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.................................... JUNE 30, 2001

                                       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                          (IRS Employer I.D. No.)
incorporation 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 ___.


                      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 AUGUST 1, 2001
--------------------------               ---------------------------------------
      Common Stock                                 31,335,179 shares

<PAGE>


                          FIRST SENTINEL BANCORP, INC.

                               INDEX TO FORM 10-Q

                                                                          Page #
                                                                          ------
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

          Consolidated Statements of Financial Condition as of
          June 30, 2001 and December 31, 2000                                 3

          Consolidated Statements of Income for the three and
          six months ended June 30, 2001 and 2000                             4

          Consolidated Statements of Stockholders' Equity for the
          six months ended June 30, 2001 and 2000                             5

          Consolidated Statements of Cash Flows for the
          six months ended June 30, 2001 and 2000                             6

          Notes to Consolidated Financial Statements                          7

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                           9

Item 3.   Quantitative and Qualitative Disclosure About Market Risk          14

PART II.  OTHER INFORMATION                                                  14

          SIGNATURES                                                         15

                                       2
<PAGE>


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

                                                         June 30,   December 31,
                                                           2001         2000
                                                        ----------   ----------

ASSETS
Cash and due from banks ..............................  $   32,078   $   14,069
Federal funds sold ...................................          --       21,050
                                                        ----------   ----------
    Total cash and cash equivalents ..................      32,078       35,119
Federal Home Loan Bank of New York (FHLB-NY)
  stock, at cost .....................................      20,417       19,643
Investment securities available for sale .............     148,991      234,970
Mortgage-backed securities available for sale ........     536,939      447,022
Loans available for sale, net ........................       2,582          277
Loans receivable, net ................................   1,211,004    1,184,525
Interest and dividends receivable ....................      12,416       13,481
Premises and equipment, net ..........................      15,608       16,092
Excess of cost over fair value of net assets acquired        5,835        6,259
Other assets .........................................      30,941       11,321
                                                        ----------   ----------
    Total assets .....................................  $2,016,811   $1,968,709
                                                        ==========   ==========

--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Deposits .............................................  $1,268,804   $1,219,336
Borrowed funds .......................................     503,336      505,955
Advances by borrowers for taxes and insurance ........      10,406        9,154
Other liabilities ....................................      11,222       12,101
                                                        ----------   ----------
    Total liabilities ................................   1,793,768    1,746,546
                                                        ----------   ----------

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 31,335,179 shares
  issued and outstanding at 6/30/01 and 43,106,742
  and 32,749,994 shares issued and outstanding
  at 12/31/00 ........................................         430          430
Paid-in capital ......................................     201,514      201,264
Retained earnings ....................................     139,587      132,537
Accumulated other comprehensive income (loss) ........         383       (8,534)
Less: Treasury stock (11,698,086 and 10,288,827
      shares at June 30, 2001 and December 31,
      2000, respectively) ............................    (105,742)     (89,508)
Common stock acquired by the Employee Stock
  Ownership Plan (ESOP) ..............................     (10,780)     (11,238)
Common stock acquired by the Recognition and
  Retention Plan (RRP) ...............................      (2,349)      (2,788)
                                                        ----------   ----------
    Total stockholders' equity .......................     223,043      222,163
                                                        ----------   ----------
    Total liabilities and stockholders' equity .......  $2,016,811   $1,968,709
                                                        ==========   ==========

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             Six months ended
                                                                                   June 30,                       June 30,
                                                                          --------------------------     --------------------------
                                                                              2001           2000            2001           2000
                                                                          -----------    -----------     -----------    -----------
<S>                                                                       <C>            <C>             <C>            <C>
INTEREST INCOME:
  Loans ..............................................................    $    22,470    $    20,492     $    44,932    $    39,676
  Investment and mortgage-backed securities
    available for sale ...............................................         10,832         13,681          22,640         27,344
                                                                          -----------    -----------     -----------    -----------
     Total interest income ...........................................         33,302         34,173          67,572         67,020
                                                                          -----------    -----------     -----------    -----------

INTEREST EXPENSE:
 Deposits:
   NOW and money market demand .......................................          2,462          2,349           4,784          4,732
   Savings ...........................................................            936            942           1,829          1,883
   Certificates of deposit ...........................................          8,891          8,587          18,056         16,658
                                                                          -----------    -----------     -----------    -----------
     Total interest expense - deposits ...............................         12,289         11,878          24,669         23,273
 Borrowed funds ......................................................          6,193          7,465          13,638         14,299
                                                                          -----------    -----------     -----------    -----------
     Total interest expense ..........................................         18,482         19,343          38,307         37,572
                                                                          -----------    -----------     -----------    -----------
     Net interest income .............................................         14,820         14,830          29,265         29,448
Provision for loan losses ............................................            150            393             350            786
                                                                          -----------    -----------     -----------    -----------
     Net interest income after provision for loan losses .............         14,670         14,437          28,915         28,662
                                                                          -----------    -----------     -----------    -----------

NON-INTEREST INCOME:
  Fees and service charges ...........................................            626            553           1,263          1,130
  Net gain (loss) on sales of loans and securities
    available for sale ...............................................            219            (78)            478            (97)
  Other income .......................................................            176            226             283            406
                                                                          -----------    -----------     -----------    -----------
     Total non-interest income .......................................          1,021            701           2,024          1,439
                                                                          -----------    -----------     -----------    -----------

NON-INTEREST EXPENSE:
  Compensation and benefits ..........................................          3,796          3,625           7,664          7,281
  Occupancy ..........................................................            560            560           1,139          1,171
  Equipment ..........................................................            413            438             853            862
  Advertising ........................................................            352            405             649            735
  Federal deposit insurance ..........................................             57             65             117            131
  Amortization of intangibles ........................................            212            212             424            424
  General and administrative .........................................          1,119            948           2,203          1,980
                                                                          -----------    -----------     -----------    -----------
     Total non-interest expense ......................................          6,509          6,253          13,049         12,584
                                                                          -----------    -----------     -----------    -----------

     Income before income tax expense ................................          9,182          8,885          17,890         17,517

Income tax expense ...................................................          2,956          3,089           5,748          5,985
                                                                          -----------    -----------     -----------    -----------

     Net income ......................................................    $     6,226    $     5,796     $    12,142    $    11,532
                                                                          ===========    ===========     ===========    ===========

Basic and diluted earnings per share .................................    $      0.20    $      0.17     $      0.39    $      0.33
                                                                          ===========    ===========     ===========    ===========

Weighted average shares outstanding - Basic ..........................     30,491,412     33,886,173      30,799,334     34,773,117
                                                                          ===========    ===========     ===========    ===========


Weighted average shares outstanding - Diluted ........................     31,129,560     34,149,484      31,433,921     35,051,300
                                                                          ===========    ===========     ===========    ===========
</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      Total
                                                                          Compre-                   Stock        Stock     Stock-
                                         Common   Paid In    Retained     hensive      Treasury    Acquired    Acquired   Holders'
                                         Stock    Capital    Earnings   Income(Loss)     Stock     by ESOP      by RRP     Equity
                                        ------------------------------------------------------------------------------------------
<S>                                      <C>    <C>          <C>          <C>         <C>          <C>         <C>        <C>
Balance at December 31, 1999 ........... $431   $ 200,781    $ 117,922    $(17,302)   $ (41,229)   $(12,156)   $(3,867)   $ 244,580
Net income for the six months ended
  June 30, 2000 ........................   --          --       11,532          --           --          --         --       11,532
Cash dividends declared ($.12) .........   --          --       (4,440)         --           --          --         --       (4,440)
Net change in unrealized gain/(loss)
  on securities available for sale .....   --          --           --      (4,533)          --          --         --       (4,533)
Purchases of treasury stock ............   --          --           --          --      (31,124)         --         --      (31,124)
Exercise of stock options ..............   --          --          (75)         --          122          --         --           47
Tax benefit on stock options and RRP ...   --         594           --          --           --          --         --          594
Purchase and retirement of
  common stock .........................   --         (14)          --          --           --          --         --          (14)
Amortization of RRP ....................   --          --           --          --           --          --        641          641
Amortization of ESOP ...................   --          --          (57)         --           --         459         --          402
                                         ------------------------------------------------------------------------------------------

Balance at June 30, 2000 ............... $431   $ 201,361    $ 124,882    $(21,835)   $ (72,231)   $(11,697)   $(3,226)   $ 217,685
                                         ==========================================================================================


Balance at December 31, 2000 ........... $430   $ 201,264    $ 132,537    $ (8,534)   $ (89,508)   $(11,238)   $(2,788)   $ 222,163
Net income for the six months
  ended June 30, 2001 ..................   --          --       12,142          --           --          --         --       12,142
Cash dividends declared ($.15) .........   --          --       (4,865)         --           --          --         --       (4,865)
Net change in unrealized gain/(loss)
  on securities available for sale .....   --          --           --       8,917           --          --         --        8,917
Purchases of treasury stock ............   --          --           --          --      (17,378)         --         --      (17,378)
Exercise of stock options ..............   --          --         (227)         --        1,144          --         --          917
Tax benefit on stock options and RRP ...   --         150           --          --           --          --         --          150
Purchase and retirement of
  common stock .........................   --         (56)          --          --           --          --         --          (56)
Amortization of RRP ....................   --          --           --          --           --          --        439          439
Amortization of ESOP ...................   --         156           --          --           --         458         --          614
                                         ------------------------------------------------------------------------------------------

Balance at June 30, 2001 ............... $430   $ 201,514    $ 139,587    $    383    $(105,742)   $(10,780)   $(2,349)   $ 223,043
                                         ==========================================================================================
</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>
                                                                                           Six Months Ended
                                                                                               June 30,
                                                                                         ----------------------
                                                                                           2001         2000
                                                                                         ---------    ---------
<S>                                                                                      <C>          <C>
Cash flows from operating activities:
  Net income .........................................................................   $  12,142    $  11,532
  ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
  Depreciation of premises and equipment .............................................         661          717
  Amortization of excess of cost over fair value of assets acquired ..................         424          424
  Amortization of ESOP ...............................................................         614          402
  Amortization of RRP ................................................................         439          641
  Net amortization of premiums and accretion of discounts and deferred fees ..........       1,130          597
  Provision for loan losses ..........................................................         350          786
  Loans originated for sale ..........................................................     (26,960)      (1,445)
  Proceeds from sales of mortgage loans available for sale ...........................      24,707          847
  Net  (gain) loss on sales of loans and securities available for sale ...............        (478)          97
  Net (gain) loss on sales of real estate owned ......................................         (42)          49
  Net loss on sales of premises and equipment ........................................         105           --
  Decrease (increase) in interest and dividends receivable ...........................       1,065       (1,182)
  Tax benefit on stock options and RRP ...............................................         150          494
  Decrease in other liabilities ......................................................        (879)        (153)
  Decrease in other assets ...........................................................         856          608
                                                                                         ---------    ---------
     Net cash provided by operating activities .......................................      14,284       14,414
                                                                                         ---------    ---------
Cash flows from investing activities:
  Proceeds from sales/calls/maturities of investment securities available for sale ...     126,170       18,647
  Purchases of investment securities available for sale ..............................     (34,193)     (48,102)
  Purchase of FHLB-NY stock ..........................................................        (774)      (1,543)
  Proceeds from sales of mortgage-backed securities available for sale ...............     165,426       73,207
  Principal payments on mortgage-backed securities ...................................      52,269       47,920
  Purchases of mortgage-backed securities available for sale .........................    (299,997)     (93,950)
  Principal repayments on loans ......................................................     177,280       97,351
  Origination of loans ...............................................................    (198,041)    (174,865)
  Purchases of mortgage loans ........................................................      (6,975)     (33,599)
  Purchase of Bank Owned Life Insurance ("BOLI") .....................................     (25,000)          --
  Proceeds from sale of real estate owned ............................................          73          306
  Proceeds from sales of premises and equipment ......................................         183           --
  Purchases of premises and equipment ................................................        (465)        (199)
                                                                                         ---------    ---------
      Net cash used in investing activities ..........................................     (44,044)    (114,827)
                                                                                         ---------    ---------
Cash flows from financing activities:
  Purchase of treasury stock .........................................................     (17,378)     (31,124)
  Purchase and retirement of common stock ............................................         (56)         (14)
  Stock options exercised ............................................................         917           47
  Cash dividends paid ................................................................      (4,865)     (10,217)
  Net increase in deposits ...........................................................      49,468       11,287
  Net increase in short-term borrowed funds ..........................................      37,450       48,775
  Proceeds from borrowed funds .......................................................     210,000      240,000
  Repayment of  borrowed funds .......................................................    (250,069)    (170,000)
  Net increase in advances by borrowers for taxes and insurance ......................       1,252        1,508
                                                                                         ---------    ---------
     Net cash provided by financing activities .......................................      26,719       90,262
                                                                                         ---------    ---------
     Net decrease in cash and cash equivalents .......................................      (3,041)     (10,151)
Cash and cash equivalents at beginning of period .....................................      35,119       30,607
                                                                                         ---------    ---------
Cash and cash equivalents at end of period ...........................................   $  32,078    $  20,456
                                                                                         =========    =========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest .........................................................................   $  39,292    $  36,910
    Income taxes .....................................................................       3,351        3,030
  Non cash investing and financing activities for the period:
    Transfer of loans to real estate owned ...........................................   $     305    $     104
</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)  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 Savings Bank, ("First
Savings" or the "Bank") Pulse Investment,  Inc., Pulse Insurance Services,  Inc.
and Pulse Real  Estate,  Inc.,  and the Bank's  wholly-owned  subsidiaries,  FSB
Financial Corp., and 1000 Woodbridge Center Drive, Inc.

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 and
six months ended June 30, 2001 and 2000. The results of operations for the three
and six months ended June 30, 2001,  are not  necessarily  indicative of results
that may be expected for the entire fiscal year ending December 31, 2001.  These
interim financial statements should be read in conjunction with the December 31,
2000 Annual Report to Stockholders.

(2)  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.  Potential
dilutive common shares are not included in the calculation.

Diluted  earnings per share is computed  similarly  to basic  earnings per share
except that 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.

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

<TABLE>
<CAPTION>
                                                   Three Months ended            Six Months ended
                                                        June 30,                     June 30,
                                              --------------------------    --------------------------
                                                  2001           2000           2001           2000
                                              -----------    -----------    -----------    -----------
<S>                                           <C>            <C>            <C>            <C>
Net income                                    $     6,226    $     5,796    $    12,142    $    11,532
                                              ===========    ===========    ===========    ===========

Basic weighted-average common
  shares outstanding                           30,491,412     33,886,173     30,799,334     34,773,117
Plus: Dilutive stock options and awards           638,148        263,311        634,587        278,183
                                              -----------    -----------    -----------    -----------
Diluted weighted-average common
  shares outstanding                           31,129,560     34,149,484     31,433,921     35,051,300
                                              ===========    ===========    ===========    ===========

Net income per common share:
   Basic                                      $      0.20    $      0.17    $      0.39    $      0.33
                                              ===========    ===========    ===========    ===========
   Diluted                                    $      0.20    $      0.17    $      0.39    $      0.33
                                              ===========    ===========    ===========    ===========
</TABLE>


(3)  DIVIDENDS

Based upon current  operating  results,  the Company  declared cash dividends of
$0.075 per share on April 24, 2001,  payable May 25, 2001,  to  stockholders  of
record on May 11, 2001.

                                       7
<PAGE>


(4)  COMMITMENTS AND CONTINGENCIES

At June 30, 2001,  the Company had the following  commitments:  (i) to originate
loans of $114.6 million; (ii) to purchase mortgage loans of $3.4 million;  (iii)
unused equity lines of credit of $51.6 million;  (iv) unused commercial lines of
credit  of $9.6  million;  (v)  unused  construction  lines of  credit  of $48.0
million; and (vi) letters of credit outstanding totaling $2.3 million.  Further,
certificates  of deposits,  which are scheduled to mature and/or rollover in one
year or less, totaled $563.7 million at June 30, 2001.

(5)  ALLOWANCE FOR LOAN LOSSES

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

                                                      Six Months Ended June 30,
                                                      --------------------------
                                                        2001             2000
                                                      --------         --------
Balance at beginning of period                        $ 12,341         $ 11,004
Provision charged to operations                            350              786
Charge offs, net of recoveries                              (6)             (34)
                                                      --------         --------
Balance at end of period                              $ 12,685         $ 11,756
                                                      ========         ========


(6)  COMPREHENSIVE INCOME

Total  comprehensive  income,  consisting  of net  income  and the net change in
unrealized  gain/(loss)  on securities  available for sale, was $7.2 million and
$3.4 million for the three  months  ended June 30, 2001 and 2000,  respectively.
For the six months ended June 30, 2001 and 2000,  comprehensive  income  totaled
$21.1 million and $7.0 million, respectively.

(7)  RECENT ACCOUNTING PRONOUNCEMENTS

On July 20, 2001, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards ("SFAS") No. 141, "Business  Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that
the  purchase  method  of  accounting  be  used  for all  business  combinations
initiated  after  June  30,  2001,  as  well  as all  purchase  method  business
combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria
which intangible assets acquired in a purchase method business  combination must
meet to be  recognized  and  reported  apart  from  goodwill.  SFAS No. 142 will
require that  goodwill and  intangible  assets with  indefinite  useful lives no
longer be amortized,  but instead be tested for  impairment at least annually in
accordance  with the  provisions of SFAS No. 142. SFAS No. 142 will also require
that  intangible  assets with  definite  useful  lives be  amortized  over their
respective  estimated  useful  lives to their  estimated  residual  values,  and
reviewed for  impairment in accordance  with SFAS No. 121,  "Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

SFAS No. 142 requires that goodwill and any intangible assets determined to have
an indefinite useful life that are acquired in a purchase  business  combination
completed  after June 30, 2001 will not be  amortized,  but will  continue to be
evaluated for  impairment in accordance  with the  appropriate  pre-SFAS No. 142
accounting  literature.  Goodwill  and  intangible  assets  acquired in business
combinations  completed  before July 1, 2001 will continue to be amortized prior
to the adoption of SFAS No. 142.

The Company is required to adopt the provisions of SFAS No. 141 immediately. The
initial  adoption  of SFAS No. 141 had no impact on the  Company's  consolidated
financial  statements.  The Company is required to adopt SFAS No. 142  effective
January 1, 2002.  The Company  currently  has no recorded  goodwill and does not
anticipate that SFAS No. 142 will significantly  impact the Company's accounting
for currently recorded intangible assets, primarily core deposit intangibles.

                                       8
<PAGE>


FIRST SENTINEL BANCORP, INC.

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

GENERAL.

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  and
legislative and regulatory changes.

ASSETS. Total assets grew to $2.0 billion at June 30, 2001, an increase of $48.1
million,  or 2.4%,  from  December  31,  2000.  The  change in assets  consisted
primarily of increases in loans receivable,  mortgage-backed  securities ("MBS")
available  for  sale  and  other  assets,  partially  offset  by a  decrease  in
investment securities available for sale.

Net loans totaled $1.2 billion at June 30, 2001,  an increase of $28.8  million,
or 2.4%,  from December 31, 2000. Of the total loan  portfolio at June 30, 2001,
1-4 family mortgage loans comprised 70.5%,  home equity loans  represented 9.3%,
commercial real estate, multi-family and construction loans comprised 18.4%, and
other consumer loans accounted for 1.8%.

Total loan  originations  for the six months  ended June 30,  2001,  were $225.0
million, compared to $176.3 million for the same period in 2000. Fixed-rate, 1-4
family first  mortgage  loan  originations  totaled $45.0  million,  or 20.0% of
production, while adjustable-rate, 1-4 family first mortgage loans accounted for
$43.1 million, or 19.2%, of total originations for the first six months of 2001.
Also during the first six months of 2001, consumer loan originations,  including
home equity loans and credit  lines,  totaled $54.9  million,  or 24.4% of total
originations.  During the same period,  commercial  real estate,  commercial and
multi-family  loan  originations   totaled  $42.2  million,   or  18.7%,   while
construction  lending totaled $39.8 million, or 17.7% of total originations.  In
addition,  the Company  purchased  $7.0  million of  primarily  adjustable-rate,
single-family first mortgage loans through  correspondents during the six months
ended June 30, 2001.  Purchased  loans are  re-underwritten  by the Bank and are
extended at rates higher than those currently offered by the Bank.

Repayment of principal on loans totaled  $177.3 million for the six months ended
June 30, 2001,  compared to $97.4 million for the same period in 2000.  Mortgage
loan  refinancing  totaled $26.9 million  during the first half of 2001, up from
$4.4 million for the first six months of 2000, as borrowers sought to capitalize
on the lower  interest  rate  environment.  In addition,  the Company sold $24.6
million in mortgage  loans during the first half of 2001 as part of its on-going
interest  rate risk  management  process and to provide  additional  funding for
current operations.

Management  has  emphasized  the  origination  of loans in an effort to increase
loans as a  percentage  of  assets.  While  management  intends to  continue  to
actively seek to originate  loans,  the 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 Bank.

MBS available for sale increased  $89.9 million,  or 20.1%, to $536.9 million at
June 30,  2001,  from $447.0  million at December  31,  2000.  The  increase was
primarily  due to  purchases of $300.0  million  exceeding  sales and  principal
repayments of $165.4 million and $52.3 million,  respectively, for the six month
period ended June 30, 2001.  The Company  implemented a leverage  program during
the latter part of the second quarter of 2001,  purchasing  approximately $106.7
million  in  MBS  which  were  funded  by  longer-term  borrowings.   Management
anticipates that the leveraging will have a positive impact on the Company's net

                                       9
<PAGE>


interest income,  earnings and return on average equity in future periods, while
causing some compression of its net interest  margin.  The Company will continue
to evaluate  leveraged growth  opportunities in the future,  giving  appropriate
consideration to market conditions and balance sheet composition.

Other assets  increased  $19.6 million to $30.9  million at June 30, 2001,  from
$11.3  million at December 31,  2000.  The  increase  was  primarily  due to the
purchase  of $25.0  million in Bank Owned Life  Insurance  ("BOLI")  late in the
second  quarter of 2001.  BOLI provides an attractive  tax-exempt  return to the
Company and is used to fund various  employee  benefit  costs.  This increase in
other  assets was  partially  offset by a reduction  in the  deferred  tax asset
associated with unrealized  securities  losses, as the interest rate environment
continued to decline throughout the first half of 2001 and investment  portfolio
market values increased.

Investment  securities  available for sale decreased $86.0 million, or 36.6%, to
$149.0  million as of June 30, 2001,  from $235.0  million at December 31, 2000.
For the six months  ended June 30,  2001,  purchases  of  investment  securities
available  for sale totaled $34.2  million,  while sales,  calls and  maturities
totaled $125.8  million.  Lower market interest rates resulted in an increase in
the exercise of call provisions on U.S. government agency debt securities during
the first half of 2001.  Proceeds from sales,  calls and maturities were used to
fund loan growth, purchase BOLI, and repurchase the Company's common stock.

LIABILITIES. Total deposits increased $49.5 million, or 4.1%, to $1.3 billion at
June 30, 2001. This growth took place primarily in core deposits,  consisting of
checking,  savings and money market accounts. These core deposit categories grew
by $35.6 million to $605.9 million, and accounted for 47.8% of total deposits at
June 30, 2001.  Certificates  of deposit  increased by $13.9  million,  or 2.1%,
compared with year-end 2000, with most of the increase  occurring in thirty-day,
three-month, and six-month maturity certificates.

Borrowed funds  decreased  $2.6 million,  or 0.5%, to $503.3 million at June 30,
2001, from $506.0 million at December 31, 2000.  Advances by borrowers for taxes
and insurance  increased  $1.3 million,  or 13.7%,  to $10.4 million at June 30,
2001, from $9.2 million at December 31, 2000, primarily as a result of growth in
the Company's residential mortgage loan portfolio.

CAPITAL.  The Company's  stockholders'  equity increased  $880,000,  or 0.4%, to
$223.0  million at June 30, 2001,  from $222.2 million at December 31, 2000. The
increase  in equity  was a result of net  income  of $12.1  million  for the six
months ended June 30, 2001,  an increase in net  unrealized  gains on securities
available  for sale of $8.9  million,  the  exercise  of stock  options  and the
amortization  of  stock-based  compensation  and  benefit  plans and related tax
benefits  of  $2.1  million.  These  increases  were  partially  offset  by  the
repurchase  of $17.4 million of the  Company's  common stock and cash  dividends
declared of $4.9 million.  In June 2001, the Company  announced the commencement
of a 5% stock repurchase  program,  the Company's fifth such repurchase  program
since going public in April 1998.  The Company  repurchased  848,990  shares and
1,538,990 shares,  respectively,  during the three and six months ended June 30,
2001,  at an average cost per share of $11.49 and $11.29,  respectively.  Stated
and  tangible  book  value per share at June 30,  2001,  were  $7.12 and  $6.93,
respectively.

The Federal Deposit  Insurance  Corporation  requires that the Bank meet minimum
leverage,  Tier 1 and Total Risk-based Capital  requirements.  At June 30, 2001,
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            $76,666      4.00%       $173,419      9.05%              $96,753
Risk-based Capital:
Tier 1                       41,589      4.00%        173,419     16.68%              131,830
Total                        83,179      8.00%        186,104     17.90%              102,925
</TABLE>

                                       10
<PAGE>


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
short-term investments;  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 general interest rates,  competition,  and
economic conditions.

The most  significant  sources  of funds for the  first six  months of 2001 were
principal  repayments and prepayments of loans and  mortgage-backed  securities,
totaling  $177.3  million and $52.3  million,  respectively.  Other  significant
sources of funds for the six months  ended June 30,  2001,  were  proceeds  from
sales of MBS  available  for sale totaling  $165.4  million,  sales and calls of
investment  securities  available for sale of $126.2 million,  deposit growth of
$49.5  million,  and proceeds from the sales of mortgage  loans  totaling  $24.7
million.  If  necessary,  the Company has  additional  borrowing  capacity  with
FHLB-NY, including an available overnight line of credit of up to $50.0 million.
At June 30,  2001,  the  Company had  unpledged  investment  securities  and MBS
available for sale with a market value of $308.6 million.

The primary investing activities of the Company for the first six months of 2001
were  the   origination  of  loans  totaling   $225.0   million,   purchases  of
mortgage-backed  securities  available for sale  totaling  $300.0  million,  and
purchases of investment  securities  available for sale totaling  $34.2 million.
Other  significant uses of funds during the six months ended June 30, 2001, were
$25.0  million in  purchases of BOLI,  $17.4  million in  repurchases  of common
stock,  $7.0  million in  purchases  of mortgage  loans and $4.9 million in cash
dividends paid.


COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001
AND 2000.

RESULTS OF  OPERATIONS.  Net income for the three and six months  ended June 30,
2001,  totaled $6.2 million and $12.1 million,  respectively.  This  represented
increases of $430,000 and  $610,000,  or 7.4% and 5.3%,  respectively,  over net
income of $5.8 million and $11.5 million for the  comparable  2000 periods.  For
the  quarter  ended June 30,  2001,  basic and diluted  earnings  per share were
$0.20,  representing  a 19.4%  and 17.8%  increase,  respectively,  over  second
quarter 2000 basic and diluted  earnings per share of $0.17.  For the six months
ended  June  30,  2001,  basic  and  diluted  earnings  per  share  were  $0.39,
representing a 18.9% and 17.4%  increase,  respectively,  over basic and diluted
earnings per share of $0.33 for the first six months of 2000.

Annualized  return on average equity improved to 11.01% and 10.72% for the three
and six months ended June 30, 2001, respectively, from 10.38% and 10.03% for the
comparable 2000 periods. Annualized return on average assets was 1.27% and 1.24%
for the three and six months ended June 30, 2001,  respectively,  compared  with
1.18% for both the three and six months ended June 30, 2000.

INTEREST INCOME.  Interest income decreased by $871,000,  or 2.6%, for the three
months ended June 30, 2001,  and  increased  by $552,000,  or 0.8%,  for the six
months ended June 30, 2001, from the same periods in 2000.

Interest on loans  increased  $2.0 million and $5.3 million,  or 9.7% and 13.3%,
respectively,  to $22.5  million and $44.9  million for the three and six months
ended June 30, 2001, as compared to $20.5 million and $39.7 million for the same
periods in 2000.  The average  balance of the loan  portfolio  for the six month
period  ended June 30,  2001,  increased  to $1.2  billion from $1.1 billion for
2000,  while the average yield on the  portfolio  increased to 7.47% for the six
months ended June 30, 2001, from 7.41% for the same period in 2000.

Interest on  securities  declined  $2.8 million and $4.7  million,  or 20.8% and
17.2%,  respectively,  to $10.8  million and $22.6 million for the three and six
months ended June 30, 2001,  as compared to $13.7  million and $27.3 million for
the same periods in 2000. The average balance of the investment,  FHLB stock and
MBS available for sale  portfolios  totaled $710.8  million,  with an annualized
yield of 6.37% for the six

                                       11
<PAGE>


months ended June 30, 2001,  compared with an average  balance of $857.8 million
with an annualized yield of 6.38% for the six months ended June 30, 2000.

INTEREST EXPENSE.  Interest expense decreased  $861,000 to $18.5 million for the
three months ended June 30, 2001,  compared to $19.3 million for the same period
in 2000.  For the six months ended June 30,  2001,  interest  expense  increased
$735,000 to $38.3 million, versus $37.6 million for the comparable 2000 period.

Interest expense on deposits  increased  $411,000 and $1.4 million,  or 3.5% and
6.0%,  respectively,  to $12.3  million and $24.7  million for the three and six
months ended June 30, 2001,  compared to $11.9 million and $23.3 million for the
same periods in 2000. The increase was primarily  attributable  to interest paid
on certificates of deposit.  The average balance of certificates of deposit grew
by $12.1 million, or 1.9%, for the six months ended June 30, 2001, compared with
the same period in 2000,  while the average rate paid on certificates  increased
33 basis points to 5.48%.  The average  balance of core deposits,  consisting of
checking,  savings and money market accounts, totaled $575.3 million for the six
months  ended June 30, 2001,  compared to $571.7  million for the same period in
2000. Within these core accounts,  non-interest  bearing deposits averaged $50.7
million for the six months  ended June 30, 2001,  up from $47.9  million for the
comparable 2000 period.

Interest on  borrowed  funds for the three and six months  ended June 30,  2001,
decreased $1.3 million and $661,000,  or 17.0% and 4.6%,  respectively,  to $6.2
million and $13.6  million,  compared to $7.5 million and $14.3  million for the
same  respective  periods in 2000. The average balance of borrowed funds for the
six months ended June 30, 2001, declined to $473.6 million,  from $483.1 million
for the same period in 2000.  The average  interest rate paid on borrowed  funds
was 5.76% for the six months  ended June 30, 2001,  compared  with 5.92% for the
same period in 2000.

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest income before
provision  for loan losses  decreased  $10,000 and  $183,000,  or 0.1% and 0.6%,
respectively,  to $14.8  million and $29.3  million for the three and six months
ended June 30, 2001,  compared to $14.8  million and $29.4  million for the same
periods in 2000.  The  decrease  was due to the changes in  interest  income and
interest expense described above.

The  interest  rate spread was 2.52% for the three  months  ended June 30, 2001,
compared with 2.41% for the same period in 2000. For the three months ended June
30, the average earning asset yield was 7.02% for 2001 and 7.03% for 2000, while
the average cost of interest-bearing liabilities declined to 4.50% for 2001 from
4.62% for 2000. For the six months ended June 30, 2001, the interest rate spread
increased three basis points to 2.44% compared with 2.41% for the same period in
2000.  The  average  earning  asset  yield was 7.06% for the first half of 2001,
compared with 6.95% for the first six months of 2000,  while the average cost of
interest-bearing  liabilities  was  4.62%  and  4.54%  for the  same  respective
periods.

The net  interest  margin was 3.12% and 3.06% for the three and six months ended
June 30,  2001,  respectively,  compared  with  3.05% for both the three and six
months ended June 30,  2000.  Average  earning  assets were $2.0 billion for all
periods discussed.

PROVISION  FOR LOAN LOSSES.  The provision for loan losses for the three and six
months ended June 30, 2001, decreased $243,000 and $436,000, or 61.8% and 55.5%,
respectively,  to $150,000 and  $350,000,  compared to $393,000 and $786,000 for
the  same  periods  in  2000.  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  remained stable at
$1.2 billion at June 30, 2001 and December 31, 2000, while  non-performing loans
declined  to $2.2  million at June 30, 2001 from $2.4  million at  December  31,
2000,  and $2.8 million at June 30,  2000.  The  allowance  for loan losses as a
percentage  of total loans was 1.03% at June 30, 2001 and December 31, 2000.  In
management's  opinion, the allowance for loan losses,  totaling $12.7 million at
June 30,  2001,  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.

                                       12
<PAGE>


The following  table sets forth ratios  regarding  nonaccrual  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.  Total  foreclosed
real estate ("REO"),  net,  totaled  $531,000 at June 30, 2001, and consisted of
four residential properties, all of which are under contract for sale.

                               June 30,  Mar. 31,  Dec. 31,  Sept. 30,  June 30,
(dollars in thousands)           2001      2001      2000      2000       2000
                                ------    ------    ------    ------     ------
Non-accrual mortgage loans ...  $1,828    $1,922    $2,334    $2,620     $2,478
Non-accrual other loans ......      --        --        15        --         45
                                ------    ------    ------    ------     ------
  Total non-accrual loans ....   1,828     1,922     2,349     2,620      2,523
Loans 90 days or more
  delinquent and still
  accruing ...................     413        40        40       166        263
Restructured loans ...........      --        --        --        --         --
                                ------    ------    ------    ------     ------
Total non-performing loans ...   2,241     1,962     2,389     2,786      2,786
Total foreclosed real estate,
  net of related allowance ...     531       445       257       215        215
                                ------    ------    ------    ------     ------
Total non-performing assets ..  $2,772    $2,407    $2,646    $3,001     $3,001
                                ======    ======    ======    ======     ======
Non-performing loans to
  loans receivable, net ......    0.18%     0.16%     0.20%     0.24%      0.24%
Non-performing assets to
  total assets ...............    0.14%     0.12%     0.13%     0.15%      0.15%

NON-INTEREST INCOME.  Non-interest income increased $320,000,  or 45.7%, to $1.0
million for the three months  ended June 30, 2001,  compared to $701,000 for the
same period in 2000. For the six months ended June 30, 2001, non-interest income
totaled $2.0 million, an increase of $585,000,  or 40.7% from the same period in
2000. The increase was primarily attributable to net gains on sales of loans and
securities  totaling  $219,000  and  $478,000 for the three and six months ended
June 30, 2001, respectively, compared with losses of $78,000 and $97,000 for the
respective 2000 periods.  The sales 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.

NON-INTEREST  EXPENSE.  Non-interest  expense for the three and six months ended
June 30, 2001, increased $256,000 and $465,000, or 4.1% and 3.7%,  respectively,
to $6.5 million and $13.0  million,  compared to $6.3 million and $12.6  million
for the same periods in 2000.

Within this category, compensation and benefits increased $171,000 and $383,000,
or 4.7% and 5.2%,  respectively,  to $3.8 million and $7.7 million for the three
and six  months  ended  June  30,  2001,  primarily  as a  result  of  increased
healthcare and other benefit costs.

General and administrative  expenses  increased $171,000 and $223,000,  or 18.0%
and 11.3%, respectively,  to $1.1 million and $2.2 million for the three and six
months ended June 30, 2001,  primarily due to increased legal fees, MAC charges,
telecommunications  expense  and costs  associated  with the  implementation  of
Internet banking and branch automation initiatives.

The  Company's  annualized  non-interest  expense,   excluding  amortization  of
intangibles,  divided by  average  assets was 1.28% for the three and six months
ended June 30,  2001,  compared  to 1.23% and 1.25% for the three and six months
ended June 30, 2000. The Company's efficiency ratio,  calculated as non-interest
expense  divided by the sum of net  interest  income plus  non-interest  income,
excluding gains on the sale of loans and securities, was 41.7% and 42.4% for the
three and six months ended June 30, 2001, respectively,  compared with 40.1% and
40.6% for the comparable 2000 periods.

                                       13
<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 (June 30, 2001).


                           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 of such
          pending claims and lawsuits.

Item 2.   CHANGES IN 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.

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

          --------- ------------------------------------------------------------
           Exhibit
           Number                           Description               Reference
          --------- ------------------------------------------------------------
             3.1    Certificate of Incorporation of                       *
                    First Sentinel Bancorp, Inc.

             3.2    Bylaws of First Sentinel Bancorp, Inc.                *

              4     Stock certificate of First Sentinel Bancorp, Inc.     *

             11     Statement re: Computation of Ratios                 Page 7
          --------- ------------------------------------------------------------

          b.)  REPORTS ON FORM 8 - K
               None.

* - Incorporated  herein by reference  into this document from 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.

                                       14
<PAGE>


                                   SIGNATURES

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


                                 FIRST SENTINEL BANCORP, INC.




Date:  August 13, 2001                By:  JOHN P. MULKERIN
                                           ----------------
                                           John P. Mulkerin
                                           President and Chief Executive Officer


Date:  August 13, 2001                By:  CHRISTOPHER MARTIN
                                           ------------------
                                           Christopher Martin
                                           Executive Vice President and
                                           Chief Operating and Financial Officer
                                           and Corporate Secretary

                                       15