<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q


/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended December 31, 2006

                                       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. 0-50358

                          CLIFTON SAVINGS BANCORP, INC.
          ------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         UNITED STATES                                        34-1983738
--------------------------------                        -----------------------
(State or Other Jurisdiction of                            (I.R.S. Employer
 Incorporation or Organization)                           Identification No.)

1433 VAN HOUTEN AVENUE, CLIFTON, NEW JERSEY                     07015
-------------------------------------------                 --------------
(Address of Principal Executive Offices)                      (Zip Code)

                                 (973) 473-2200
                                 --------------
              (Registrant's telephone number, including area code)


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 a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one)

Large Accelerated Filer |_|   Accelerated Filer |X|    Non-Accelerated Filer |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes|_| No |X|

The number of shares outstanding of each of the issuer's classes of common
stock, as of February 1, 2007: 29,179,019 shares outstanding.

<PAGE>
<TABLE>
<CAPTION>
                                          CLIFTON SAVINGS BANCORP, INC.
                                                AND SUBSIDIARIES

                                                      INDEX

                                                                                                                  Page
PART I - FINANCIAL INFORMATION                                                                                   Number
                                                                                                              -------------
        <S>          <C>                                                                                        <C>
        Item 1:      Financial Statements

                     Consolidated Statements of Financial Condition (Unaudited)
                     at December 31, 2006 and March 31, 2006                                                       1

                     Consolidated Statements of Income (Unaudited)- For the Three
                     And Nine Months Ended December 31, 2006 and 2005                                              2

                     Consolidated Statements of Comprehensive Income (Unaudited) - For the
                     Three And Nine Months Ended December 31, 2006 and 2005                                        3

                     Consolidated Statements of Cash Flows (Unaudited) - For the
                     Nine Months Ended December 31, 2006 and 2005                                                4 - 5

                     Notes to Consolidated Financial Statements                                                  6 - 11

        Item 2:      Management's Discussion and Analysis of
                     Financial Condition and Results of Operations                                              12 - 19

        Item 3:      Quantitative and Qualitative Disclosures About Market Risk                                 20 - 21

        Item 4:      Controls and Procedures                                                                       22


PART II - OTHER INFORMATION

         Item 1:     Legal Proceedings                                                                             23

         Item 1A:    Risk Factors                                                                                  23

         Item 2:     Unregistered Sales of Equity Securities and Use of Proceeds                                   23

         Item 3:     Defaults Upon Senior Securities                                                               24

         Item 4:     Submission of Matters to a Vote of Security Holders                                           24

         Item 5:     Other Information                                                                             24

         Item 6:     Exhibits                                                                                      25


SIGNATURES                                                                                                         26
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 ----------------------------------------------
                                                   (Unaudited)

                                                                                        December 31,          March 31,
ASSETS                                                                                      2006                2006
                                                                                      -----------------   ------------------

<S>                                                                                   <C>                 <C>
Cash and due from banks                                                               $      6,805,351    $       4,561,894
Interest-bearing deposits in other banks                                                    51,512,682           12,511,134
Federal funds sold                                                                                   -            5,550,000
                                                                                      -----------------   ------------------
         Total cash and cash equivalents                                                    58,318,033           22,623,028
Securities available for sale:
     Investment                                                                              4,960,950           39,554,500
     Mortgage-backed                                                                        47,418,131           54,401,020
Securities held to maturity:
     Investment, estimated fair value of $163,511,000
       and $166,762,000, respectively                                                      164,988,239          169,985,390
     Mortgage-backed, estimated fair value of $95,899,000
       and $120,745,000, respectively                                                       97,631,369          123,908,717

Loans receivable                                                                           425,800,163          404,941,556
Allowance for loan losses                                                                   (1,340,000)          (1,260,000)
                                                                                      -----------------   ------------------
         Net loans                                                                         424,460,163          403,681,556

Premises and equipment                                                                       8,466,530            8,833,150
Federal Home Loan Bank of New York stock                                                     3,257,500            3,780,200
Interest receivable                                                                          3,998,211            4,523,789
Other assets                                                                                 3,440,402            3,588,946
                                                                                      -----------------   ------------------
         Total assets                                                                 $    816,939,528    $     834,880,296
                                                                                      =================   ==================

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
     Deposits                                                                         $    572,568,932    $     571,962,103
     Advances from Federal Home Loan Bank of New York                                       46,241,767           57,874,218
     Advance payments by borrowers for taxes and insurance                                   3,883,562            3,833,311
     Other liabilities and accrued expenses                                                  3,984,627            3,462,338
                                                                                      -----------------   ------------------
         Total liabilities                                                                 626,678,888          637,131,970
                                                                                      -----------------   ------------------
Stockholders' equity:
     Preferred stock (par value $0.01), authorized 1,000,000
       shares; issued and outstanding - none                                                         -                    -
     Common stock (par value $0.01), authorized 75,000,000
       shares; 30,530,470 shares issued; 29,329,200 shares outstanding
       at December 31, 2006; 30,284,480 shares outstanding at
       March 31, 2006                                                                          305,305              305,305
     Paid-in capital                                                                       131,152,921          133,859,581
     Deferred compensation obligation under Rabbi Trust                                        134,828              105,860
     Retained earnings - substantially restricted                                           81,479,844           81,275,666
     Treasury stock, at cost, 1,201,270 shares at December 31, 2006
      and 245,990 shares at March 31, 2006                                                 (13,184,079)          (2,559,207)
     Common stock acquired by Employee Stock Ownership Plan ("ESOP")                        (8,792,773)          (9,342,322)
     Unearned common stock held by the Equity Incentive Plan                                         -           (4,386,114)
     Accumulated other comprehensive loss                                                     (746,817)          (1,456,072)
     Stock held by Rabbi Trust                                                                 (88,589)             (54,371)
                                                                                      -----------------   ------------------
         Total stockholders' equity                                                        190,260,640          197,748,326
                                                                                      -----------------   ------------------
         Total liabilities and stockholders' equity                                   $    816,939,528    $     834,880,296
                                                                                      =================   ==================

See notes to consolidated financial statements.
</TABLE>
                                                           - 1 -


<PAGE>
<TABLE>
<CAPTION>
                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF INCOME
                                        ---------------------------------
                                                   (Unaudited)

                                                             Three Months Ended                    Nine Months Ended
                                                                December 31,                          December 31,
                                                    ------------------------------------- -------------------------------------
                                                           2006                2005              2006                2005
                                                    ------------------  ----------------- ------------------   ----------------
<S>                                                 <C>                 <C>               <C>                  <C>
Interest income:
      Loans                                         $       5,524,375   $      5,053,918  $      16,279,553    $    14,737,706
      Mortgage-backed securities                            1,681,856          1,958,419          5,295,600          6,391,572
      Investment securities                                 1,884,927          1,633,295          5,685,546          4,661,232
      Other interest-earning assets                           421,988            158,601            846,086            525,897
                                                    ------------------  ----------------- ------------------   ----------------
              Total interest income                         9,513,146          8,804,233         28,106,785         26,316,407
                                                    ------------------  ----------------- ------------------   ----------------
Interest expense:
      Deposits                                              5,201,812          4,013,310         14,324,643         10,914,697
      Advances                                                486,162            610,171          1,579,033          1,958,920
                                                    ------------------  ----------------- ------------------   ----------------
              Total interest expense                        5,687,974          4,623,481         15,903,676         12,873,617
                                                    ------------------  ----------------- ------------------   ----------------

Net interest income                                         3,825,172          4,180,752         12,203,109         13,442,790
Provision for loan losses                                      10,000             10,000             80,000            160,000
                                                    ------------------  ----------------- ------------------   ----------------
Net interest income after provision
      for loan losses                                       3,815,172          4,170,752         12,123,109         13,282,790
                                                    ------------------  ----------------- ------------------   ----------------
Non-interest income:
      Fees and service charges                                 46,947             51,975            167,470            173,394
      Miscellaneous                                             7,499              8,424             19,816             27,392
                                                    ------------------  ----------------- ------------------   ----------------
              Total non-interest income                        54,446             60,399            187,286            200,786
                                                    ------------------  ----------------- ------------------   ----------------

Non-interest expenses:
      Salaries and employee benefits                        1,750,580          2,244,194          5,304,189          5,031,278
      Net occupancy expense of premises                       244,664            245,777            723,283            721,811
      Equipment                                               226,071            245,077            691,358            724,067
      Directors' compensation                                 292,365            532,467            887,296            792,338
      Legal                                                    64,138             53,946            191,865            213,438
      Advertising                                              73,557            104,228            238,745            281,029
      Federal insurance premium                                18,287             18,935             55,095             57,016
      Miscellaneous                                           314,991            400,855          1,015,062          1,270,867
                                                    ------------------  ----------------- ------------------   ----------------
              Total non-interest expenses                   2,984,653          3,845,479          9,106,893          9,091,844
                                                    ------------------  ----------------- ------------------   ----------------

Income before income taxes                                    884,965            385,672          3,203,502          4,391,732
Income taxes                                                  325,000            101,234          1,186,000          1,606,234
                                                    ------------------  ----------------- ------------------   ----------------
Net income                                          $         559,965   $        284,438  $       2,017,502    $     2,785,498
                                                    ==================  ================= ==================   ================

Basic earnings per share                            $            0.02   $           0.01  $            0.07    $          0.10
                                                    ==================  ================= ==================   ================
Diluted earnings per share                          $            0.02   $           0.01  $            0.07    $          0.10
                                                    ==================  ================= ==================   ================

Dividends per common share                          $            0.05   $           0.05  $            0.15    $          0.15
                                                    ==================  ================= ==================   ================

Weighted average number of common shares
 and common stock equivalents outstanding:
      Basic                                                28,199,664         28,911,187         28,355,313         29,212,026
                                                    ==================  ================= ==================   ================
      Diluted                                              28,430,139         28,914,270         28,455,548         29,213,394
                                                    ==================  ================= ==================   ================

See notes to consolidated financial statements.
</TABLE>
                                                             - 2 -

<PAGE>
<TABLE>
<CAPTION>
                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                   (Unaudited)



                                                             Three Months Ended                    Nine Months Ended
                                                                December 31,                          December 31,
                                                    ------------------------------------- -------------------------------------
                                                          2006                2005              2006                2005
                                                    ------------------  ----------------- ------------------   ----------------
<S>                                                 <C>                 <C>               <C>                  <C>
Net income                                          $         559,965   $        284,438  $       2,017,502    $     2,785,498
                                                    ------------------  ----------------- ------------------   ----------------

Other comprehensive income (loss),
  net of income taxes:
      Gross unrealized holding gain (loss) on
        securities available for sale                         218,716           (206,176)         1,180,911             32,901
      Deferred income tax (expense) benefit                   (87,355)            82,347           (471,656)           (13,141)
                                                    ------------------  ----------------- ------------------   ----------------
Other comprehensive income (loss)                             131,361           (123,829)           709,255             19,760
                                                    ------------------  ----------------- ------------------   ----------------

Comprehensive income                                $         691,326   $        160,609  $       2,726,757    $     2,805,258
                                                    ==================  ================= ==================   ================


See notes to consolidated financial statements.
</TABLE>


                                                              - 3 -


<PAGE>
<TABLE>
<CAPTION>

                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      -------------------------------------
                                                   (Unaudited)

                                                                                         Nine Months Ended December 31,
                                                                                        ----------------------------------
                                                                                             2006              2005
                                                                                        ----------------  ----------------
<S>                                                                                     <C>               <C>
Cash flows from operating activities:
     Net income                                                                         $     2,017,502   $     2,785,498
     Adjustments to reconcile net income to net cash provided by operating activities:
        Depreciation and amortization of premises and equipment                                 480,912           514,663
        Net amortization of deferred fees and costs, premiums and discounts                     394,133           512,738
        Provision for loan losses                                                                80,000           160,000
        Loss on disposal of premises and equipment                                                    -             7,527
        Decrease in interest receivable                                                         525,578           771,647
        Deferred income taxes                                                                  (307,930)         (127,454)
        (Increase) in other assets                                                              (10,932)         (205,873)
        (Dncrease) in accrued interest payable                                                  (32,664)          (31,700)
        Increase (decrease) in other liabilities                                                554,953          (902,754)
        ESOP shares committed to be released                                                    609,936           569,723
        Restricted stock expense                                                                892,317         1,295,894
        Stock option expense                                                                    570,955                 -
        Increase in deferred compensation obligation under Rabbi Trust                           28,968            25,213
                                                                                        ----------------  ----------------
           Net cash provided by operating activities                                          5,803,728         5,375,122
                                                                                        ----------------  ----------------

Cash flows from investing activities: Proceeds from calls, maturities and
     repayments of:
        Investment securities available for sale                                             35,000,000         5,000,000
        Mortgage-backed securities available for sale                                         7,751,144        10,162,236
        Investment securities held to maturity                                               35,000,000         8,000,000
        Mortgage-backed securities held to maturity                                          25,911,288        37,599,752
     Redemptions of Federal Home Loan Bank of New York stock                                  1,164,800         2,071,900
     Purchases of:
        Investment securities held to maturity                                              (30,000,000)      (25,000,000)
        Loan receivable                                                                      (3,706,382)       (5,036,751)
        Premises and equipment                                                                 (118,542)         (266,871)
        Federal Home Loan Bank of New York stock                                               (642,100)       (1,520,000)
     Net change in loans receivable                                                         (17,176,943)      (40,664,564)
                                                                                        ----------------  ----------------
           Net cash provided by (used in) investing activities                               53,183,265        (9,654,298)
                                                                                        ----------------  ----------------
</TABLE>
See notes to consolidated financial statements.

                                             - 4 -

<PAGE>
<TABLE>
<CAPTION>

                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)
                                 ----------------------------------------------
                                                   (Unaudited)

                                                                                         Nine Months Ended December 31,
                                                                                        ----------------------------------
                                                                                             2006              2005
                                                                                        ----------------  ----------------
<S>                                                                                     <C>               <C>
Cash flows from financing activities:
     Net increase in deposits                                                                   606,829        17,197,492
     Net (decrease) in short-term borrowed funds                                                      -        (5,000,000)
     Principal payments on advances from Federal Home Loan Bank of New York                 (11,632,451)      (11,528,634)
     Net increase in payments by borrowers for taxes and insurance                               50,251           160,475
     Dividends paid                                                                          (1,813,324)       (1,862,163)
     Purchase of treasury stock                                                             (10,656,213)       (7,179,022)
     Exercise of stock options                                                                   24,494                 -
     Tax benefit from equity incentive plan                                                     128,426                 -
                                                                                        ----------------  ----------------
           Net cash (used in ) financing activities                                         (23,291,988)       (8,211,852)
                                                                                        ----------------  ----------------

Net increase (decrease) in cash and cash equivalents                                         35,695,005       (12,491,028)
Cash and cash equivalents - beginning                                                        22,623,028        31,120,558
                                                                                        ----------------  ----------------
Cash and cash equivalents - ending                                                      $    58,318,033   $    18,629,530
                                                                                        ================  ================

Supplemental information:
     Cash paid during the period for:
        Interest on deposits and borrowings                                             $    15,936,340   $    12,905,317
                                                                                        ================  ================
        Income taxes paid, net of refunds                                               $     2,209,607   $     3,133,133
                                                                                        ================  ================

See notes to consolidated financial statements.
</TABLE>

                                                    - 5 -

<PAGE>
                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

1.   PRINCIPLES OF CONSOLIDATION
--------------------------------

The consolidated financial statements include the accounts of the Clifton
Savings Bancorp, Inc. (the "Company"), the Company's wholly-owned subsidiary,
Clifton Savings Bank, S.L.A. (the "Bank") and the Bank's wholly-owned
subsidiary, Botany Inc. ("Botany"). The Company's business consists principally
of investing in securities and the operation of the Bank. Botany's business
consists solely of holding investment and mortgage-backed securities, and is
treated under New Jersey tax law as a New Jersey Investment Company. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

2.   BASIS OF PRESENTATION
--------------------------

The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and Regulation S-X and do not include
information or footnotes necessary for a complete presentation of financial
condition, results of operations, or cash flows in conformity with generally
accepted accounting principles. However, in the opinion of management, all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the consolidated financial statements have been included. The
results of operations for the three and nine month periods ended December 31,
2006 are not necessarily indicative of the results which may be expected for the
entire fiscal year. These consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
related notes thereto for the year ended March 31, 2006, which are included in
the Company's Annual Report on Form 10-K as filed with Securities and Exchange
Commission on June 14, 2006.

3.   EARNINGS PER SHARE (EPS)
-----------------------------

Basic EPS is based on the weighted average number of common shares actually
outstanding, and is adjusted for Employee Stock Ownership Plan ("ESOP") shares
not yet committed to be released, unvested restricted stock awards and deferred
compensation obligations required to be settled in shares of Company stock.
Diluted EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock, such as unvested restricted stock awards
and outstanding stock options, were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
Company. Diluted EPS is calculated by adjusting the weighted average number of
shares of common stock outstanding to include the effect of contracts or
securities exercisable (such as stock awards and options) or which could be
converted into common stock, if dilutive, using the treasury stock method. The
calculation of diluted EPS for the three and nine months ended December 31,
2006, include incremental shares related to outstanding stock options and
unvested restricted stock awards of 126,659 and 103,816, and 12,914 and 87,321
respectively. The calculation of diluted EPS for the three and nine months ended
December 31, 2005 includes incremental shares related to outstanding stock
options of 4,334 and 1,923, respectively. Shares issued and reacquired during
any period are weighted for the portion of the period they were outstanding.

4. DIVIDEND WAIVER
------------------

During the three and nine months ended December 31, 2006 and 2005, respectively,
Clifton MHC ("MHC"), the federally chartered mutual holding company of the
Company, waived its right, upon non-objection from the Office of Thrift
Supervision ("OTS"), to receive cash dividends of approximately $840,000 and
$2,519,000 and $840,000 and $2,519,000, respectively, on the shares of Company
common stock it owns.

                                      - 6 -

<PAGE>


                           CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           ------------------------------------------


5. STOCK REPURCHASE PLAN
------------------------

On February 1, 2006, the Company's Board of Directors authorized the repurchase
of up to 680,000 shares of the Company's outstanding stock, representing
approximately 5% of the outstanding shares owned by entities other than MHC.
During the nine months ended December 31, 2006, 525,945 shares were repurchased
under this plan at a total cost of $5.59 million or $10.62 per share. Under this
second repurchase program, which began in February 2006 and expired on July 31,
2006, 670,716 shares were purchased at a total cost of approximately $7.10
million, or $10.58 per share.

On August 16, 2006, the Company's Board of Directors authorized a third
repurchase program for up to 648,000 shares, or approximately 5% of the
Company's outstanding common stock held by entities other than MHC. During the
three and nine months ended December 31, 2006, 257,069 and 414,649 shares were
repurchased under this plan, respectively, at a total cost of $3.10 million or
$12.04 per share and $4.85 million or $11.70 per share, respectively.

In December 2006, 17,906 shares were purchased at a total cost of approximately
$218,000 or $12.17 per share, representing the withholding of shares subject to
restricted stock awards under Clifton Savings Bancorp, Inc. 2005 Equity
Incentive Plan for payment of taxes due upon the vesting of restricted stock
awards.

6. INCOME TAXES
---------------

Under New Jersey tax law, Botany is subject to a 3.6% state income tax rate as
compared to the 9.0% rate to which the Company and Bank are subject. The
presence of Botany during the three and nine months ended December 31, 2006 and
2005, respectively, resulted in an income tax savings of approximately $62,000
and $180,000, and $52,000 and $152,000, respectively.

7. RETIREMENT PLAN-COMPONENTS OF NET PERIODIC PENSION COST
----------------------------------------------------------

Periodic pension expense for the director's and former President's retirement
plans were as follows:

<TABLE>
<CAPTION>
                                                                        Three Months                Nine Months
                                                                     Ended December 31,          Ended December 31,
                                                              -----------------------------  -------------------------
                                                                  2006            2005          2006         2005
                                                              --------------   ------------  ------------ ------------
                                                                                    (In thousands)
<S>                                                           <C>              <C>           <C>          <C>
Service cost                                                  $           5    $         4   $        15  $        12
Interest cost                                                            34             28           102           84
Amortization of past service cost                                        22             22            66           66
Amortization of unrecognized net loss (gain)                              3             (3)            9           (9)
                                                              --------------   ------------  ------------ ------------
Net periodic benefit cost                                     $          64    $        51   $       192  $       153
                                                              ==============   ============  ============ ============

</TABLE>

                                      - 7 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------


8. OTHER STOCK-BASED COMPENSATION
---------------------------------

Under the Clifton Savings Bancorp, Inc. 2005 Equity Incentive Plan, 1,495,993
shares of common stock are available as stock options and 598,397 shares of
common stock are available as restricted stock awards. On August 31, 2005,
1,483,510 options were awarded. On December 7, 2005, 585,231 shares of
restricted stock were awarded.

The options to purchase common stock were granted at a price of $10.24 per
share, and immediately upon grant, 20% of the options awarded were vested, with
an additional 20% becoming vested annually thereafter. In February 2006, the
Company's Board of Directors approved a five-month acceleration of the second
20% of the option grants so that those options became fully vested as of March
31, 2006.

The Company adopted SFAS No.123 (R) using the modified-prospective transition
method, beginning April 1, 2006, and therefore, began to expense the fair value
of all outstanding options over their remaining vesting periods to the extent
the options were not fully vested as of the date of adoption date, and
instituted a procedure to expense the fair value of all options granted
subsequent to March 31, 2006 over their requisite service periods.

The fair value of options granted and pro forma effects are computed using the
Black-Scholes option- pricing model, using weighted average assumptions as of
the grant date. As of August 31, 2005, the risk free interest rate, expected
option life, expected stock price volatility, dividend yield and weighted
average fair value of options granted were 4.11%, 6.0 years, 21.56%, 1.95% and
$2.38, respectively.

In April 2006, 1,675 shares of restricted stock and 3,588 options that had been
previously awarded were forfeited by a participant due to the participant's
discontinued employment by the Bank. The Company reversed approximately $1,400
of restricted stock compensation expense in April 2006 resulting from that
forfeiture. In December 2006, 719 shares of restricted stock that had been
previously awarded were forfeited by a participant due to the participant's
discontinued employment by the Bank. The Company may consider awarding these
such shares and options at a later date.

During the three and nine months ended December 31, 2006, the Company recorded
stock option expense of $190,000 and $571,000, respectively. The Company
recognized approximately $55,000 and $165,000, for the three and nine months
ended December 31, 2006, respectively, of income tax benefits resulting from
this expense. Prior to April 1, 2006, employee compensation expense under stock
options was reported using the intrinsic value method. No stock-based
compensation was reflected in net income. If the Company had accounted for all
employee stock options granted prior to April 1, 2006 under the fair value based
accounting method of SFAS No.123, net income and earnings per share for the
three and nine month periods ended December 31, 2005 would have been as follows:


                                      - 8 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------


8. OTHER STOCK-BASED COMPENSATION(CONT'D.)
------------------------------------------
<TABLE>
<CAPTION>
                                                                        Three Months            Nine Months
                                                                           Ended                   Ended
                                                                     -------------------   ----------------------
                                                                                   December 31, 2005
                                                                     --------------------------------------------
                                                                      (Dollars In Thousands Except Share Data)
<S>                                                                  <C>                   <C>
Net income as reported                                               $              284    $               2,785
Add: Expense recognized for the Equity Incentive Plan
   net of related tax effect of $518 and $518, respectively                         778                      778
Deduct: Equity Incentive Plan expense determined
  under fair value based method, net of related tax
  effect of $624 and $863, respectively                                          (1,039)                  (1,628)
                                                                     -------------------   ----------------------
Pro forma net income                                                 $               23    $               1,935
                                                                     ===================   ======================
Basic/diluted earnings per share as reported                         $             0.01    $                0.10
                                                                     ===================   ======================
Pro forma basic/diluted earnings per share                           $             0.00    $                0.07
                                                                     ===================   ======================

</TABLE>

A summary of the Company's stock option activity and related information for its
option plan for the nine months ended December 31, 2006 is as follows:
<TABLE>
<CAPTION>
                                                                                                Weighted Average        Aggregate
                                                    Number of           Weighted Average           Remaining            Intrinsic
                                                  Stock Options          Exercise Price         Contractual Term          Value
                                                ------------------   ---------------------  ----------------------- ----------------
<S>                                                     <C>                         <C>                 <C>              <C>
Balance at March 31, 2006                               1,483,510                   $10.24
Granted                                                         -                        -
Exercised                                                  (2,392)                   10.24                               $      742
Forfeited or cancelled                                     (3,588)                   10.24
                                               -------------------   ----------------------
Outstanding at December 31, 2006                        1,477,530                   $10.24              8.67 Years        2,881,184
                                               ===================   ======================
Exercisable at December 31, 2006                          591,012                   $10.24              8.67 Years        1,152,473
                                               ===================   ======================
</TABLE>

Expected future compensation expense relating to the 887,000 non-vested
options outstanding as of December 31, 2006 is $1.1 million over a weighted
average period of 2.7 years.

The restricted shares awarded on December 7, 2005 had a grant date fair value of
$10.22 per share. 20% of the shares awarded were immediately vested, with an
additional 20% becoming vested annually thereafter. During the three and nine
months ended December 31, 2006, $298,000 and $892,000, respectively, in expense
was recognized with regard to these awards. The Company recognized approximately
$119,000 and $356,000 of income tax benefits resulting from this expense for the
three and nine months ended December 31, 2006, respectively.

                                     - 9 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

8. OTHER STOCK-BASED COMPENSATION(CONT'D.)
------------------------------------------

The following is a summary of the status of the Company's restricted shares as
of December 31, 2006 and changes during the nine months ended December 31, 2006:
<TABLE>
<CAPTION>
                                                                       Weighted Average
                                                  Restricted              Grant Date
                                                    Shares                Fair Value
                                              --------------------   ----------------------
<S>                                                      <C>                     <C>
Non-vested at March 31, 2006                              468,185                $10.22
      Vested                                             (116,627)                10.22
      Granted                                                   -                     -
      Forfeited                                            (2,394)                10.22
                                              --------------------   ----------------------
Non-vested at December 31, 2006                           349,164                $10.22
                                              ====================   ======================
</TABLE>

Expected future compensation expense relating to the 350,000 non-vested
restricted shares outstanding at December 31, 2006 is $3.5 million over a
weighted average period of 2.9 years.

9. RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------

In September 2006, the Financial Accounting Standards Board, (the "FASB") issued
FASB Statement No. 157, FAIR VALUE MEASUREMENTS, which defines fair value,
establishes a framework for measuring fair value under GAAP, and expands
disclosures about fair value measurements. FASB Statement No. 157 applies to
other accounting pronouncements that require or permit fair value measurements.
The new guidance is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and for interim periods within those fiscal
years. We are currently evaluating the potential impact, if any, of the adoption
of FASB Statement No. 157 on our consolidated financial position, results of
operations and cash flows.

On September 29, 2006, the FASB issued SFAS No. 158, EMPLOYERS' ACCOUNTING FOR
DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT PLANS ("SFAS 158"), which
amends SFAS 87 and SFAS 106 to require recognition of the overfunded or
underfunded status of pension and other postretirement benefit plans on the
balance sheet. Under SFAS 158, gains and losses, prior service costs and
credits, and any remaining transition amounts under SFAS 87 and SFAS 106 that
have not yet been recognized through net periodic benefit cost will be
recognized in accumulated other comprehensive income, net of tax effects, until
they are amortized as a component of net periodic cost. The measurement date --
the date at which the benefit obligation and plan assets are measured -- is
required to be the Company's fiscal year end. SFAS 158 is effective for
publicly-held companies for fiscal years ending after December 15, 2006, except
for the measurement date provisions, which are effective for fiscal years ending
after December 15, 2008. The Company is currently analyzing the effects of SFAS
158 but does not expect its implementation will have a significant impact on the
Company's financial conditions or results of operations.

On September 13, 2006, the Securities and Exchange Commission "SEC" issued Staff
Accounting Bulletin No. 108 ("SAB 108"). SAB 108 provides interpretive guidance
on how the effects of the carryover or reversal of prior year misstatements
should be considered in quantifying a potential current year misstatement. Prior
to SAB 108, companies might evaluate the materiality of financial-statement
misstatements using either the income statement or balance sheet approach, with
the income statement

                                     - 10 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

9. RECENT ACCOUNTING PRONOUNCEMENTS (CONT'D.)
---------------------------------------------

approach focusing on new misstatements added in the current year, and the
balance sheet approach focusing on the cumulative amount of misstatement present
in a company's balance sheet. Misstatements that would be material under one
approach could be viewed as immaterial under another approach, and not be
corrected. SAB 108 now requires that companies view financial statement
misstatements as material if they are material according to either the income
statement or balance sheet approach. The Company has analyzed SAB 108 and
determined that upon adoption it will have no impact on the reported results of
operations or financial condition.






                                     - 11 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                     ITEM 2:
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

FORWARD-LOOKING STATEMENTS

This Form 10-Q may include certain forward-looking statements based on current
management expectations. The Company's actual results could differ materially
from those management expectations. Factors that could cause future results to
vary from current management expectations include, but are not limited to,
general economic conditions, legislative and regulatory changes, monetary and
fiscal policies of the federal government, changes in tax policies, rates and
regulations of federal, state and local tax authorities, changes in interest
rates, deposit flows, the cost of funds, demand for loan products, demand for
financial services, competition, changes in the quality or composition of loan
and investment portfolios, changes in accounting principles, policies or
guidelines, and other economic, competitive, governmental and technological
factors affecting the Company's operations, markets, products, services and
prices. Further description of the risks and uncertainties to the business are
included in the Company's other filings with the Securities and Exchange
Commission.

OVERVIEW OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company's results of operations depend primarily on its net interest income,
which is a direct result of the interest rate environment. Net interest income
is the difference between the interest income earned on interest-earning assets
and the interest paid on interest-bearing liabilities. It is a function of the
average balances of loans and securities versus deposits and borrowed funds
outstanding in any one period and the yields earned on those loans and
securities and the cost of those deposits and borrowed funds.

Interest-earning assets consist primarily of investment and mortgage-backed
securities and loans which comprised 38.6% and 52.0%, respectively, of total
assets at December 31, 2006, as compared to 46.5% and 48.4%, respectively, at
March 31, 2006. Cash and cash equivalents increased to 7.1% of total assets at
December 31, 2006 from 2.7% at March 31, 2006. The largest change in the balance
of interest-earning assets between March 31, 2006 and December 31, 2006 was a
decrease of $72.9 million or 18.8% in securities, which was mainly used to fund
increases of $35.7 million or 158.0% in cash and cash equivalents and $20.8
million or 5.2% in loans receivable.

Interest-bearing liabilities consist of deposits and borrowings from the Federal
Home Loan Bank of New York ("FHLB"). Deposits increased $600,000, or 0.1%
between March 31, 2006 and December 31, 2006, which was more than offset by a
decrease in borrowed funds of $11.7 million, or 20.2%. Long-term borrowings
totaling $11.7 million were repaid during the period in accordance with their
original terms.

Net interest income decreased $360,000 or 8.6%, during the three months ended
December 31, 2006, when compared with the same 2005 period. Such decrease was
due to an increase in total interest expense of $1.06 million which was
partially offset by a $709,000 increase in total interest income. Average
interest-earning assets decreased $32.5 million or 3.9%, while average
interest-bearing liabilities decreased $25.9 million or 4.1%. The $6.6 million
decrease in average net interest-earning assets was mainly attributable to a
reduction in interest earning mortgage-backed securities and investments. In
addition to the decrease in net interest-earning assets, there was a decline in
interest rate spread to 1.10% from 1.37% as an increase of fifty-four basis
points in the yield earned on interest-earning assets was not sufficient to
offset an eighty-one basis point increase in the cost of interest-bearing
liabilities.

                                     - 12 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


OVERVIEW OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D.)

Results of operations also depend, to a lesser extent, on non-interest income
generated, provision for loan losses recorded and non-interest expense. During
the three months ended December 31, 2006, non-interest income decreased $6,000
or 10.0%, provision for loan losses remained constant at $10,000, and
non-interest expense decreased $861,000 or 22.4%.

CHANGES IN FINANCIAL CONDITION

The Company's assets at December 31, 2006, totaled $816.9 million, which
represents a decrease of $18.0 million or 2.2% as compared with $834.9 million
at March 31, 2006.

Cash and cash equivalents at December 31, 2006, totaled $58.3 million, which
represents an increase of $35.7 million or 158.0% as compared with $22.6 million
at March 31, 2006. This cash increase resulted from repayments from
mortgage-backed and investment securities being reinvested into higher yielding
interest-bearing deposits.

Securities available for sale at December 31, 2006 decreased $41.6 million or
44.3% to $52.4 million when compared with $94.0 million at March 31, 2006. The
decrease during the nine months ended December 31, 2006, resulted primarily from
maturities and repayments totaling $42.8 million partially offset by a decrease
in unrealized losses of $1.2 million on the portfolios.

Securities held to maturity at December 31, 2006 decreased $31.3 million or
10.6% to $262.6 million when compared with $293.9 million at March 31, 2006. The
decrease during the nine months ended December 31, 2006, resulted primarily from
maturities and repayments totaling $60.9 million which were partially reinvested
into higher yielding investments, loans and interest-bearing deposits.

Net loans at December 31, 2006 increased $20.8 million or 5.2 % to $424.5
million when compared with $403.7 million at March 31, 2006. The increase during
the nine months ended December 31, 2006, resulted primarily from continued
strong origination volume in one-to- four family residential real estate loans
and second mortgage loans which outpaced repayments. The increase in loans
receivable was funded by the redeployment of cash from security repayments and
maturities.

Total liabilities decreased $10.4 million or 1.6% to $626.7 million at December
31, 2006 from $637.1 at March 31, 2006. Deposits at December 31, 2006 increased
minimally by $600,000 or 0.1% to $572.6 million when compared with $572.0
million at March 31, 2006. Borrowings decreased $11.7 million or 20.2% to $46.2
million at December 31, 2006, as compared with $57.9 million at March 31, 2006.
$11.7 million in long-term borrowings were repaid during the nine months ended
December 31, 2006 in accordance with their original terms. $13 million in
short-term borrowed funds were originated and repaid during the nine months
ended December 31, 2006.

At December 31, 2006, the remaining borrowings of $46.2 million have an average
interest rate of 3.85%.

                                     - 13 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


CHANGES IN FINANCIAL CONDITION (CONT'D.)

Stockholders' equity totaled $190.3 million and $197.7 million at December 31,
2006 and March 31, 2006, respectively. The decrease of $7.4 million, or 3.7%,
for the nine months ended December 31, 2006, resulted primarily from the
repurchase of 958,500 shares of Company common stock for $10.66 million and cash
dividends paid of $1.81 million, partially offset by net income of $2.02
million, a net decrease in unrealized losses of $709,000 on the available for
sale securities portfolios, ESOP shares committed to be released of $610,000,
and $1.59 million for stock options and awards earned under the Equity Incentive
Plan and related tax benefits.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2006
AND 2005

Net income increased $276,000 or 97.2% to $560,000 for the three months ended
December 31, 2006 compared with $284,000 for the same 2005 period. The increase
in net income during the 2006 period resulted primarily from a decrease in
non-interest expenses partially offset by a decrease in net interest income and
an increase in income taxes.

Interest income on loans increased by $470,000 or 9.3% to $5.52 million during
the three months ended December 31, 2006, when compared with $5.05 million for
the same 2005 period. The increase during the 2006 period resulted from an
increase of $27.5 million or 6.9% in the average balance of loans. The yield
earned on the loan portfolio increased to 5.18%, an increase of twelve basis
points, from 5.06% when compared to the same period in 2005. Interest on
mortgage-backed securities decreased $280,000 or 14.3% to $1.68 million during
the three months ended December 31, 2006, when compared with $1.96 million for
the same 2005 period. The decrease during the 2006 period resulted from a
decrease of $47.8 million or 24.2% in the average balance of mortgage-backed
securities outstanding which was sufficient to offset an increase of fifty-two
basis points in the yield earned on mortgage-backed securities to 4.48% from
3.96%. Interest earned on investment securities increased by $260,000 or 16.0%
to $1.89 million during the three months ended December 31, 2006, when compared
to $1.63 million during the same 2005 period, due to a one hundred five basis
point increase in yield to 4.13% from 3.08%, partially offset by a decrease in
the average balance by $29.6 million or 14.0%. Interest earned on other
interest-earning assets increased by $263,000 or 165.4% to $422,000 during the
three months ended December 31, 2006, when compared to $159,000 during the same
2005 period primarily due to a $17.4 million or 115.8% increase in the average
balance, coupled with an increase of ninety-eight basis points in yield to 5.21%
from 4.23%.

Interest expense on deposits increased $1.2 million or 30.0% to $5.2 million
during the three months ended December 31, 2006, when compared to $4.0 million
during the same 2005 period. Such increase was primarily attributable to an
increase of eighty-nine basis points in the cost of interest-bearing deposits to
3.70% from 2.81%, partially offset by a decrease of $9.0 million or 1.6% in the
average balance of interest-bearing deposits. Interest expense on borrowed money
decreased $124,000 to $486,000 during the three months ended December 31, 2006
when compared with $610,000 during the same 2005 period. Such decrease was
primarily attributable to a decrease of $16.9 million or 25.2% in the average
balance of borrowings, partially offset by an increase of twenty-three basis
points in the cost of borrowings to 3.87% from 3.64%.


                                     - 14 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                 ---------------------------------------------

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2006 AND
2005 (CONT'D.)

Net interest income decreased $360,000 or 8.6% during the three months ended
December 31, 2006, to $3.82 million when compared to $4.18 million for the same
2005 period. Such decrease was due to a $1.06 million increase in total interest
expense which more than offset an increase in total interest income of $709,000.
Average interest-earning assets decreased $32.5 million or 3.9% while average
interest-bearing liabilities decreased $25.9 million or 4.1%. The $6.6 million
decrease in average net interest-earning assets was mainly attributable to a
reduction in interest earning mortgage-backed securities and investments,
partially offset by increases in loans and cash balances. The $25.9 million
decrease in average interest-bearing liabilities consisted of a decrease of
$16.9 million in borrowings coupled with a decrease of $9.0 million in
interest-bearing deposits. Adding to the decreases in net interest-earning
assets and net interest-bearing liabilities was a decline in the interest rate
spread to 1.10% from 1.37%, due to an eighty-one basis point increase in the
cost of interest-bearing liabilities which was partially offset by an increase
of fifty-four basis points in the yield earned on interest-earning assets.

During both the three months ended December 31, 2006, and 2005 the Bank provided
$10,000 as a provision for loan losses. The allowance for loan losses is based
on management's evaluation of the risk inherent in its loan portfolio and gives
due consideration to the changes in general market conditions and in the nature
and volume of the Bank's loan activity. The Bank intends to continue to evaluate
the need for a provision for loan losses based on its periodic review of the
loan portfolio and general market conditions. At December 31, 2006 and March 31,
2006, the Bank's non-performing loans, which were delinquent ninety days or
more, totaled $47,000 and $10,000 respectively, remaining at or under 0.01% of
total loans and assets at both period ends. During the three months ended
December 31, 2006 and 2005, the Bank did not charge off any loans. The allowance
for loan losses amounted to $1.34 million at December 31, 2006, representing
0.32% of total loans, as compared to $1.26 million, representing 0.31% of total
loans at March 31, 2006, and $1.26 million, representing 0.31% of total loans at
December 31, 2005.

Non-interest income decreased $6,000 or 10.0% to $54,000 during the three months
ended December 31, 2006 as compared to $60,000 for the same 2005 period.

Non-interest expenses decreased by $870,000 or 22.6% to $2.98 million during the
three months ended December 31, 2006, when compared with $3.85 million during
the same 2005 period. The components of non-interest expenses which experienced
the most significant change were salaries and employee benefits, directors'
compensation, and miscellaneous expenses which decreased $494,000, $240,000, and
$86,000, respectively. The 22.0% and 45.1% decreases in salaries and employee
benefits and director's compensation was mainly due to the granting of stock
awards to employees and directors in December 2005, of which the expense
relating to the immediate vesting of 20% was recorded in December 2005. The
expense of these awards recorded during the quarter ended December 2005 for
employees and directors was $898,000 and $398,000, respectively, as compared to
$206,000 and $92,000, respectively, for the same 2006 period. The 21.4% decrease
in miscellaneous expenses was mainly attributable to the prior period expensing
of previously capitalized costs relating to potential branch sites. All other
elements of non-interest expenses totaled $627,000 and $668,000 during the three
months ended December 31, 2006 and 2005, respectively.

                                     - 15 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2006 AND
2005 (CONT'D.)

Income taxes totaled $325,000 and $101,000 during the three months ended
December 31, 2006 and 2005, respectively. The increase during the 2006 period
resulted from an increase in pre-tax income. The Company's effective income tax
rate was 36.7% and 26.2% during the three months ended December 31, 2006 and
2005, respectively. The lower tax rate for the period ended December 31, 2005
was due to the effect on pretax income of the immediate vesting of 20% of
restricted stock recorded in December 2005.

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2006 AND
2005

Net income decreased $770,000 or 27.6% to $2.02 million for the nine months
ended December 31, 2006 compared with $2.79 million for the same 2005 period.
The decrease in net income during the 2006 period resulted primarily from an
increase in total interest and non-interest expense partially offset by an
increase in total interest income, and decreases in provision for loan losses
and income taxes.

Interest income on loans increased by $1.6 million or 10.9% to $16.3 million
during the nine months ended December 31, 2006, when compared with $14.7 million
for the same 2005 period. The increase during the 2006 period resulted from an
increase of $36.0 million or 9.4% in the average balance of loans and a five
basis point increase in the yield earned on the loan portfolio to 5.16% from
5.11%. Interest on mortgage-backed securities decreased $1.1 million or 17.2% to
$5.3 million during the nine months ended December 31, 2006, when compared with
$6.4 million for the same 2005 period. The decrease during the 2006 period
resulted from a decrease of $54.1 million or 25.2% in the average balance of
mortgage-backed securities outstanding partially offset by an increase of
forty-three basis points in the yield earned on mortgage-backed securities to
4.39% from 3.96%. Interest earned on investment securities increased by $1.0
million or 21.3% to $5.7 million during the nine months ended December 31, 2006,
when compared to $4.7 million during the same 2005 period due to an eighty-six
basis point increase in yield to 3.86% from 3.00% partially offset by a $10.8
million or 5.2% decrease in the average balance. Interest earned on other
interest-earning assets increased by $320,000 or 60.8% to $846,000 during the
nine months ended December 31, 2006, when compared to $526,000 during the same
2005 period due to an increase of one hundred thirty-two basis points in yield
to 5.05% from 3.73%, and a $3.5 million or 18.7% increase in average balance.

Interest expense on deposits increased $3.4 million or 31.2% to $14.3 million
during the nine months ended December 31, 2006, when compared to $10.9 million
during the same 2005 period. Such increase was primarily attributable to an
increase of eighty-two basis points in the cost of interest-bearing deposits to
3.39% from 2.57%, and to lesser extent, an increase of 1.0 million or 0.2% in
the average balance of interest-bearing deposits. Interest expense on borrowed
money decreased $380,000 or 19.4% to $1.58 million during the nine months ended
December 31, 2006 when compared with $1.96 million during the same 2005 period.
Such decrease was primarily attributable to a decrease of $17.1 million or 23.9%
in the average balance of borrowings, partially offset by an increase of
twenty-two basis points in the cost of borrowings to 3.87% from 3.65%.

Net interest income decreased $1.2 million or 9.0% during the nine months ended
December 31, 2006, to $12.2 million when compared to $13.4 million for the same
2005 period. Such decrease was due to a $3.0 million increase in total interest
expense which more than offset an increase in total interest income of $1.8
million. Average interest-earning assets decreased $25.4 million or 3.1%, while
average interest-bearing liabilities decreased $18.0 million or 2.8%. The $7.4
million decrease in average net interest

                                     - 16 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2006 AND
2005 (CONT'D.)

earning assets was mainly attributable to a reduction in mortgage-backed
securities and investments, partially offset by increases in loans and cash
balances. The $18.1 million decrease in average interest-bearing liabilities
consisted of decreases of $17.1 million in borrowings and $1.0 million in
interest-bearing deposits. Coupled with the decreases in net interest-earning
assets and net-interest bearing liabilities was a decline in interest rate
spread to 1.25% from 1.55% as an increase of forty-three basis points in the
yield earned on interest-earning assets was more than offset by a seventy-three
basis point increase in the cost of interest-bearing liabilities.

During the nine months ended December 31, 2006 the Bank provided $80,000 as a
provision for loan losses as compared to $160,000 during the same 2005 period.
The larger provision in the prior nine month period was the result of a larger
increase in the loan portfolio during that period. The allowance for loan losses
is based on management's evaluation of the risk inherent in its loan portfolio
and gives due consideration to the changes in general market conditions and in
the nature and volume of the Bank's loan activity. The Bank intends to continue
to evaluate the need for a provision for loan losses based on its periodic
review of the loan portfolio and general market conditions. At December 31, 2006
and March 31, 2006, the Bank's non-performing loans, which were delinquent
ninety days or more, totaled $47,000 and $10,000 respectively, remaining at or
under 0.01% of total loans and assets at both period ends. During the nine
months ended December 31, 2006 and 2005, the Bank did not charge off any loans.
The allowance for loan losses amounted to $1.34 million at December 31, 2006,
representing 0.32% of total loans and 2851.06% of loans delinquent ninety days
or more, as compared to $1.26 million, representing 0.31% of total loans and
12600.00% of loans delinquent ninety days or more at March 31, 2006 and $1.26
million, representing 0.31% of total loans and 3073.17% of loans delinquent
ninety days or more at December 31, 2005.

Non-interest income decreased $14,000 or 7.0% to $187,000 during the nine months
ended December 31, 2006 as compared to $201,000 for the same 2005 period.

Non-interest expenses increased by $20,000 or 0.22% to $9.11 million during the
nine months ended December 31, 2006, when compared with $9.09 million during the
same 2005 period. The components of non-interest expenses which experienced the
most significant change were salaries and employees benefits and directors'
compensation which increased $273,000 and $95,000, respectively, partially
offset by miscellaneous expenses which decreased $256,000. The 5.4% increase in
salaries and employee benefits was mainly due to the expenses relating to the
granting of stock options to management, and normal salary increases, partially
offset by a decrease in expenses related to stock awards. The 12.0% increase in
director's compensation was also largely attributable to the stock options
granted to non-employee Directors of the Company, partially offset by a decrease
in expenses related to stock awards. The 20.1% decrease in miscellaneous
expenses was mainly attributable to the prior period expensing of previously
capitalized costs relating to potential branch sites. All other elements of
non-interest expenses totaled $1.9 million and $2.0 million during the nine
months ended December 31, 2006 and 2005, respectively.

Income taxes totaled $1.2 million and $1.6 million during the nine months ended
December 31, 2006 and 2005, respectively. The decrease during the 2006 period
resulted primarily from a decrease in pretax income. The Company's effective
income tax rate was 37.0% and 36.6% during the nine months ended December 31,
2006 and 2005, respectively.


                                     - 17 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


LIQUIDITY AND CAPITAL RESOURCES

The Company maintains levels of liquid assets sufficient to ensure the Bank's
safe and sound operation. The Company adjusts its liquidity levels in order to
meet funding needs for deposit outflows, payment of real estate taxes from
escrow accounts on mortgage loans, repayment of borrowings, when applicable, and
loan funding commitments. The Company also adjusts its liquidity level as
appropriate to meet its asset/liability objectives. Liquid assets, which include
cash and cash equivalents and securities available for sale, totaled $110.7
million or 13.6% of total assets at December 31, 2006 as compared to $116.6
million or 14.0% of total assets at March 31, 2006.

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

Cash was generated by operating activities during the three months ended
December 31, 2006. The primary source of cash was net income. The Company
declared a cash dividend during the three months ended December 31, 2006.
totaling $594,000 and the dividend was paid on December 8, 2006. Dividends
declared totaled $1.8 million during the nine months ended December 31, 2006.

The primary uses of investing activity are lending and the purchases of
securities. Net loans amounted to $424.5 million and $403.7 million at December
31 and March 31, 2006, respectively. Securities, including available for sale
and held to maturity issues, totaled $315.0 million and $387.9 million at
December 31 and March 31, 2006, respectively. In addition to funding new loan
production through operating and financing activities, such activities were
funded by principal repayments and maturities on existing loans and securities.

Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds and interest-bearing deposits. If the Bank requires funds
beyond its ability to generate them internally, the Bank can borrow funds up to
approximately $79.4 million under an overnight line of credit, and $79.4 under a
one-month overnight repricing line of credit agreement with the Federal Home
Loan Bank of New York. At December 31, 2006, advances from the FHLB amounted to
$46.2 million.







                                     - 18 -

<PAGE>



                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


LIQUIDITY AND CAPITAL RESOURCES (CONT'D.)

The Bank anticipates that it will have sufficient funds available to meet its
current commitments. At December 31, 2006, the Bank has outstanding commitments
to originate loans, and fund approved lines of credit, aggregating $6.2 million.
Certificates of deposit scheduled to mature in one year or less at December 31,
2006, totaled $341.3 million. Management believes that, based upon its
experience and the Bank's deposit flow history, a significant portion of such
deposits will remain with the Bank. FHLB advances scheduled to mature in one
year or less at December 31, 2006, totaled $18.6 million.

Under OTS regulations, three separate measurements of capital adequacy (the
"Capital Rule") are required. The Capital Rule requires each savings institution
to maintain tangible capital equal to at least 1.5% and core capital equal to
4.0% of its adjusted total assets. The Capital Rule further requires each
savings institution to maintain total capital equal to at least 8.0% of its
risk-weighted assets

The following table sets forth the Bank's capital position at December 31, 2006,
as compared to the minimum regulatory capital requirements:
<TABLE>
<CAPTION>
                                                                                                                To Be Well
                                                                                                                Capitalized
                                                                                                               Under Prompt
                                                                               Minimum Capital                  Corrective
                                                    Actual                       Requirements               Actions Provisions
                                         -----------------------------   ----------------------------   ---------------------------
                                             Amount         Ratio           Amount          Ratio          Amount         Ratio
                                         --------------  -------------   -------------   ------------   ------------   ------------
<S>                                          <C>               <C>            <C>              <C>         <C>              <C>
Total Capital
  (to risk-weighted assets)                  $ 143,414         46.47%         $24,692          8.00%       $ 30,865         10.00%
                                         --------------  -------------   -------------   ------------   ------------   ------------

Tier 1 Capital
  (to risk-weighted assets)                    142,074         46.03%          12,346          4.00%         18,519          6.00%
                                         --------------  -------------   -------------   ------------   ------------   ------------

Core (Tier 1) Capital
  (to adjusted total assets)                   142,074         17.75%          32,008          4.00%         40,010          5.00%
                                         --------------  -------------   -------------   ------------   ------------   ------------

Tangible Capital
  (to adjusted tangible assets)                141,511         17.70%          11,995          1.50%              -             -%
                                         --------------  -------------   -------------   ------------   ------------   ------------
</TABLE>

                                                           - 19 -


<PAGE>


                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                     ITEM 3:
            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
            ---------------------------------------------------------

MANAGEMENT OF INTEREST RATE RISK. The ability to maximize net interest income is
largely dependent upon the achievement of a positive interest rate spread that
can be sustained during fluctuations in prevailing interest rates. Interest rate
sensitivity is a measure of the difference between amounts of interest-earning
assets and interest-bearing liabilities which either reprice or mature within a
given period of time. The difference, or the interest rate repricing "gap",
provides an indication of the extent to which an institution's interest rate
spread will be affected by changes in interest rates. A gap is considered
positive when the amount of interest-rate sensitive assets exceeds the amount of
interest-rate sensitive liabilities, and is considered negative when the amount
of interest rate sensitive liabilities exceeds the amount of interest-rate
sensitive assets. Generally, during a period of rising interest rates, a
negative gap within shorter maturities would adversely affect net interest
income, while a positive gap within shorter maturities would result in an
increase in net interest income, and during a period of falling interest rates,
a negative gap within shorter maturities would result in an increase in net
interest income while a positive gap within shorter maturities would result in a
decrease in net interest income.

Because the Bank's interest-bearing liabilities which mature or reprice within
short periods exceed its interest-earning assets with similar characteristics,
material and prolonged increases in interest rates generally would adversely
affect net interest income, while material and prolonged decreases in interest
rates generally would have a positive effect on net interest income.

The Bank's current investment strategy is to maintain an overall securities
portfolio that provides a source of liquidity and that contributes to the Bank's
overall profitability and asset mix within given quality and maturity
considerations. Securities classified as available for sale provide management
with the flexibility to make adjustments to the portfolio given changes in the
economic or interest rate environment, to fulfill unanticipated liquidity needs,
or to take advantage of alternative investment opportunities.

NET PORTFOLIO VALUE. The Bank's interest rate sensitivity is monitored by
management through the use of the OTS model which estimates the change in the
Bank's net portfolio value ("NPV") over a range of interest rate scenarios. NPV
is the present value of expected cash flows from assets, liabilities, and
off-balance sheet contracts.

The NPV ratio, under any interest rate scenario, is defined as the NPV in that
scenario divided by the market value of assets in the same scenario. The OTS
produces its analysis based upon data submitted on the Bank's quarterly Thrift
Financial Reports. The following table sets forth the Bank's NPV as of September
30, 2006, the most recent date the Bank's NPV was calculated by the OTS. The
Bank expects that its NPV as of December 31, 2006 is consistent with the table
below.
<TABLE>
<CAPTION>
                                                                                     NPV as
                                                                              Percent of Portfolio
          Change in                      Net Portfolio Value                     Value of Assets
        Interest Rates     ---------------------------------------------  -----------------------------
        In Basis Points                        Dollar         Percent        NPV          Change In
         (Rate Shock)          Amount          Change          Change       Ratio        Basis Points
       ------------------  ---------------  ------------- --------------  ------------  ---------------
                             (Dollars in Thousands)

            <S>                  <C>            <C>              <C>         <C>                  <C>
              300                $ 92,214       $(50,511)        (35)%       12.64 %              (536)
                           ---------------  ------------- --------------  ------------  ---------------
              200                 109,925        (32,800)        (23)        14.63                (337)
                           ---------------  ------------- --------------  ------------  ---------------
              100                 126,948        (15,777)        (11)        16.43                (157)
                           ---------------  ------------- --------------  ------------  ---------------
            Static                142,725              -           -         17.99                   -
                           ---------------  ------------- --------------  ------------  ---------------
             -100                 154,294         11,569           8         19.06                 107
                           ---------------  ------------- --------------  ------------  ---------------
             -200                 162,487         19,761          14         19.76                 176
                           ---------------  ------------- --------------  ------------  ---------------
</TABLE>

                                             - 20 -


<PAGE>


                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
            ---------------------------------------------------------

NET PORTFOLIO VALUE (CONT'D.)

Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurements. Modeling changes in NPV require the making of certain
assumptions which may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates. In this regard, the NPV model
presented assumes that the composition of the Bank's interest sensitive assets
and liabilities existing at the beginning of a period remains constant over the
period being measured and also assumes that a particular change in interest
rates is reflected uniformly across the yield curve regardless of the duration
to maturity or repricing of specific assets and liabilities. Accordingly,
although the NPV measurements and net interest income models provide an
indication of the Bank's interest rate risk exposure at a particular point in
time, such measurements are not intended to and do not provide a precise
forecast of the effect of changes in market interest rates on the Bank's net
interest income and will differ from actual results.






                                     - 21 -


<PAGE>


                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                     ITEM 4:
                             CONTROLS AND PROCEDURES
      ---------------------------------------------------------------------



                  DISCLOSURE CONTROLS AND PROCEDURES. The Company's management,
         including the Company's principal executive officer and principal
         financial officer, have evaluated the effectiveness of the Company's
         "disclosure controls and procedures," as such term is defined in Rule
         13a-15(e) promulgated under the Securities Exchange Act of 1934, as
         amended, (the "Exchange Act"). Based upon their evaluation, the
         principal executive officer and principal financial officer concluded
         that, as of the end of the period covered by this report, the Company's
         disclosure controls and procedures were effective to ensure that
         information required to be disclosed in the reports that it files or
         submits under the Exchange Act were recorded, processed, summarized and
         reported as and when required, and that such information was
         accumulated and communicated to management as appropriate to allow
         timely decisions regarding required disclosures.

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








                                     - 22 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES

                                     PART II


ITEM 1. Legal Proceedings
        -----------------

         Periodically, there have been various claims and lawsuits against the
         Company and Bank, such as claims to enforce liens, condemnation
         proceedings on properties in which we hold security interests, claims
         involving the making and servicing of real property loans and other
         issues incident to our business. We are not a party to any pending
         legal proceedings that we believe would have a material adverse effect
         on our consolidated financial condition, results of operations or cash
         flows.

ITEM 1A:  Risk Factors
          ------------

         In addition to the other information set forth in this report, you
         should carefully consider the factors discussed in Part I, "Item 1A.
         Risk Factors" in our Annual Report on Form 10-K for the year ended
         March 31, 2006, which could materially affect our business, financial
         condition or future results. The risks described in our Annual Report
         on Form 10-K are not the only risks that we face. Additional risks and
         uncertainties not currently known to us or that we currently deem to be
         immaterial also may materially adversely affect our business, financial
         condition and/or operating results.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
        -----------------------------------------------------------

         The following table sets forth information regarding the Company's
         repurchases of its common stock during the quarter ended December 31,
         2006.
<TABLE>
<CAPTION>
                                                                              TOTAL NUMBER
                                                                                OF SHARES
                                                                                PURCHASED         MAXIMUM
                                                                               AS PART OF    NUMBER OF SHARES
                                                 TOTAL                          PUBLICLY      THAT MAY YET BE
                                               NUMBER OF       AVERAGE          ANNOUNCED     PURCHASED UNDER
                                                SHARES       PRICE PAID         PLANS OR       THE PLANS OR
                   PERIOD                    PURCHASED (1)    PER SHARE         PROGRAMS         PROGRAMS
                   ------                    -------------    ---------         --------         --------
              <S>                              <C>             <C>              <C>               <C>
              October 2006
              Beginning date: October 1         46,794         $11.42            46,794           443,626
              Ending date: October 31

              November 2006
              Beginning date: November 1        41,164         $11.92            41,164           402,462
              Ending date: November 30

              December 2006 (2)
              Beginning date: December 1       187,017         $12.24           169,111           233,351
              Ending date: December 31
</TABLE>
              -------------------------------
              (1) On August 16, 2006, the Company's Board of Directors approved
              its third stock repurchase program authorizing the Company to
              repurchase up to 648,000 shares of the Company's common stock.

              (2) Includes withholding of 17,906 shares at $12.17 per share
              subject to restricted stock awards under the Clifton Savings
              Bancorp, Inc. 2005 Equity Incentive Plan for payment of taxes due
              upon the vesting of the restricted stock awards.

                                     - 23 -

<PAGE>



                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES

                                     PART II


ITEM 3. Defaults Upon Senior Securities
        -------------------------------

         None


ITEM 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

         None.


ITEM 5. Other Information
        -----------------

         None.





                                     - 24 -

<PAGE>

                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES

                                     PART II


ITEM 6. Exhibits
        --------

         The following Exhibits are filed as part of this report.
<TABLE>
<CAPTION>
                  <S>    <C>
                  3.1    Certificate of Incorporation of Clifton Savings Bancorp, Inc.*
                  3.2    By-Laws of Clifton Savings Bancorp, Inc.*
                  4.1    Specimen Stock Certificate of Clifton Savings Bancorp, Inc. *
                  31.1   Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-
                         Oxley Act of 2002 (filed herewith).
                  31.2   Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-
                         Oxley Act of 2002 (filed herewith).
                  32.1   Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
                         U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                         Act of 2002 (filed herewith).
</TABLE>
                  -------------------------------
                      *  Incorporated herein by reference to the Company's
                         Annual Report on Form 10-K for the fiscal year
                         ended March 31, 2004, filed with the Securities
                         and Exchange Commission on June 29, 2004 (File No.
                         000-50358).


                                     - 25 -


<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.



                                  CLIFTON SAVINGS BANCORP, INC.


Date: February 8, 2007            By: /s/ John A. Celentano, Jr.
                                      -----------------------------------------
                                      John A. Celentano, Jr.
                                      Chairman of the Board and Chief Executive
                                       Officer
                                      (Principal Executive Officer)


Date: February 8, 2007            By: /s/ Christine R. Piano
                                      -----------------------------------------
                                      Christine R. Piano
                                      Chief Financial Officer and Treasurer
                                      (Principal Financial and Chief Accounting
                                       Officer)



                                     - 26 -