<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, 2008
                                       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, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one)

Large Accelerated Filer |_|                   Accelerated Filer |X|

Non-Accelerated Filer |_|                     Smaller reporting company |_|
(Do not check if a smaller reporting company)

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, 2009: 26,766,442 shares outstanding.


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

                                                     INDEX

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

                     Consolidated Statements of Financial Condition (Unaudited)
                     at December 31, 2008 and March 31, 2008                                                       1

                     Consolidated Statements of Income (Unaudited) For the Three
                     and Nine Months Ended December 31, 2008 and 2007                                              2

                     Consolidated Statements of Comprehensive Income (Unaudited) For the
                     Three and Nine Months Ended December 31, 2008 and 2007                                        3

                     Consolidated Statements of Cash Flows (Unaudited) For the
                     Nine Months Ended December 31, 2008 and 2007                                                4 - 5

                     Notes to Consolidated Financial Statements                                                  6 - 10

        Item 2:      Management's Discussion and Analysis of
                     Financial Condition and Results of Operations                                              11 - 18

        Item 3:      Quantitative and Qualitative Disclosures About Market Risk                                 19 - 20

        Item 4:      Controls and Procedures                                                                       21



PART II - OTHER INFORMATION

         Item 1:     Legal Proceedings                                                                             22

         Item 1A:    Risk Factors                                                                                  22

         Item 2:     Unregistered Sales of Equity Securities and Use of Proceeds                                   22

         Item 3:     Defaults Upon Senior Securities                                                               23

         Item 4:     Submission of Matters to a Vote of Security Holders                                           23

         Item 5:     Other Information                                                                             23

         Item 6:     Exhibits                                                                                      24


SIGNATURES                                                                                                         25
</TABLE>


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


                                                                                         December 31,          March 31,
ASSETS                                                                                       2008                2008
------                                                                                ------------------  ------------------
<S>                                                                                    <C>                 <C>
Cash and due from banks                                                                $     12,030,187    $      6,499,339
Interest-bearing deposits in other banks                                                     21,452,817          45,731,351
                                                                                      ------------------  ------------------
         Total cash and cash equivalents                                                     33,483,004          52,230,690

Mortgage-backed securities available for sale                                                82,643,197          90,218,624
Securities held to maturity:
      Investment, estimated fair value of $61,162,000
         and $112,086,000, respectively                                                      59,996,299         109,993,194
      Mortgage-backed, estimated fair value of $252,666,000
         and $182,686,000, respectively                                                     246,334,853         180,666,236

Loans receivable                                                                            467,496,621         422,059,272
Allowance for loan losses                                                                    (1,555,000)         (1,440,000)
                                                                                      ------------------  ------------------
         Net loans                                                                          465,941,621         420,619,272
                                                                                      ------------------  ------------------

Bank owned life insurance                                                                    21,721,326          21,033,212
Premises and equipment                                                                        9,112,638           9,000,367
Federal Home Loan Bank of New York stock                                                      7,832,300           7,536,600
Interest receivable                                                                           4,145,655           4,577,398
Other assets                                                                                  2,628,827           3,180,650
                                                                                      ------------------  ------------------
         Total assets                                                                  $    933,839,720    $    899,056,243
                                                                                      ==================  ==================

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
      Deposits:
         Non-interest bearing                                                          $      5,651,113         $ 4,528,978
         Interest bearing                                                                   602,151,568         572,192,833
                                                                                      ------------------  ------------------
                                                                                            607,802,681         576,721,811
                                                                                      ------------------  ------------------

      Advances from Federal Home Loan Bank of New York                                      146,311,965         142,306,370
      Advance payments by borrowers for taxes and insurance                                   4,687,852           4,269,117
      Other liabilities and accrued expenses                                                  3,355,208           3,404,141
                                                                                      ------------------  ------------------
         Total liabilities                                                                  762,157,706         726,701,439
                                                                                      ------------------  ------------------
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; 26,766,442 shares outstanding
         at December 31, 2008; 27,307,385 shares outstanding at
         March 31, 2008                                                                         305,305             305,305
      Paid-in capital                                                                       134,863,457         133,747,349
      Deferred compensation obligation under Rabbi Trust                                        201,987             179,055
      Retained earnings                                                                      84,256,700          81,671,543
      Treasury stock, at cost; 3,764,028 shares at December 31, 2008
         and 3,223,085 shares at March 31, 2008                                             (41,620,760)        (36,079,647)
      Common stock acquired by Employee Stock Ownership Plan                                 (7,327,309)         (7,876,858)
      Accumulated other comprehensive loss                                                    1,161,728             532,496
      Stock held by Rabbi Trust                                                                (159,094)           (124,439)
                                                                                      ------------------  ------------------
         Total stockholders' equity                                                         171,682,014         172,354,804
                                                                                      ------------------  ------------------
         Total liabilities and stockholders' equity                                    $    933,839,720    $    899,056,243
                                                                                      ==================  ==================
</TABLE>

See notes to consolidated financial statements.

                                                     - 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,
                                                       ----------------------------------  ----------------------------------
                                                             2008              2007              2008              2007
                                                       ----------------  ----------------  ----------------  ----------------
<S>                                                      <C>               <C>               <C>               <C>
Interest income:
      Loans                                              $   6,244,518     $   5,652,968     $  17,859,855     $  16,602,392
      Mortgage-backed securities                             4,292,022         2,186,450        11,981,638         5,706,052
      Investment securities                                    758,303         1,530,717         2,851,284         5,010,406
      Other interest-earning assets                             86,940           276,684           613,115         1,134,349
                                                       ----------------  ----------------  ----------------  ----------------
              Total interest income                         11,381,783         9,646,819        33,305,892        28,453,199
                                                       ----------------  ----------------  ----------------  ----------------
Interest expense:
      Deposits                                               5,055,782         5,577,877        15,113,459        16,558,661
      Advances                                               1,449,428           595,161         4,451,120         1,412,097
                                                       ----------------  ----------------  ----------------  ----------------
              Total interest expense                         6,505,210         6,173,038        19,564,579        17,970,758
                                                       ----------------  ----------------  ----------------  ----------------

Net interest income                                          4,876,573         3,473,781        13,741,313        10,482,441
Provision for loan losses                                            -                 -           115,000            90,000
                                                       ----------------  ----------------  ----------------  ----------------
Net interest income after provision for loan losses          4,876,573         3,473,781        13,626,313        10,392,441
                                                       ----------------  ----------------  ----------------  ----------------

Non-interest income:
      Fees and service charges                                  47,616            51,864           149,681           151,631
      Bank owned life insurance                                232,434           228,320           688,114           678,028
      Other                                                      7,934             5,200            25,388            14,502
                                                       ----------------  ----------------  ----------------  ----------------
              Total non-interest income                        287,984           285,384           863,183           844,161
                                                       ----------------  ----------------  ----------------  ----------------

Non-interest expenses:
      Salaries and employee benefits                         1,660,481         1,629,516         5,072,745         5,229,208
      Net occupancy expense of premises                        277,854           259,045           766,791           764,449
      Equipment                                                220,893           213,867           641,532           655,464
      Directors' compensation                                  228,948           241,689           713,085           764,486
      Legal                                                     51,041            60,119            52,595           174,343
      Advertising                                               48,769            76,677           223,339           229,624
      Federal insurance premium                                 23,581            16,925            63,508            51,625
      Other                                                    384,069           371,924         1,033,924         1,144,957
                                                       ----------------  ----------------  ----------------  ----------------
              Total non-interest expenses                    2,895,636         2,869,762         8,567,519         9,014,156
                                                       ----------------  ----------------  ----------------  ----------------

Income before income taxes                                   2,268,921           889,403         5,921,977         2,222,446
Income taxes                                                   723,500           192,000         1,880,700           473,000
                                                       ----------------  ----------------  ----------------  ----------------
Net income                                               $   1,545,421     $     697,403     $   4,041,277     $   1,749,446
                                                       ================  ================  ================  ================

Basic earnings per share                                 $        0.06     $        0.03     $        0.16     $        0.06
                                                       ================  ================  ================  ================
Diluted earnings per share                               $        0.06     $        0.03     $        0.15     $        0.06
                                                       ================  ================  ================  ================

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

Weighted average number of common shares and
  common stock equivalents outstanding:
      Basic                                                 25,872,371        26,505,298        25,969,087        26,998,197
                                                       ================  ================  ================  ================
      Diluted                                               26,034,134        26,616,345        26,084,884        27,131,895
                                                       ================  ================  ================  ================
</TABLE>

See notes to consolidated financial statements.

                                                               -2-
<PAGE>
<TABLE>
<CAPTION>

                                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                -----------------------------------------------
                                                   (Unaudited)

                                                                       Three Months                     Nine Months
                                                                      Ended December 31,              Ended December 31,
                                                                 ------------------------------  ------------------------------
                                                                      2008            2007            2008            2007
                                                                 --------------  --------------  --------------  --------------
<S>                                                                <C>               <C>           <C>             <C>
Net income                                                         $ 1,545,421       $ 697,403     $ 4,041,277     $ 1,749,446
                                                                 --------------  --------------  --------------  --------------

Other comprehensive income:
     Gross unrealized holding gain on securities available for sale,
       net of income tax of $917,155 and $333,305,
       $387,421 and $256,863, respectively                           1,379,177         501,209         582,587         386,260
     Benefit plans, net of income taxes of $7,755 and $7,575,
        $23,264 and $22,725, respectively                               11,661          11,391          34,984          34,173
                                                                 --------------  --------------  --------------  --------------
Total other comprehensive income                                     1,390,838         512,600         617,571         420,433
                                                                 --------------  --------------  --------------  --------------
Comprehensive income                                               $ 2,936,259     $ 1,210,003     $ 4,658,848     $ 2,169,879
                                                                 ==============  ==============  ==============  ==============
</TABLE>



See notes to consolidated financial statements.

                                                               -3-


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

                                                                                      Nine Months Ended December 31,
                                                                                     ----------------------------------
                                                                                           2008              2007
                                                                                     ----------------  ----------------
<S>                                                                                    <C>               <C>
Cash flows from operating activities:
   Net income                                                                          $   4,041,277     $   1,749,446
   Adjustments to reconcile net income to net cash provided by operating activities:
      Depreciation and amortization of premises and equipment                                365,059           442,986
      Net amortization of deferred fees and costs, premiums and discounts                     82,124           340,211
      Amortization component of net periodic benefit cost                                     58,248            11,448
      Provision for loan losses                                                              115,000            90,000
      Decrease in interest receivable                                                        431,743           309,127
      Deferred income tax benefit                                                           (104,441)         (211,384)
      Decrease (increase) in other assets                                                    268,796          (709,847)
      (Decrease) increase in accrued interest payable                                         (1,880)          112,810
      (Decrease) in other liabilities                                                       (105,182)         (728,333)
      (Increase) in cash surrender value of bank owned life insurance                       (688,114)         (678,028)
      ESOP shares committed to be released                                                   584,046           610,669
      Restricted stock expense                                                               796,702           795,885
      Stock option expense                                                                   206,137           407,888
      Increase in deferred compensation obligation under Rabbi Trust                          22,932            26,646
                                                                                     ----------------  ----------------
        Net cash provided by operating activities                                          6,072,447         2,569,524
                                                                                     ----------------  ----------------

Cash flows from investing activities: Proceeds from calls, maturities and
   repayments of:
      Investment securities available for sale                                                     -         5,000,000
      Mortgage-backed securities available for sale                                        8,561,769         5,602,500
      Investment securities held to maturity                                              50,000,000        45,000,000
      Mortgage-backed securities held to maturity                                         21,843,132        22,911,432
   Redemptions of Federal Home Loan Bank of New York stock                                   959,600           797,100
   Purchases of:
      Investment securities held to maturity                                                       -        (5,000,000)
      Mortgage-backed securities held to maturity                                        (87,539,091)      (91,015,359)
      Loans receivable                                                                    (3,827,496)      (10,934,919)
      Premises and equipment                                                                (477,330)       (1,135,629)
      Federal Home Loan Bank of New York stock                                            (1,255,300)       (1,755,000)
   Net change in loans receivable                                                        (41,684,074)        2,854,732
                                                                                     ----------------  ----------------
        Net cash (used in) by investing activities                                       (53,418,790)      (27,675,143)
                                                                                     ----------------  ----------------


See notes to consolidated financial statements.

                                                        -4-


<PAGE>

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

                                                                                       Nine Months Ended December 31,
                                                                                     ----------------------------------
                                                                                           2008              2007
                                                                                     ----------------  ----------------
Cash flows from financing activities:
   Net increase in deposits                                                           $   31,080,870     $   2,123,132
   Proceeds from advances from Federal Home Loan Bank of New York                         25,000,000        40,000,000
   Principal payments on advances from Federal Home Loan Bank of New York                (20,994,405)      (17,740,541)
   Net increase in payments by borrowers for taxes and insurance                             418,735           (16,419)
   Dividends paid                                                                         (1,409,547)       (1,577,044)
   Purchase of treasury stock                                                             (5,572,559)      (16,466,079)
   Tax benefit from stock based compensation                                                  75,563            40,888
                                                                                     ----------------  ----------------
        Net cash provided by financing activities                                         28,598,657         6,363,937
                                                                                     ----------------  ----------------

Net (decrease) in cash and cash equivalents                                              (18,747,686)      (18,741,682)
Cash and cash equivalents - beginning                                                     52,230,690        41,105,229
                                                                                     ----------------  ----------------
Cash and cash equivalents - ending                                                    $   33,483,004     $  22,363,547
                                                                                     ================  ================
Supplemental information:
   Cash paid during the period for:
      Interest on deposits and borrowings                                             $   19,566,548     $  17,857,948
                                                                                     ================  ================
      Income taxes paid, net of refunds                                               $   1,850,642     $   1,636,295
                                                                                     ================  ================
</TABLE>



See notes to consolidated financial statements.

                                                 -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 Clifton Savings
Bancorp, Inc. (the "Company"), the Company's wholly-owned subsidiary, Clifton
Savings Bank (the "Bank") and the Bank's wholly-owned subsidiary, Botany Inc.
("Botany"). The Company's business consists principally of investing in
securities and the operations of the Bank. Botany's business consists solely of
holding investment and mortgage-backed securities, and Botany 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 the 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
accounting principles generally accepted in the United States of America.
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, 2008 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, 2008, which are included in the Company's Annual Report on Form 10-K
as filed with the Securities and Exchange Commission on June 13, 2008.


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,
2008, include incremental shares related to outstanding stock options and
unvested restricted stock awards of 86,011 and 75,752 and 48,758 and 67,039,
respectively. The calculation of diluted EPS for the three and nine months ended
December 31, 2007, include incremental shares related to outstanding stock
options and unvested restricted stock awards of 34,222 and 76,825 and 77,185 and
56,513, 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, 2008 and 2007, Clifton MHC
(the "MHC") the federally chartered mutual holding company of the Company,
waived its right, upon non-objection from the OTS, to receive cash dividends of
approximately $840,000 and $2.5 million, respectively, on the shares of Company
common stock it owned in each year.


                                      -6-

<PAGE>

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


5. STOCK REPURCHASE PLANS
-------------------------

On May 14, 2008, the Company's Board of Directors authorized the Company's
seventh repurchase plan for up to 525,000 shares of the Company's outstanding
stock, representing approximately 5% of the outstanding shares owned by entities
other than the MHC. During the three and nine months ended December 31, 2008,
76,247 and 525,000 shares were repurchased under this plan, respectively, at a
cost of $790,000, or $10.36 per share, and $5.35 million, or $10.19 per share,
respectively. The Company's seventh repurchase program was completed on October
28, 2008, under which 525,000 shares were purchased at a total cost of
approximately $5.35 million or $10.19 per share.


6. 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 Ended                Nine Months Ended
                                                         December 31,                      December 31,
                                                --------------------------------    ---------------------------
                                                     2008             2007             2008           2007
                                                ---------------   --------------    ------------  -------------
                                                       (In Thousands)                   (In Thousands)
<S>                                              <C>                <C>              <C>            <C>
Service cost                                     $          22      $        20      $       66     $       60
Interest cost                                               36               34             108            102
Amortization of past service cost                           22               22              66             66
Amortization of unrecognized net (gain)                     (2)              (3)             (6)            (9)
                                                ---------------   --------------    ------------  -------------

Net periodic benefit cost                        $          78      $        73      $      234     $      219
                                                ===============   ==============    ============  =============
</TABLE>


7. FAIR VALUE OF FINANCIAL INSTRUMENTS
--------------------------------------

The Company adopted Statement of Financial Accounting Standards ("SFAS") No.157,
"Fair Value Measurements", on April 1, 2008. Under SFAS No. 157, fair value
measurements are not adjusted for transaction costs. SFAS No. 157 establishes a
fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1
measurements) and the lowest priority to unobservable inputs (level 3
measurements). The three levels of the fair value hierarchy under SFAS No. 157
are described below:

Basis of Fair Value Measurement:

         Level 1:  Unadjusted  quoted prices in active markets that are
         accessible at the measurement  date for identical  unrestricted assets
         or liabilities;

         Level 2: Quoted prices in markets that are not active, or inputs that
         are observable either directly or indirectly, for substantially the
         same term of the asset or liability;

         Level 3: Price or valuation techniques that require inputs that are
         both significant to the fair value measurement and unobservable (i.e.
         supported with little or no market activity).


                                      -7-

<PAGE>

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



7. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT'D)
-----------------------------------------------

A financial instrument's level within the fair value hierarchy is based on the
lowest level of input that is significant to the fair value measurement.

The types of instruments valued based on quoted market prices in active markets
include most U.S. government and agency securities, mortgage-backed securities,
many other sovereign government obligations, and active listed securities. Such
instruments are generally classified within level 1 or level 2 of the fair value
hierarchy. As required by SFAS No. 157, the Company does not adjust the quoted
price for such instruments.

The type of instruments valued based on quoted prices in markets that are not
active, broker or dealer quotations, or alternative pricing sources with
reasonable levels or price transparency include less liquid mortgage products,
less liquid equities, and state municipal and provincial obligations. Such
instruments are generally classified within level 2 of the fair value hierarchy.

The following table sets forth the Company's financial assets that were
accounted for at fair values as of December 31, 2008 by level within the fair
value hierarchy. As required by SFAS No. 157, financial assets are classified in
their entirety based on the lowest level of input that is significant to the
fair value measurements:

<TABLE>
<CAPTION>
                                                                (LEVEL 1)        (LEVEL 2)
                                            DECEMBER 31,      QUOTED PRICES     SIGNIFICANT         (LEVEL 3)
                                               2008            IN ACTIVE          OTHER            SIGNIFICANT
                                             CARRYING         MARKETS FOR       OBSERVABLE         UNOBSERVABLE
                                              VALUE         IDENTICAL ASSETS      INPUTS             INPUTS
                                           -------------   ------------------  --------------    ---------------
ASSETS:                                                             (In Thousands)
<S>                                          <C>               <C>              <C>                  <C>
Securities available for sale                $ 82,643          $      -         $  82,643            $     -
</TABLE>

We base our fair values on the price that would be received to sell an asset in
an orderly transaction between market participants at the measurement date. SFAS
No. 157 requires us to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value.

Assets that we measure on a recurring basis are limited to our
available-for-sale portfolio. Our available-for-sale portfolio is carried at
estimated fair value with any unrealized gains and losses, net of taxes,
reported as accumulated other comprehensive income/loss in shareholders' equity.
All of our available-for-sale portfolio consists of mortgage-backed securities
issued by government-sponsored enterprises. The fair values of these securities
are obtained from quotes received from an independent broker. Our broker
provides us with prices which are categorized as Level 2 since quoted prices in
active markets for identical assets are generally not available. Their various
modeling techniques used to determine pricing for our mortgage-backed
securities, include option pricing and discounted cash flow models.


                                      -8-
<PAGE>


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



8. EMPLOYERS' ACCOUNTING FOR DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT
-----------------------------------------------------------------------------
PLANS
-----

On April 1, 2008, the Company adopted the measurement date provisions of SFAS
No. 158, "Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans" - an Amendment of FASB Nos. 87, 88, 106 and 132 (R). SFAS
No. 158 requires that the funded status of a defined benefit postretirement plan
be measured as of the entity's fiscal year-end rather than as of an earlier
date. As a result, the Company changed the measurement date from January 1 to
March 31 for its defined benefit pension and other postretirement plans. This
adoption of SFAS No. 158 on April 1, 2008 resulted in adjustments of
approximately $46,000 to the Company's retained earnings and $12,000 to other
comprehensive income.

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

In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles." This Statement
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements. This Statement
is effective 60 days following the SEC's approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles." The Company
is currently evaluating the potential impact the new pronouncement will have on
its consolidated financial statements.

In June 2008, the FASB issued FASB Staff Position (FSP) Emerging Issues Task
Force (EITF) 03-6-1, "Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities." This FSP clarifies that all
outstanding unvested share-based payment awards that contain rights to
non-forfeitable dividends participate in undistributed earnings with common
shareholders. Awards of this nature are considered participating securities and
the two-class method of computing basic and diluted earnings per share must be
applied. This FSP is effective for fiscal years beginning after December 15,
2008. The Company is currently evaluating the potential impact the new
pronouncement will have on its consolidated financial statements.

In November 2008, the SEC released a proposed roadmap regarding the potential
use by U.S. issuers of financial statements prepared in accordance with
International Financial Reporting Standards (IFRS). IFRS is a comprehensive
series of accounting standards published by the International Accounting
Standards Board ("IASB"). Under the proposed roadmap, the Company may be
required to prepare financial statements in accordance with IFRS as early as
2014. The SEC will make a determination in 2011 regarding the mandatory adoption
of IFRS. The Company is currently assessing the impact that this potential
change would have on its consolidated financial statements and it will continue
to monitor the development of the potential implementation of IFRS. In December
2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures about
Postretirement Benefit Plan Assets". This FSP amends SFAS 132(R), "Employers'
Disclosures about Pensions and Other Postretirement Benefits", to provide
guidance on an employer's disclosures about plan assets of a defined benefit
pension or other postretirement plan. The disclosures about plan assets required
by this FSP shall be provided for fiscal years ending after December 15, 2009.
The Company does not expect this new pronouncement will have a material effect
on its consolidated financial statements.



                                      -9-
<PAGE>


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


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

In January 2009, the FASB issued FSP EITF 99-20-1, "Amendments to the Impairment
of Guidance of EITF Issue No. 99-20" (FSP EITF 99-20-1). FSP EITF 99-20-1 amends
the impairment guidance in EITF Issue No. 99-20, "Recognition of Interest Income
and Impairment on Purchased Beneficial Interests and Beneficial Interests That
Continue to Be Held by a Transferor in Securitized Financial Assets", to achieve
more consistent determination of whether an other-than-temporary impairment has
occurred. FSP EITF 99-20-1 also retains and emphasizes the objective of an
other-than-temporary impairment assessment and the related disclosure
requirements in SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", and other related guidance. FSP EITF 99-20-1 is effective
for interim and annual reporting periods ending after December 15, 2008, and
shall be applied prospectively. Retrospective application to a prior interim or
annual reporting period is not permitted. The application of the provisions of
FSP EITF 99-20-1 did not materially affect our results of operations or
financial condition as of and for the periods ended December 31, 2008.



                                      -10-


<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 41.7% and 49.9%, respectively, of total
assets at December 31, 2008, as compared to 42.4% and 46.8%, respectively, at
March 31, 2008. Cash and cash equivalents decreased to 3.6% of total assets at
December 31, 2008, as compared to 5.8% at March 31, 2008. The Company's
investment and mortgage-backed securities portfolios consist of only U.S.
government-sponsored or guaranteed enterprises.

Interest-bearing liabilities consist of deposits and borrowings from the Federal
Home Loan Bank of New York ("FHLB"). Deposits increased $31.1 million, or 5.4%
between March 31, 2008 and December 31, 2008, and borrowed funds increased by
$4.0 million, or 2.8%. The balance in borrowed funds was $146.3 million at
December 31, 2008 as compared to $142.3 million at March 31, 2008. During the
nine months ended December 31, 2008, $25.0 million in long-term borrowings with
an average rate of 3.77% were originated, while $21.0 million of long-term
borrowings were repaid in accordance with their original terms. There were no
short-term borrowed funds outstanding at December 31, 2008, as $22.0 million of
short-term borrowings with an average rate of 1.57% were originated and repaid
during the nine months ended December 31, 2008, in accordance with their
original terms.

Net interest income increased $1.4 million, or 40.0%, during the three months
ended December 31, 2008, when compared with the same 2007 period. Such increase
was due to a $1.7 million increase in total interest income partially offset by
an increase in total interest expense of $332,000. Average interest-earning
assets increased $119.0 million, or 15.7%, while average interest-bearing
liabilities increased $122.6 million, or 19.8%. The $3.6 million decrease in
average net interest-earning assets was mainly attributable to a decrease of
$66.2 million in the average balance of investment securities, coupled with
increases of $30.3 million in the average balance of interest bearing deposits
and $92.3 million in the average balance of borrowed funds, partially offset by
increases of $148.3 million in the average balance


                                      -11-

<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)

of mortgage-backed securities and $38.3 million in the average balance of loans.
The interest rate spread increased 59 basis points to 1.68% from 1.09%. This was
due to an increase of 11 basis points in the yield earned on interest-earning
assets coupled with a 48 basis points decrease in the cost of interest-bearing
liabilities.

Results of operations also depend, to a lesser extent, on non-interest income
generated, provision for loan losses recorded, and non-interest expense
incurred. During the three months ended December 31, 2008, the provision for
loan losses remained unchanged, while non-interest income increased $3,000, or
1.1% and non-interest expense increased $30,000, or 1.0% from the comparable
2007 period.


CHANGES IN FINANCIAL CONDITION

The Company's assets at December 31, 2008 totaled $933.8 million, which
represents an increase of $34.7 million, or 3.9% as compared with $899.1 million
at March 31, 2008.

Cash and cash equivalents decreased $18.7 million, or 35.8% to $33.5 million at
December 31, 2008 as compared to $52.2 million at March 31, 2008. This decrease
resulted primarily from cash being redeployed into higher yielding
mortgage-backed securities and loans.

Securities available for sale decreased $7.6 million, or 8.4% to $82.6 million
at December 31, 2008 when compared with $90.2 million at March 31, 2008. The
decrease during the nine months ended December 31, 2008, resulted primarily from
repayments totaling $8.6 million offset by an increase in unrealized gains of
$970,000 on the portfolio.

Securities held to maturity increased $15.6 million, or 5.4% to $306.3 million
at December 31, 2008 when compared with $290.7 million at March 31, 2008. The
increase during the nine months ended December 31, 2008, resulted primarily from
purchases of securities totaling $87.5 million<184> partially offset by
maturities, calls and repayments totaling $71.8 million.

Net loans increased $45.3 million, or 10.8% to $465.9 million at December 31,
2008 when compared with $420.6 million at March 31, 2008. The increase during
the nine months ended December 31, 2008, resulted primarily from internal
origination volume, primarily in residential real estate, which more than offset
repayment levels. The largest increase in the loan portfolio was in one-to-four
family residential real estate loans which increased $42.0 million, or 10.8%.

Total liabilities increased $35.5 million, or 4.9% to $762.2 million at December
31, 2008 from $726.7 million at March 31, 2008. Deposits increased $31.1
million, or 5.4% to $607.8 million at December 31, 2008 when compared with
$576.7 million at March 31, 2008. The Bank has been able to retain and attract
deposits by continuing to offer competitive rates for a broad range of deposit
instruments. Borrowings increased $4.0 million, or 2.8% to $146.3 million at
December 31, 2008, as compared with $142.3 million at March 31, 2008. During the
nine months ending December 31, 2008, $25.0 million in long-term borrowings with
an average rate of 3.77% were originated, as part of the Bank's leverage
strategy, while $21.0 million of long-term borrowings were repaid in accordance
with their original terms. During the three and nine months ended December 31,
2008, $22.0 million of short-term borrowings with an average rate of 1.57% were
originated, and were repaid in accordance with their original terms. At December
31, 2008, the remaining borrowings of $146.3 million had an average interest
rate of 3.86%.



                                      -12-
<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 $171.7 million and $172.4 million at December 31,
2008 and March 31, 2008, respectively. The decrease of $700,000, or 0.4%, for
the nine months ended December 31, 2008, resulted primarily from the repurchase
of approximately 544,000 shares of Company common stock for $5.6 million and
cash dividends paid of $1.4 million, partially offset by net income of $4.0
million, a net increase in unrealized gains of $583,000 on the available for
sale securities portfolios, ESOP shares committed to be released of $584,000,
and $1.1 million for stock options and awards earned under the Company's 2005
Equity Incentive Plan and related tax benefits.


COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2008
AND 2007

Net income increased $848,000 or 121.7% to $1.55 million for the three months
ended December 31, 2008 compared with $697,000 for the same 2007 period. The
increase in net income during the 2008 period primarily was the result of an
increase in the net interest rate spread, partially offset by an increase in
income taxes.

Interest income on loans increased by $590,000, or 10.4% to $6.24 million during
the three months ended December 31, 2008, when compared with $5.65 million for
the same 2007 period. The increase during the 2008 period resulted from an
increase in the average yield earned on the loan portfolio of 8 basis points to
5.34% from 5.26%, coupled with an increase in the average balance of $38.3
million, or 8.9% when compared to the same period in 2007. The increase in yield
was a result of new loan originations which have yields significantly higher
than the overall average yield on the portfolio. Interest on mortgage-backed
securities increased $2.1 million, or 95.5% to $4.3 million during the three
months ended December 31, 2008, when compared with $2.2 million for the same
2007 period. The increase during the 2008 period resulted from an increase of 34
basis points in the average yield earned on mortgage-backed securities to 5.29%
from 4.95%, coupled with an increase of $148.3 million, or 84.0% in the average
balance of mortgage-backed securities outstanding. The increase in yield was due
to new purchases of securities at yields significantly higher than the overall
portfolio yield. Interest earned on investment securities decreased by $772,000,
or 50.4% to $758,000 during the three months ended December 31, 2008, when
compared to $1.53 million during the same 2007 period, due to a decrease in the
average balance by $66.2 million, or 60.0%, partially offset by an increase in
the average yield of 5 basis points to 4.76% from 4.71%. Investment securities
decreased primarily due to the redeployment of maturities and calls of
investment securities into higher yielding loans and mortgage-backed securities.
Interest earned on other interest-earning assets decreased by $190,000, or 68.6%
to $87,000 during the three months ended December 31, 2008, when compared to
$277,000 during the same 2007 period primarily due to a decrease of 326 basis
points in average yield to 1.64% from 4.90%, coupled with a decrease of $1.4
million, or 6.2%, in the average balance of other interest-earning assets.

Interest expense on deposits decreased $520,000, or 9.3% to $5.06 million during
the three months ended December 31, 2008, when compared to $5.58 million during
the same 2007 period. Such decrease was primarily attributable to a decrease of
55 basis points in the average cost of interest-bearing deposits to 3.43% from
3.98%, partially offset by an increase of $30.3 million, or 5.5% in the average
balance of interest-bearing deposits. The decrease in the average cost of
deposits reflected lower market interest rates. Interest expense on borrowed
money increased approximately $854,000, or 143.5% to $1.45 million during the
three months ended December 31, 2008 when compared with $595,000 during the same
2007 period. Such increase was primarily attributable to an increase of $92.3
million, or 158.9% in the average


                                      -13-

<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, 2008 AND
2007 (CONT'D.)

balance of borrowings, partially offset by a decrease of 24 basis points in the
average cost of borrowings to 3.86% from 4.10%. The decrease in the average cost
of borrowings was a result of both existing borrowings at a higher rate being
repaid in accordance with their original terms, and new borrowings being taken
when market interest rates were lower than the average cost of existing
borrowings.

Net interest income increased $1.4 million, or 40.0% during the three months
ended December 31, 2008, to $4.9 million when compared to $3.5 million for the
same 2007 period. Such increase was due to a $1.7 million increase in total
interest income, which more than offset an increase in total interest expense of
$332,000. Average interest-earning assets increased $119.0 million, or 15.7%
while average interest-bearing liabilities increased $122.6 million, or 19.8%.
The $119.0 million increase in average interest-earning assets was mainly
attributable to increases of $38.3 million in loans and $148.3 million in
mortgage-backed securities, partially offset by decreases of $66.2 million in
investment securities and $1.4 million in other interest earning assets. Loans
and mortgage-backed securities increased primarily due to the redeployment of
maturities and calls of investment securities into higher yielding assets. In
addition, mortgage-backed securities increased due to the continuation of a
leverage strategy initiated in November 2007, under which the Bank borrowed
funds from the Federal Home Loan Bank of New York ("FHLB") and simultaneously
invested those funds into higher yielding mortgage-backed securities. The $122.6
million increase in average interest-bearing liabilities consisted of increases
of $30.3 million in interest-bearing deposits and $92.3 million in borrowings.
The net interest rate spread increased 59 basis points as an 11 basis point
increase in the average yield earned on interest-earning assets was coupled with
a decrease of 48 basis points in the average rate paid on interest-bearing
liabilities. Long-term market rates decreased in 2008, however, the more
significant decline in short-term market rates during 2008 lowered the average
yield on interest-bearing liabilities at a faster pace, therefore causing an
increase in spread.

During both the three months ended December 31, 2008 and 2007, there were no
provisions for loan losses recorded. The allowance for loan losses is based on
management's evaluation of the risk inherent in the Bank's 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, 2008 and
March 31, 2008, the Bank's non-performing loans, all of which were delinquent
ninety days or more, totaled $444,000 and $265,000 respectively, at 0.10% and
0.06%, respectively, to total gross loans, and 0.05% and 0.03%, respectively, to
total assets at the end of each period. During the three months ended December
31, 2008 and 2007, the Bank did not charge off any loans. The allowance for loan
losses amounted to $1.56 million, representing 0.33% of total gross loans at
December 31, 2008, and $1.44 million, representing 0.34% of total gross loans at
March 31, 2008.

Non-interest income increased $3,000, or 1.1% to $288,000 during the three
months ended December 31, 2008 as compared to $285,000 for the same 2007 period.

Non-interest expense increased by $30,000, or 1.0% to $2.90 million during the
three months ended December 31, 2008, when compared with $2.87 million during
the same 2007 period. The components of non-interest expense which experienced
the most significant change were salaries and employee benefits and net
occupancy expense of premises which increased $31,000, or 1.9% and $19,000, or
7.3%, respectively. This was partially offset by a decrease of $28,000, or 36.4%
in advertising expense as a result of a reduction in the number of newspaper
advertisements during the 2008 quarter.


                                      -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, 2008 AND
2007 (CONT'D.)

Income taxes totaled $724,000 and $192,000 during the three months ended
December 31, 2008 and 2007, respectively. The increase of $532,000, or 277.1%
during the 2008 period resulted from higher pre- tax income, coupled with an
increase in the overall effective income tax rate which was 31.9% in the 2008
period, compared with 21.6% for 2007. The higher effective income tax rate in
the 2008 period is due to an increase in taxable income, resulting in tax exempt
income representing a smaller percentage of total income, therefore increasing
the overall effective tax rate.


COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2008 AND
2007

Net income increased $2.29 million, or 130.9% to $4.04 million for the nine
months ended December 31, 2008 compared with $1.75 million for the same 2007
period. The increase in net income during the 2008 period primarily was the
result of an increase in the net interest rate spread and a reduction of
non-interest expense, as well as continued favorable trends in loan production,
partially offset by an increase in income taxes.

Interest income on loans increased by $1.3 million, or 7.8% to $17.9 million
during the nine months ended December 31, 2008, when compared with $16.6 million
for the same 2007 period. The increase during the 2008 period resulted from an
increase in the average yield earned on the loan portfolio of 7 basis points to
5.29% from 5.22%, coupled with an increase in the average balance of $25.8
million, or 6.1% when compared to the same period in 2007. Interest on
mortgage-backed securities increased $6.3 million, or 110.5% to $12.0 million
during the nine months ended December 31, 2008, when compared with $5.7 million
for the same 2007 period. The increase during the 2008 period resulted from an
increase of 50 basis points in the average yield earned on mortgage-backed
securities to 5.23% from 4.73%, coupled with an increase of $144.5 million, or
89.9% in the average balance of mortgage-backed securities outstanding. The
average yields on loans and securities increased as a result of yields on new
loan originations and securities purchased being significantly higher than the
overall existing portfolio yields. Interest earned on investment securities
decreased by $2.1 million, or 42.0% to $2.9 million during the nine months ended
December 31, 2008, when compared to $5.0 million during the same 2007 period,
due to a decrease in the average balance by $64.0 million, or 44.4%, partially
offset by an 11 basis point increase in average yield to 4.75% from 4.64%.
Investment securities decreased primarily due to the redeployment of maturities
and calls of investment securities into higher yielding loans and
mortgage-backed securities. Interest earned on other interest-earning assets
decreased by $521,000, or 45.9% to $613,000 during the nine months ended
December 31, 2008, when compared to $1.13 million during the same 2007 period
primarily due to a decrease of 277 basis points in average yield to 2.52% from
5.29%, partially offset by an increase of $3.8 million, or 13.4%, in the average
balance.

Interest expense on deposits decreased $1.5 million, or 9.0% to $15.1 million
during the nine months ended December 31, 2008, when compared to $16.6 million
during the same 2007 period. Such decrease was primarily attributable to a
decrease of 45 basis points in the average cost of interest-bearing deposits to
3.48% from 3.93%, partially offset by an increase of $16.9 million, or 3.0% in
the average balance of interest-bearing deposits. Interest expense on borrowed
money increased approximately $3.1 million, or 221.4% to $4.5 million during the
nine months ended December 31, 2008 when compared with $1.4 million during the
same 2007 period. Such increase was primarily attributable to an increase of
$102.0 million, or 209.2% in the average balance of borrowings, coupled with an
increase of 7 basis points in the average cost of borrowings to 3.93% from
3.86%.


                                      -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 NINE MONTHS ENDED DECEMBER 31, 2008 AND
2007 (CONT'D.)

Net interest income increased $3.2 million, or 30.5% during the nine months
ended December 31, 2008, to $13.7 million when compared to $10.5 million for the
same 2007 period. Such increase was due to a $4.9 million increase in total
interest income which more than offset an increase in total interest expense of
$1.6 million. Average interest-earning assets increased $110.1 million, or 14.5%
while average interest-bearing liabilities increased $118.9 million, or 19.5%.
The $110.1 million increase in average interest-earning assets was mainly
attributable to an increase of $25.8 million in loans, $144.5 million in
mortgage-backed securities and $3.8 million in other interest-earning assets,
partially offset by a decrease of $64.0 million in investment securities. Loans
and mortgage-backed securities increased primarily due to the redeployment of
maturities and calls of investment securities into these higher yielding assets.
In addition, mortgage-backed securities increased due to the continuation of a
leverage strategy initiated in November 2007, under which the Bank borrowed
funds from the FHLB and simultaneously invested those funds into higher yielding
mortgage-backed securities. The $118.9 million increase in average
interest-bearing liabilities consisted of increases of $16.9 million in
interest-bearing deposits and $102.0 million in borrowings. The net interest
rate spread increased 46 basis points as an 11 basis point increase in the
average yield earned on interest-earning assets was coupled with a decrease of
35 basis points in the average rate paid on interest-bearing liabilities.

During the nine months ended December 31, 2008 and 2007, the Bank recorded
$115,000 and $90,000, respectively, as a provision for loan losses. The
allowance for loan losses is based on management's evaluation of the risk
inherent in the Bank's 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. The larger provision in the 2008 period was a result of both
increases in non-performing loans and the loan portfolio balance. The gross loan
portfolio increased $45.3 million, or 10.7% from March 31, 2008 to December 31,
2008, and only $8.3 million, or 2.0% from March 31, 2007 to December 31, 2007.
At December 31, 2008 and March 31, 2008, the Bank's non-performing loans, all of
which were delinquent ninety days or more, totaled $444,000 and $265,000
respectively, at 0.10% and 0.06%, respectively, to total gross loans, and 0.05%
and 0.03%, respectively, to total assets at the end of each period. During the
nine months ended December 31, 2008 and 2007, the Bank did not charge off any
loans. The allowance for loan losses amounted to $1.56 million, representing
0.33% of total gross loans at December 31, 2008, and $1.44 million representing
0.34% of total gross loans at March 31, 2008.

Non-interest income increased $19,000, or 2.4% to $863,000 during the nine
months ended December 31, 2008 as compared to $844,000 for the same 2007 period.

Non-interest expense decreased by $440,000, or 4.9% to $8.57 million during the
nine months ended December 31, 2008, when compared with $9.01 million during the
same 2007 period. The components of non-interest expense which experienced the
most significant change were salaries and employee benefits, legal expenses, and
miscellaneous expenses, which decreased by $156,000, or 3.0%, $122,000, or
69.8%, and $111,000, or 9.7%, respectively. Salaries and employee benefits were
lower during the nine months ended December 31, 2008 due to decreases in stock
option, ESOP and health insurance expenses while the decrease in legal expense
was mainly due to a $92,000 insurance recovery of previously expensed fees
relating to litigation. Stock option expense decreased as the Bank's option
expense methodology results in less expense each year as the options vest, while
ESOP expense decreased due to a decrease in the Company's stock price. Health
insurance expense decreased due to a change in insurance carriers and overall
plan to reduce these type costs. The decrease in miscellaneous expenses was
mostly

                                      -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, 2008 AND
2007 (CONT'D.)

due to a $49,000 recovery of previously expensed consulting fees, and a $47,000
decrease in State of New Jersey bank supervisory fees.

Income taxes totaled $1.88 million and $473,000 during the nine months ended
December 31, 2008 and 2007, respectively. The increase of $1.41 million, or
297.6% during the 2008 period resulted from higher pre-tax income, coupled with
an increase in the overall effective income tax rate which was 31.8% in the 2008
period, compared with 21.3% for 2007. The higher effective income tax in the
2008 period is due to an increase in taxable income, resulting in tax exempt
income representing a smaller percentage of total income, therefore increasing
the overall effective tax rate.

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 $116.1
million, or 12.4% of total assets at December 31, 2008 as compared to $142.4
million, or 15.8% of total assets at March 31, 2008.

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

Cash was generated by operating and financing activities during the three and
nine months ended December 31, 2008. The primary source of cash was net income,
a net increase in deposits, and the proceeds from advances from the FHLB. The
Company declared and paid a cash dividend during the three months ended December
31, 2008, totaling $460,000. Dividends declared and paid totaled $1.4 million
during the nine months ended December 31, 2008.

The Company's primary investing activities are lending and purchases of
securities. Net loans amounted to $465.9 million and $420.6 million at December
31, 2008 and March 31, 2008, respectively. Securities, including available for
sale and held to maturity issues, totaled $389.0 million and $380.9 million at
December 31, 2008 and March 31, 2008, respectively. In addition to funding new
loan production through operating and financing activities, new loan production
was 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 interest-bearing deposits. If the Bank requires funds beyond its ability
to generate them internally, the Bank can borrow funds from the FHLB up to
approximately $88.9 million under an overnight line of credit and $88.9 million
under a one-month overnight repricing line of credit agreement. The Bank's
membership in FHLB also provides access to additional sources of borrowed funds
based on the Bank's ability to collateralize such borrowings. At December 31,
2008, advances from the FHLB amounted to $146.3 million at a weighted average
rate of 3.86%.


                                      -17-
<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, 2008, the Bank had outstanding commitments
to originate and purchase loans, and fund customers' approved unused equity
lines of credit, aggregating $4.4 million. At December 31, 2008, the Bank had
outstanding commitments to purchase a $750,000 participation in a $5.8 million
construction loan, a $750,000 participation in a $7.3 million construction loan,
and a $500,000 participation in a $3.0 million construction loan with adjustable
interest rates of 3.00%, 2.50% and 2.75%, respectively, over the one month
London Interbank Offering Rate. At December 31, 2008, the Bank also had a
commitment outstanding related to a purchase of a $5.0 million FHLB bond with a
fixed interest rate of 1.75%.

Certificates of deposit scheduled to mature in one year or less at December 31,
2008, totaled $380.7 million, or 82.1% of our certificates of deposit.
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, 2008, totaled
$12.7 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, 2008,
as compared to the minimum regulatory capital requirements:

<TABLE>
<CAPTION>
                                                                                  OTS Requirements
                                                                ------------------------------------------------------
                                                                      Minimum Capital          For Classification as
                                            Actual                      Adequacy                 Well-Capitalized
                                  --------------------------    --------------------------   -------------------------
                                      Amount        Ratio          Amount         Ratio         Amount        Ratio
                                  --------------------------    -------------   ----------   -------------  ----------
                                                                (Dollars In Thousands)
<S>                                    <C>           <C>            <C>             <C>          <C>           <C>
Total capital
   (to risk-weighted assets)           $145,451      40.97 %        $28,399         8.00 %       $35,499       10.00 %
Tier 1 capital
   (to risk-weighted assets)            143,896      40.54           14,199         4.00          21,299        6.00
Core (tier 1) capital
   (to adjusted total assets)           143,896      15.84           36,348         4.00          45,345        5.00
Tangible capital
   (to adjusted tangible assets)        143,896      15.84           13,630         1.50               -           -
</TABLE>

In April 2008, the Bank received approval from the OTS for a $7,950,000 capital
distribution to the Company. This cash dividend was paid in May 2008.


                                      -18-

<PAGE>


                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                     ITEM 3:
           QUANTITATIVE AND QUALITATIVE DISCLOSURES 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.





                                      -19-



<PAGE>


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


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 Report. The following table sets forth the Bank's NPV as of September
30, 2008, the most recent date the Bank's NPV was calculated by the OTS. Given
the current economic environment, the Bank expects that its NPV values as of
December 31, 2008 may decline from those listed in the table below. However, any
such declines are currently expected to be immaterial.

<TABLE>
<CAPTION>
                                                                             Net Portfolio Value as % of
                                       Net Portfolio Value                     Present Value of Assets
  Basis Points ("bp")   ----------------------------------------------  -------------------------------------
   Change in Rates          $ Amount       $ Change        % Change         NPV Ratio           Change
----------------------  ---------------- -------------  --------------  ----------------  -------------------
                                            (Dollars in Thousands)
       <S>                  <C>           <C>                 <C>             <C>                <C>
       300 bp               $  84,056     $ (60,446)          (42)%           10.09 %            (567)bp
                        ---------------- -------------  --------------  ----------------  -------------------
       200                    105,390       (29,112)          (27)            12.23              (353)
                        ---------------- -------------  --------------  ----------------  -------------------
       100                    125,491       (19,011)          (13)            14.11              (166)
                        ---------------- -------------  --------------  ----------------  -------------------
        50                    135,198        (9,305)           (6)            14.97               (79)
                        ---------------- -------------  --------------  ----------------  -------------------
        0                     144,502             -             -             15.76                 -
                        ---------------- -------------  --------------  ----------------  -------------------
       (50)                   150,859         6,356           + 4             16.27               +50
                        ---------------- -------------  --------------  ----------------  -------------------
      (100)                   155,277        10,774           + 7             16.58               +82
                        ---------------- -------------  --------------  ----------------  -------------------
</TABLE>

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.


                                      -20-

<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 the Company files or
submits under the Exchange Act with the Securities and Exchange Commission (the
"SEC") (1) is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and (2) is accumulated and
communicated to the Company's management, including its principal executive and
principal financial officers, as appropriate to allow timely decisions regarding
required disclosure.

         CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no
changes in the Company's internal control over financial reporting that occurred
during the three months ended December 31, 2008 that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.



                                      -21-


<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, 2008, as filed with Securities and Exchange Commission on
         June 13, 2008, which could materially affect our business, financial
         condition or future results. As of December 31, 2008, the risk factors
         of the Company have not changed materially from those recorded in our
         Annual Report on Form 10-K. However, 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,
         2008.
<TABLE>
<CAPTION>

                                                                                TOTAL NUMBER          MAXIMUM
                                                                                  OF SHARES       NUMBER OF SHARES
                                             TOTAL                              PURCHASED AS      THAT MAY YET BE
                                           NUMBER OF         AVERAGE          PART OF PUBLICLY    PURCHASED UNDER
                                            SHARES          PRICE PAID          ANNOUNCED PLANS      THE PLANS OR
               PERIOD                      PURCHASED        PER SHARE            OR PROGRAMS          PROGRAMS
-------------------------------------    -----------      --------------      -----------------   -----------------
<S>                                          <C>             <C>                   <C>                       <C>
October 1 - October 31, 2008 (1)             76,247          $10.36                76,247                    -
November 1 - November 30, 2008                    -             -                       -                    -
December 1 - December 31, 2008 (2)           18,999          $11.74                     -                    -
                                         -----------                          ------------
               TOTAL                         95,246          $10.64                76,247
                                         ===========                          ============
</TABLE>
-------------------------------------
(1)  On May 14, 2008, the Company announced that the Board of Directors had
     approved its seventh stock repurchase program authorizing the Company to
     repurchase up to 525,000 shares of the Company's common stock, which was
     completed on October 28, 2008.

(2)  Includes the withholding of 18,999 shares at $11.74 per share subject to
     restricted stock awards under the Clifton Savings Bancorp, Inc. 2005 Equity
     incentive Plan as payment of taxes due upon the vesting of the restricted
     stock awards.



                                      -22-

<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.




                                      -23-
<PAGE>


                 CLIFTON SAVINGS BANCORP, INC. AND SUBSIDIARIES
                                     PART II

<TABLE>
<CAPTION>
ITEM 6. Exhibits
        --------

         The following Exhibits are filed as part of this report.
                 <S>      <C>
                 3.1      Charter of Clifton Savings Bancorp, Inc. (1)
                 3.2      By-Laws of Clifton Savings Bancorp, Inc. (2)
                 4.1      Specimen Stock Certificate of Clifton Savings Bancorp, Inc. (1)
                 10.1     *Amended and Restated Employment Agreement by and between Clifton Savings Bancorp, Inc.
                          and John A. Celentano, Jr., dated December 17, 2008 (3)
                 10.2     *Amended and Restated Employment Agreement by and between Clifton Savings Bank
                          and John A. Celentano, Jr., dated December 17, 2008 (3)
                 10.3     *Amended and Restated Employment Agreement by and between Clifton Savings Bancorp, Inc.
                          and Walter Celuch, dated December 17, 2008 (3)
                 10.4     *Amended and Restated Employment Agreement by and between Clifton Savings Bank
                          and Walter Celuch dated December 17, 2008 (3)
                 10.5     *Amended and Restated Change in Control Agreement by and between Clifton Savings Bank
                          and Christine R. Piano, dated December 17, 2008 (3)
                 10.6     *Amended and Restated Change in Control Agreement by and between Clifton Savings Bank
                          and Stephen A. Hoogerhyde, dated December 17, 2008 (3)
                 10.7     *Amended and Restated Change in Control Agreement by and between Clifton Savings Bank
                          and Bart D'Ambra, dated December 17, 2008 (3)
                 10.8     *Amended and Restated Clifton Savings Bank Supplemental Executive Retirement Plan
                 10.9     *Amended and Restated Clifton Savings Bank Directors' Retirement Plan (3)
                 10.10    *Amendment to the Clifton Savings Bank Change in Control Severance Plan (3)
                 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).

                  --------------------------
                  *     Management contract or compensation plan arrangement.
                  (1)   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).
                  (2)   Incorporated herein by reference to the Company's Current Report on Form 8-K filed with the
                        Securities and Exchange Commission on October 26, 2007.
                  (3)   Amended during the quarter ended December 31, 2008 to comply with Section 409A of the Internal
                        Revenue Code of 1986, as amended (the "Code") and the regulations and guidance issued with respect
                        to 409A of the Code.
</TABLE>


                                              -24-


<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 5, 2009                 By: /s/ John A. Celentano, Jr.
      ------------------------------       ---------------------------------
                                           John A. Celentano, Jr.
                                           Chairman of the Board and Chief
                                           Executive Officer
                                           (Principal Executive Officer)


Date: February 5, 2009                 By: /s/ Christine R. Piano
      ------------------------------       -------------------------------------
                                           Christine R. Piano
                                           Chief Financial Officer and Treasurer
                                           (Principal Financial and Chief
                                            Accounting Officer)




                                      -25-