======   ======



                                       10
<PAGE>


Item 2.  Management's Discussion and Analysis

     This Form 10-Q contains certain forward-looking  statements and information
relating to the Company that are based on the beliefs of  management  as well as
assumptions  made by and  information  currently  available  to  management.  In
addition,  the words,  "anticipate,"  "believe," "estimate," "expect," "intent,"
"should" and similar expressions, or the negative thereof, as they relate to the
Company or the Company's  management,  are intended to identify  forward-looking
statements.  Such  statements  reflect  the current  views of the  Company  with
respect to future looking events and are subject to certain risks, uncertainties
and assumptions.  Should one or more of these risks or uncertainties materialize
or should  underlying  assumptions  prove  incorrect,  actual  results  may vary
materially from those  described  herein as  anticipated,  believed,  estimated,
expected   or   intended.   The  Company   does  not  intend  to  update   these
forward-looking statements.

Changes in Financial Condition

     General.  Total assets of the Company increased by $34.2 million or 8.4% to
$439.6 million at December 31, 1998 compared to $405.4 million at June 30, 1998.
This increase is reflected  primarily as an increase of $1.3 million in cash and
cash equivalents, an increase of $27.4 million in securities, and an increase of
$18.1  million in loans.  The  increases  in assets were funded by  increases of
$23.3  million in  deposits  and $19.7  million of net stock  subscription  cash
proceeds (net of Reorganization costs of $960,000).

     Cash and cash  equivalents.  Cash and cash  equivalents  amounted  to $19.6
million and $18.3 million at December 31, 1998 and June 30, 1998, respectively.

     Assets  Available  for Sale.  At December 31, 1998,  the  Company's  assets
available for sale  consisted of $75.5  million in securities  compared to $48.1
million in  securities  and $12.2  million in loans,  respectively,  at June 30,
1998.  This increase in assets  available for sale of $15.2 million or 25.2% was
related to the  purchase of  additional  securities,  as a means of  deploying a
significant poertion of the recently raised equity capital.

     At December 31, 1998 the Company had an unrealized  gain, net of taxes,  on
securities  available  for sale of  $141,000,  which is an  increase  of $61,000
compared to June 30, 1998.

     Loans. The net loan portfolio of the Company  increased from $315.7 million
at June 30, 1998 to $333.8  million at December  31,  1998.  The increase in the
Bank's net loan  portfolio  during 1998 was due,  in large  part,  to the Bank's
efforts  to  expand  its  lending   activities,   other  than  to  single-family
residential first mortgage loans.

     The following table sets forth  information with respect to  non-performing
assets identified by the Bank, including non-accrual loans and other real estate
owned.


                                               December 31, 1998   June 30, 1998
                                               -----------------   -------------
                                                      (Dollars in Thousands)
Accruing loans 90 days or more past due:
   Mortgage loans ...........................       $  463             $  142
   Other loans ..............................           --                 --
                                                    ------             ------
     Total accruing loans ...................       $  463             $  142
Non-accrual loans:
   Mortgage loans:
     Single-family residential ..............        1,010              1,249
     Multi-family residential ...............           --                 --
     Commercial real estate .................           --                 --
     Construction ...........................            1                 --
     Home equity ............................            1                 --
   Non-mortgage consumer loans ..............           58                  2
   Commercial business loans ................           --                 96
                                                    ------             ------
     Total non-accruing loans ...............       $1,069             $1,347
                                                    ------             ------
     Total non-performing
       loans....... .........................       $1,532             $1,489
                                                    ------             ------
Other real estate owned, net ................           --                 --
                                                    ------             ------
     Total non-performing assets ............       $1,532             $1,489
                                                    ======             ======
Non-performing loans to total
  loans......................................         0.46%              0.47%
Non-performing assets to total assets .......         0.35%              0.37%

     Intangible Assets. The Company's intangible assets amounted to $2.2 million
and $2.4  million at December  31, 1998 and June 30,  1998,  respectively.  Such
assets are comprised of goodwill and


                                       11
<PAGE>

a core deposit  intangible  resulting  from the Bank's  purchase of three branch
offices from another  institution in March 1994. The goodwill is being amortized
on a  straight-line  basis over 15 years while the core  deposit  intangible  is
being amortized on an accelerated basis over 10 years.

     Liabilities. The Company's total liabilities increased by $12.4 million, or
3.4%, to $381.8  million at December 31, 1998 compared to $369.4 million at June
30, 1998. The primary  reason for such increase was a $23.3 million  increase in
deposits,  which was partially offset by a $9.0 million decrease in Federal Home
Loan Bank ("FBLB")  advances.  The Company  attributes the growth in deposits to
its  increase  in  certificates  of  deposit  and to its  continued  efforts  in
soliciting non-interest checking and business accounts.

     Equity.  Total equity of the Company  amounted to $57.8 million or 13.1% of
assets at December 31, 1998 compared to $35.9 million or 8.9% of total assets at
June 30, 1998. The primary reason for the significant increase to equity was the
$19.7 million net proceeds  raised from the Company's  initial public  offering.
Total equity of the Company  included  $141,000 and $80,000 of unrealized  gain,
net of taxes on securities  available for sale at December 31, 1998 and June 30,
1998,  respectively.  The  increase in retained  earnings  from June 30, 1998 to
December 31, 1998  reflects the income for the six month period of $1.4 million,
net of capitalization of the MHC.


                                       12
<PAGE>

Results of Operations

     General - Net  income  for the three  months  and six month  periods  ended
December 31, 1998 was $335,000 and $1.4 million, respectively.  This compares to
net income of $834,000 and $1.7 million for the same  respective  periods of the
prior year.

     Net Interest  Income - Net interest income  increased  during the three and
six months ended  December 31, 1998  compared to the prior  respective  periods.
Increases in the average balances of interest-earning  assets during each of the
periods in 1998 more than offset  declines in net interest  spreads  during such
periods.

     The  following  tables set forth,  for the periods  indicated,  information
regarding  (i) the  total  dollar  amount  of  interest  income of the Bank from
interest-earning  assets and the resultant average yields; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average rate; (iii) net interest income;  (iv) interest rate spread; and (v) net
interest  margin.  Information  is based on average  daily  balances  during the
indicated periods. Given that the Company had only nominal amounts of tax-exempt
investments, the date below is shown without tax effects.

<TABLE>
<CAPTION>
                                                                     Six Months Ended December 31,
                                              ----------------------------------------------------------------------------
                                                             1998                                   1997
                                              ------------------------------------    ------------------------------------
                                                                           Average                                 Average
                                              Average                       Yield/    Average                       Yield/
                                              Balance       Interest         Cost     Balance      Interest          Cost
                                              -------       --------       -------    -------      --------        -------
                                                                         (Dollars in Thousands)
<S>                                           <C>            <C>              <C>     <C>            <C>             <C>  
Interest-earning assets:
  Loans receivable:(1)
   Mortgage loans .......................     $317,019       $12,924          8.15%   $296,701       $12,149         8.19%
   Non-mortgage consumer loans ..........        5,522           177          6.36       3,469           110         6.29
   Commercial business loans ............        7,507           344          9.09       2,361            75         6.30
                                              --------      --------                  --------      --------
     Total loans ........................     $330,048       $13,445          8.08    $302,531       $12,334         8.09
  Securities ............................       41,579         1,222          5.83      43,319         1,431         6.55
  Other interest-earning assets .........       28,424           692          4.83       6,397           157         4.87
                                              --------      --------                  --------      --------
     Total interest-earning assets ......     $400,051       $15,359          7.62     352,247       $13,922         7.84
                                                            --------                                --------
Non-interest-earning assets .............       10,328                                  10,353
                                              --------                                --------
     Total assets .......................     $410,379                                $362,600
                                              ========                                ========
Interest-bearing liabilities:
  Deposits:
     NOW and money market accounts ......      $72,337          $527          1.45     $56,615          $444         1.56
     Savings accounts ...................       41,234           440          2.12      35,983           392         2.16
     Certificates of deposit ............      237,926         6,728          5.61     223,434         6,397         5.68
                                              --------      --------                  --------      --------
       Total deposits ...................     $351,497         7,695          4.34     316,032        $7,233         4.54
  Total borrowings ......................       14,185           395          5.52       6,875           178         5.14
  Total escrows .........................        3,048            12          0.78       2,744            15         1.08
                                              --------      --------                  --------      --------
  Total interest-bearing liabilities ....      368,730        $8,102          4.36    $325,651        $7,426         4.52
                                                            --------                                --------
Non-interest bearing liabilities ........        3,803                                   1,934
                                              --------                                --------
       Total liabilities ................      372,533                                $327,585
Total equity ............................       37,846                                  35,015
                                              --------                                --------
       Total liabilities and equity .....     $410,379                                $362,600
                                              ========                                ========
Net interest-earning assets .............      $31,321                                 $26,596
                                              ========                                ========
Net interest income/interest rate spread                      $7,257          3.26%                   $6,496         3.32%
                                                            ========      ========                  ========     ========
Net interest margin .....................                                     3.60%                                  3.66%
                                                                          ========                               ========
Ratio of average interest-earning assets
  to average interest-bearing liabilities                                   108.49%                                108.17%
                                                                          ========                               ========
</TABLE>
----------
(1) The average balance of loans  receivable  includes loans  available-for-sale
and nonperforming loans, interest on which is recognized on a cash basis.



                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                    Three Months Ended December 31,
                                              ----------------------------------------------------------------------------
                                                             1998                                   1997
                                              ------------------------------------    ------------------------------------
                                                                           Average                                 Average
                                              Average                       Yield/    Average                       Yield/
                                              Balance       Interest         Cost     Balance      Interest          Cost
                                              -------       --------       -------    -------      --------        -------
                                                                         (Dollars in Thousands)
<S>                                           <C>            <C>            <C>       <C>           <C>           <C>  
Interest-earning assets:
  Loans receivable:(1)
   Mortgage loans .......................     $315,164        $6,414        8.14%     $301,647        $6,203       8.23%
   Non-mortgage consumer loans ..........        5,780            92        6.31         3,789            61       6.39
   Commercial business loans ............        8,446           191        8.97         2,458            53       8.55
                                              --------      --------                  --------      --------
     Total loans ........................     $329,390        $6,697        8.07      $307,894        $6,317       8.14
  Securities ............................      $39,234          $562        5.68        41,084          $679       6.56
  Other interest-earning assets .........       41,534           496        4.74         7,115            83       4.63
                                              --------      --------                  --------     
     Total interest-earning assets ......     $410,158        $7,755        7.50      $356,093        $7,079       7.89
                                                            --------                                --------
Noninterest-earning assets ..............       10,632                                  10,460
                                              --------                                --------
     Total assets .......................     $420,790                                $366,553
                                              ========                                ========
Interest-bearing liabilities:
  Deposits:
     NOW and money market accounts ......      $75,647          $272        1.43       $57,663          $222       1.53
     Savings accounts ...................       41,454           222        2.12        35,553           188       2.10
     Certificates of deposit ............      245,586         3,461        5.59       226,796         3,249       5.68
                                              --------      --------                  --------      --------
       Total deposits ...................     $362,687        $3,955        4.33      $320,012        $3,659       4.54
  Total borrowings ......................       13,293           180        5.37         6,707            87       5.15
  Total escrows .........................        2,559             5        0.78         2,232             6       1.07
                                              --------      --------                  --------      --------
  Total interest-bearing liabilities ....     $378,539        $4,140        4.34      $328,951        $3,752       4.53
                                                            --------                                --------
Non-interest bearing liabilities ........        3,803                                   1,974
                                              --------                                --------
       Total liabilities ................     $382,342                                $330,925
Total equity ............................       38,448                                  35,628
                                              --------                                --------
       Total liabilities and equity .....     $420,790                                $366,553
                                              ========                                ========
Net interest-earning assets .............      $31,619                                 $27,142
                                              ========                                ========
Net interest income/interest rate spread                      $3,615        3.16%                     $3,327       3.36%
                                                            ========     =======                    ========     ======
Net interest margin .....................                                   3.50%                                  3.71%
                                                                         =======                                 ======
Ratio of average interest-earning assets
  to average interest-bearing liabilities                                 108.35%                                108.25%
                                                                         =======                                 ======
</TABLE>
----------
(1) The average balance of loans  receivable  includes loans  available-for-sale
and nonperforming loans, interest on which is recognized on a cash basis.

     Interest Income - Interest income  increased  $676,000 and $1.4 million for
the three and six months  ended  December  31, 1998.  These  increases  resulted
primarily from increases in the average balances of loans and investments.

     Interest  Expense - Interest  expense on deposits  increased  $296,000  and
$462,000,  respectively,  for the three and six month periods ended December 31,
1998.  During 1998,  management  has continued to be  competitive  with interest
rates paid on deposits. Also, savings balances increased during the three months
ended  December  31, 1998 due to the Bank's  continuing  promotional  efforts to
attract new customers during the period.


                                       14
<PAGE>

     Provision  for Loan Losses - The  Company's  provision  for loan losses was
$140,000 and $230,000 for the three month and six month periods  ended  December
31, 1998,  respectively.  This  compares to provision for loan losses of $90,000
and $180,000 for the same respective periods of the prior year.


                                                            For the Six Months
                                                                 Ended
                                                            December 31, 1998
                                                          ----------------------
                                                          (Dollars in Thousands)

     Allowance at beginning of period                            $   2,665
                                                                 ---------
     Provisions                                                        230
        Charge-offs:
          Mortgage loans                                                --
          Non-mortgage consumer loans                                   --
          Commercial business loans                                     --
                                                                 ---------
            Total charge-offs                                           --
        Recoveries                                                      --
                                                                 ---------
     Allowance at end of period                                  $   2,895
                                                                 =========

     Allowance for loan losses to total
        nonperforming loans at end of period                        188.94%
                                                                 =========
     Allowance for loan losses to total loans
        at end of period                                              0.86%
                                                                 =========
     Ratio of charge-offs to average loans                             0.0%
                                                                 =========

     Non-interest  Income - Non-interest  income increased $82,000 and $221,000,
respectively,  for the three and six months ended  December 31, 1998 as compared
to the same periods in 1997.  This was due to an increase in service charges and
fees and  increased net loan  servicing  income and a loss on sale of securities
available-for-sale in the 1997 six month period.

     Non-interest Expense - Non-interest expense increased $1.1 million and $1.4
million,  respectively,  for the three and six months  ended  December  31, 1998
compared  to the same  periods  in the prior  year.  Compensation  and  employee
benefits  expense  increased  due to  general  increases  in salary  levels  and
benefits  and in number of  employees  at the  Company.  Furniture  and  fixture
expense increases were the result of management's  continuing  efforts to update
equipment  and  facilities.  Data  processing  costs  increased  due to  general
increased  levels of numbers of accounts  and testing and  preparation  for Year
2000 contingencies.  Advertising expense increased due to managements's  efforts
to utilize a more targeted approach to marketing. The Company also had a pre-tax
expense of $896,000 as a result of the initial contribution to the Foundation.

     Income Tax Expense - The  provision  for income taxes for the three and six
month periods ended December 31, 1998 decreased from the comparable 1997 periods
due to a lower level of pre-tax earnings.

Liquidity and Commitments

     The Company's  liquidity,  represented by cash and cash  equivalents,  is a
product of its operating,  investing,  and financing  activities.  The Company's
primary sources of funds are deposits, 


                                       15
<PAGE>

amortizations,   prepayments   and   maturities   of   outstanding   loans   and
mortgage-backed  securities,  maturities  of  investment  securities  and  other
short-term  investments  and funds  provided from  operations.  The Company also
utilizes  borrowings,  generally  in the form of FHLB  advances,  as a source of
funds.  While  scheduled  payments from the  amortization  of loans and mortgage
related securities and maturing investment securities and short-term investments
are relatively  predictable sources of funds, deposit flows and loan prepayments
are greatly  influenced  by general  interest  rates,  economic  conditions  and
competition.  In  addition,  the  Company  invests  excess  funds in  short-term
interest earning assets which provide liquidity to meet lending requirements.

     Liquidity  management  is both a daily and long term  function  of business
management.  Excess  liquidity is generally  invested in short-term  investments
such as U.S.  Treasury  Securities.  The  Company  uses  its  sources  of  funds
primarily  to meet its ongoing  commitments,  to pay  maturing  certificates  of
deposit and savings withdrawals,  fund loan commitments and maintain a portfolio
of mortgage backed and mortgage related securities and investment securities. At
December 31, 1998 the total approved investment and loan origination commitments
outstanding  amounted to $40.1  million.  Certificates  of deposit  scheduled to
mature  in one  year  or  less at  December  31,  1998  totaled  $73.1  million.
Investment  securities  scheduled  to mature in one year or less at December 31,
1998 totaled $15.0 million. Based on historical experience,  management believes
that a  significant  portion of maturing  deposits will remain with the Company.
The Company anticipates that it will continue to have sufficient funds, together
with borrowings, to meet its current commitments.

Capital

     At December 31, 1998 and June 30,  1998,  the Bank had  regulatory  capital
which  was well in  excess  of  regulatory  limits  set by the  Office of Thrift
Supervision.  The current  requirements and the Bank's actual capital levels are
detailed below.

<TABLE>
<CAPTION>
                                                                                                           To be Well
                                                                             For Capital                Capitalized Under
                                                                              Adequacy                  Prompt Corrective
                                            Actual Capital                    Purposes                  Action Provisions
                                         -------------------           -----------------------        ----------------------
                                         Amount        Ratio           Amount            Ratio        Amount           Ratio
                                         ------        -----           ------            -----        ------           -----
                                                                       (Dollars in Thousands)
<S>                                      <C>             <C>           <C>                <C>         <C>               <C>
As of December 31, 1998:
   Tangible capital
      (to tangible assets)              $45,402         10.4%           6,608             1.5%            N/A           N/A
   Core Capital
      (to adjusted tangible assets)      45,402         10.4           13,146             3.0          21,910           5.0
   Tier 1 capital
      (to risk-weighted assets)          45,402         18.9            9,783             4.0          14,674           6.0
   Risk-based capital
      (to risk-weighted assets)          48,303         19.7           19,566             8.0          24,457          10.0
As of June 30, 1998:
   Tangible capital
      (to tangible assets)              $33,505          8.3           $6,038             1.5             N/A           N/A
   Core capital
      (to adjusted tangible assets)      33,505          8.3           12,075             3.0         $20,126           5.0
   Tier 1 capital
      (to risk-weighted assets)          33,505         13.8            9,719             4.0          14,578           6.0
   Risk-based capital
      (to risk-weighted assets)          36,170         14.9           19,438             8.0          24,297          10.0
</TABLE>


                                       16
<PAGE>

Year 2000 Considerations

     In order to be ready for the year 2000 (the "Year 2000 Issue"), the Company
has developed a Year 2000 Action and  Assessment  Plan (the "Action Plan") which
was presented to the Board of Directors  during  February  1998. The Action Plan
was  developed   using  the  guidelines   outlined  in  the  Federal   Financial
Institutions  Examination's  Council's "The Effect of 2000 on Computer Systems".
The Company's Board of Directors assigned  responsibility for the Action Plan to
the Company's Year 2000  Committee  which reports to the Board of Directors on a
quarterly  basis.  The Action  Plan  recognizes  that the  Company's  operating,
processing and accounting  operations are computer reliant and could be affected
by the Year 2000 Issue. The Company's Action Plan addressed the potential impact
of the Year 2000 Issue on both its  information  technology  ("IT")  systems and
non-IT systems (such as security systems, elevators, electrical, heating and air
conditioning,  telephone, check-signing equipment, etc.). Pursuant to its Action
Plan,  the Company has reviewed  its IT systems and non-IT  systems for the Year
2000 Issue and has tested all of its IT and non-IT  systems  and  equipment  for
Year 2000  readiness and believes  that it has  identified  all equipment  which
needs to be upgraded or replaced.  Commencing in early 1998, the Company began a
program of upgrading or replacing all such equipment in order to ensure that the
Company's  equipment is Year 2000 compliant on or before September 30, 1999. The
Company is primarily  reliant on third party vendors for its computer output and
processing,  as well as other  significant  non-IT functions and services (i.e.,
securities safekeeping services, securities pricing information, etc.). The Year
2000  Committee  is currently  working with these third party  vendors to assess
their year 2000 readiness.  Such vendors generally are reluctant to guarantee or
provide firm  assurance  that their  products  will be Year 2000  compliant in a
timely fashion. In addition,  the Company believes that it would be difficult to
prevail on legal  claims  against such vendors with respect to Year 2000 issues.
Instead,  the Company's  approach has been that it is primarily  responsible for
identifying and correcting Year 2000  compliance  issues.  A major factor in the
Company's  operations  is the  data  processing  software  which  is  used  on a
Company-wide  basis.  Such software is  maintained by a third party vendor.  The
Company has been working  closely with such vendor,  whose clients  include many
depository  institutions,  in an  effort  to  ensure  the  Company's  Year  2000
preparedness.  In  this  respect,  the  Company  has,  on two  occasions  during
non-banking hours, tested essentially all of its operation systems,  both IT and
non-IT  systems,  for Year  2000  readiness.  Such  tests  revealed  only  minor
problems, which are being corrected,  with the Company's systems with respect to
Year 2000. Based upon the initial assessment, management presently believes that
with  planned  modifications  to  existing  software  and  hardware  and planned
conversions to new software and hardware,  the Company's third party vendors are
taking the appropriate steps to ensure critical systems will function  properly.
The Company's Action Plan  contemplates that all of its software vendors will be
Year 2000  compliant by September 30, 1998. If any of its vendors  cannot assure
the Company of their Year 2000  readiness by such date,  the Company  intends to
evaluate and use alternative vendors and products where possible. As of the date
hereof,  the Bank has  completed  the awareness  (i.e.,  education),  assessment
(i.e.,  assessing the potential  Year 2000 problems in its IT and non-IT systems
and software),  renovation  (i.e.,  developing plans to remedy Year 2000 issues)
and validation (i.e., testing all critical application units and systems) phases
of  its  Year  2000  Action  Plan.  The  Company  currently  is  completing  the
implementation phase (i.e., replacing certain equipment


                                       17
<PAGE>

identified as not being Year 2000 compliant).  The Company is approximately  30%
complete on the implementation  phase. To date, the Company's assessment is that
its ATM system and software,  its remote flood plain certification  software and
its payroll  software system are not Year 2000  compliant.  The Company does not
believe that any of such  non-compliant  systems will have a critical  effect on
the Company's  operations if they are not Year 2000 compliant by the turn of the
century.  While no assurance can be given as to actual systems  operations  upon
the turn of the century,  based on  information  currently  known to it and upon
consideration  of its testing efforts to date,  management  believes that in the
worst case  scenario,  the Company  will suffer  only a slight  interruption  of
business as a result of minor application  failures of its IT and non-IT systems
and  software  as the  result  of the Year  2000.  However,  if the  appropriate
modifications  and  conversions  are not made,  or are not completed on a timely
basis, the Year 2000 Issue could have a material impact on the operations of the
Company.

     The Year 2000 mailing to the commercial  customers  results  indicated that
the  commercial  customers  that use software  have updated or will update their
software  packages by December 31, 1999.  Many of the  customers  use  outsource
services such as payroll  companies who are assuring the customers that they are
Year 2000 compliant.  It has been determined that no Bank customers are facing a
high risk of business disruption because of technological defaults.

     The Company has completed its own company-wide  Year 2000 contingency plan.
Individual  contingency  plans concerning  specific software and hardware issues
have been  formulated for the specific  departments  of the Company.  Such plans
include the  identification  of Company  operations that can be done on a manual
basis or with stand  alone  personal  computers  and  printers.  The Company has
identified  phone lines  within the Company  which should not be affected by any
Year  2000  problems  and it also  has  identified  alternative  electric  power
sources.

     The costs of  modifications  to the existing  software are being  primarily
absorbed by the third party  vendors;  however the Company  recognized  that the
need exists to purchase new hardware and software. Based upon current estimates,
the Bank has identified $300,000 in total costs,  including hardware,  software,
and  other  issues,  for  completing  its Year  2000  project.  Of that  amount,
approximately  $126,000 was expensed for the Year 2000 project through  December
31, 1998.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     For a discussion of the Company's asset and liability  management  policies
as well as the  potential  impact of interest rate changes upon the market value
of the Company's portfolio equity, see "Management's  Discussion and Analysis of
Financial  Condition  and  Results of  Operation"  in the  Company's  prospectus
included in the registration statement on Form S-1 filed with the


                                       18
<PAGE>


Securities and Exchange  Commission (the "Commission") on September 18, 1998, as
subsequently  amended and as declared effective by the Commission by order dated
November 12, 1998.

Part II.   OTHER INFORMATION

Item 1.  Legal Proceedings

     Not applicable

Item 2.  Use of Proceeds From Registered Securities

     The Company's initial  registration  statement (No.  333-63737) on Form S-1
was declared effective on November 12, 1998. The subscription offering commenced
on November 12, 1998 and terminated on December 15, 1998.  Charles Webb & Co., a
division of Keefe,  Bruyette & Woods,  Inc.,  assisted  the  Company,  on a best
efforts  basis,  in the  offering.  The sale in the offering of 2,240,878 of the
Company's  common stock,  par value $.01 per share ("Common  Stock"),  closed on
December 23, 1998 for gross proceeds of  $22,408,780.  Net of offering costs and
expenses of $960,000,  the offering generated net proceeds of $21.4 million.  Of
such proceeds, $1.8 million was loaned to the Company's ESOP for the purchase by
the ESOP of 179,270 shares of Common Stock, $9.8 million was paid to the Bank in
exchange  for the common stock of the Bank issued in its  reorganization  from a
federally-chartered  mutual savings bank to a federally-chartered  stock savings
bank, and $11.6 million was invested in investment securities as of December 31,
1998. Of the $9.8 million  contributed to the Bank, $9.8 million was invested in
investment securities.

Item 3.  Defaults Upon Senior Securities

     Not applicable

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

     Not applicable

Item 5.  Other Information

     Not applicable



                                       19
<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

         (a) List of Exhibits (filed herewith unless otherwise noted)

2.1       Plan of Reorganization*

2.2       Plan of Stock Issuance*

3.1       Federal Stock Charter of Willow Grove Bancorp, Inc.*

3.2       Bylaws of Willow Grove Bancorp, Inc.*

4.0       Form of Stock Certificate of Willow Grove Bancorp,  Inc.*

10.1      Form of Employment  Agreement  entered into between  Willow Grove Bank
          and Frederick A. Marcell, Jr.*

10.2      Form of Employment  Agreement  entered into between  Willow Grove Bank
          and each of Thomas M. Fewer, John J. Foff, Jr. and John T. Powers*

10.3      Supplemental Executive Retirement Agreement*

10.4      Non-Employee Director's Retirement Plan*

27.0      Financial Data Schedule

-------------
*    Incorporated by Reference from the Company's Registration Statement on Form
     S-1 filed on September  18,  1998,  as amended,  and declared  effective on
     November 12, 1998.

(b)       Not applicable


                                       20
<PAGE>

                                   SIGNATURES

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


                                WILLOW GROVE BANCORP, INC.



Date: February 16, 1999         By:   /s/ Frederick A. Marcell, Jr.             
                                      ------------------------------------------
                                      Frederick A. Marcell, Jr.  President and
                                      Chief Executive Officer


Date: February 16, 1999         By:   /s/ John J. Foff, Jr.                     
                                      ------------------------------------------
                                      John J. Foff, Jr., Senior Vice President,
                                      Chief Financial Officer and Treasurer




                                       21