UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q/A
                                (Amendment No. 1)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
    ACT OF 1934
For the quarterly period ended..................................   JUNE 30, 2003
                                       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 AUGUST 1, 2003
---------------------------               --------------------------------------
      Common Stock                                 26,677,955 shares


<PAGE>


                          FIRST SENTINEL BANCORP, INC.

                              INDEX TO FORM 10-Q/A

<TABLE>
<CAPTION>
                                                                                                     Page #
                                                                                                     ------
<S>             <C>                                                                                    <C>
                EXPLANATORY NOTE                                                                        3

PART I.         FINANCIAL INFORMATION

Item 1.         Financial Statements (Unaudited)

                Consolidated Statements of Financial Condition as of June 30, 2003 (restated) and
                December 31, 2002                                                                       4

                Consolidated Statements of Income (restated) for the three and six months ended
                June 30, 2003 and 2002                                                                  5

                Consolidated Statements of Stockholders' Equity (restated) for the six months
                ended June 30, 2003 and 2002                                                            6

                Consolidated Statements of Cash Flows (restated) for the six months ended June
                30, 2003 and 2002                                                                       7

                Notes to Restated Unaudited Consolidated Financial Statements                           8

Item 2.         Management's Discussion and Analysis of Financial Condition and Results of
                Operations                                                                             13

Item 3.         Quantitative and Qualitative Disclosure About Market Risk                              22

Item 4.         Controls and Procedures                                                                22

PART II.        OTHER INFORMATION.                                                                     22

                SIGNATURES                                                                             24
</TABLE>





                                       2
<PAGE>


                                EXPLANATORY NOTE

         The purpose of this  Amendment  No. 1 on Form  10-Q/A to the  Quarterly
Report on Form 10-Q of First  Sentinel  Bancorp,  Inc. (the  "Company")  for the
quarter ended June 30, 2003, which was originally filed on August 14, 2003, (the
"Original Filing") is to restate the Company's consolidated financial statements
at and for the three and six months  ended June 30,  2003 and 2002,  and related
disclosures.

         This  Amendment No. 1 amends and restates in their  entirety Items 1, 2
and  4 of  Part  I of  the  Original  Filing.  Except  for  financial  statement
information  and  related  disclosures  that  are  specifically  related  to the
restatement,  all information  contained in this report is stated as of the date
of the Original Filing.  This amendment does not otherwise update information in
the Original Filing to reflect facts or events occurring  subsequent to the date
of the Original Filing.

         The Company has restated its  consolidated  financial  statements as of
and for the three and six  months  ended June 30,  2003 and 2002 to conform  its
accounting for First Savings Bank's  Directors'  Deferred Fee Plan in accordance
with  Emerging  Issues Task Force  ("EITF")  Issue No.  97-14,  "Accounting  for
Deferred  Compensation  Arrangements  Where  Amounts  Earned are Held in a Rabbi
Trust and Invested." Under the Directors' Deferred Fee Plan, directors may elect
to defer all or part of their fees and have such  amounts  held in a rabbi trust
and  invested  in the  Company's  common  stock  or a  deferred  money  account.
Historically,  the Company  expensed such deferred  directors' fees, but did not
recognize  subsequent changes in the fair value of stock held in the rabbi trust
for the  Directors'  Deferred  Fee  Plan  as  periodic  charges  or  credits  to
compensation  cost  with  a  corresponding  change  in a  deferred  compensation
obligation.  The Company has determined that a deferred compensation  obligation
(liability)  is required to be recognized for the fair value of the common stock
held in the rabbi trust for the  Directors'  Deferred Fee Plan,  with changes in
the fair value of the common stock being recorded as a periodic charge or credit
to compensation cost and the cost of shares held in the rabbi trust treated in a
manner similar to treasury stock. The restatements  resulted in net income being
reduced by $1.1  million and  $477,000  for the three months ended June 30, 2003
and 2002,  respectively  and by $835,000  and  $677,000 for the six months ended
June 30, 2003 and 2002,  respectively.  The restatements  also had the effect of
reducing the number of shares  outstanding for book value and earnings per share
calculations for all periods presented.

         Additional  detail  regarding the  restatement is included in Note 2 of
the Notes to Restated Unaudited  Consolidated  Financial  Statements included in
Item 1 of Part I of this Amendment No. 1 on Form 10-Q/A.

         The restated unaudited  consolidated  financial  statements included in
this  Amendement  No. 1 on Form 10-Q/A  should be read in  conjunction  with the
restated consolidated financial statements included in the Company's Form 10-K/A
for the year ended December 31, 2002, which was filed on January 28, 2004.



                                       3
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                              June 30,          December 31,
                                                                                                2003               2002
                                                                                             -----------        -----------
<S>                                                                                          <C>                <C>
ASSETS
Cash and due from banks ................................................................     $    30,055        $    21,695
Federal funds sold .....................................................................          30,300             44,250
                                                                                             -----------        -----------
     Total cash and cash equivalents ...................................................          60,355             65,945
Federal Home Loan Bank of New York (FHLB-NY) stock, at cost ............................          21,829             20,835
Investment securities available for sale ...............................................         120,980            114,219
Mortgage-backed securities available for sale ..........................................         791,102            790,562
Loans held for sale, net ...............................................................           7,957                563
Loans receivable, net ..................................................................       1,206,704          1,200,647
Interest and dividends receivable ......................................................          10,301             11,055
Premises and equipment, net ............................................................          16,077             15,882
Core deposit intangibles ...............................................................           4,149              4,568
Other assets ...........................................................................          36,006             37,203
                                                                                             -----------        -----------
     Total assets ......................................................................     $ 2,275,460        $ 2,261,479
                                                                                             ===========        ===========
---------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Deposits ...............................................................................     $ 1,401,422        $ 1,387,986
Borrowed funds .........................................................................         601,583            596,663
Advances by borrowers for taxes and insurance ..........................................          10,141              9,615
Other liabilities ......................................................................          30,994             30,643
                                                                                             -----------        -----------
    Total liabilities ..................................................................       2,044,140          2,024,907
                                                                                             -----------        -----------

Company-obligated mandatorily redeemable preferred capital securities of a
    subsidiary trust holding solely junior subordinated debentures of the Company ......          25,000             25,000
                                                                                             -----------        -----------

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 26,650,395 shares issued and outstanding at 6/30/03 and
     43,106,742 and 27,444,098 shares issued and outstanding at 12/31/02 ...............             430                430
Paid-in capital ........................................................................         206,454            205,915
Retained earnings ......................................................................         166,809            161,453
Accumulated other comprehensive income .................................................           9,066              9,776
Treasury stock (15,362,435 and 14,586,591 shares at 6/30/03 and 12/31/02,
    respectively) ......................................................................        (156,676)          (145,480)
Common stock acquired by the Employee Stock Ownership Plan (ESOP) ......................          (8,945)            (9,404)
Common stock acquired by the Recognition and Retention Plan (RRP) ......................            (554)            (1,032)
Common stock acquired by the DDFP ......................................................          (2,590)            (2,412)
DDFP transition differential ...........................................................          (7,674)            (7,674)
                                                                                             -----------        -----------
     Total stockholders' equity ........................................................         206,320            211,572
                                                                                             -----------        -----------
     Total liabilities and stockholders' equity ........................................     $ 2,275,460        $ 2,261,479
                                                                                             ===========        ===========
</TABLE>

See accompanying notes to the restated unaudited consolidated financial
statements.


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Three months ended                   Six months ended
                                                                          June 30,                             June 30,
                                                                -----------------------------       -----------------------------
                                                                    2003              2002             2003              2002
                                                                -----------       -----------       -----------      ------------
INTEREST INCOME:
<S>                                                             <C>              <C>                <C>              <C>
  Loans ..................................................      $    18,653      $     21,518       $    37,846      $     42,913
  Investment and mortgage-backed securities
      available for sale .................................            8,904            11,214            18,492            20,935
                                                                -----------       -----------       -----------      ------------
       Total interest income .............................           27,557            32,732            56,338            63,848
                                                                -----------       -----------       -----------      ------------

INTEREST EXPENSE:
   Deposits:
     NOW and money market demand .........................            1,128             2,086             2,464             4,181
     Savings .............................................              606               932             1,328             1,770
     Certificates of deposit .............................            3,827             5,330             8,007            11,404
                                                                -----------       -----------       -----------      ------------
       Total interest expense - deposits .................            5,561             8,348            11,799            17,355
   Borrowed funds ........................................            7,431             7,520            14,963            14,596
                                                                -----------       -----------       -----------      ------------
       Total interest expense ............................           12,992            15,868            26,762            31,951
                                                                -----------       -----------       -----------      ------------
       Net interest income ...............................           14,565            16,864            29,576            31,897
  Provision for loan losses ..............................               --             1,105                --             1,205
                                                                -----------       -----------       -----------      ------------
       Net interest income after provision for loan losses           14,565            15,759            29,576            30,692
                                                                -----------       -----------       -----------      ------------

NON-INTEREST INCOME:
    Fees and service charges .............................            1,142               859             2,030             2,099
    Net gain (loss) on sales of loans and securities
            available for sale ...........................              633            (1,587)            1,526            (1,471)
    Income on Bank Owned Life Insurance (BOLI) ...........              385               404               783               819
    Other, net ...........................................              189               199               433               378
                                                                -----------       -----------       -----------      ------------
       Total non-interest income .........................            2,349              (125)            4,772             1,825
                                                                -----------       -----------       -----------      ------------

NON-INTEREST EXPENSE:
    Compensation and benefits ............................            6,152             4,897            10,004             9,169
    Occupancy ............................................              587               545             1,233             1,103
    Equipment ............................................              409               401               837               839
    Advertising ..........................................              283               358               538               533
    Federal deposit insurance ............................               56                59               114               118
    Amortization of core deposit intangibles .............              209               211               419               423
    Distributions on preferred capital securities ........              472               491               944               989
    General and administrative ...........................            1,143             1,100             2,314             2,234
                                                                -----------       -----------       -----------      ------------
       Total non-interest expense ........................            9,311             8,062            16,403            15,408
                                                                -----------       -----------       -----------      ------------

       Income before income tax expense ..................            7,603             7,572            17,945            17,109


  Income tax expense .....................................            2,540             2,489             6,034             5,625
                                                                -----------       -----------       -----------      ------------

       Net income ........................................      $     5,063      $      5,083       $    11,911      $     11,484
                                                                ============     ============       ===========      ============

  Basic earnings per share ...............................      $       0.20     $       0.18       $      0.46      $       0.41
                                                                ============     ============       ===========      ============

  Weighted average shares outstanding - Basic ............        25,526,867       27,942,683        25,742,864        28,219,768
                                                                ============     ============       ===========      ============

  Diluted earnings per share .............................      $       0.19     $       0.18       $      0.45      $       0.40
                                                                ============     ============       ===========      ============

  Weighted average shares outstanding - Diluted ..........        26,254,038       28,815,073        26,459,674        29,025,556
                                                                ============     ============       ===========      ============
</TABLE>

See accompanying notes to the restated unaudited consolidated financial
statements.


                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                Accumulated
                                                                  Other
                                                                  Compre-     Common      Common                Common
                                                                  hensive      Stock      Stock                  Stock
                                  Common   Paid-In     Retained    Income    Acquired    Acquired   Treasury    Acquired
                                  Stock    Captial     Earnings    (Loss)     By ESOP     By RRP      Stock      By DDFP
                                 -----------------------------------------------------------------------------------------

<S>                                <C>    <C>          <C>          <C>      <C>         <C>        <C>          <C>
Balance at December 31, 2001 ...   $430   $ 204,544    $ 147,159    $2,178   $(10,321)   $(1,910)   $(110,571)   $(2,132)
Net income for the six
  months ended June 30,
  2002 (restated) ..............     --          --       11,484        --         --         --           --         --
Cash dividends declared
  ($0.075) .....................     --          --       (5,079)       --         --         --           --         --
Net change in unrealized gain on
  securities available for
  sale .........................     --          --           --     6,167         --         --           --         --
Purchases of treasury
  stock ........................     --          --           --        --         --         --      (10,461)        --
Increase in cost of DDFP, net ..     --          --           --        --         --         --           --       (117)
Exercise of stock
  options ......................     --          --         (339)       --         --         --          516         --
Tax benefit on stock options
  and RRP ......................     --         326           --        --         --         --           --         --
Purchase and retirement of
  common stock .................     --        (108)          --        --         --         --           --
Amortization of RRP ............     --          --           --        --         --        439           --         --
ESOP expense ...................     --         218           --        --        459         --           --         --
                                 -----------------------------------------------------------------------------------------
Balance at June 30, 2002
  (restated) ...................   $430   $ 204,980    $ 153,225    $8,345   $ (9,862)   $(1,471)   $(120,516)   $(2,249)
                                 =========================================================================================


Balance at December 31, 2002 ...   $430   $ 205,915    $ 161,453    $9,776   $ (9,404)   $(1,032)   $(145,480)   $(2,412)
Net income for the six months
  ended June 30, 2003
  (restated) ...................     --          --       11,911        --         --         --           --         --
Cash dividends declared
  ($0.105) .....................     --          --       (5,707)       --         --         --           --         --
Net change in unrealized gain
  on securities available for
  sale .........................     --          --           --      (710)        --         --           --         --
Purchases of treasury
  stock ........................     --          --           --        --         --         --      (12,429)        --
Increase in cost of DDFP, net ..     --          --           --        --         --         --           --       (178)
Exercise of stock
  options ......................     --         (67)        (848)       --         --         --        1,233         --
Tax benefit on stock options
  and RRP ......................     --         457           --        --         --         --           --         --
Purchase and retirement of
  common stock .................     --        (177)          --        --         --         --           --         --
Amortization of RRP ............     --          34           --        --         --        478           --         --
ESOP expense ...................     --         292           --        --        459         --           --         --
                                 -----------------------------------------------------------------------------------------
Balance at June 30, 2003
  (restated) ...................   $430   $ 206,454    $ 166,809    $9,066   $ (8,945)   $  (554)   $(156,676)   $(2,590)
                                 =========================================================================================

<CAPTION>



     DDPF         Total
  Transition   Stockholders
 Differential     Equity
---------------------------

    <S>          <C>
    $(7,674)     $ 221,703


         --         11,484

         --         (5,079)


         --          6,167

         --        (10,461)
         --           (117)

         --            177

         --            326

                      (108)
         --            439
         --            677
---------------------------

    $(7,674)     $ 225,208
===========================


    $(7,674)     $ 211,572


         --         11,911

         --         (5,707)


         --           (710)

         --        (12,429)
         --           (178)

         --            318

         --            457

         --           (177)
         --            512
         --            751
---------------------------

    $(7,674)     $ 206,320
===========================
</TABLE>


See accompanying notes to the restated unaudited consolidated financial
statements.


                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                              Six months ended
                                                                                                   June 30,
                                                                                          ---------------------------
                                                                                             2003             2002
                                                                                          ----------       ----------
<S>                                                                                        <C>              <C>
Cash flows from operating activities:
   Net income ..........................................................................   $  11,911        $  11,484
   ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
   Depreciation of premises and equipment ..............................................         713              706
   Amortization of core deposit intangibles ............................................         419              423
   ESOP expense ........................................................................         751              677
   Amortization of RRP .................................................................         512              439
   DDFP expense ........................................................................       1,284            1,042
   Net amortization of premiums and accretion of discounts and deferred fees ...........       3,427            1,631
   Provision for loan losses ...........................................................          --            1,205
   Loans originated for sale ...........................................................     (34,814)         (11,938)
   Proceeds from sales of mortgage loans held for sale .................................      27,477           17,074
   Net (gain) loss on sales of loans and securities available for sale .................      (1,526)           1,471
   Net (gain) loss on sales of real estate owned .......................................         (81)              10
   Income on BOLI ......................................................................        (783)            (819)
   Decrease (increase) in interest and dividends receivable ............................         754             (741)
   Tax benefit on stock options and RRP ................................................         457              326
   (Decrease) increase in other liabilities ............................................        (615)             538
   Decrease in other assets ............................................................       1,943            5,904
                                                                                           ---------        ---------
         Net cash provided by operating activities .....................................      11,829           29,432
                                                                                           ---------        ---------
Cash flows from investing activities:
   Proceeds from sales/calls/maturities of investment securities available for sale ....      38,339           19,308
   Purchases of investment securities available for sale ...............................     (43,564)         (36,752)
   Purchase of FHLB-NY stock ...........................................................        (994)            (347)
   Proceeds from sales of mortgage-backed securities available for sale ................      94,612           87,897
   Principal payments on mortgage-backed securities ....................................     202,089          118,097
   Purchases of mortgage-backed securities available for sale ..........................    (302,474)        (288,572)
   Principal repayments on loans .......................................................     342,039          322,618
   Origination of loans ................................................................    (332,118)        (330,728)
   Purchases of mortgage loans .........................................................     (15,353)         (19,315)
   Proceeds from sale of real estate owned .............................................         204               32
   Purchases of premises and equipment .................................................        (908)            (469)
                                                                                           ---------        ---------
          Net cash used in investing activities ........................................     (18,128)        (128,231)
                                                                                           ---------        ---------
Cash flows from financing activities:
   Purchase of treasury stock ..........................................................     (12,429)         (10,461)
   Increase in cost of DDFP, net .......................................................        (178)            (117)
   Purchase and retirement of common stock .............................................        (177)            (108)
   Stock options exercised .............................................................         318              177
   Cash dividends paid .................................................................      (5,707)          (5,079)
   Net increase in deposits ............................................................      13,436           60,014
   Net increase in short-term borrowed funds ...........................................          --               --
   Proceeds from borrowed funds ........................................................      25,000           67,000
   Repayment of  borrowed funds ........................................................     (20,080)         (15,074)
   Net increase in advances by borrowers for taxes and insurance .......................         526            1,095
                                                                                           ---------        ---------
            Net cash provided by financing activities ..................................         709           97,447
                                                                                           ---------        ---------
            Net decrease in cash and cash equivalents ..................................      (5,590)          (1,352)
Cash and cash equivalents at beginning of period .......................................      65,945           53,875
                                                                                           ---------        ---------
Cash and cash equivalents at end of period .............................................   $  60,355        $  52,523
                                                                                           =========        =========
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
       Interest ........................................................................   $  27,100        $  31,362
       Income taxes ....................................................................       5,300            3,142
   Non cash investing and financing activities for the period:
        Transfer of loans to real estate owned .........................................   $      51        $      --
</TABLE>


See accompanying notes to the restated unaudited consolidated financial
statements.


                                       7
<PAGE>

                  FIRST SENTINEL BANCORP, INC. AND SUBSIDIARIES

          Notes to Restated Unaudited Consolidated Financial Statements

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF PRESENTATION

The accompanying restated unaudited  consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States of America 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 LLC, and 1000 Woodbridge
Center Drive, Inc. Certain  disclosures have been omitted or condensed  pursuant
to such rules.  These restated interim  financial  statements  should be read in
conjunction with the restated consolidated  financial statements included in the
Company's Form 10-K/A for the year ended  December 31, 2002,  which was filed on
January 28, 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 and
six months ended June 30, 2003 and 2002. The results of operations for the three
and six months ended June 30, 2003,  are not  necessarily  indicative of results
that may be expected for the entire fiscal year ending December 31, 2003.

(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 Disclosures" (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                 Three months ended June 30,         Six months ended June 30,
                                               --------------------------------   --------------------------------
                                                   2003              2002             2003              2002
                                               --------------    --------------   --------------    --------------
<S>                                            <C>               <C>              <C>               <C>
Net income, as reported                        $       5,063     $       5,083    $      11,911     $      11,484
Add:
   Stock-based employee compensation
     expense included in reported net
    income, net of related tax effects
    (RRP awards)                                         178               142              333               285
Deduct:
   Total stock-based  employee
    compensation expense determined
    under fair value based method for all
    options and RRP awards, net of
    related tax effects                                  182               332              344               664
                                               --------------    --------------   --------------    --------------
Pro forma net income                                   5,059             4,893           11,900            11,105
                                               ==============    ==============   ==============    ==============

Net income per common share:
   Basic - as reported                         $        0.20     $        0.18    $        0.46     $        0.41
                                               ==============    ==============   ==============    ==============
   Basic - pro forma                           $        0.20     $        0.18    $        0.46     $        0.39
                                               ==============    ==============   ==============    ==============
   Diluted - as reported                       $        0.19     $        0.18    $        0.45     $        0.40
                                               ==============    ==============   ==============    ==============
   Diluted - pro forma                         $        0.19     $        0.17    $        0.45     $        0.38
                                               ==============    ==============   ==============    ==============
</TABLE>


                                       8
<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.  Potential
dilutive common shares 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)  expense if the effect is more  dilutive to do so,  otherwise  the DDFP
(credit)  expense is  included  in net income and the shares are  excluded  from
diluted shares outstanding.

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

<TABLE>
<CAPTION>
                                             Three months ended June 30,     Six months ended June 30,
                                            ----------------------------   ----------------------------
                                                2003            2002           2003            2002
                                            ------------    ------------   ------------    ------------
<S>                                         <C>             <C>            <C>             <C>
Net income                                  $     5,063     $     5,083    $    11,911     $    11,484
                                            ============    ============   ============    ============

Basic weighted-average common shares
     outstanding                             25,526,867      27,942,683     25,742,864      28,219,768
Plus: Dilutive stock options and awards         727,171         872,390        716,810         805,798
                                            ------------    ------------   ------------    ------------
Diluted weighted-average common
     shares outstanding                      26,254,038      28,815,073     26,459,674      29,025,556
                                            ============    ============   ============    ============

Net income per common share:
   Basic                                    $      0.20     $      0.18    $      0.46     $      0.41
                                            ============    ============   ============    ============
   Diluted                                  $      0.19     $      0.18    $      0.45     $      0.40
                                            ============    ============   ============    ============
</TABLE>


(2)  RESTATEMENTS

The Company has restated its unaudited  consolidated  financial statements as of
and for the three and six  months  ended June 30,  2003 and 2002 to conform  its
accounting  for the  Bank's  Directors'  Deferred  Fee Plan in  accordance  with
Emerging  Issues Task Force ("EITF") Issue No. 97-14,  "Accounting  for Deferred
Compensation  Arrangements  Where  Amounts  Earned are Held in a Rabbi Trust and
Invested." Under the Directors' Deferred Fee Plan,  directors may elect to defer
all or part of their  fees and  have  such  amounts  held in a rabbi  trust  and
invested  in  the  Company's   common  stock  or  a  deferred   money   account.
Historically,  the Company  expensed such deferred  directors' fees, but did not
recognize  subsequent changes in the fair value of stock held in the rabbi trust
for the  Directors'  Deferred  Fee  Plan  as  periodic  charges  or  credits  to
compensation  cost  with  a  corresponding  change  in a  deferred  compensation
obligation.

The Company has determined that a deferred compensation  obligation  (liability)
is required to be recognized  for the fair value of the common stock held in the
rabbi trust,  with changes in the fair value of the common stock being  recorded
as a periodic charge or credit to compensation  cost and the cost of shares held
in  the  rabbi  trust  treated  in a  manner  similar  to  treasury  stock.  The
restatements  resulted in net income being  reduced by $1.1 million and $477,000
for the three months ended June 30, 2003 and 2002, respectively, and by $835,000
and $677,000 for the six months ended June 30, 2003 and 2002, respectively.  The
restatements also had the effect of reducing the number of shares outstanding on
the  consolidated  statements of financial  condition and for earnings per share
calculations for all periods presented. In addition, Notes 1(b) and (c) and Note
6 reflect certain adjustments related to the restatement.


                                       9
<PAGE>

The tables  below  present a summary of the impact of  restating  the  Company's
consolidated  statements  of income  and cash flows for the three and six months
ended  June  30,  2003 and 2002 and the  Company's  consolidated  statements  of
financial  condition at June 30, 2003  (dollars in  thousands,  except per share
data):

<TABLE>
<CAPTION>
                                                                Three months ended June 30,
                                                       2003                                      2002
                                       -------------------------------------     -------------------------------------
                                         Originally                                Originally
                                          Reported              Restated            Reported             Restated
                                       ----------------      ---------------     ---------------     -----------------
<S>                                    <C>                   <C>                 <C>                 <C>
Consolidated Statements of
Income:
Compensation and benefits              $         4,409       $        6,152      $        4,163      $          4,897
Total non-interest expense                       7,568                9,311               7,328                 8,062
Income before income tax expense                 9,346                7,603               8,306                 7,572
Income tax expense                               3,150                2,540               2,746                 2,489
Net income                                       6,196                5,063               5,560                 5,083
Basic earnings per share               $          0.23       $         0.20      $         0.19      $           0.18
Basic weighted average shares
     outstanding                            26,496,125           25,526,867          28,908,094            27,942,683
Diluted earnings per share             $          0.23       $         0.19      $         0.19      $           0.18
Diluted  weighted  average shares
outstanding                                 27,223,296           26,254,038          29,780,484            28,815,073
</TABLE>


<TABLE>
<CAPTION>
                                                                 Six months ended June 30,
                                                       2003                                      2002
                                       -------------------------------------     -------------------------------------
                                         Originally                                Originally
                                          Reported              Restated            Reported             Restated
                                       ----------------      ---------------     ---------------     -----------------
<S>                                    <C>                   <C>                 <C>                 <C>
Consolidated Statements of
Income:
Compensation and benefits              $         8,720       $       10,004      $        8,127      $          9,169
Total non-interest expense                      15,119               16,403              14,366                15,408
Income before income tax expense                19,229               17,945              18,151                17,109
Income tax expense                               6,483                6,034               5,990                 5,625
Net income                                      12,746               11,911              12,161                11,484
Basic earnings per share               $          0.48       $         0.46      $         0.42      $           0.41
Basic weighted average shares
     outstanding                            26,719,615           25,742,864          29,182,305            28,219,768
Diluted earnings per share             $          0.46       $         0.45      $         0.41      $           0.40
Diluted  weighted  average shares
outstanding                                 27,436,425           26,459,674          29,988,103            29,025,556
</TABLE>





                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                 Six months ended June 30,
                                                       2003                                      2002
                                       -------------------------------------     -------------------------------------
                                         Originally                                Originally
                                          Reported              Restated            Reported             Restated
                                       ----------------      ---------------     ---------------     -----------------
<S>                                    <C>                   <C>                 <C>                 <C>
Consolidated Statements of Cash
     Flows:
Net income                             $        12,746       $       11,911      $       12,161      $         11,484
DDFP expense                                        --                1,284                  --                 1,042
Decrease in other assets                         2,357                1,943               6,266                 5,904
Net cash provided by operating                  11,794               11,829              29,429                29,432
     Activities
Cash dividends paid                             (5,850)              (5,707)             (5,193)               (5,079)
Increase in cost of DDFP, net                       --                 (178)                 --                  (117)
Net cash provided by financing
     activities                        $           744       $          709      $       97,450      $         97,447
</TABLE>


                                                  At June 30, 2003
                                         Originally
                                          Reported              Restated
                                       ----------------      ---------------
Consolidated Statements of
     Financial Condition:
Other assets                           $        31,112       $       36,006
Total assets                                 2,270,566            2,275,460
Other liabilities                               15,602               30,994
Total liabilities                            2,028,748            2,044,140
Paid-in capital                                203,768              206,454
Retained earnings                              169,729              166,809
Common stock acquired by DDFP                       --               (2,590)
DDFP transition differential                        --               (7,674)
Total stockholders' equity                     216,818              206,320
Total liabilities and
     stockholders' equity              $     2,270,566       $    2,275,460


 (3)  DIVIDENDS

Based upon current  operating  results,  the Company declared a cash dividend of
$0.105 per share on April 28, 2003,  payable May 30, 2003,  to  stockholders  of
record on May 16, 2003.

(4)  COMMITMENTS AND CONTINGENCIES

At June 30, 2003,  the Company had the following  commitments:  (i) to originate
loans of  $121.6  million;  (ii)  unused  home  equity  lines of credit of $71.0
million;  (iii) unused commercial lines of credit of $16.5 million;  (iv) unused
construction  lines of  credit  of $87.7  million;  and (v)  letters  of  credit
outstanding totaling $1.6 million.  Further,  certificates of deposits which are
scheduled to mature and/or rollover in one year or less,  totaled $419.8 million
at June 30, 2003.


                                       11
<PAGE>

(5)  ALLOWANCE FOR LOAN LOSSES

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

                                                  SIX MONTHS ENDED JUNE 30,
                                                2003                   2002
                                           ---------------        --------------
Balance at beginning of period             $      12,830          $     12,932
Provision charged to operations                       --                 1,205
Charge-offs, net of recoveries                       (37)               (1,390)
                                           ---------------        --------------
Balance at end of period                   $       12,793         $     12,747
                                           ===============        ==============

(6)  COMPREHENSIVE INCOME

Total  comprehensive  income,  consisting  of net  income  and the net change in
unrealized  gain/(loss)  on securities  available for sale, was $2.9 million and
$11.9  million for the three months ended June 30, 2003 and 2002,  respectively.
For the six months ended June 30, 2003 and 2002,  comprehensive  income  totaled
$11.2 million and $17.7 million, respectively.

(7)  RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial  Accounting  Standards ("SFAS") No. 150,  "Accounting for
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity," was issued in May 2003.  SFAS No. 150 requires  instruments  within its
scope to be classified as a liability (or, in some cases, as an asset). SFAS No.
150 is generally  effective for financial  instruments  entered into or modified
after May 31, 2003,  and  otherwise  is effective at the  beginning of the first
interim  period  beginning  after June 15, 2003 (i.e.  July 1, 2003 for calendar
year  entities).  The  adoption of SFAS No. 150 on July 1, 2003  resulted in the
reclassification  of $25  million in  Company-obligated  mandatorily  redeemable
preferred   capital   securities  to   interest-bearing   liabilities   and  the
reclassification of related costs to interest expense from non-interest expense.

SFAS No. 149, "Amendment of Statement 133 on Derivative  Instruments and Hedging
Activities,"  was issued on April 30, 2003.  The Statement  amends and clarifies
accounting for derivative instruments,  including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS No. 133. This
Statement is effective  for  contracts  entered into or modified  after June 30,
2003.  The  adoption  of SFAS No. 149 did not have a  significant  effect on the
Company's consolidated financial statements.



                                       12
<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.

RESTATEMENTS.

The Company has restated its consolidated financial statements as of and for the
three and six months ended June 30, 2003 and 2002 to conform its  accounting for
the Bank's Directors'  Deferred Fee Plan in accordance with Emerging Issues Task
Force  ("EITF")  Issue  No.  97-14,   "Accounting   for  Deferred   Compensation
Arrangements Where Amounts Earned are Held in a Rabbi Trust and Invested." Under
the  Directors'  Deferred Fee Plan,  directors may elect to defer all or part of
their  fees and have such  amounts  held in a rabbi  trust and  invested  in the
Company's  common stock or a deferred money account.  Historically,  the Company
expensed such deferred directors' fees, but did not recognize subsequent changes
in the fair  value of stock  held in the  rabbi  trust as  periodic  charges  or
credits  to  compensation  cost  with  a  corresponding  change  in  a  deferred
compensation obligation. The Company has determined that a deferred compensation
obligation  (liability)  is required to be recognized  for the fair value of the
common stock held in the rabbi trust for the Directors'  Deferred Fee Plan, with
changes in the fair  value of the  common  stock  being  recorded  as a periodic
charge or credit to  compensation  cost and the cost of shares held in the rabbi
trust treated in a manner similar to treasury stock. The  restatements  resulted
in net income  being  reduced by $1.1  million and $477,000 for the three months
ended June 30, 2003 and 2002, respectively, and by $835,000 and $677,000 for the
six months ended June 30, 2003 and 2002, respectively. The restatements also had
the  effect of  reducing  the  number of shares  outstanding  for book value and
earnings  per share  calculations  for all  periods  presented.  For  additional
information  regarding  the  restatements,  see Note 2 of the Notes to  Restated
Unaudited Consolidated Financial Statements included herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES.

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  as well as disclosures  found  elsewhere in this Form 10-Q/A,  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. 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, 2002 included
in our Annual  Report on Form 10-K/A for the year ended  December 31,  2002,  as
supplemented  by the Company's  Quarterly  Report on Form 10-Q/A for the quarter
ended  March 31,  2003 and 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  periodically  reviewed with the Audit Committee and the
Board of Directors.

The  provision  for loan  losses is based upon  management's  evaluation  of the
adequacy of the  allowance,  including an assessment of known and inherent risks
in the portfolio,  giving  consideration to the size and composition of the loan
portfolio,  actual  loan  loss  experience,  level  of  delinquencies,  detailed
analysis of individual loans for which full  collectibility  may not be assured,
the  existence  and  estimated  fair  value  of any  underlying  collateral  and
guarantees  securing  the loans,  and current  economic  and market  conditions.
Although  management  uses  the best  information


                                       13
<PAGE>

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  Central  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.

ASSETS.  Total assets grew $14.0 million from December 31, 2002, to $2.3 billion
at June 30, 2003. The change in assets consisted primarily of increases in loans
and investment  securities available for sale, partially offset by a decrease in
cash and cash equivalents.

Net loans, including loans held for sale, totaled $1.2 billion at June 30, 2003,
an increase of $13.5 million, or 1.1%, from December 31, 2002. Of the total loan
portfolio at June 30, 2003, 1-4 family  mortgage  loans  comprised  66.0%,  home
equity  loans  represented  9.0%,  commercial  real  estate,   multi-family  and
construction loans comprised 24.3%, and other consumer loans accounted for 0.7%.

Total loan  originations  for the six months  ended June 30,  2003,  were $366.9
million, compared to $342.7 million for the same period in 2002. Fixed-rate, 1-4
family first  mortgage loan  originations  totaled $129.0  million,  or 35.2% of
production, while adjustable-rate, 1-4 family first mortgage loans accounted for
$58.1 million, or 15.9%, of total originations for the first six months of 2003.
Also during the first six months of 2003, consumer loan originations, consisting
primarily of home equity loans and credit lines, totaled $88.9 million, or 24.2%
of total  originations.  During the same period,  construction  lending  totaled
$72.7 million,  or 19.8% of total  originations,  while  commercial real estate,
commercial and multi-family loan originations totaled $18.2 million, or 5.0%. In
addition,  the Company  purchased  $15.4  million of primarily  adjustable-rate,
single-family first mortgage loans through  correspondents during the six months
ended June 30, 2003.  Purchased loans are re-underwritten by the Company and are
extended at rates higher than those currently offered by the Company.

Repayment of principal on loans totaled  $342.0 million for the six months ended
June 30,  2003,  compared  to $322.6  million  for the same  period in 2002.  In
addition, the Company sold $27.4 million of primarily 30-year,  fixed-rate,  1-4
family  mortgage  loans  during the first  half of 2003 as part of its  on-going
interest rate risk management  process.  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,
competition and other economic factors outside of the control of the Company.

Investment  securities  available for sale increased  $6.8 million,  or 5.9%, to
$121.0  million as of June 30, 2003,  from $114.2  million at December 31, 2002.
For the six months  ended June 30,  2003,  purchases  of  investment  securities
available  for sale totaled $43.6  million,  while sales,  calls and  maturities
totaled $38.0 million.  Purchases  consisted primarily of debt securities issued
by U.S. corporations and  government-sponsored  agencies. At June 30, 2003, U.S.
government and agency obligations totaled $75.7 million, or 62.6%, of investment
securities available for sale, while state and municipal  obligations  accounted
for another $13.9 million,  or 11.5%.  Corporate  obligations  represented $28.3
million,  or 23.4%,  and equity  securities  accounted  for the  remaining  $3.1
million, or 2.5%, of investment  securities available for sale at June 30, 2003.
All corporate  obligations  held at June 30, 2003, are investment grade with the
largest exposure to any single creditor totaling $3.4 million.

Cash and cash  equivalents  decreased  $5.6 million to $60.4 million at June 30,
2003,  from $65.9  million at December 31, 2002,  as funds were  deployed in the
aforementioned earning asset growth.

LIABILITIES.  Total deposits increased $13.4 million, or 1.0%, from December 31,
2002, to $1.4 billion at June 30, 2003.  Core deposits,  consisting of checking,
savings and money market  accounts,  grew by $44.3  million,  or 5.6%, to $829.5
million,  and  accounted  for 59.2% of total  deposits  at June 30,  2003.  This
compares  with a  core/total  deposits  ratio of 56.6% at December  31, 2002 and
54.5% at June 30, 2002.  Certificates of deposit decreased by $30.8 million,  or
5.1%,  compared  with  year-end  2002,  with  decreases  occurring  primarily in
one-year and shorter maturity categories.


                                       14
<PAGE>

Borrowed funds increased by $4.9 million, or 0.8%, to $601.6 million at June 30,
2003, from $596.7 million at December 31, 2002.

CAPITAL. The Company's  stockholders' equity decreased $5.3 million, or 2.5%, to
$206.3  million at June 30, 2003,  from $211.6 million at December 31, 2002. The
decrease  in  equity  was a result of the  repurchase  of $12.6  million  of the
Company's common stock,  cash dividends  declared of $5.7 million and a decrease
in net unrealized gains on securities available for sale of $710,000,  partially
offset by net income of $11.9  million for the six months  ended June 30,  2003,
the  amortization of stock-based  compensation and benefit plans and related tax
benefits of $1.5  million,  and  proceeds  from the  exercise  of stock  options
totaling  $318,000.  In  February  2003,  the  Company  authorized  a  5%  stock
repurchase  program.  The Company  repurchased  5,000 shares and 871,000 shares,
respectively, during the three and six months ended June 30, 2003, at an average
cost per share of $15.30 and  $14.26,  respectively.  Stated and  tangible  book
value per share at June 30, 2003, were $7.74 and $7.59, respectively.

The Federal Deposit  Insurance  Corporation  requires that the Bank meet minimum
leverage,  Tier 1 and Total Risk-based Capital  requirements.  At June 30, 2003,
the Bank exceeded all regulatory  capital  requirements,  as follows (dollars in
thousands):

<TABLE>
<CAPTION>
                                Required                   Actual
                          ----------------------    ----------------------       Excess of Actual
                                                                                  Over Regulatory
                            Amount       Ratio        Amount      Ratio             Requirements
                          ----------   ---------    ----------   ---------     ---------------------

<S>                         <C>          <C>         <C>          <C>                <C>
Leverage Capital            $91,185      4.00%       $180,133      7.90%             $ 88,948
Risk-based Capital:
Tier 1                       43,864      4.00         180,133     16.43               136,269
Total                        87,727      8.00         192,926     17.59               105,199
</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  ("MBS");  sales  of  loans,  MBS  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 MBS 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 2003 were
principal  repayments and  prepayments of loans and MBS totaling  $342.0 million
and $202.1 million, respectively. Other significant sources of funds for the six
months ended June 30, 2003,  were  proceeds from sales of MBS available for sale
totaling $94.6  million,  sales,  calls and maturities of investment  securities
available for sale of $38.3  million,  proceeds from the sales of mortgage loans
totaling $27.5 million and net deposit  growth of $13.4  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, 2003, the
Company had unpledged  investment  securities  and MBS available for sale with a
market value of $429.9 million.

The primary investing activities of the Company for the first six months of 2003
were  the  origination  of  loans  totaling  $366.9  million,  purchases  of MBS
available  for  sale  totaling  $302.5  million,  and  purchases  of  investment
securities available for sale totaling $43.6 million.  Other significant uses of
funds during the six months ended June 30, 2003, were $15.4 million in purchases
of mortgage  loans,  $12.6 million in repurchases of the Company's  common stock
and $5.7 million in cash dividends paid.

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003
AND 2002.

RESULTS OF  OPERATIONS.  Net income for the three and six months  ended June 30,
2003, totaled $5.1 million and $11.9 million, respectively, versus net income of
$5.1  million  and  $11.5  million,  for  the  comparable  2002  periods.   This
represented  a decrease of $20,000,  or 0.4%,  and an increase of  $427,000,  or
3.7%,  respectively,  for the three and six months ended June 30, 2003, compared
with 2002. For the quarter ended June 30, 2003,  basic and diluted  earnings per
share were $0.20 and $0.19,  respectively,  representing  increases  of 9.0% and
9.3% over second quarter


                                       15
<PAGE>

2002 basic and diluted  earnings  per share of $0.18.  For the six months  ended
June 30,  2003,  basic and  diluted  earnings  per share  were  $0.46 and $0.45,
respectively,  representing  increases of 13.7% and 13.8% over basic and diluted
earnings per share of $0.41 and $0.40, respectively, for the first six months of
2002.

Annualized  return on average equity was 11.46% and 11.72% for the three and six
months ended June 30, 2003, respectively, compared with 9.60% and 10.51% for the
comparable 2002 periods. Annualized return on average assets was 1.09% and 1.12%
for the three and six months ended June 30, 2003,  respectively,  compared  with
0.99% and 1.10% for the three and six months ended June 30, 2002, respectively.

Prior year results were adversely affected by two events precipitated by alleged
acts of fraud and/or  misrepresentation.  In June 2002, the Company  recorded an
impairment charge totaling $1.2 million,  or $.04 per diluted share, net of tax,
related to WorldCom,  Inc. corporate bonds. In addition,  the Company recorded a
$1.1 million provision to the allowance for loan losses in the second quarter of
2002,  the  majority  of which  was due to a $1.4  million  writedown  of a $6.9
million  participation loan to an insurance premium financing  company.  Both of
these items were fully resolved in 2002.










                                       16
<PAGE>

CONSOLIDATED AVERAGE STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)

The Company has restated its consolidated  financial  statements for the periods
presented in this table. See  Management's  Discussion and Analysis of Financial
Condition and Results of Operations - Restatements.

<TABLE>
<CAPTION>
                                                                               Three Months Ended June 30,
                                                       ----------------------------------------------------------------------------
                                                                        2003                                   2002
                                                       ------------------------------------    ------------------------------------
                                                         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 ..............................    $   48,682    $      145    1.19%        $   65,440    $      280    1.71%
   Investment securities available for
     sale (1) ......................................       136,160         1,591    4.67            146,419         1,945    5.31
   Mortgage-backed securities available
     for sale ......................................       753,728         7,168    3.80            683,610         8,989    5.26
                                                        ----------    ----------                 ----------    ----------
     Total investments .............................       938,570         8,904    3.79            895,469        11,214    5.01

   Mortgage loans ..................................     1,108,597        16,878    6.09          1,150,478        19,340    6.72
   Home equity loans ...............................        62,354         1,047    6.72             70,602         1,291    7.31
   Home equity lines of credit .....................        48,124           549    4.56             41,732           560    5.37
   Other loans .....................................        13,537           179    5.29             18,339           327    7.13
                                                        ----------    ----------                 ----------    ----------
     Total loans ...................................     1,232,612        18,653    6.05          1,281,151        21,518    6.72
                                                        ----------    ----------                 ----------    ----------

  Total interest-earning assets ....................     2,171,182        27,557    5.08%         2,176,620        32,732    6.01%
                                                        ----------    ----------    ----                       ----------    ----
  Non-interest earning assets ......................       105,126                                   64,113
                                                        ----------                               ----------
        Total assets ...............................    $2,276,308                               $2,240,733
                                                        ==========                               ==========

LIABILITIES AND STOCKHOLDERS'
  EQUITY
  Interest-bearing liabilities:
   NOW and money market accounts ...................    $  510,958    $    1,128    0.88%        $  467,196    $    2,086    1.79%
   Savings accounts ................................       234,916           606    1.03            202,113           932    1.84
   Certificates of deposit .........................       579,438         3,827    2.64            633,188         5,330    3.37
                                                        ----------    ----------                 ----------    ----------
     Total interest-bearing deposits ...............     1,325,312         5,561    1.68          1,302,497         8,348    2.56

   Borrowed funds ..................................       611,707         7,431    4.86            596,457         7,520    5.04
                                                        ----------    ----------                 ----------    ----------
  Total interest-bearing liabilities ...............     1,937,019        12,992    2.68          1,898,954        15,868    3.34
                                                        ----------    ----------    ----                       ----------    ----
  Non-interest bearing deposits ....................        76,732                                   68,059
  Other liabilities ................................        51,602                                   46,543
                                                        ----------                               ----------
        Total liabilities ..........................     2,065,353                                2,013,556
  Stockholders' equity .............................       210,955                                  227,177
                                                        ----------                               ----------
        Total liabilities and stockholders'
            equity .................................    $2,276,308                               $2,240,733
                                                        ==========                               ==========
Net interest income/interest rate spread ...........                  $   14,565    2.40%                      $   16,864   2.67%
                                                                      ==========    ====                       ==========   ====
Net interest-earning assets/net interest
   margin ..........................................    $  234,163                  2.68%        $  277,666                 3.10%
                                                        ==========                  ====         ==========                 ====
Ratio of interest-earning assets
   to interest-bearing liabilities .................          1.12X                                    1.15X
                                                        ==========                               ==========
</TABLE>

(1) Includes FHLB-NY stock.


                                       17
<PAGE>

CONSOLIDATED AVERAGE STATEMENTS OF FINANCIAL CONDITION

 (Dollars in thousands)

The Company has restated its consolidated  financial  statements for the periods
presented in this table. See  Management's  Discussion and Analysis of Financial
Condition and Results of Operations - Restatements.

<TABLE>
<CAPTION>
                                                                                Six Months Ended June 30,
                                                       ----------------------------------------------------------------------------
                                                                        2003                                   2002
                                                       ------------------------------------    ------------------------------------
                                                         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 ..............................    $   41,518    $      246    1.19%        $   59,901    $      509    1.70%
   Investment securities available for
     sale (1) ......................................       133,889         3,235    4.83            142,018         3,876    5.46
   Mortgage-backed securities available
     for sale ......................................       762,568        15,011    3.94            662,343        16,550    5.00
                                                        ----------    ----------                 ----------    ----------
     Total investments .............................       937,975        18,492    3.94            864,262        20,935    4.84

   Mortgage loans ..................................     1,106,193        34,230    6.19          1,139,676        38,499    6.76
   Home equity loans ...............................        62,623         2,120    6.77             71,242         2,603    7.31
   Home equity lines of credit .....................        48,201         1,112    4.61             41,168         1,106    5.37
   Other loans .....................................        14,297           384    5.37             19,126           705    7.37
                                                        ----------    ----------                 ----------    ----------
     Total loans ...................................     1,231,314        37,846    6.15          1,271,212        42,913    6.75
                                                        ----------    ----------                 ----------    ----------

  Total interest-earning assets ....................     2,169,289        56,338    5.19%         2,135,474        63,848    5.98%
                                                                      ----------    ----                       ----------    ----
  Non-interest earning assets ......................       100,250                                   70,296
                                                        ----------                               ----------
        Total assets ...............................    $2,269,539                               $2,205,770
                                                        ==========                               ==========

LIABILITIES AND STOCKHOLDERS'
  EQUITY
  Interest-bearing liabilities:
   NOW and money market accounts ...................    $  501,033    $    2,464    0.98%        $  453,367    $    4,181    1.84%
   Savings accounts ................................       230,245         1,328    1.15            193,365         1,770    1.83
   Certificates of deposit .........................       587,320         8,007    2.73            640,539        11,404    3.56
                                                        ----------    ----------                 ----------    ----------
     Total interest-bearing deposits ...............     1,318,598        11,799    1.79          1,287,271        17,355    2.70
   Borrowed funds ..................................       606,690        14,963    4.93            576,513        14,596    5.06
                                                        ----------    ----------                 ----------    ----------
  Total interest-bearing liabilities ...............     1,925,288        26,762    2.78          1,863,784        31,951    3.43
                                                                      ----------    ----                       ----------    ----
  Non-interest bearing deposits ....................        74,907                                   64,272
  Other liabilities ................................        57,124                                   50,857
                                                        ----------                               ----------
        Total liabilities ..........................     2,057,319                                1,978,913
  Stockholders' equity .............................       212,220                                  226,857
                                                        ----------                               ----------
        Total liabilities and stockholders'
            equity .................................    $2,269,539                               $2,205,770
                                                        ==========                               ==========
Net interest income/interest rate spread ...........                  $   29,576    2.41%                      $   31,897    2.55%
                                                                      ==========    ====                       ==========    ====
Net interest-earning assets/net interest
   margin ..........................................    $  244,001                  2.73%          $271,690                  2.99%
                                                        ==========                  ====         ==========                  ====
Ratio of interest-earning assets
   to interest-bearing liabilities .................          1.13X                                    1.15X
                                                              ====                                     ====
</TABLE>

(1) Includes FHLB-NY stock.


                                       18
<PAGE>

INTEREST  INCOME.  Interest income  decreased $5.2 million,  or 15.8%,  and $7.5
million,  or  11.8%,  for  the  three  and  six  months  ended  June  30,  2003,
respectively,  from the same periods in 2002. The decline in interest income was
primarily  attributable  to  the  historically  low  interest  rate  environment
experienced over the past year.

Interest on loans decreased $2.9 million,  or 13.3%, and $5.1 million, or 11.8%,
to $18.7  million and $37.8  million for the three and six months ended June 30,
2003,  respectively,  compared to $21.5  million and $42.9  million for the same
periods in 2002.  The average  balance of the loan portfolio for the three month
period ended June 30, 2003,  decreased  $48.5 million to $1.2 billion from 2002,
while the average yield on the portfolio decreased to 6.05% for the three months
ended June 30, 2003, from 6.72% for the same period in 2002. The average balance
of the loan  portfolio  for the six month period ended June 30, 2003,  decreased
$39.9  million  to $1.2  billion  from  2002,  while  the  average  yield on the
portfolio  decreased to 6.15% for the six months ended June 30, 2003, from 6.75%
for the same period in 2002.

Interest on securities  decreased  $2.3 million,  or 20.6% and $2.4 million,  or
11.7%, to $8.9 million and $18.5 million for the three and six months ended June
30, 2003,  compared to $11.2  million and $20.9  million for the same periods in
2002. The average  balance of the  investment,  FHLB stock and MBS available for
sale portfolios  totaled $938.6 million,  with an annualized  yield of 3.79% for
the three months ended June 30, 2003, compared with an average balance of $895.5
million  with an  annualized  yield of 5.01% for the three months ended June 30,
2002. For the first half of 2003, the average  balance of the  investment,  FHLB
stock and MBS available for sale  portfolios  totaled  $938.0  million,  with an
annualized yield of 3.94%, compared to an average balance of $864.3 million with
an annualized yield of 4.84% for the six months ended June 30, 2002. The Company
has adopted  what it believes is a prudent  strategy in the current low interest
rate  environment  of reducing the duration of the  securities  portfolio  while
carefully managing the risk of extending maturities should rates begin to rise.

INTEREST EXPENSE.  Interest expense  decreased $2.9 million,  or 18.1%, to $13.0
million for the three months ended June 30, 2003,  compared to $15.9 million for
the same  period in 2002.  For the six  months  ended  June 30,  2003,  interest
expense decreased $5.2 million,  or 16.2%, to $26.8 million versus $32.0 million
for the comparable 2002 period.  The decrease in interest  expense was primarily
attributable  to reductions in rates paid on time and core deposits,  as well as
growth in  lower-costing  core  accounts and managed  run-off in higher  costing
certificates of deposit.

Interest expense on deposits  decreased $2.8 million,  or 33.4%, to $5.6 million
for the three months ended June 30, 2003,  compared to $8.3 million for the same
period in 2002. The average balance of interest-bearing  core deposits increased
$76.6 million,  or 11.4%, for the quarter ended June 30, 2003, compared with the
same period in 2002, while the average rate paid on these deposits  decreased 87
basis points to 0.93%.  Average non-interest bearing deposits grew $8.7 million,
or 12.7%,  to $76.7  million for the second  quarter of 2003 compared with 2002.
The average balance of certificates of deposit declined $53.8 million,  or 8.5%,
for the three months ended June 30, 2003, compared with the same period in 2002,
while the average rate paid on certificates decreased 73 basis points to 2.64%.

For the first half of 2003, interest expense on deposits decreased $5.6 million,
or 32.0%,  to $11.8  million,  compared to $17.4  million for the same period in
2002.  For the  year-to-date,  the  average  balance  of  interest-bearing  core
deposits  increased  $84.5 million,  or 13.1%,  compared with the same period in
2002, while the average rate paid on these deposits decreased 80 basis points to
1.04%.  Average  non-interest  bearing deposits grew $10.6 million, or 16.5%, to
$74.9  million for the first half of 2003 compared with the same period in 2002.
The average balance of certificates of deposit declined $53.2 million,  or 8.3%,
for the six months ended June 30, 2003,  compared  with the same period in 2002,
while the average rate paid on certificates decreased 83 basis points to 2.73%.

Interest on  borrowed  funds for the three and six months  ended June 30,  2003,
decreased  $89,000 and  increased  $367,000,  respectively,  to $7.4 million and
$15.0  million,  compared  to $7.5  million  and  $14.6  million  for  the  same
respective  periods in 2002. The average balance of borrowed funds for the three
months ended June 30, 2003, increased to $611.7 million, from $596.5 million for
the same period in 2002.  The average  interest rate paid on borrowed  funds was
4.86% for the three months ended June 30, 2003, compared with 5.04% for the same
period in 2002.  The average  balance of borrowed funds for the six months ended
June 30, 2003,  increased to $606.7  million,  from $576.5  million for the same
period in 2002.  The average  interest rate paid on borrowed funds was 4.93% for
the six months ended June 30, 2003,  compared  with 5.06% for the same period in
2002.  During the three and six months ended June 30, 2003, the Company modified
$25 million and $75  million,  respectively,  in  borrowings  with the  FHLB-NY,
extending  terms and reducing the interest  rates. At June 30, 2003, the Company
had an additional  $50 million in borrowings  with a weighted  average  interest
rate of 4.77% scheduled to mature in 2003.



                                       19
<PAGE>


NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest income before
provision  for  loan  losses   decreased  $2.3  million,   or  13.6%  and  7.3%,
respectively,  to $14.6  million and $29.6  million for the three and six months
ended June 30, 2003,  compared to $16.9  million and $31.9  million for the same
periods in 2002.  The  increase  was due to the changes in  interest  income and
interest expense described previously.

The interest rate spread decreased 27 basis points to 2.40% for the three months
ended June 30, 2003,  compared  with 2.67% for the same period in 2002.  For the
three months ended June 30, the average  earning  asset yield  declined to 5.08%
for 2003,  from  6.01% for 2002,  while  the  average  cost of  interest-bearing
liabilities  declined to 2.68% for 2003, from 3.34% for 2002. For the six months
ended June 30, 2003, the interest rate spread decreased 14 basis points to 2.41%
compared with 2.55% for the same period in 2002. The average earning asset yield
was 5.19%  for the first  half of 2003,  compared  with  5.98% for the first six
months of 2002, while the average cost of  interest-bearing  liabilities fell to
2.78% from 3.43% for the same respective periods.

The net interest margin declined 42 basis points to 2.68% for the second quarter
of 2003,  from 3.10% for the quarter ended June 30, 2002,  and nine basis points
sequentially,  from 2.77% for the first quarter of 2003.  For the  year-to-date,
net interest margin  declined 26 basis points to 2.73%,  compared with 2.99% for
the six months ended June 30, 2002.

PROVISION  FOR LOAN  LOSSES.  The Company  did not record a  provision  for loan
losses  during the three and six months  ended June 30,  2003,  compared to $1.1
million  and  $1.2  million  for the same  periods  in  2002,  as a result  of a
reduction  in loan  portfolio  size and  improvements  in asset  quality.  Total
non-performing  assets  decreased to $1.4  million at June 30,  2003,  from $1.8
million at December 31, 2002 and $7.8 million at June 30,  2002.  The  allowance
for loan  losses as a  percentage  of total loans was 1.04% at June 30, 2003 and
December 31, 2002.  In  management's  opinion,  the  allowance  for loan losses,
totaling $12.8 million at June 30, 2003, 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
investments,  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)                                June 30,    Mar. 31,     Dec. 31,     Sept. 30,    June 30,
                                                       2003         2003         2002         2002         2002
                                                      -----------------------------------------------------------
<S>                                                   <C>          <C>          <C>          <C>          <C>
Non-accrual mortgage loans ........................   $1,291       $1,082       $1,511       $2,297       $1,875
Non-accrual other loans ...........................        6           43           30           --        5,552
                                                      -----------------------------------------------------------
   Total non-accrual loans ........................    1,297        1,125        1,541        2,297        7,427
Loans 90 days or more delinquent and
     still accruing ...............................       64          294          223          440           80
                                                      -----------------------------------------------------------
Total non-performing loans ........................    1,361        1,419        1,764        2,737        7,507
Non-accrual investments (WorldCom, Inc.
     corporate bonds) .............................       --           --           --          300          300
Total foreclosed real estate, net of related
     allowance ....................................       50           --           72          100           --
                                                      -----------------------------------------------------------
Total non-performing assets .......................   $1,411       $1,419       $1,836       $3,137       $7,807
                                                      ===========================================================
Non-performing loans to loans receivable, net .....     0.11%        0.12%        0.15%        0.22%        0.59%
Non-performing assets to total assets .............     0.06%        0.06%        0.08%        0.14%        0.35%
</TABLE>


NON-INTEREST  INCOME.  Non-interest  income  increased  $2.5  million,  to  $2.3
million,  for the three months ended June 30, 2003,  compared to the same period
in 2002. For the six months ended June 30, 2003,  non-interest  income increased
$2.9 million, to $4.8 million, compared to the same period in 2002. Net gains on
sales of loans and securities  totaling  $633,000 and $1.5 million were realized
during the three and six months ended June 30, 2003, respectively, compared with
net losses of $1.6 million and $1.5 million,  respectively,  for the  comparable
2002  periods.   In  2003,  the  Company   recognized  gains  on  the  sales  of
higher-coupon MBS that demonstrated a significant propensity



                                       20
<PAGE>


to prepay, as well as several corporate debt obligations that had attained their
price  target.  Prior year results  included a $1.8 million  pre-tax  impairment
charge recorded on WorldCom, Inc. corporate bonds.

In addition,  fee and service  charge  income  increased  $283,000 and decreased
$69,000 for the three and six months ended June 30, 2003, respectively, compared
with the same  periods  in 2002.  Current  year fee and  service  charge  income
benefited from core deposit growth and increased fee levels  implemented in July
of 2002.  Prior year income  included  approximately  $600,000 in prepayment fee
income  attributable to a single large commercial real estate loan earned during
the first quarter of 2002.

NON-INTEREST  EXPENSE.  Non-interest  expense for the three and six months ended
June  30,  2003,  increased  $1.2  million  and  $995,000,  or 15.5%  and  6.5%,
respectively,  to $9.3 million and $16.4  million,  compared to $8.1 million and
$15.4  million  for the  same  periods  in  2002.  The  increase  was  primarily
attributable to compensation and benefits expense,  which increased $1.3 million
and $835,000, or 25.6% and 9.1%, respectively, to $6.2 million and $10.0 million
for the three and six  months  ended  June 30,  2003,  primarily  as a result of
increased DDFP and ESOP costs  attributable  to increases in the Company's stock
price as well as increased  healthcare  and pension costs.  Effective  August 1,
2003, the Company has adopted  changes to its pension plan which will reduce the
retirement benefit and close the plan to new participants hired on or after that
date. As a result of this  amendment,  pension expense for the remainder of 2003
is projected to decline by $236,000 compared with the first half of the year.







                                       21
<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, 2003).

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 June 30, 2003.
               Based  upon  their  evaluation,  they each  found  the  Company's
               disclosure  controls and procedures  were adequate 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
               information   required  to  be  disclosed  is   accumulated   and
               communicated  to them as  appropriate  to allow timely  decisions
               regarding required disclosure.

               In December 2003, the Company  determined that its accounting for
               the Bank's Directors' Deferred Fee Plan did not conform with EITF
               Issue  No.   97-14,   "Accounting   for   Deferred   Compensation
               Arrangements  Where  Amounts  Earned Are Held in Rabbi  Trust and
               Invested"  at the required  implementation  date  (September  30,
               1998). As described in Note 2 of the Notes to Restated  Unaudited
               Consolidated Financial Statements included in Item 1 of this Form
               10-Q/A,  the Company has conformed  its  accounting in accordance
               with EITF Issue No.  97-14 and,  as a result,  has  restated  its
               consolidated  financial  statements  as of September 30, 1998 and
               for all subsequent periods.

               Due  to  the  discovery  in  December  2003  that  the  Company's
               financial  statements  did not conform with EITF Issue No. 97-14,
               Mr. Martin and Mr. Lyons have since determined that the Company's
               disclosure  controls and procedures  were not adequate as of June
               30,  2003.  As  part of the  Company's  disclosure  controls  and
               procedures  over the  selection  and  application  of  accounting
               principles,   the  Company's   accounting   officers   relied  on
               information regarding accounting  developments as provided by the
               Company's  independent  auditing  firm,  as well as attendance at
               continuing  education  courses for the accounting  profession and
               receipt of various accounting  journals and other literature with
               respect to the  existence of new  accounting  pronouncements  and
               their  application to the Company.  These controls and procedures
               did not result in the Company's  becoming  aware of the existence
               of EITF Issue No. 97-14 at the time of its pronouncement,  at the
               time of its  required  implementation  or at any  time  prior  to
               December  2003.  Therefore,  the  Company  was not  aware  of its
               applicability to the accounting for the Bank's Directors Deferred
               Fee Plan.  Mr.  Martin  and Mr.  Lyons  have  concluded  that the
               procedures described above were not sufficiently comprehensive to
               identify new accounting  developments required to be incorporated
               in  the  Company's   financial   statements,   resulting  in  the
               determination   that  the  Company's   disclosure   controls  and
               procedures were not adequate.

          b)   CHANGES IN INTERNAL CONTROLS.

               There were no  changes in the  Company's  internal  control  over
               financial  reporting  during the quarter  ending on June 30, 2003
               that  have  materially  affected,  or are  reasonably  likely  to
               materially  affect, the Company's internal control over financial
               reporting.

               In  connection  with the  determination  in December  2003 by Mr.
               Martin and Mr. Lyons that the Company's  disclosure  controls and
               procedures were not adequate as of June 30, 2003, as described in
               section (a) above,  the Company has enhanced its  procedures  for
               educating its financial  officers with respect to the adoption of
               new or revised accounting principles, practices and applications.
               In particular,  the Company's  Chief  Financial  Officer will now
               perform the following review quarterly:

               1.   Review  the   American   Institute   of   Certified   Public
                    Accountants'    website   for   any   new,   revisions   to,
                    interpretation   of  or   application   of  any   accounting
                    principles.

               2.   Correspond with accounting professionals,  including but not
                    limited  to the  Company's  independent  auditing  firm,  to
                    ascertain any changes in application  of Generally  Accepted
                    Accounting Principles (GAAP).

               3.   Review the Financial  Accounting  Standards  Board's  (FASB)
                    website and any available information to acknowledge, review
                    and interpret any applicable FASB changes, including changes
                    brought about by the EITF.

               4.   Catalog   any   and  all   correspondence/information   from
                    America's  Community  Banker's,  Financial Managers Society,
                    American Banker Association,  Independent  Community Bankers
                    Association, New Jersey League (including the Accounting and
                    Tax  Committee)  and other  financial  organizations  of any
                    accounting pronouncements or interpretations.

               5.   Discuss with industry  specialists any changes in accounting
                    procedures or GAAP that they may be aware of.

               The foregoing  quarterly  review is now required by the Company's
               written policies for its disclosure controls and procedures.  The
               results of this review  will be reported to the Audit  Committee.
               This will be in addition to any  communications  made directly to
               the Audit Committee by the Company's independent auditors.

                           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.
          The Annual  Meeting of  Stockholders  was held on April 28, 2003.  The
          following proposals were voted on by the stockholders:

<TABLE>
<CAPTION>
                                                     For          Against     Withhold/Abstain
                                                     ---          -------     ----------------
<S>                                                <C>            <C>             <C>
         1.   Election of directors

                    Christopher Martin             22,198,062           --        187,269
                    Keith H. McLaughlin            22,200,779           --        184,552
                    Philip T. Ruegger, Jr.         22,198,537           --        186,794

         2.   The approval of the First
              Sentinel Bancorp, Inc. 2003
              Key Employee Equity
              Compensation Plan                    21,201,276     1,090,242        93,813
</TABLE>



                                       22
<PAGE>


<TABLE>
<S>                                                <C>            <C>             <C>
         3.   The ratification of KPMG LLP
              as the independent auditors
              of the Company for the year
              ended December 31, 2003.             22,089,797       270,679        24,855
</TABLE>

Item 5.   OTHER INFORMATION.
          None.

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,          (a)
                             Inc.

                 3.2         Bylaws of First Sentinel Bancorp, Inc.                           (b)

                  4          Stock certificate of First Sentinel Bancorp, Inc.                (a)

                 10          First Sentinel Bancorp, Inc. 2003 Key Employee Equity            (c)
                             Compensation Plan

                 11          Statement re: Computation of Ratios                             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>

* Pursuant to SEC rules,  this  exhibit will not be deemed filed for purposes of
Section 18 of the Exchange Act or otherwise be subject to the  liability of that
section.

(a)  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.

(b)  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.

(c)  Previously  filed  and  incorporated  herein  by  reference  to  the  Proxy
     Statement for the 2003 Annual  Meeting of  Stockholders  of First  Sentinel
     Bancorp, Inc. filed with the SEC on March 28, 2003, SEC File No. 000-23809.

       b.)  REPORTS ON FORM 8 - K

       On April 25, 2003,  the Company  furnished a Current  Report on  Form 8-K
       reporting its earnings for the three months ended March 31, 2003.

       On April  28,  2003,  the  Company  filed a  Current  Report  on Form 8-K
       including the text of a financial presentation regarding the state of the
       Company made at the April 28, 2003, Annual Meeting of Stockholders.




                                       23
<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:  January 28, 2004                By: /s/ CHRISTOPHER MARTIN
                                           ----------------------
                                           Christopher Martin
                                           President and Chief Executive Officer


Date:  January 28, 2004                By: /s/ THOMAS M. LYONS
                                           -------------------
                                           Thomas M. Lyons
                                           Executive Vice President and
                                           Chief Financial Officer








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