UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended.............................       MARCH 31, 2004
                                       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 No.: 000-23809

                          FIRST SENTINEL BANCORP, INC.
             (exact name of registrant as specified in its charter)

                   DELAWARE                                    22-3566151
(State or other jurisdiction of incorporation            (IRS Employer I.D. No.)
               or organization)

               1000 WOODBRIDGE CENTER DRIVE, WOODBRIDGE, NJ 07095
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (732) 726-9700

                                 NOT APPLICABLE
       Former Name, Address, and 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 by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).

Yes    X       No
    -------       -------

                      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.

        CLASS                           OUTSTANDING AT MAY 1, 2004
----------------------     -----------------------------------------------------
    Common Stock            28,299,252 shares, including 964,656 shares held by
                              the Directors' Deferred Fee Plan not otherwise
                            considered outstanding under accounting principles
                            generally accepted in the United States of America


<PAGE>

                          FIRST SENTINEL BANCORP, INC.

                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
                                                                                                     PAGE #
<S>             <C>                                                                                    <C>
PART I.         FINANCIAL INFORMATION

Item 1.         Financial Statements (Unaudited)

                Consolidated Statements of Financial Condition as of March 31, 2004 and
                December 31, 2003                                                                       3

                Consolidated Statements of Income for the Three Months Ended March 31, 2004
                and 2003                                                                                4

                Consolidated Statements of Stockholders' Equity for the Three Months Ended
                March 31, 2004 and 2003                                                                 5

                Consolidated Statements of Cash Flows for the Three Months Ended March 31,
                2004 and 2003                                                                           6

                Notes to Unaudited Consolidated Financial Statements                                    7

Item 2.         Management's Discussion and Analysis of Financial Condition and Results of
                Operations                                                                             10

Item 3.         Quantitative and Qualitative Disclosure About Market Risk                              18

Item 4.         Controls and Procedures                                                                18

PART II.        OTHER INFORMATION

Item 1.         Legal Proceedings                                                                      18

Item 2.         Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities       18

Item 3.         Defaults Upon Senior Securities                                                        18

Item 4.         Submission of Matters to a Vote of Security Holders                                    18

Item 5.         Other Information                                                                      18

Item 6.         Exhibits and Reports on Form 8-K                                                       19

                SIGNATURES                                                                             20
</TABLE>


                                       2
<PAGE>

FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                           March 31,
                                                                                             2004              December 31,
                                                                                          (Unaudited)               2003
                                                                                        ----------------       ---------------
<S>                                                                                   <C>                    <C>
ASSETS
Cash and due from banks ..........................................................    $          32,169      $        16,007
Federal funds sold ...............................................................               41,500               59,800
                                                                                        ----------------       --------------
     Total cash and cash equivalents .............................................               73,669               75,807
Federal Home Loan Bank of New York (FHLB-NY) stock, at cost ......................               19,523               21,075
Investment securities available for sale, at fair value ..........................              101,859              106,459
Mortgage-backed securities available for sale, at fair value .....................              692,652              722,794
Loans held for sale, net .........................................................                  917                  777
Loans receivable, net ............................................................            1,221,945            1,209,944
Interest and dividends receivable ................................................                9,159                9,282
Premises and equipment, net ......................................................               14,847               15,160
Core deposit intangibles .........................................................                3,520                3,730
Other assets .....................................................................               38,359               39,642
                                                                                        ----------------       --------------
     Total assets ................................................................    $       2,176,450      $     2,204,670
                                                                                        ================       ==============
</TABLE>

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

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>                                                                                   <C>                    <C>
LIABILITIES
Deposits .........................................................................    $       1,346,240      $     1,339,858
Borrowed funds ...................................................................              550,457              591,500
Subordinated debentures ..........................................................               25,774               25,774
Advances by borrowers for taxes and insurance ....................................                9,780                9,519
Other liabilities ................................................................                8,857               10,445
                                                                                        ----------------       --------------
     Total liabilities ...........................................................            1,941,108            1,977,096
                                                                                        ================       ==============

STOCKHOLDERS' EQUITY

Preferred stock; authorized 10,000,000 shares; none issued and outstanding .......                   --                   --
Common stock, $.01 par value, 85,000,000 shares authorized;
     43,106,742 and 27,305,249 shares issued and outstanding at 3/31/04 and
     43,106,742 and 27,251,064 shares issued and outstanding at 12/31/03 .........                  430                  430
Paid-in capital ..................................................................              209,530              208,523
Retained earnings ................................................................              169,893              166,902
Accumulated other comprehensive income ...........................................                7,327                4,059
Treasury stock (14,704,218 and 14,748,818 shares at 3/31/04 and 12/31/03,
    respectively) ................................................................             (150,115)            (150,571)
Common stock acquired by the Employee Stock Ownership Plan (ESOP) ................               (8,257)              (8,486)
Common stock acquired by the Recognition and Retention Plan (RRP) ................                 (209)                (280)
Common stock acquired by the Deferred Directors Fee Plan (DDFP) ..................               (2,858)              (2,768)
DDFP Transition Differential .....................................................               (7,674)              (7,674)
Deferred compensation - DDFP .....................................................               17,275               17,439
                                                                                        ----------------       --------------
     Total stockholders' equity ..................................................              235,342              227,574
                                                                                        ----------------       --------------
     Total liabilities and stockholders' equity ..................................    $       2,176,450      $     2,204,670
                                                                                        ================       ==============
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.


                                       3
<PAGE>

FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data) (Unaudited)

<TABLE>
<CAPTION>
                                                                       Three Months Ended March 31,
                                                                   --------------------------------------
                                                                       2004                    2003
                                                                   --------------          --------------
<S>                                                              <C>                     <C>
INTEREST INCOME:
  Loans .....................................................    $        17,827         $        19,193
  Investment and other and mortgage-backed securities
    available for sale ......................................              8,736                   9,588
                                                                   --------------          --------------
     Total interest income ..................................             26,563                  28,781
                                                                   --------------          --------------

INTEREST EXPENSE:
 Deposits:
   NOW and money market .....................................              1,061                   1,336
   Savings ..................................................                458                     722
   Certificates of deposit ..................................              2,888                   4,180
                                                                   --------------          --------------
     Total interest expense - deposits ......................              4,407                   6,238
  Borrowed funds ............................................              6,796                   7,532
  Subordinated debentures ...................................                477                      --
                                                                   --------------          --------------
     Total interest expense .................................             11,680                  13,770
                                                                   --------------          --------------
     Net interest income ....................................             14,883                  15,011
Provision for loan losses ...................................                 --                      --
                                                                   --------------          --------------
     Net interest income after provision for loan losses ....             14,883                  15,011
                                                                   --------------          --------------

NON-INTEREST INCOME:
  Fees and service charges ..................................              1,030                     888
  Net gain on sales of loans and securities
     available for sale .....................................                363                     893
  Income on Bank Owned Life Insurance .......................                394                     398
  Other income ..............................................                 99                     244
                                                                   --------------          --------------
     Total non-interest income ..............................              1,886                   2,423
                                                                   --------------          --------------

NON-INTEREST EXPENSE:
  Compensation and benefits .................................              4,385                   3,852
  Occupancy .................................................                642                     646
  Equipment .................................................                538                     428
  Advertising ...............................................                129                     255
  Federal deposit insurance .................................                 54                      58
  Amortization of core deposit intangibles ..................                210                     210
  Distributions on preferred capital securities .............                 --                     472
  General and administrative ................................              1,278                   1,171
  Merger-related expense ....................................                264                      --
                                                                   --------------          --------------
     Total non-interest expense .............................              7,500                   7,092
                                                                   --------------          --------------

     Income before income tax expense .......................              9,269                  10,342

Income tax expense ..........................................              3,238                   3,494
                                                                   --------------          --------------

     Net income .............................................    $         6,031         $         6,848
                                                                   ==============          ==============

Basic earnings per share ....................................    $          0.23         $          0.26
                                                                   ==============          ==============

Weighted average shares outstanding - Basic .................         26,334,868              25,961,344
                                                                   ==============          ==============

Diluted earnings per share ..................................    $          0.22         $          0.24
                                                                   ==============          ==============

Weighted average shares outstanding - Diluted ...............         27,881,458              27,652,037
                                                                   ==============          ==============
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.


                                       4
<PAGE>

FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                  Accumulated
                                                     Other    Common    Common               Common               Deferred   Total
                                                    Compre-   Stock      Stock               Stock        DDPF     Compen-   Stock-
                       Common   Paid-In   Retained  hensive  Acquired   Acquired  Treasury  Acquired   Transition  sation   holders'
                        Stock   Captial   Earnings   Income   By ESOP    By RRP     Stock    By DDFP  Differential  DDFP     Equity
                        -----  --------   --------    ------  -------    ------   ---------  -------  ------------ -------  --------
<S>                      <C>   <C>        <C>         <C>     <C>       <C>       <C>         <C>       <C>       <C>      <C>
Balance at
 December 31, 2002 ....  $430  $205,915   $161,453    $9,776  $(9,404)  $(1,032)  $(145,480)  $(2,412)  $(7,674)  $    --  $211,572
  Net income for the
   three months ended
   March 31, 2003 .....    --        --      6,848        --       --        --          --        --        --        --     6,848
Cash dividends
  declared ($0.105) ...    --        --     (2,881)       --       --        --          --        --        --        --    (2,881)
Net change in
 unrealized gain on
 securities
 available for sale ...    --        --         --     1,445       --        --          --        --        --        --     1,445
Purchases of
 treasury stock .......    --        --         --        --       --        --     (12,353)       --        --        --   (12,353)
Increase in cost
 of DDFP, net .........    --        --         --        --       --        --          --       (90)       --        --       (90)
Exercise of
 stock options ........    --       (67)      (477)       --       --        --         549        --        --        --         5
Purchase and
 retirement of
 common stock .........    --      (177)        --        --       --        --          --        --        --        --      (177)
Amortization of RRP ...    --        --         --        --       --       239          --        --        --        --       239
ESOP expense ..........    --       121         --        --      230        --          --        --        --        --       351
                         ----  --------   --------    ------  -------     -----   ---------   -------   -------   -------  --------
Balance at
 March 31, 2003 .......  $430  $205,792   $164,943   $11,221  $(9,174)    $(793)  $(157,284)  $(2,502)  $(7,674)  $    --  $204,959
                         ====  ========   ========   =======  =======     =====   =========   =======   =======   =======  ========


Balance at
 December 31, 2003 ....  $430  $208,523   $166,902    $4,059  $(8,486)    $(280)  $(150,571)  $(2,768)  $(7,674)  $17,439  $227,574
Net income for the
 three months ended
 March 31, 2004 .......    --        --      6,031        --       --        --          --        --        --        --     6,031
Cash dividends
 declared ($0.105) ....    --        --     (2,968)       --       --        --          --        --        --        --    (2,968)
Net change in
 unrealized gain
 on securities
 available for sale ...    --        --         --     3,268       --        --          --        --        --        --     3,268
Decrease in cost
 of DDFP, net .........    --       348        (73)       --       --        --          --       (90)       --      (164)       21
Exercise of stock
 options ..............    --         5          1        --       --        --         456        --        --        --       462
Tax benefit on
 options and awards ...    --       436         --        --       --        --          --        --        --        --       436
Purchase and
 retirement of
 common stock .........    --      (102)        --        --       --        --          --        --        --        --      (102)
Amortization of RRP ...    --        16         --        --       --        71          --        --        --        --        87
ESOP expense ..........    --       304         --        --      229        --          --        --        --        --       533
                         ----  --------   --------    ------  -------     -----   ---------   -------   -------   -------  --------
Balance at
 March 31, 2004 .......  $430  $209,530   $169,893    $7,327  $(8,257)    $(209)  $(150,115)  $(2,858)  $(7,674)  $17,275  $235,342
                         ====  ========   ========   =======  =======     =====   =========   =======   =======   =======  ========
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.


                                       5
<PAGE>

FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                                                                 Three Months Ended
                                                                                                      March 31,
                                                                                             ----------------------------
                                                                                                2004            2003
                                                                                             ------------    ------------
<S>                                                                                        <C>             <C>
Cash flows from operating activities:
   Net income ..........................................................................   $       6,031   $       6,848
   ADJUSTMENTS  TO  RECONCILE  NET  INCOME  TO NET CASH  PROVIDED  BY  OPERATING
   ACTIVITIES:
   Depreciation of premises and equipment ..............................................             350             372
   Amortization of core deposit intangibles ............................................             210             210
   ESOP expense ........................................................................             533             351
   Amortization of RRP .................................................................              87             239
   DDFP credit .........................................................................              --            (459)
   Net amortization of premiums and accretion of discounts and deferred fees ...........           1,189           1,175
   Loans originated for sale ...........................................................          (5,298)        (18,080)
   Proceeds from sales of mortgage loans held for sale .................................           5,165          13,811
   Net gain on sales of loans and securities available for sale ........................            (363)           (893)
   Net gain on sale of real estate owned ...............................................              --             (81)
   Decrease in interest and dividends receivable .......................................             123             232
   Tax benefit on stock options and RRP ................................................             436              --
   Decrease in other liabilities .......................................................          (2,941)         (3,182)
   Decrease in other assets ............................................................             847           2,012
                                                                                             ------------    ------------
         Net cash provided by operating activities .....................................           6,369           2,555
                                                                                             ------------    ------------
Cash flows from investing activities:
   Proceeds from sales/calls/maturities of investment securities available for sale ....          22,589          17,687
   Purchases of investment securities available for sale ...............................         (17,007)        (15,579)
   Redemption (purchase) of FHLB-NY stock ..............................................           1,552          (1,246)
   Proceeds from sales of mortgage-backed securities available for sale ................          74,947          50,036
   Principal payments on mortgage-backed securities available for sale .................          44,527          91,049
   Purchases of mortgage-backed securities available for sale ..........................         (85,880)       (155,868)
   Principal repayments on loans .......................................................          86,616         158,526
   Origination of loans ................................................................         (95,770)       (164,096)
   Purchases of mortgage loans .........................................................          (3,057)         (3,299)
   Proceeds from sale of real estate owned .............................................              --             153
   Purchases of premises and equipment .................................................             (37)           (727)
                                                                                             ------------    ------------
         Net cash provided by (used in) investing activities ...........................          28,480         (23,364)
                                                                                             ------------    ------------
Cash flows from financing activities:
   Purchase of treasury stock ..........................................................              --         (12,353)
   Decrease (increase) in cost of DDFP, net ............................................              21             (90)
   Stock options exercised .............................................................             462              72
   Cash dividends paid .................................................................          (2,968)         (2,881)
   Net increase in deposits ............................................................           6,382          18,091
   Proceeds from borrowed funds ........................................................              --          50,000
   Repayment of borrowed funds .........................................................         (41,043)        (25,040)
   Net increase in advances by borrowers for taxes and insurance .......................             261             363
   Purchase and retirement of common stock .............................................            (102)           (177)
                                                                                             ------------    ------------
         Net cash (used in) provided by financing activities ...........................         (36,987)         27,985
                                                                                             ------------    ------------
         Net (decrease) increase in cash and cash equivalents ..........................          (2,138)          7,176
Cash and cash equivalents at beginning of period .......................................          75,807          65,945
                                                                                             ------------    ------------
Cash and cash equivalents at end of period .............................................   $      73,669   $      73,121
                                                                                             ============    ============
Supplemental  disclosures of cash flow information:
   Cash paid during the period for:
       Interest ........................................................................   $      11,803   $      14,165
       Income taxes ....................................................................          10,300           4,803
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.


                                       6
<PAGE>

          FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES

      Notes to Unaudited Consolidated Financial Statements



(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") for interim
financial  information and in conformity with the  instructions to Form 10-Q and
Article 10 of Regulation S-X for First Sentinel Bancorp,  Inc. ("First Sentinel"
or the  "Company") and its  wholly-owned  subsidiaries,  First Sentinel  Capital
Trust I, First  Sentinel  Capital  Trust II,  and First  Savings  Bank,  ("First
Savings"  or  the  "Bank");  the  Bank's  wholly-owned  subsidiaries,   Sentinel
Investment  Corp.  and  FSB  Financial  LLC;  and  Sentinel  Investment  Corp.'s
majority-owned   subsidiary,   1000  Woodbridge   Center  Drive,   Inc.  Certain
disclosures have been omitted or condensed pursuant to such rules. These interim
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  included  in the  Company's  Form 10-K for the year ended
December 31, 2003, which was filed on March 15, 2004.

In the  opinion  of  management,  all  adjustments  (consisting  of only  normal
recurring accruals) necessary to present fairly the financial condition, results
of  operations,  and  changes  in cash flows have been made at and for the three
months ended March 31, 2004 and 2003.  The results of  operations  for the three
months ended March 31, 2004, are not necessarily  indicative of results that may
be expected for the entire fiscal year ending December 31, 2004.

(B) STOCK-BASED COMPENSATION

The  Company  applies  the  "intrinsic  value  based  method"  as  described  in
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees,"  and  related  interpretations  in  accounting  for its  stock-based
compensation.  No employee  compensation  cost for stock options is reflected in
net income,  as all options  granted under the Company's  stock option plans had
exercise  prices  greater  than or equal to the market  value of the  underlying
common  stock on the  date of  grant.  Stock  awarded  to  employees  under  the
Company's  Recognition  and  Retention  Plan is expensed by the Company over the
awards' vesting period based upon the fair market value of the stock on the date
of the  grant.  The  following  table  illustrates  the effect on net income and
earnings  per  share if the  Company  had  applied  the fair  value  recognition
provisions  for  stock-based  compensation  pursuant to  Statement  of Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-based
Compensation," amended by SFAS No. 148, "Accounting for Stock-based Compensation
- Transition and Disclosure" (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                        Three Months Ended March 31,
                                                                ------------------------------------------
                                                                     2004                     2003
                                                                ----------------        -----------------
<S>                                                              <C>                       <C>
Net income, as reported..................................               $ 6,031                 $ 6,848
Add:
    Stock-based employee compensation expense
       included in reported net income, net of related
       tax effects (RRP awards)..........................                    57                     155
Deduct:
    Total stock-based employee compensation
       expense determined under fair value based
       method for all options and RRP awards, net
       of related tax....................................                    62                     162
                                                                 ---------------           -------------
Pro forma net income.....................................               $ 6,026                 $ 6,841
                                                                 ===============           =============
Net income per common share:
   Basic - as reported...................................                $ 0.23                  $ 0.26
                                                                 ===============           =============
   Basic - pro forma.....................................                $ 0.23                  $ 0.26
                                                                 ===============           =============
   Diluted - as reported.................................                $ 0.22                  $ 0.24
                                                                 ===============           =============
   Diluted - pro forma.................................. .               $ 0.22                  $ 0.24
                                                                 ===============           =============
</TABLE>



                                       7
<PAGE>

(C) EARNINGS PER SHARE

Basic  earnings  per share is  calculated  by  dividing  net income by the daily
average  number of common  shares  outstanding  during the period.  Common stock
equivalents are not included in the calculation.

Diluted  earnings per share is computed  similarly to that of basic earnings per
share except that for stock options and RRP shares the  denominator is increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding if all potential  dilutive  common shares were issued  utilizing the
treasury stock method. With respect to the DDFP shares, such shares are included
in diluted  earnings per share and net income is adjusted to eliminate  the DDFP
credit.

Calculation of Basic and Diluted Earnings Per Share
--------------------------------------------------------
(dollars in thousands, except share data)

<TABLE>
<CAPTION>
                                                  Three Months Ended March 31,
                                               -----------------------------------
                                                    2004               2003
                                               ----------------   ----------------
<S>                                         <C>                <C>
Net income for basic earnings per share     $            6,031 $            6,848
DDFP credit, net of related tax                             --               (298)
                                               ----------------   ----------------
Net income for diluted earnings per share   $            6,031 $            6,550
                                               ================   ================

Basic weighted-average common shares
     outstanding                                    26,334,868         25,961,344
Plus: Common stock held by DDFP                        979,404            984,244
Plus: Dilutive stock options and awards                567,186            706,449
                                               ----------------   ----------------
Diluted weighted-average common
     shares outstanding                             27,881,458         27,652,037
                                               ================   ================
Net income per common share:
   Basic                                    $             0.23 $             0.26
                                               ================   ================
   Diluted                                  $             0.22 $             0.24
                                               ================   ================
</TABLE>


(2)  DIVIDENDS

Based upon current  operating  results,  the Company  declared cash dividends of
$0.105 per share on January 28, 2004, payable February 27, 2004, to stockholders
of record on February 13, 2004.

(3)  COMMITMENTS AND CONTINGENCIES

At March 31, 2004, the Company had the following  commitments:  (i) to originate
loans of $102.1  million;  (ii) unused equity lines of credit of $81.7  million;
(iii)  unused  commercial  lines  of  credit  of  $15.4  million;   (iv)  unused
construction  lines of  credit  of $77.2  million;  and (v)  letters  of  credit
outstanding totaling $1.3 million. Further,  certificates of deposits, which are
scheduled to mature and/or rollover in one year or less,  totaled $372.5 million
at March 31, 2004.

(4)  ALLOWANCE FOR LOAN LOSSES

The following  table  presents the activity in the allowance for loan losses (in
thousands):

                                                 Three Months Ended March 31,
                                               ---------------------------------
                                                    2004              2003
                                               ----------------   --------------
Balance at beginning of period              $           12,768 $         12,830
Provision charged to operations                             --               --
Net charge-offs                                             (2)              (2)
                                               ----------------   --------------
Balance at end of period                    $           12,766 $         12,828
                                                ===============    =============


                                       8
<PAGE>

(6)  COMPREHENSIVE  INCOME

Total  comprehensive  income,  consisting  of net  income  and the net change in
unrealized  gain/(loss)  on securities  available for sale, was $9.3 million and
$8.3 million for the three months ended March 31, 2004 and 2003, respectively.


                                       9
<PAGE>

FIRST SENTINEL BANCORP, INC.

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

FORWARD-LOOKING  STATEMENTS.  Statements  contained  in this report that are not
historical fact are forward-looking  statements,  as that term is defined in the
Private  Securities  Litigation  Reform  Act of  1995.  Such  statements  may be
characterized  as  management's  intentions,  hopes,  beliefs,  expectations  or
predictions  of the future.  It is important  to note that such  forward-looking
statements  are  subject  to risks and  uncertainties  that could  cause  actual
results  to differ  materially  from  those  projected  in such  forward-looking
statements.  Factors that could cause  future  results to vary  materially  from
current expectations include, but are not limited to, changes in interest rates,
economic  conditions,  deposit and loan growth,  real estate  values,  loan loss
provisions,  competition,  customer retention; changes in accounting principles,
policies or guidelines; legislative and regulatory changes; and the inability to
complete the merger with Provident Financial Services,  Inc. ("PFS") as and when
expected. The Company has no obligation to update any forward-looking statements
at any time.

PENDING MERGER WITH PROVIDENT FINANCIAL SERVICES, INC. On December 22, 2003, the
Company announced that it had entered into a definitive  agreement to merge with
and into PFS in a cash and  stock  transaction  valued at  approximately  $642.0
million.  Under the terms of the  agreement,  60% of the Company's  common stock
will be converted  into PFS stock and the remaining  40% will be converted  into
cash. The Company's  stockholders will have the option to receive for each share
of the  Company's  common stock held either  1.092  shares of PFS common  stock,
$22.25  of  cash,  or some  combination  thereof,  subject  to an  election  and
allocation procedure as set forth in the merger agreement.  The merger agreement
has been approved by the directors of both PFS and the Company. The transaction,
which is expected to close on, or about June 30,  2004,  is subject to customary
closing  conditions,  including  regulatory  approvals  and the  approval of the
Company's shareholders and PFS's shareholders. The merger agreement requires the
Company  to pay PFS a  termination  fee of $24.0  million  if the  agreement  is
terminated  under certain  circumstances  following  the Company's  receipt of a
superior acquisition proposal.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES.   "Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations",  as well as other
disclosures  found  elsewhere  in this Form 10-Q,  are based upon the  Company's
consolidated  financial statements,  which have been prepared in accordance with
accounting  principles  generally  accepted  in the  United  States  of  America
("GAAP").  The preparation of these financial statements requires the Company to
make  estimates  and  judgments  that  affect  the  reported  amounts of assets,
liabilities, revenues and expenses. Note 1 to the Company's Audited Consolidated
Financial  Statements  for the year ended  December  31,  2003  included  in the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 2003, as
supplemented  by this report,  contains a summary of the  Company's  significant
accounting  policies.  Management  believes the Company's policy with respect to
the methodology for the  determination of the allowance for loan losses involves
a higher degree of  complexity  and requires  management  to make  difficult and
subjective  judgments which often require  assumptions or estimates about highly
uncertain  matters.  Changes in these judgments,  assumptions or estimates could
materially   impact  results  of  operations.   This  critical  policy  and  its
application  is reviewed  quarterly  with the Audit  Committee  and the Board of
Directors.

The allowance for loan losses is established through a provision for loan losses
based upon management's  evaluation of the adequacy of the allowance,  including
an  assessment  of  known  and  inherent  risks in the  loan  portfolio,  giving
consideration to the size and composition of the portfolio, review of individual
loans for adverse  situations  that may affect the borrowers'  ability to repay,
actual  loan loss  experience,  level of  delinquencies,  detailed  analysis  of
individual loans for which full collectibility may not be assured, the existence
and estimated net realizable  value of any underlying  collateral and guarantees
securing  the  loans,  and  current  economic  and market  conditions.  Although
management uses the best information  available,  the level of the allowance for
loan losses  remains an estimate  which is subject to  significant  judgment and
short-term  change.  Various regulatory  agencies,  as an integral part of their
examination  process,  periodically  review  the  Company's  allowance  for loan
losses. Such agencies may require the Company to make additional  provisions for
loan  losses  based  upon  information  available  to them at the  time of their
examination.  Furthermore,  the majority of the  Company's  loans are secured by
real estate in the State of New Jersey.  Accordingly,  the  collectibility  of a
substantial  portion of the carrying  value of the Company's  loan  portfolio is
susceptible to changes in local market conditions and may be adversely  affected
should real estate values  decline or the New Jersey area  experience an adverse
economic  shock.  Future  adjustments  to the  allowance  for loan losses may be
necessary due to economic, operating, regulatory and other conditions beyond the
Company's control.


                                       10
<PAGE>

The  determination of the loans on which full  collectibility  is not reasonably
assured,  the estimates of the fair value of the  underlying  collateral and the
assessments of economic and regulatory conditions are subject to assumptions and
judgments by management.  The allowance  could differ  materially as a result of
changes in these assumptions and judgments.

These evaluations are inherently  subjective because, even though they are based
on  objective  data,  it  is  management's  interpretation  of  that  data  that
determines  the amount of the  appropriate  allowance.  Therefore,  the  Company
periodically  reviews  the  actual  performance  and  charge-off  history of its
portfolio  and compares that to the  previously  determined  allowance  coverage
percentages.  In doing so, the  Company  evaluates  the  impact  the  previously
mentioned variables may have had on the portfolio to determine which changes, if
any, should be made to the assumptions and analyses.

Actual results could differ from the Company's  estimates as a result of changes
in  economic  or market  conditions.  Changes  in  estimates  could  result in a
material  change in the  allowance for loan losses.  While the Company  believes
that the allowance for loan losses has been established and maintained at levels
adequate to reflect the risks inherent in its loan portfolio,  future  increases
may be necessary if economic or market conditions decline substantially from the
conditions that existed at the time of the initial determinations.

EXECUTIVE SUMMARY. Net income for the three months ended March 31, 2004 was $6.0
million,  or $0.22 per diluted share,  compared with $6.8 million,  or $0.24 per
diluted  share for the three months ended March 31, 2003.  Annualized  return on
average  equity was 10.41% for first  quarter of 2004,  compared with 12.80% for
the same period in 2003, while the annualized return on average assets was 1.10%
for the first  quarter of 2004,  compared  with  1.21% for the first  quarter of
2003. Net interest income declined $128,000 for the first quarter of 2004 versus
the same  period in 2003,  as  reduced  interest  income was  largely  offset by
reduced  interest   expense.   Interest-earning   assets  and   interest-bearing
liabilities experienced decreases in average balances, resulting in a decline in
net interest-earning assets compared with the first quarter of 2003. The Company
allowed  these  average  balances  to  decline  as it  determined  not  to  grow
fixed-rate  earning assets during a period of  historically  low interest rates.
The impact of these declines was partially offset by an increase in the interest
rate spread.  Non-interest  income declined  $537,000,  primarily as a result of
lower net gains realized on sales on securities.  Non-interest expense increased
$408,000  compared  with the first  quarter  of 2003,  primarily  as a result of
increased compensation expense and costs related to the Company's pending merger
with PFS.

ASSETS.  Total assets  decreased  $28.2  million from December 31, 2003, to $2.2
billion at March 31, 2004.  The decrease in assets was primarily a result of the
Company's  decision  not to pursue  growth at  historically  low  interest  rate
levels.  Changes in asset composition during the quarter consisted  primarily of
decreases  in  mortgage-backed  securities  ("MBS")  and  investment  securities
available for sale, partially offset by an increase in loans receivable.

MBS available for sale decreased  $30.1  million,  or 4.2%, to $692.7 million at
March 31, 2004,  from $722.8  million at December 31, 2003.  Sales and principal
repayments of $74.4 million and $44.5 million, respectively,  exceeded purchases
totaling  $85.9  million  for the three  month  period  ended  March  31,  2004.
Purchases  during  the  quarter  consisted  primarily  of  MBS  issued  by  U.S.
government-sponsored  agencies.  At March  31,  2004,  approximately  65% of the
Company's MBS had adjustable rates and the portfolio had a modified  duration of
3.1 years.

Investment  securities  available for sale decreased  $4.6 million,  or 4.3%, to
$101.9  million at March 31,  2004,  from $106.5  million at December  31, 2003.
Sales,  calls and maturities of $22.8 million exceeded  purchases totaling $17.0
million for the three month period ended March 31,  2004.  Purchases  during the
quarter  consisted of securities issued by U.S.  government-sponsored  agencies.
Proceeds from the sales,  calls and maturities of investment  securities and MBS
available for sale were used to reduce borrowings and fund loan growth.

Loans receivable,  net,  increased $12.1 million from December 31, 2003, to $1.2
billion at March 31, 2004.  Total loan  originations  for the three months ended
March 31, 2004,  were $101.1  million,  compared to $182.2  million for the same
period in 2003,  and $157.0  million for the trailing  quarter.  Adjustable-rate
single-family  first  mortgage loans  accounted for $14.0  million,  or 13.8% of
production,  while  fixed-rate  single-family  first mortgage loan  originations
totaled $9.3 million,  or 9.2% of total  originations for the first three months
of 2004. Also during the first quarter of 2004, construction lending,  primarily
for single-family developments and commercial buildings,  totaled $32.2 million,
or 31.9% of total  originations,  while  commercial real estate,  commercial and
multi-family  loan originations  were $22.3 million,  or 22.1%.  During the same
period,  consumer  loan  originations,  including  home equity  loans and credit
lines,  were $23.3 million,  or 23.0% of total  originations.  In addition,  the
Company purchased $3.1 million of primarily adjustable-rate  single-family first
mortgage  loans through  correspondents  during the three months ended March 31,
2004.  Purchased  loans are  underwritten  internally and are extended at higher
rates than those currently offered by the Bank.


                                       11
<PAGE>

Repayment of principal on loans totaled $86.6 million for the three months ended
March 31,  2004,  compared to $158.5  million  for the same period in 2003,  and
$137.0 million for the trailing  quarter.  The decrease in loan originations and
repayments  was  primarily   attributable  to  reduced  refinance  activity,  as
longer-term  interest  rates have  increased  and most eligible  borrowers  have
already realized the economic  benefits of refinancing their mortgage debt. Loan
sales for the first  quarter of 2004 totaled $5.2  million,  compared with $13.8
million for the same period in 2003.  The Company  generally  sells  fixed-rate,
30-year loan production as a means of managing  interest rate risk. At March 31,
2004, $557.3 million,  or approximately 50%, of the Company's mortgage loans had
adjustable interest rates. Approximately $196.5 million of these adjustable-rate
loans are scheduled to reprice within the next twelve months.

Of the total  loan  portfolio  at March 31,  2004,  1-4  family  mortgage  loans
comprised  59.8%,  home equity loans comprised 9.3%, and commercial real estate,
multi-family  and  construction  loans comprised  30.1%.  The Company intends to
continue to prudently expand its  non-residential  mortgage  lending  activities
while maintaining its underwriting  standards and commitment to  community-based
lending.  While  management  intends to continue  emphasizing the origination of
loans,  future levels of loan  originations and repayments will be significantly
influenced by external  interest rates and other economic factors outside of the
control of the Company,  as well as the Company's  interest rate risk management
practices.

LIABILITIES. Total liabilities decreased $36.0 million, or 1.8%, to $1.9 billion
at March 31, 2004, from $2.0 billion at December 31, 2003.

Borrowed funds decreased $41.0 million,  or 6.9%, to $550.5 million at March 31,
2004,  from $591.5  million at December 31, 2003 as the Company  repaid  several
maturing reverse repurchase agreements.

Deposits increased $6.4 million from December 31, 2003, to $1.3 billion at March
31,  2004.  Core  deposits,  consisting  of  checking,  savings and money market
accounts,  grew by $16.5  million,  or 2.0%, to $839.1 million and accounted for
62.3% of total  deposits at March 31, 2004.  Core deposit  growth was  partially
offset by managed  certificate of deposit run-off,  as certificates  declined by
$10.1  million,  or  2.0%,  compared  with  year-end  2003.  Decreases  occurred
primarily in the one-year and shorter maturity  categories.  The Company intends
to continue its efforts to develop and maintain core deposit relationships while
reducing higher-costing certificates of deposit.

CAPITAL. Stockholders' equity increased $7.8 million, or 3.4%, to $235.3 million
at March 31, 2004,  from $227.6  million at December  31, 2003.  The increase in
equity was attributable to net income of $6.0 million for the three months ended
March 31, 2004, an increase in the net unrealized  gain on securities  available
for sale of $3.3 million and the  amortization of stock-based  compensation  and
benefit plans and related tax benefits of $1.5 million, partially offset by cash
dividends of $3.0  million.  Book value and  tangible  book value per share were
$8.62 and $8.49, respectively, at March 31, 2004, compared with $8.35 and $8.21,
respectively,  at December 31, 2003, and $7.71 and $7.54, respectively, at March
31, 2003.

The Federal Deposit  Insurance  Corporation  requires that the Bank meet minimum
leverage,  Tier 1 and total risk-based capital requirements.  At March 31, 2004,
the Bank exceeded all regulatory  capital  requirements,  as follows (dollars in
thousands):

<TABLE>
<CAPTION>
                                Required                   Actual
                          ----------------------    ----------------------        Excess of Actual
                                         % of                      % of            Over Regulatory
                            Amount      Assets         Amount     Assets             Requirements
                          ----------- ----------    ----------- ----------     -----------------------
<S>                          <C>         <C>          <C>         <C>                  <C>
Leverage Capital             $87,534     4.00%        $211,668     9.67%               $ 124,134
Risk-based Capital:
Tier 1                        44,786     4.00%         211,668    18.90%                 166,882
Total                         89,572     8.00%         224,434    20.05%                 134,862
</TABLE>

LIQUIDITY  AND CAPITAL  RESOURCES.  The Company's  primary  sources of funds are
deposits;   proceeds  from   principal  and  interest   payments  on  loans  and
mortgage-backed  securities;  sales of  loans,  mortgage-backed  securities  and
investments  available for sale;  maturities or calls of investment  securities;
and advances from the FHLB-NY and other  borrowed  funds.  While  maturities and
scheduled amortization of loans and mortgage-backed securities are a predictable
source  of funds,  deposit  cash  flows and  mortgage  prepayments  are  greatly
influenced by interest rates, competition, and economic conditions.


                                       12
<PAGE>

The most  significant  sources of funds for the first three  months of 2004 were
principal  repayments and  prepayments of loans and  mortgage-backed  securities
totaling $86.6 million and $44.5 million,  respectively,  proceeds from sales of
MBS  totaling  $74.9  million,  proceeds  from sales,  calls and  maturities  of
investment securities of $22.6 million, a net increase in deposits totaling $6.4
million and proceeds from sales of mortgage loans of $5.2 million. If necessary,
the Company has  additional  borrowing  capacity with the FHLB-NY,  including an
available  overnight line of credit of up to $50.0  million.  At March 31, 2004,
the Company had unpledged investment  securities and MBS available for sale with
a market value of $357.5 million.

The  primary  uses of  funds  for the  first  three  months  of  2004  were  the
origination of loans,  including  loans held for sale,  totaling $101.1 million,
purchases of mortgage-backed securities totaling $85.9 million, the repayment of
borrowings  of $41.0 million and  purchases of  investment  securities  totaling
$17.0 million.

The Company anticipates that it will have sufficient funds available to meet its
current commitments. At March 31, 2004, the Company had commitments to originate
loans of $102.1 million.  The Company is obligated to pay $1.8 million under its
lease agreements for branch and administrative  facilities, of which $446,000 is
due in the next twelve months.  Certificates  of deposit  scheduled to mature in
one year or less totaled $372.5 million at March 31, 2004. Based upon historical
experience,  management  estimates  that a significant  portion of such deposits
will remain with the Company.

OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

The Company is a party to financial  instruments with off-balance  sheet risk in
the normal course of its business to meet the financing  needs of its customers.
These instruments involve, to varying degrees, elements of credit, interest rate
and  liquidity  risk in and  are  not  recorded  in the  Company's  consolidated
financial  statements.  The Company's  off-balance  sheet  arrangements  consist
primarily of lending  commitments,  operating  lease  commitments and letters of
credit.

Lending  commitments  include  commitments  to originate and purchase  loans and
commitments  to fund unused lines of credit.  Commitments  to extend  credit are
agreements  to  lend to a  customer  as long as  there  is no  violation  of any
condition  established  in  the  contract.   Commitments  generally  have  fixed
expiration dates or other termination  clauses and may require payment of a fee.
Since some of the  commitments  are expected to expire without being drawn upon,
the  total  commitment   amounts  do  not  necessarily   represent  future  cash
requirements.  The  Company's  exposure  to credit  risk is  represented  by the
contractual amount of the instruments.

Operating  lease  commitments  are  obligations  under  various   non-cancelable
operating  leases on  buildings  and land  used for  office  space  and  banking
purposes.  The  leases  generally  have rent  escalation  provisions  based upon
certain defined indexes.

Standby letters of credit are conditional  commitments  issued by the Company to
guarantee  the  performance  of a  customer  to a third  party.  The  guarantees
generally extend for a term of up to one year and are fully collateralized.  For
each guarantee issued, if the customer fails to perform or defaults on a payment
to the third  party,  the  Company  would have to perform  under the  guarantee.
Commitments under standby letters of credit, both financial and performance,  do
not necessarily  represent future cash  requirements,  in that these commitments
often expire without being drawn upon.

Borrowed funds include fixed-term borrowings from the Federal Home Loan Bank and
reverse  repurchase  agreements.  The  borrowings  have defined  terms and under
certain circumstances are callable at the option of the lender.

Subordinated  debentures  represent  debentures  issued by the  Company to First
Sentinel  Capital  Trust I and II,  which  were  formed in  connection  with the
issuance of preferred capital securities.


                                       13
<PAGE>

The following table shows the contractual obligations of the Company by expected
payment period as of March 31, 2004:

<TABLE>
<CAPTION>
    CONTRACTUAL                          LESS THAN                                       MORE THAN
     OBLIGATION             TOTAL         ONE YEAR         1-3 YEARS      3-5 YEARS       5 YEARS
     ----------             -----         --------         ---------      ---------       -------
<S>                        <C>             <C>             <C>             <C>            <C>
Lending commitments        $276,390        $276,390        $     --        $    --        $     --
Operating lease
  commitments .....           1,804             446             661            320             377
Standby letters of
  credit ..........           1,316             429             887             --              --
Borrowed Funds ....         550,457          36,000         257,000         97,457         160,000
Subordinated
  debentures ......          25,774              --              --             --          25,774
</TABLE>


COMPARISON  OF  OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND
2003.

RESULTS OF OPERATIONS.  For the quarter ended March 31, 2004,  basic and diluted
earnings per share were $0.23 and $0.22,  respectively,  compared with basic and
diluted  earnings  per share of $0.26 and $0.24,  respectively,  for the quarter
ended  March 31,  2003.  Net income for the three  months  ended  March 31, 2004
totaled $6.0 million  compared  with $6.8 million for the first quarter of 2003.
Annualized  return on average equity declined to 10.41% for the first quarter of
2004, from 12.80% for the comparable 2003 period.  Annualized  return on average
assets  was 1.10% for the March  2004  quarter,  compared  to 1.21% for the same
period in 2003.


                                       14
<PAGE>

 CONSOLIDATED AVERAGE STATEMENTS OF FINANCIAL CONDITION
 (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                              Three Months Ended March 31,
                                                       ------------------------------------------------------------------------
                                                                      2004                                  2003
                                                       -----------------------------------  -----------------------------------
                                                          Average                Average       Average                Average
                                                          Balance    Interest   Yield/Cost     Balance    Interest   Yield/Cost
                                                       -----------------------------------  -----------------------------------
<S>                                                      <C>            <C>         <C>       <C>            <C>         <C>
ASSETS
  Interest-earning assets:
   Federal funds sold ..............................     $   24,857     $    58     0.93%     $   34,354     $   101     1.18%
   Investment securities available for sale (1) ....        127,297       1,249     3.92         131,618       1,644     5.00
   Mortgage-backed securities available for sale ...        727,786       7,429     4.08         771,408       7,843     4.07
                                                         ----------     -------     ----      ----------     -------     ----
     Total investments .............................        879,940       8,736     3.97         937,380       9,588     4.09

   Mortgage loans ..................................      1,108,135      16,206     5.85       1,103,789      17,353     6.29
   Home equity loans ...............................         61,407         942     6.14          62,892       1,074     6.83
   Home equity lines of credit .....................         51,995         526     4.05          48,278         562     4.66
   Other loans .....................................          9,632         153     6.35          15,057         204     5.42
                                                         ----------     -------     ----      ----------     -------     ----
     Total loans ...................................      1,231,169      17,827     5.79       1,230,016      19,193     6.24
                                                         ----------     -------     ----      ----------     -------     ----

  Total interest-earning assets ....................      2,111,109      26,563     5.03%      2,167,396      28,781     5.31%
  Non-interest earning assets ......................         86,968                               95,069
                                                         ----------                           ----------
        Total assets ...............................     $2,198,077                           $2,262,465
                                                         ==========                           ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Interest-bearing liabilities:
   NOW and money market accounts ...................     $  526,594     $ 1,061     0.81%     $  491,108     $ 1,336     1.09%
   Savings accounts ................................        220,824         458     0.83         225,574         722     1.28
   Certificates of deposit .........................        511,739       2,888     2.26         595,202       4,180     2.81
                                                         ----------     -------               ----------     -------
     Total interest-bearing deposits ...............      1,259,157       4,407     1.40       1,311,884       6,238     1.90

   Borrowed funds ..................................        585,217       6,796     4.65         601,673       7,532     5.01
   Subordinated debentures .........................         25,774         477     7.40              --          --       --
                                                         ----------     -------               ----------     -------
  Total interest-bearing liabilities ...............      1,870,148      11,680     2.50       1,913,557      13,770     2.88
                                                                        -------     ----                     -------     ----
  Non-interest bearing deposits ....................         79,049                               73,082
  Other liabilities ................................         17,190                               61,766
                                                         ----------                           ----------
        Total liabilities ..........................      1,966,387                            2,048,405
  Stockholders' equity .............................        231,690                              214,060
                                                         ----------                           ----------
        Total liabilities and stockholders'
            equity .................................     $2,198,077                           $2,262,465
                                                         ==========                           ==========
Net interest income/interest rate spread ...........                    $14,883     2.53%                    $15,011     2.43%
                                                                        =======     ====                     =======     ====
Net interest-earning assets/net interest
   margin...........................................     $  240,961                 2.82%     $  253,839                 2.77%
                                                         ==========                 ====      ==========                 ====
Ratio of interest-earning assets
   to interest-bearing liabilities .................           1.13 X                               1.13 X
                                                         ==========                           ==========
</TABLE>

(1) Includes FHLB-NY stock.


                                       15
<PAGE>

INTEREST  INCOME.  Interest  income for the three  months  ended March 31, 2004,
decreased by $2.2 million, or 7.7%, to $26.6 million,  compared to $28.8 million
for the same period in 2003.

Interest on loans  decreased  $1.4  million,  or 7.1%,  to $17.8 million for the
three months ended March 31, 2004, compared to $19.2 million for the same period
in 2003. The average  balance of the loan portfolio  increased $1.2 million,  or
0.1%,  to $1.2 billion for the first  quarter of 2004,  compared  with the first
three months of 2003.  Growth in average  construction and commercial  mortgages
was  partially  offset  by a  decline  in  average  1-4  family  mortgage  loans
attributable to prepayments and refinancings. Interest income on loans, however,
decreased  as the average  yield on the  portfolio  decreased 45 basis points to
5.79% as a result of lower market interest rates.

Interest on MBS and investment securities,  including Fed funds sold and FHLB-NY
stock, declined $852,000 for the quarter ended March 31, 2004, compared with the
same  period in 2003,  as a result of a decrease  in the  average  balance and a
decline in market interest rates.  The average balance of the investment and MBS
portfolios  totaled $879.9  million,  with an annualized  yield of 3.97% for the
three months ended March 31, 2004,  compared  with an average  balance of $937.4
million with an  annualized  yield of 4.09% for the three months ended March 31,
2003.

INTEREST EXPENSE.  Interest expense  decreased $2.1 million,  or 15.2%, to $11.7
million for the three months ended March 31, 2004, compared to $13.8 million for
the same period in 2003.

Interest expense on deposits  decreased $1.8 million,  or 29.4%, to $4.4 million
for the three months ended March 31, 2004, compared to $6.2 million for the same
period  in 2003,  as a result  of lower  market  interest  rates  and a shift in
deposit   composition   from   higher-costing   certificates   of  deposit  into
lower-priced core deposit accounts.  Interest expense on certificates of deposit
decreased  $1.3 million,  or 30.9%,  for the first quarter of 2004 compared with
2003. The average balance of certificates of deposit declined $83.5 million,  or
14.0%,  to $511.7 million for the three months ended March 31, 2004, from $595.2
million for the same period in 2003.  The average cost of  certificates  for the
three-month period ended March 31, 2004, fell 55 basis points to 2.26%, compared
to 2.81%  for the  same  period  in  2003.  Interest  expense  on core  deposits
decreased  $539,000,  or 26.2%,  to $1.5 million for the quarter ended March 31,
2004,   compared   with  the  same  period  in  2003  as  the  average  cost  of
interest-bearing  core  deposits  for the  three-months  ended  March  31,  2004
declined  34 basis  points to 0.81%,  compared  to 1.15% for the same  period in
2003. The average  balance of  interest-bearing  core deposits  increased  $30.7
million,  or 4.3%, to $747.4  million for the three months ended March 31, 2004,
from  $716.7  million  for  the  same  period  in  2003.  In  addition,  average
non-interest  bearing deposits grew $6.0 million,  or 8.2%, to $79.0 million for
the three  months  ended March 31,  2004,  versus the  comparable  2003  period.
Average  deposits  for the first  quarter of 2004 were  impacted  by the sale in
December 2003 of the Company's Lawrenceville, New Jersey branch which held $38.9
million in deposits.

Interest on borrowed funds for the three months ended March 31, 2004,  decreased
$736,000, or 9.8%, to $6.8 million, compared to $7.5 million for the same period
in 2003. The average  balance of borrowed funds for the three months ended March
31, 2004, decreased to $585.2 million from $601.7 million for the same period in
2003. The average interest rate paid on borrowed funds declined to 4.65% for the
three months ended March 31,  2004,  compared  with 5.01% for the same period in
2003. The decline in interest  expense on borrowed funds was partially offset by
the inclusion in interest  expense in 2004 of $477,000 in costs on  subordinated
debentures as a result of the Company's adoption of revised FASB  Interpretation
No. 46,  "Consolidation of Variable Interest Entities",  ("FIN 46R") on December
31, 2003. FIN 46R required  deconsolidation  of the subsidiary  trusts formed in
connection  with the Company's  issuance of preferred  capital  securities.  The
distributions  on preferred  capital  securities  were included in  non-interest
expense  prior  to the  deconsolidation,  while  subsequently  the  interest  on
debentures is included in interest expense.

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest income before
provision for loan losses decreased $128,000,  or 0.9%, to $14.9 million for the
three  months  ended March 31,  2004,  compared to the same period in 2003.  The
decrease  was  due to the  changes  in  interest  income  and  interest  expense
described  above.  The interest rate spread was 2.53% for the three months ended
March 31,  2004,  compared  with 2.43% for the same period in 2003 and 2.42% for
the trailing  quarter.  The net interest  margin improved to 2.82% for the three
months  ended March 31,  2004,  from 2.77% for the same period in 2003 and 2.72%
for the fourth quarter of 2003.


                                       16
<PAGE>

PROVISION  FOR LOAN  LOSSES.  The Company  did not record a  provision  for loan
losses  during the  quarters  ended  March 31,  2004 and 2003,  as a result of a
stable loan  portfolio  size and asset  quality.  Provisions for loan losses are
made based on  management's  evaluation of risks inherent in the loan portfolio,
giving  consideration to on-going credit  evaluations and changes in the balance
and composition of the loan portfolio.  Total loans  receivable  increased $12.1
million,  or 1.0%,  to $1.2  billion at March 31, 2004 from  December  31, 2003,
while  non-performing loans declined to $1.3 million at March 31, 2004, compared
with $1.8 million at December  31, 2003 and $1.4 million at March 31, 2003.  The
allowance  for loan losses as a percentage of total loans was 1.03% at March 31,
2004,  compared  with  1.04%  at  December  31,  2003 and  March  31,  2003.  In
management's  opinion, the allowance for loan losses,  totaling $12.8 million at
March 31,  2004,  adequately  addresses  the risks  inherent  in the  portfolio.
Management  will  continue to review the need for additions to its allowance for
loan losses based upon its quarterly review of the loan portfolio,  the level of
delinquencies, and general market and economic conditions.

The following table sets forth ratios  regarding  non-accrual  loans,  and loans
which are 90 days or more  delinquent,  but on which  the  Company  is  accruing
interest at the dates indicated.  The Company discontinues  accruing interest on
delinquent loans when collection of interest is considered  doubtful,  generally
when 90 days or more  delinquent  and when  loan-to-value  ratios exceed 55%, at
which time all accrued but uncollected interest is reversed.

<TABLE>
<CAPTION>
(dollars in thousands)                                    Mar. 31,    Dec. 31,   Sept. 30,  June 30,    Mar. 31,
                                                            2004        2003       2003       2003        2003
                                                          ------------------------------------------------------
<S>                                                        <C>         <C>         <C>       <C>         <C>
Non-accrual mortgage loans ...........................     $  944      $1,176      $841      $1,291      $1,082
Non-accrual other loans ..............................         --          17         6           6          43
                                                          ------------------------------------------------------
   Total non-accrual loans ...........................        944       1,193       847       1,297       1,125
Loans 90 days or more delinquent and
     still accruing ..................................        367         634        64          64         294
                                                          ------------------------------------------------------
Total non-performing loans ...........................      1,311       1,827       911       1,361       1,419
Total foreclosed real estate, net of related
     allowance .......................................         --          --        --          50          --
                                                          ------------------------------------------------------
Total non-performing assets ..........................     $1,311      $1,827      $911      $1,411      $1,419
                                                          ======================================================
Non-performing loans to loans receivable .............      0.11%       0.15%     0.07%       0.11%       0.12%
Non-performing assets to total assets ................      0.06%       0.08%     0.04%       0.06%       0.06%
</TABLE>


NON-INTEREST INCOME.  Non-interest income decreased $537,000,  or 22.2%, to $1.9
million for the three  months  ended March 31,  2004,  from $2.4 million for the
same period in 2003.  The first  quarter of 2004  included net gains on sales of
loans and  securities  totaling  $363,000,  compared with $893,000 for the first
quarter of 2003. During the quarter ended March 31, 2003, the Company recognized
gains on the sale of higher coupon mortgage-backed  securities that demonstrated
a  significant   propensity  to  prepay,  as  well  as  several  corporate  debt
obligations.  The sale of loans and  securities  and related gains or losses are
dependent on market  conditions,  as well as the  Company's  liquidity  and risk
management  requirements.  Also in non-interest  income, a $142,000  increase in
fees and service charges primarily attributable to prepayment fees on commercial
mortgage  loans was offset by a $145,000  decrease  in other  income,  primarily
attributable  to a gain on sale of REO which took place in the first  quarter of
2003, and reduced income from annuity sales in the first quarter of 2004.

NON-INTEREST EXPENSE.  Non-interest expense for the three months ended March 31,
2004, increased $408,000, or 5.8%, to $7.5 million, compared to $7.1 million for
the same period in 2003.  Compensation and benefits expense  increased  $533,000
for the quarter ended March 31, 2004 compared with the same period in 2003.  The
increase in compensation  and benefits  expense was primarily  attributable to a
credit of  $459,000  resulting  from  changes in the fair value of stock held in
rabbi trust for the DDFP for the  quarter  ended  March 31,  2003.  The DDFP was
amended as to its  structure and operation  effective  October 1, 2003,  with no
further  changes in the fair value of stock held in the rabbi trust for the DDFP
required to be recognized as periodic credits or charges to compensation expense
subsequent  to that date.  Also included in  compensation  expense is a $182,000
increase in ESOP expense  resulting  from  appreciation  in the Company's  stock
price,  which was largely offset by a $152,000 decrease in stock awards expense,
the  majority of which fully  vested in December  2003.  Merger-related  charges
associated with the Company's  pending merger with PFS consisted of professional
fees  totaling  $264,000 for the first  quarter of 2004.  These  increases  were
partially offset by the  classification of expense associated with the Company's
subordinated  debentures  as interest  expense in 2004.  Prior to the  Company's
adoption of FIN 46R on December  31,  2003,  the  comparable  expense,  totaling
$472,000 for the first quarter of 2003, was  characterized as  "Distributions on
preferred capital securities" and included in non-interest expense.


                                       17
<PAGE>

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

There  have  been  no  material  changes  to  information   required   regarding
quantitative and qualitative  disclosures  about market risk from the end of the
preceding  fiscal  year  to  the  date  of the  most  recent  interim  financial
statements (March 31, 2004).

Item 4.  CONTROLS AND PROCEDURES.

a.) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
    -------------------------------------------------

    Christopher  Martin,  the Company's Chief Executive  Officer,  and Thomas M.
    Lyons, the Company's Chief Financial Officer, conducted an evaluation of the
    effectiveness  of the  Company's  disclosure  controls  and  procedures  (as
    defined in Rule  13a-15(e)  under the  Securities  Exchange Act of 1934,  as
    amended) as of March 31, 2004. Based upon their evaluation,  they each found
    the Company's  disclosure  controls and procedures  were effective to ensure
    that  information  required to be  disclosed in the reports that the Company
    files and submits under the Exchange Act is recorded, processed,  summarized
    and reported as and when required and that such  information  is accumulated
    and communicated to the Company's  management as appropriate to allow timely
    decisions regarding required disclosures.

b.) CHANGES IN INTERNAL CONTROLS.
    -----------------------------

    There were no changes  in the  Company's  internal  control  over  financial
    reporting  that occurred  during the period covered by this report that have
    materially  affected,  or are reasonably  likely to materially  affect,  the
    Company's internal control over financial reporting.

                           PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

         There are  various  claims  and  lawsuits  in which the  Registrant  is
         periodically  involved incidental to the Registrant's  business. In the
         opinion of  management,  no  material  loss is  expected  from any such
         pending claims and lawsuits.

Item 2.  CHANGES IN SECURITIES, USE OF  PROCEEDS AND ISSUER PURCHASES  OF EQUITY
         SECURITIES.

         None.

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

Item 5.  OTHER INFORMATION.

         None.


                                       18
<PAGE>

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         a.)  EXHIBITS

<TABLE>
<CAPTION>
          ---------------------------------------------------------------------------------------------
               Exhibit

               Number                                Description                           Reference
          ---------------------------------------------------------------------------------------------
                <S>          <C>                                                          <C>
                 3.1         Certificate of Incorporation of First Sentinel Bancorp, Inc.      *
                 3.2         Bylaws of First Sentinel Bancorp, Inc.                           **
                 3.3         Amendment to Bylaws of First Sentinel Bancorp, Inc.              ***
                  4          Stock certificate of First Sentinel Bancorp, Inc.                 *
                 11          Statement re: Computation of per Share Earnings                 Page 8
                31.1         Certification of Chief Executive Officer                     Filed herein
                31.2         Certification of Chief Financial Officer                     Filed herein
                32.1         Statement of Chief Executive Officer furnished pursuant to    Furnished
                             Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.        herein
                             Section 1350
                32.2         Statement of Chief Financial Officer furnished pursuant to    Furnished
                             Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.        herein
                             Section 1350
          ---------------------------------------------------------------------------------------------
</TABLE>

              *  Previously  filed and  incorporated  herein by reference to the
              Registration  Statement on Form S-1 and exhibits  thereto of First
              Sentinel Bancorp, Inc. (formerly First Source Bancorp,  Inc.), and
              any  amendments  or  supplements  thereto  filed  with  the SEC on
              December  19, 1997 and  amended on February 9, 1998,  SEC File No.
              333-42757.

              ** Previously  filed and  incorporated  herein by reference to the
              December  31,  2002 Annual  Report on Form 10-K of First  Sentinel
              Bancorp,  Inc.  filed with the SEC on March 31, 2003, SEC File No.
              000-23809.

              *** Previously filed and  incorporated  herein by reference to the
              December  31,  2003 Annual  Report on Form 10-K of First  Sentinel
              Bancorp,  Inc.  filed with the SEC on March 15, 2004, SEC File No.
              000-23809.

         b.)  REPORTS ON FORM 8-K

              1)  On January 20,  2004,  the Company  filed a report on Form 8-K
                  which includes,  under Item 12, a press release announcing the
                  rescheduling of its fourth quarter and year-ended December 31,
                  2003  earnings  release  date from January 23, 2004 to January
                  29, 2004.

              2)  On January 30,  2004,  the Company  filed a report on Form 8-K
                  which includes,  under Item 12, a press release  reporting the
                  Company's  financial  results  for the  quarter and year ended
                  December 31, 2003.



                                       19
<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.


                      FIRST SENTINEL BANCORP, INC.



Date:  May 10, 2004                 By:   /s/ CHRISTOPHER MARTIN
                                          ----------------------
                                          Christopher Martin
                                          President and Chief
                                          Executive Officer


Date:  May 10, 2004                 By:   /s/ THOMAS M. LYONS
                                          -------------------
                                          Thomas M. Lyons
                                          Executive Vice President and
                                          Chief Financial Officer



                                       20