<PAGE>


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


                                    Form 10-Q

        (Mark One)

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

For the quarterly period ended December 31, 2000

                                       OR

[   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

For the transition period from _____ to _____

                          Commission file number 23663
                                                 -----

                          CRUSADER HOLDING CORPORATION
                          ----------------------------
             (Exact name of registrant as specified in its charter)

          Pennsylvania                                   23-2562545
          ------------                                   ----------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

                   1230 Walnut Street, Philadelphia, PA 19107
                   ------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (215) 893-1500
                                 --------------
              (Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year
                          if changed since last report)


        Indicate by check mark whether the registrant (1) has filed all reports
required 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 [X]   NO [  ]


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

Common Stock, par value $0.01 per share, 3,855,387 shares outstanding as of
February 9, 2000.


<PAGE>

                          Crusader Holding Corporation

                            Index to Form 10-Q Report

<TABLE>
<CAPTION>

                                                                                                             Page
<S>                                                                                                          <C>
PART I. FINANCIAL INFORMATION


        Item 1. Financial Statements

        Consolidated Balance Sheets as of December 31, 2000 and June 30, 2000................................. 3

        Consolidated Statements of Income for the three months ended and
        six months ended December 31, 2000 and 1999........................................................... 4

        Consolidated Statement of Shareholders' Equity and Comprehensive
        Income for the six months ended December 31, 2000..................................................... 5

        Consolidated Statements of Cash Flows for the six months ended December 31, 2000 and 1999............. 6

        Notes to Consolidated Financial Statements............................................................ 7

        Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations................................................................... 8

        Item 3. Quantitative and Qualitative Disclosures about Market Risk....................................11

PART II........OTHER INFORMATION


        Item 1            Legal Proceedings  .................................................................13

        Item 2.           Changes in Securities and Use of Proceeds ..........................................13

        Item 3.           Defaults Upon Senior Securities.....................................................13

        Item 4.           Submission of Matters to a Vote of Security Holders ................................13

        Item 5.           Other Information...................................................................13

        Item 6.           Exhibits and Reports on Form 8-K ...................................................13
</TABLE>



                                       2

<PAGE>


Item 1.  Financial Statements

Crusader Holding Corporation and Subsidiary
Consolidated Balance Sheets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                    December 31,               June 30,
                                                                        2000                     2000
                                                                        ----                     ----
                                                                     (Unaudited)
<S>                                                                  <C>                       <C>
ASSETS
  Cash and cash equivalents                                          $42,146,000               $13,332,000
  Investment securities available-for-sale                            26,818,000                26,312,000
  Mortgage-backed securities available-for-sale                       14,383,000                14,393,000
  Loans held for sale (estimated market value
      of $7,526,000  and $9,850,000 at December 31, 2000
      and June 30, 2000, respectively)                                 7,438,000                 9,735,000
  Loans receivable, net                                              304,863,000               320,839,000
  Accrued interest receivable                                          2,697,000                 2,326,000
  Other real estate owned                                                633,000                 1,149,000
  Premises and equipment, net                                            711,000                   773,000
  Other assets.                                                        6,660,000                 4,889,000
                                                                    ------------              ------------
               Total Assets                                         $406,349,000              $393,748,000
                                                                    ============              ============

LIABILITIES

  Deposits                                                          $261,677,000              $243,261,000
  Advances from Federal Home Loan Bank                                90,500,000                95,200,000
  Other borrowings                                                     4,142,000                 9,033,000
  Other liabilities                                                   11,469,000                13,372,000
                                                                    ------------              ------------
               Total Liabilities                                     367,788,000               360,866,000

MINORITY INTEREST                                                        302,000                   286,000

SHAREHOLDERS' EQUITY
  Preferred stock - authorized, 5,000,000 shares of
      $0.01 par value; none outstanding                                      ---                       ---
  Common stock - authorized, 20,000,000 shares of
      $0.01 par value; 3,855,387 and 3,865,087
      shares outstanding at December 31,
      2000 and June 30, 2000, respectively                                40,240                    40,240
  Additional paid-in capital                                          23,521,510                23,521,510
  Retained earnings                                                   16,903,250                11,822,250
  Treasury stock, at cost (168,795 and 159,095 shares at
      December 31, 2000 and June 30, 2000, respectively)              (1,465,000)               (1,390,000)
  Accumulated other comprehensive loss                                  (741,000)               (1,398,000)
                                                                    ------------              ------------
               Total Shareholders' Equity                             38,259,000                32,596,000
                                                                    ------------              ------------
               Total Liabilities and Shareholders' Equity           $406,349,000              $393,748,000
                                                                    ============              ============
</TABLE>



See accompanying notes to consolidated financial statements

                                       3
<PAGE>


Crusader Holding Corporation and Subsidiary
Consolidated Statements of Income (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                     Three months                         Six months
                                                                  ended December 31,                  ended December 31,
                                                               -----------------------              ---------------------
                                                               2000               1999              2000             1999
                                                               ----               ----              ----             ----
<S>                                                        <C>                <C>               <C>              <C>
INTEREST INCOME
  Loans, including fees                                    $7,594,000         $6,694,000        $15,213,000       $12,913,000
  Short-term consumer loans, including fees                 2,351,000          1,070,000          3,896,000         1,811,000
  Investment and mortgage-backed securities                 1,026,000            782,000          1,943,000         1,433,000
                                                           ----------         ----------        -----------       -----------
                    Total interest income                  10,971,000          8,546,000         21,052,000        16,157,000
                                                           ----------         ----------        -----------       -----------

INTEREST EXPENSE
  Deposits                                                  4,361,000          2,437,000          8,369,000         4,741,000
  Borrowed funds                                              973,000          1,638,000          2,309,000         2,970,000
                                                           ----------         ----------        -----------       -----------
                    Total interest expense                  5,334,000          4,075,000         10,678,000         7,711,000
                                                           ----------         ----------        -----------       -----------

NET INTEREST INCOME                                         5,637,000          4,471,000         10,374,000         8,446,000

PROVISION FOR LOAN LOSSES
  Short-term consumer loans                                   692,000            558,000          1,433,000           885,000
  Other loans                                                 350,000            350,000            600,000           650,000
                                                           ----------         ----------        -----------       -----------
                   Total provision for loan losses          1,042,000            908,000          2,033,000         1,535,000
                                                           ----------         ----------        -----------       -----------

NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                         4,595,000          3,563,000          8,341,000         6,911,000

NON-INTEREST INCOME
  Service charges on deposit accounts and
     other fees                                                36,000             61,000             81,000            91,000
  Mortgage banking revenues                                   279,000            401,000            385,000           951,000
  Other                                                       221,000            187,000            372,000           353,000
                                                           ----------         ----------        -----------       -----------
                    Total non-interest income                 536,000            649,000            838,000         1,395,000

NON-INTEREST EXPENSES
  Employee compensation and benefits                          505,000            463,000            922,000           880,000
  Data processing                                              40,000             37,000             76,000            73,000
  Federal insurance premiums                                   31,000             28,000             57,000            53,000
  Occupancy and equipment                                     111,000            101,000            211,000           213,000
  Professional fees                                            82,000             54,000            188,000           136,000
  Mortgage banking expenses                                   330,000            595,000            661,000         1,303,000
  Other operating                                             193,000            150,000            412,000           250,000
  Goodwill amortization                                        21,000             21,000             42,000            42,000
                                                           ----------         ----------        -----------       -----------
                    Total non-interest expenses             1,313,000          1,449,000          2,569,000         2,950,000
                                                           ----------         ----------        -----------       -----------

INCOME BEFORE INCOME TAX EXPENSE                            3,818,000          2,763,000          6,610,000         5,356,000

INCOME TAX EXPENSE                                            496,000            876,000          1,352,000         1,705,000
                                                           ----------         ----------        -----------       -----------
    Income before minority interest                         3,322,000          1,887,000          5,258,000         3,651,000
Minority interest                                              83,000             85,000            177,000           163,000
                                                           ----------         ----------        -----------       -----------
    NET INCOME                                             $3,239,000         $1,802,000       $  5,081,000        $3,488,000
                                                           ==========         ==========       ============       ===========


Net income per share, basic and diluted                    $    0 .84         $     0.46       $       1.32       $      0.89
                                                           ==========         ==========       ============       ===========

Basic and diluted weighted average shares outstanding       3,858,000          3,906,000          3,859,000         3,916,000
                                                           ==========         ==========       ============       ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        4
<PAGE>


Crusader Holding Corporation and Subsidiary
Consolidated Statement of Shareholders' Equity and Comprehensive Income
For the six months ended December 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                         Accumulated
                                                     Additional                                             other
                                        Common         paid-in         Treasury         Retained        Comprehensive
                                        stock          capital           stock          earnings        income (loss)
                                        -----          -------           -----          --------        -------------
<S>                                  <C>           <C>              <C>              <C>                <C>
Balance at June 30, 2000             $ 40,240      $23,521,510      ($1,390,000)     $11,822,250        ($1,398,000)

Net unrealized loss on
  securities available-for-sale           -               -                  -              -               657,000

Purchase of treasury stock                -               -          (  75,000)             -                  -

Net income                                -               -                  -          5,081,000              -

Total comprehensive loss             --------      ----------       ----------       ------------     -------------


Balance at December 31, 2000         $ 40,240      $23,521,510      ($1,465,000)      $16,903,250       ($  741,000)
                                     ========      ===========      ============     ============     ==============
</TABLE>

                                [RESTUBBED TABLE]


<TABLE>
<CAPTION>
                                            Total
                                        Shareholders'      Comprehensive
                                            equity            Income
                                            ------            ------
                                      <C>                   <C>
<S>
Balance at June 30, 2000               $32,596,000

Net unrealized loss on
  securities available-for-sale           657,000       $   657,000

Purchase of treasury stock                ( 75,000)

Net income                               5,081,000         5,081,000
                                                         -----------

                                                         $ 5,738,000
Total comprehensive loss               -----------       ===========

                                       $38,259,000
Balance at December 31, 2000           ===========

</TABLE>


See accompanying notes to consolidated financial statements.

                                        5
<PAGE>


Crusader Holding Corporation and Subsidiary
Consolidated Statements of Cash Flows (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                      Six months ended
                                                                                                         December 31,
                                                                                                   ------------------------
                                                                                                   2000                1999
                                                                                                   ----                ----
<S>                                                                                           <C>                   <C>
OPERATING ACTIVITIES
Net income                                                                                   $  5,081,000         $  3,488,000
Adjustments to reconcile net income to net cash provided by
  (used in) operating activities:
Amortization of premiums and discounts on securities and loans, net                               (77,000)              79,000
Amortization of goodwill                                                                           42,000               42,000
Provision for loan losses                                                                       2,033,000            1,535,000
Net gain on sale of loans held for sale                                                          (384,000)            (583,000)
Depreciation and amortization of premises and equipment                                           111,000              132,000
Proceeds from sale of assets held for sale                                                     33,214,000           71,969,000
Originations of loans held for sale                                                           (30,533,000)         (58,195,000)
(Increase) decrease in accrued interest receivable                                               (371,000)              74,000
(Increase) decrease in deferred income taxes                                                         -                (431,000)
Other, net                                                                                     (3,990,000)             778,000
                                                                                             ------------         ------------
    Net cash provided by (used in) operating activities                                         5,126,000           18,888,000

INVESTMENT ACTIVITIES
Net (increase) decrease in loans                                                               13,943,000          (51,980,000)
Purchase of investment securities available-for-sale                                                 -              (4,659,000)
Purchase of mortgage-backed securities available-for-sale                                            -              (3,769,000)
Repayment of principal of investment securities available-for-sale                                   -                    -
Repayment of principal of mortgage-backed securities available-for-sale                           576,000              735,000
Proceeds from sale of property acquired through loan foreclosure actions                          516,000              587,000
Purchase of premises and equipment                                                               ( 49,000)            (156,000)
                                                                                             ------------         ------------
    Net cash provided by (used in) investing activities                                        14,986,000          (59,242,000)

FINANCING ACTIVITIES
Net increase in deposits                                                                       18,416,000           19,191,000
Advances (repayments) from Federal Home Loan Bank, net                                         (4,700,000)          37,700,000
(Repayment) proceeds from long-term FHLB advances                                                    -              (6,800,000)
Repayment of securities sold under agreements to repurchase                                    (4,891,000)          (3,280,000)
(Decrease) Increase in advance payments by borrowers for taxes and insurance                      (64,000)             362,000
Purchase of treasury stock                                                                        (75,000)            (808,000)
Increase(decrease) in minority interest                                                            16,000              (10,000)
                                                                                             ------------         ------------
    Net cash provided by financing activities                                                   8,702,000           46,355,000

Net increase (decrease) in cash and cash equivalents                                           28,814,000            6,001,000

Cash and cash equivalents at beginning of period                                               13,332,000            6,056,000
                                                                                             ------------         ------------

Cash and cash equivalents at end of period                                                   $ 42,146,000         $ 12,057,000
                                                                                             ============         ============
</TABLE>



See accompanying notes to consolidated financial statements.


                                        6
<PAGE>


Crusader Holding Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information as of and for the three  and six month periods ended December 31,
2000 and 1999 is unaudited)
--------------------------------------------------------------------------------
1. BASIS OF PRESENTATION

The unaudited consolidated financial statements as of December 31, 2000, and for
the three and six month periods ended December 31, 2000 and 1999 include the
accounts of Crusader Holding Corporation (the "Company") and its wholly-owned
subsidiary, Crusader Savings Bank, FSB (the "Bank"), along with the Bank's
wholly-owned and majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.

The interim financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (including normal recurring accruals) necessary
for fair presentation of results of operations for the interim periods included
herein have been made. The results of operations for the three and six month
periods ended December 31, 2000 are not necessarily indicative of results to be
anticipated for the full year.


2. NET INCOME PER SHARE

Basic and diluted earnings per share are calculated using statement of Financial
Accounting Standards ("SFAS") No. 128. Under SFAS No. 128, basic earnings per
share is computed based upon the weighted average number of common shares
outstanding during the period while diluted earnings per share is computed based
upon the weighted average number of common shares and common equivalent shares
outstanding during the period. Common equivalent shares are stock options,
warrants and similar items. In converting the common equivalent shares to common
shares, the Treasury Stock Method is utilized whereby it is assumed that the
proceeds that would be received upon the exercise of the common stock equivalent
shares are used to repurchase outstanding common shares at the average market
price during the period. There was no difference between the Company's basic and
diluted earnings per share.

In determining the weighted average shares outstanding during the period in the
computation of basic and diluted earnings per share, retroactive effect was
given to all stock dividends, including the 5% stock dividend paid October 14,
1999. Basic and diluted weighted average shares outstanding were 3,858,000 and
3,906,000 for the three months ended December 31, 2000, and December 31, 1999,
respectively.


3. ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is established through a provision for possible
loan losses charged to expenses. Loans are charged against the allowance for
loan losses when management believes that the collectibility of the principal is
unlikely. The allowance is an amount that management believes will be adequate
to absorb possible loan losses on existing loans that may become uncollectible
based on evaluations of the collectibility of loans and prior loan loss
experience. The evaluations take into consideration such factors as changes in
the nature and volume of the loan portfolio, overall portfolio quality, the
status of specific problem loans and overall current economic conditions that
may affect the ability of borrowers to repay their loans. While management uses
available information to recognize losses on loans, future additions to the
allowance may be necessary based on changes in economic conditions. In addition,
various regulatory agencies, as an integral part of their examination processes,
periodically review the Bank's allowance for loan losses based on their
judgments about information available to them at the time of their examinations.


                                        7
<PAGE>



4.  RECENT PRONOUNCEMENTS

None

5.  RECENT LITIGATION

During October 1998, one of the Bank's deposit customers (the "Bank Depositor")
had deposited approximately $1.3 million of dishonored money orders which
resulted in its account being deficient by a similar amount. The Bank has
initiated a lawsuit in the Court of Common Pleas of Philadelphia County against
the money order company which placed the stop payments on the money orders
issued by the Bank Depositor alleging, among other things, that the money orders
were improperly stopped and the Bank was a holder in due course and is therefore
entitled to reimbursement. The Bank is seeking reimbursement in the lawsuit. The
Bank has also initiated an involuntary bankruptcy proceeding against the Bank
Depositor in the United States Bankruptcy Court for the Eastern District of
Pennsylvania. The Bank is seeking to have a trustee preserve the assets of the
Bank Depositor in order that the Bank may receive partial reimbursement. An
order for relief under Chapter 7 of the Bankruptcy Code was granted on March 8,
1999. In September 1999, the Company recorded a pre-tax provision of $950,000 to
provide for its potential exposure with respect to the money orders. At December
31, 2000 the Company has a remaining receivable of $275,000 related to this
matter. The Company believes its litigation has strong merit; however, the
pre-tax provision was recorded because of the length of time likely to transpire
before the litigation is finalized and the potential uncertainty associated
therewith.



















                                        8

<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes appearing on the preceding
pages as well as in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 2000. Unaudited results of operations for the three and six month
periods ended December 31, 2000 are compared to the unaudited results of
operations for the comparable periods ended December 31, 1999. Such information
is based upon the historical financial information available as of the dates
indicated. Results of operations for the three and six month periods ended
December 31, 2000 are not necessarily indicative of results to be attained for
any other period.

Statements regarding the Company's expectations as to financial results and
other aspects of its business set forth herein or otherwise made in writing or
orally by the Company may constitute forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
Company believes that its expectations are based on reasonable assumptions
within the bounds of its knowledge of its business and operations, there can be
no assurance that actual results will not differ materially from its
expectations. Factors that might cause or contribute to such differences
include, but are not limited to, uncertainty of future profitability, changing
economic conditions and monetary policies, uncertainty of interest rates, risks
inherent in banking transactions, the impact of the action to limit the Bank's
asset growth and any related future actions by the Office of Thrift Supervision
("OTS"), the risk of whether the Company will successfully implement its
recently announced plan to exit from the short-term consumer lending business
and whether the results of operations related to such exit will not be more
negatively impacted than anticipated, competition, extent of government
regulations, and delay in or failure in obtaining regulatory approvals.


GENERAL

The Company is a holding company operating a federally chartered savings bank.
The Bank conducts community banking activities by accepting deposits from the
public and investing the proceeds in loans and investment securities. The
Company's lending products include conforming and nonconforming credit
residential mortgages, consumer and home equity loans, multi-family residential
and non-residential real estate loans, SBA loans, and secured property tax
liens. The Company announced in December 2000 that it is discontinuing its
short-term consumer lending business during the quarter ending March 31, 2001.
In order to manage its liquidity and interest rate risk, the Company maintains
an investment portfolio consisting of bonds and mortgage-backed securities, most
of which are investment quality. The Company's loan and investment portfolios
are funded with deposits as well as borrowings from the Federal Home Loan Bank
of Pittsburgh ("FHLB") or collateralized borrowings secured by the Company's
investment securities. The Company's earnings are largely dependent upon its net
interest income (the difference between what it earns on its loans and
investments and what it pays on its deposits and borrowings). In addition to net
interest income, the Company's net income is impacted by its loan loss
provision, non-interest income (mortgage banking revenue and loan, deposit and
ATM fees) and non-interest expenses (such as salaries and benefits, professional
fees, occupancy cost, deposit insurance premiums and expenses related to
mortgage operations).

FINANCIAL CONDITION

The Company's assets increased to $406.3 million at December 31, 2000 compared
to $393.7 million at June 30, 2000. The increase in assets primarily reflects a
$28.8 million increase in cash and cash equivalents, partially offset by a $15.9
million decrease in loans receivable. At December 31, 2000, the loan portfolio
aggregated $304.9 million compared to $320.8 million at June 30, 2000. Loans
held for sale decreased to $7.4 million at December 31, 2000 as compared to $9.7
million at June 30, 2000. Cash and cash equivalents aggregated $42.1 million at




                                        9
<PAGE>

December 31, 2000 compared to $13.3 million at June 30, 2000. Deposits were
$261.7 million at December 31, 2000 as compared to $243.3 million at June 30,
2000 reflecting primarily an increase in certificates of deposit. FHLB advances
decreased to $90.5 million at December 31, 2000 from $95.2 million at June 30,
2000. Shareholders' equity increased by $5.7 million due primarily to net income
generated during the period and a decrease of $657,000 in unrealized losses on
securities available for sale. These increases were offset by $75,000 of
treasury stock purchases.

RESULTS OF OPERATIONS

Three months ended December 31, 2000 versus three months ended December 31,
1999. Net income increased to $3.2 million for the three months ended December
31, 2000 as compared to $1.8 million for the comparable prior period. Net
interest income increased by $1.2 million due to a $43.1 million increase in
average earning assets and an increase in the net yield on interest-earning
assets to 5.99% as compared to 5.36% in the prior year period. The increase in
the net yield on interest-earning assets is primarily attributable to the
increase in volume of short-term consumer loans. The provision for loan losses
was increased to $1.0 million for the three months ended December 31, 2000 as
compared to $908,000 for the prior period. Non-interest income decreased by
$113,000 due primarily to a decrease in mortgage banking revenues. The reduction
in mortgage banking revenues is consistent with the Company's strategy to
de-emphasize the origination and resale of nonconforming loans in the current
year. Non-interest income for the three months ended December 31, 2000 include a
pre-tax gain of $112,000 for the sale of the Company's partnership interest in
its 1334 Walnut Street office location. Non-interest expenses decreased to $1.3
million as compared to $1.4 million in the prior year period, due primarily to a
$265,000 reduction in mortgage banking expenses, partially offset by a $129,000
increase in core operating expenses.

Six months ended December 31, 2000 versus six months ended December 31, 1999.
Net income increased to $5.1 million for the six months ended December 31, 2000
as compared to $3.5 million for the comparable prior period. Net interest income
increased by $1.9 million due to a $51.6 million increase in average earning
assets and an increase in the net yield on interest-earning assets to 5.54% as
compared to 5.23% in the prior year period. The provision for loan losses was
increased to $2.0 million for the six months ended December 31, 2000 as compared
to $1.5 million for the prior year period. The increase primarily relates to
increased short-term consumer lending activity. Non-interest income decreased by
$557,000 due primarily to a decrease in mortgage banking revenues. The reduction
in mortgage banking revenues is consistent with the Company's strategy to
de-emphasize the origination and resale of nonconforming loans in the current
year. Non interest expenses decreased to $2.6 million as compared to $3.0
million in the prior year period, due primarily to a $642,000 reduction in
mortgage banking expenses, partially offset by a $261,000 increase in core
operating expenses.

As a result of the 1999 OTS examination, the Bank has entered into a supervisory
agreement with the OTS effective April 26, 2000. Effective for the quarter ended
March 31, 2000, the Bank is required to limit its ongoing quarterly asset growth
based on the interest credited on its deposits each quarter and certain other
factors. The agreement also requires the Bank to enhance its policies and
procedures and its management, internal control and audit functions. As a result
of the OTS concens, the Bank has not originated any new commerical loans since
October 2000. There can be no assurance that the OTS will remove the asset
growth restriction in any particular time period or that the OTS will not impose
additional regulatory constraints on the Bank. Failure to comply with the
provisions of the supervisory agreement could expose the Bank to futher
regulatory sanctions that could have a material adverse effect on the Company.

The Bank notified the OTS in December 2000 that it is discontinuing its
short-term consumer lending business. This action will be completed during the
quarter ended March 31, 2001 and is not expected to result in any special
charges to operations. Income from this business segment for the quarters ended
December 31, 2000 and 1999 was $1.1 million and $302,000, respectively, based
upon the assumptions as set forth in the Company's "Segment Information"
disclosure in its June 30, 2000 Annual Report on Form 10-K.





                                       10
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

A major source of the Company's asset growth has been funded through deposits,
mostly certificates of deposit ("CDs"), generated through the Bank's two branch
offices and a network of financial planners and brokers and FHLB advances.

The ability of the Bank to retain and attract deposits is dependent upon a
number of factors, including interest rates offered on the Bank's products.
Historically, most of the Bank's deposits have been in the form of CDs, which
typically provide for a higher interest rate than other bank deposit products,
such as checking and savings accounts. The Bank also funds its assets with
secured borrowings from the FHLB and collateralized borrowings secured by its
investment securities portfolio. These borrowings generally provide the Bank
with greater flexibility in matching the duration of its liabilities with that
of certain of its assets. Future availability of these funding sources is
largely dependent upon the Bank having sufficient available eligible assets to
collateralize these borrowings. The Bank currently has available excess
collateral to secure future borrowings from these sources and it anticipates
that future asset growth will provide additional eligible collateral. The Bank's
assets generally provide for scheduled principal and interest payments which
provide the Bank with additional sources of funds. If required, additional funds
could be obtained through the sale of either loans or investment securities
which are classified as available-for-sale. The Bank has and will continue to
utilize its investment securities portfolio to manage liquidity.

The Bank's primary uses of funds are for the origination and acquisition of
loans, the funding of maturing deposits and the repayment of borrowings. Based
upon management's current business strategy, management believes that the
Company's income from operations and existing funding sources will be adequate
to meet its operating and growth requirements for the foreseeable future;
however, there can be no assurance that such strategy will not change or that
the implementation of the strategy will not require additional capital or
funding sources.

Net cash provided by operating activities for the six months ended December 31,
2000 was $5.1 million as compared to $18.9 million of net cash provided in the
comparable prior year period. The decrease in net cash provided by operating
activities primarily relates to the change in the level of loans
available-for-sale. Net cash provided by investment activities was $15.0
million, as compared to $59.2 million used for the prior year period. The change
primarily relates to the level of the Company's loan portfolio. Net cash
provided by financing activities was $8.7 million and $46.4 million for the six
months ended December 31, 2000 and 1999, respectively.

The Bank monitors its capital level relative to its business operations and
anticipated growth and has continually maintained it at a level which would
allow it to be classified as "well-capitalized" under the Federal Deposit
Insurance Corporation Improvement Act ("FDICIA"). The Bank's capital growth
during the period presented has come primarily from internally generated
earnings.

The following table sets forth the Bank's regulatory capital levels at December
31, 2000. The Company is not subject to regulatory capital requirements.

<TABLE>
<CAPTION>
                                                                      Required for          To Be Well Capitalized
                                                                   Capital Adequacy            Corrective Action
                                             Actual                    Purposes                    Provisions
                                             ------                    --------                    ----------
                                                                   (Dollars in thousands)
                                     Amount          Ratio       Amount             Ratio     Amount           Ratio
                                     ------         ------       -------            -----     ------           -----
<S>                                  <C>            <C>          <C>                <C>       <C>              <C>
Tangible capital                     $39,255         9.74%       $ 6,043            1.50%     $20,142          5.00%
Core capital                         $39,255         9.74%       $16,114            4.00%     $24,171          5.00%
Risk-based capital                   $42,731        15.36%       $22,249            8.00%     $27,811         10.00%
</TABLE>



                                       11

<PAGE>

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. Interest rate risk is defined as the sensitivity of the
Company's current and future earnings and capital to changes in the level of
market interest rates. The Bank's exposure to interest rate risk results from,
among other things, the difference in maturities on interest-earning assets and
interest-bearing liabilities. Since the Bank's assets currently have a longer
maturity than its liabilities, the Bank's earnings could be negatively impacted
during a period of rising interest rates and conversely positively impacted
during a period of falling interest rates. The relationship between the interest
rate sensitivity of the Bank's assets and liabilities is continually monitored
by management. In this regard, the Bank emphasizes the origination of adjustable
rate assets for portfolio while originating longer term fixed rate assets for
resale. Additionally, the origination level of fixed rate assets are continually
monitored and if deemed appropriate, the Bank will enter into forward
commitments for the sale of these assets to ensure the Bank is not exposed to
undue interest rate risk.

The Bank utilizes its investment and mortgage-backed portfolio in managing its
liquidity and therefore generally seeks securities with a stated or estimated
duration of less than five years. These securities are readily marketable and
provide the Bank with a cash flow stream to fund asset growth or liability
maturities.

A significant portion of the Bank's assets have been funded with CDs, including
jumbo CDs. Unlike other deposit products such as checking and savings accounts,
CDs carry a high degree of interest rate sensitivity and therefore, their
renewal will vary based on the competitiveness of the Bank's interest rates. The
Bank has customarily priced its CDs to be competitive at the shorter maturities
(i.e., maturities of less than one year) in order to better match the repricing
characteristics of portfolio loans and the anticipated holding period for loans
held for sale.

The Bank utilizes borrowings from the FHLB and collateralized repurchase
agreements in managing its interest rate risk and as a tool to augment deposits
in funding asset growth. The Bank may utilize these funding sources to better
match its longer term repricing assets (i.e., between one and five years).

The nature of the Bank's current operations is such that it is not subject to
foreign currency exchange or commodity price risk. Additionally, neither the
Company nor the Bank owns any trading assets. In connection with its asset and
liability management, the Company has in the past entered into interest rate
swap arrangements with the FHLB, although no such swaps were outstanding at
December 31, 2000. At December 31, 2000, the Bank did not have any hedging
transactions in place, such as caps or floors.

Interest Rate Sensitivity Analysis. One measure of a bank's interest rate
sensitivity is through the use of a GAP analysis. Using a GAP analysis, the Bank
matches the extent to which its interest-earning assets and interest-bearing
liabilities mature or reprice within specified time horizons. The interest rate
sensitivity gap is defined as the excess of interest-earning assets maturing or
repricing within a specific time period over the interest-bearing liabilities
maturing or repricing within the same time period (a negative GAP for a
specified time period would indicate there are more liabilities than assets
maturing or repricing within that time period).

Gap analysis is a useful measurement of asset and liability management; however,
it is difficult to predict the effect of changing interest rates based solely on
this measure. An additional analysis required by the OTS and generated quarterly
is the OTS Interest Rate Exposure Report. This report forecasts changes in the
Bank's market value of portfolio equity ("MVPE") under alternative interest rate
environments. The MVPE is defined as the net present value of the Bank's
existing assets, liabilities and off-balance sheet instruments.

Management believes that the assumptions utilized in evaluating the
vulnerability of the Company's earnings and capital to changes in interest rates
approximate actual experience; however, the interest rate sensitivity of the
Bank's assets and liabilities as well as the estimated effect of changes in
interest rates on MVPE could vary substantially if different assumptions are
used or actual experience differs from the experience on which the assumptions
were based.

In the event the Bank should experience a mismatch in its desired GAP ranges or
an excessive decline in its MVPE subsequent to an immediate and sustained change
in interest rate, it has a number of options which it could utilize to remedy
such mismatch. The Bank could restructure its investment portfolio through sale
or purchase of securities with more favorable repricing attributes. It could
also emphasize loan products with appropriate maturities or repricing attributes
or it could attract deposits or obtain borrowings with desired maturities.



                                       12

<PAGE>



PART II.       OTHER INFORMATION

Item 1. Legal Proceedings

There are various claims and lawsuits in which the Company or the Bank are
periodically involved, such as claims to enforce liens, condemnation proceedings
on properties in which the Bank holds security interests, claims involving the
making and servicing of real property loans, and other issues incident to the
Bank's business. In the opinion of management, there are no material pending
claims or lawsuits.

During October 1998, one of the Bank's deposit customers (the "Bank Depositor")
had deposited approximately $1.3 million of dishonored money orders which
resulted in its account being deficient by a similar amount. The Bank has
initiated a lawsuit in the Court of Common Pleas of Philadelphia County against
the money order company which placed the stop payments on the money orders
issued by the Bank Depositor alleging, among other things, that the money orders
were improperly stopped and the Bank was a holder in due course and is therefore
entitled to reimbursement. The Bank is seeking reimbursement in the lawsuit. The
Bank has also initiated an involuntary bankruptcy proceeding against the Bank
Depositor in the United States Bankruptcy Court for the Eastern District of
Pennsylvania. The Bank is seeking to have a trustee preserve the assets of the
Bank Depositor in order that the Bank may receive partial reimbursement. An
order for relief under Chapter 7 of the Bankruptcy Code was granted on March 8,
1999. In September 1999, the Company recorded a pre-tax provision of $950,000 to
provide for its potential exposure with respect to the money orders. At December
31, 2000 the Company has a remaining receivable of $275,000 related to this
matter. The Company believes its litigation has strong merit; however, the
pre-tax provision was recorded because of the length of time likely to transpire
before the litigation is finalized and the potential uncertainty associated
therewith.


Item 2. Changes in Securities and Use of Proceeds

        None

Item 3. Defaults Upon Senior Securities

        None

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

        None

Item 5. Other Information

        None

Item 6. Exhibits and Reports on Form 8-K

        (A)    Exhibits

               Those exhibits previously filed with the Securities and Exchange
               Commission as required by Item 601 of Regulation S-K, are
               incorporated herein by reference in accordance with the provision
               of Rule 12b-32.

               Exhibit No.
               -----------
               27.    Financial Data Schedule

        (B)    Reports on Form 8-K

               None



                                       13
<PAGE>


                                   SIGNATURES

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



                                            Crusader Holding Corporation


        Date: February 13, 2001             By:    /s/  Thomas J. Knox
                                                   ----------------------------
                                            Thomas J. Knox
                                            Chairman and Chief Executive Officer
                                            (Principal Executive Officer)




        Date: February 13, 2001             By:    /s/  Robert C. Faix
                                                   -----------------------------
                                            Robert C. Faix
                                            Senior Vice President and
                                            Chief Financial Officer
                                            (Principal Accounting and
                                            Financial Officer)













                                       14

<PAGE>



                                  EXHIBIT INDEX

               Exhibit No.                               Exhibit
               -----------                               -------
                  27                                     Financial Data Schedule

































                                       15