FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



For Quarter Ended:               March 31, 2000
                            __________________________

Commission File Number               1-13936
                            __________________________


                               BOSTONFED BANCORP, INC.
________________________________________________________________________________
             (Exact name of registrant as specified in its charter)

            Delaware                                            52-1940834
________________________________________________________________________________
  (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                           Identification No.)

17 New England Executive Park, Burlington, Massachusetts  01803
________________________________________________________________________________
  (Address of principal executive offices)              (Zip Code)

                                  (781) 273-0300
________________________________________________________________________________
              (Registrant's telephone number, including area code)

                                  Not Applicable
________________________________________________________________________________
              (Former name, former address and former fiscal year,
                          if changed since last report)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes  (X)                No   (    )

Number of shares of common stock, par value $.01 per share,
outstanding as of April 30, 2000:  4,902,881.

<PAGE>

                        BOSTONFED BANCORP INC.
                              FORM 10-Q
                               INDEX



PART I - FINANCIAL INFORMATION                                           Page
______________________________                                           ____

 Item 1.    Financial Statements:

            Consolidated Balance Sheets as of
            March 31, 2000 (unaudited) and December 31, 1999                  2

            Consolidated Statements of Operations for the Three
            Months ended March 31, 2000 and 1999 (unaudited)                  3

            Consolidated Statement of Changes in Stockholders'
            Equity for the Three Months ended
            March 31, 2000 (unaudited)                                        4

            Consolidated Statements of Cash Flows for the
            Three Months ended March 31, 2000 and 1999 (unaudited)        5 - 6

            Notes to Consolidated Financial Statements                    7 - 9

            Average Balances and Yield / Costs                               10

 Item 2     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                         11 - 16


 Item 3.    Quantitative and Qualitative Disclosures About
            Market Risk                                                 17 - 18





PART II _ OTHER INFORMATION
___________________________

 Item 1.    Legal Proceedings                                                19

 Item 2.    Changes in Securities and Use of Proceeds                        19

 Item 3.    Defaults Upon Senior Securities                                  19

 Item 4.    Submission of Matters to a Vote of Security Holders              19

 Item 5.    Other Information                                                19

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

 Signature Page                                                              20


                                      1

<PAGE>
                    BOSTONFED BANCORP, INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets
                          ---------------------------
                                (In Thousands)

                                                   March 31,    December 31,
                                                     2000           1999
                                                  -----------  --------------
Assets                                                   (Unaudited)
------------
Cash and cash equivalents                            $ 34,422   $  34,696
Investment securities available for sale
  (amortized cost of $58,237 and $55,051 at
  March 31, 2000 and December 31, 1999,
  respectively)                                        57,367      53,203
Investment securities held to maturity (fair
  value of $2,264 and $2,275 at March 31,
  2000 and December 31, 1999)                           2,304       2,304
Mortgage-backed securities available for sale
  (amortized cost of $15,473 and $15,881 at
  March 31, 2000 and December 31, 1999)                15,052      15,540
Mortgage-backed securities held to maturity (fair
  value of $62,434 and $14,030 at March 31,
  2000 and December 31, 1999)                          64,085      13,941
Mortgage loans held for sale                           16,527      16,174
Loans, net of allowance for loan losses of $10,725
  and $10,654 at March 31, 2000 and December 31,    1,008,000   1,032,594
  1999)
Accrued interest receivable                             6,504       6,267
Stock in FHLB of Boston and Federal Reserve Bank       20,649      20,311
Premises and equipment                                  9,055       8,212
Real estate owned                                         370         376
Goodwill                                               20,254      19,519
Other assets                                           31,459      30,516
                                                      -------     -------
            Total assets                           $1,286,048  $1,253,653
                                                      =======     =======

Liabilities and Stockholders' Equity
---------------------------------------
Liabilities:
 Deposit accounts                                    $808,466    $770,049
 Federal Home Loan Bank advances and other
  Borrowed Money                                      379,501     387,555
 Advance payments by borrowers for taxes
  and insurance                                         3,376       3,298
 Other liabilities                                      7,695       7,047
                                                      -------     -------
            Total liabilities                       1,199,038   1,167,949
                                                      -------     -------
Commitments and contingencies

Stockholders' equity;
 Preferred stock, $.01 par value, 1,000,000 shares
  authorized; none issued                               -- --       -- --
 Common stock, $0.01 par value, 17,000,000 shares
  authorized; 6,589,617 shares issued (4,907,481 and
  4,973,081 shares outstanding at March 31, 2000
   and December 31, 1999, respectively)                    66          66
 Additional paid-in capital                            67,260      67,198
 Retained earnings                                     52,176      50,481
 Accumulated other comprehensive income (loss)           (984)     (1,485)
  Less Treasury Stock, (1,682,136 shares and
   1,616,536 shares at March 31, 2000
    and December 31, 1999, respectively), at cost     (29,553)    (28,532)
  Less unallocated ESOP shares                         (1,663)     (1,663)
  Less unearned Stock-Based Incentive Plan               (292)       (361)
                                                      -------     -------
            Total stockholders' equity                 87,010      85,704
                                                      -------     -------
Total liabilities and stockholders' equity         $1,286,048  $1,253,653
                                                      =======     =======

See accompanying condensed notes to consolidated financial statements.
                                       2
<PAGE>
                    BOSTONFED BANCORP, INC. AND SUBSIDIARIES
                     Consolidated Statements of Operations
               (Dollars In Thousands, except per share amount)

                                 Three Months Ended
                                 ------------------
                                 3/31/00    3/31/99
                                 ------------------

                                     (Unaudited)

Interest income:
 Loans                          $ 19,661  $  17,658
 Mortgage-backed securities          698        616
 Investment securities             1,387      1,257
                                 -------    -------
   Total interest income          21,746     19,531
                                 -------    -------
Interest expense:
 Deposit accounts                  7,180      6,275
 Borrowed funds                    5,716      5,088
                                 -------    -------
   Total interest expense         12,896     11,363
                                 -------    -------
Net interest income                8,850      8,168
Provision for loan losses            251        430
                                 -------    -------
 Net interest
   income after provision          8,599      7,738
Non-interest income:
 Loan processing and servicing
   fees                              175        161
 Gain on sale of loans             1,908        764
 Deposit service fees                460        409
 Other                               623        213
                                 -------    -------
Total non-interest income          3,166      1,547
                                 -------    -------
Non-interest expense:
 Compensation and benefits         5,134      3,626
 Occupancy and equipment           1,004        797
 Federal deposit insurance
   premiums                           39         94
 Real Estate Operations             (287)       (21)
 Other                             2,337      1,547
                                 -------    -------
  Total non-interest expense       8,227      6,043
                                 -------    -------
Income before income taxes         3,538      3,242
Income tax expense                 1,256      1,238
                                 -------    -------
Net income                      $  2,282   $  2,004
                                 =======    =======

Basic earnings per share           $0.48      $0.41
Diluted earnings
  per share                        $0.48      $0.40
Basic weighted average shares
  outstanding                  4,744,871  4,853,831
Common stock equivalents
  due to dilutive effect
  of stock options                55,817    190,890
Diluted total weighted average
  shares outstanding           4,800,688  5,044,721

See accompanying condensed notes to consolidated financial statements.
                                       3
<PAGE>
<TABLE>
                             BOSTONFED BANCORP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Changes in Stockholders' Equity
                                Three Months Ended March 31, 2000
                                         (In Thousands)
                                          (Unaudited)
                                                                          Accumulated                 Unearned
                                                                            other                     Stock-
                                        Additional                      Comprehensive  Unallocated    Based        Total
                                Common    paid-in   Retained  Treasury      income        ESOP      Incentive   stockholders'
                                stock     capital   earnings    Stock       (loss)       shares        Plan        equity
                                ------   --------  ---------   --------   ----------   -----------  ----------  ------------
<S>                             <C>       <C>        <C>       <C>            <C>         <C>          <C>          <C>
Balance at December 31, 1999    $ 66       67,198     50,481    (28,532)     (1,485)      (1,663)       (361)         85,704

Net income                       - -         - -       2,282       - -         - -           - -         - -          2,282

Change in net unrealized gain/(loss)
 on investments available for sale
 (net of tax of $396)            - -         - -        - -        - -          501          - -         - -            501
                                                                                                                    --------
Total comprehensive income       - -         - -        - -        - -         - -           - -         - -          2,783

Cash dividends declared and
 paid ($0.12 per share)          - -         - -        (587)      - -         - -           - -         - -           (587)

Common Stock repurchased
 (68,600 shares at an average
  price of $15.63 per share)     - -         - -        - -     (1,073)        - -           - -         - -         (1,073)
Stock option exercised
 (3 shares at an average price
  $14.66 per share, net of tax
  benefit)                       - -          (13)      - -         52         - -           - -         - -             39

Allocation relating to earned
  portion of Stock-Based
  Incentive Plan                 - -         - -        - -       - -          - -           - -          69             69

Appreciation in fair value of
  shares charged to expense for
  compensation plans             - -           75       - -       - -          - -           - -         - -             75

                               -------    -------   --------   ---------    ---------      --------   ---------    --------
Balance at March 31, 2000       $ 66       67,260     52,176   (29,553)         (984)      (1,663)      (292)        87,010
                               -------    -------   --------   ---------    ---------      --------   ---------    --------

See accompanying condensed notes to consolidated financial statements.
                                       4
</TABLE>
<PAGE>


           BOSTONFED BANCORP, INC. AND SUBSIDIARIES
            Consolidated Statements of Cash Flows
                        (In Thousands)

                                                 For the Three Months Ended
                                                         March 31,
                                                    2000          1999
                                                   -------       -------
                                                      (Unaudited)
Net cash flows from operating activities:
    Net income                                  $    2,282    $    2,004
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Depreciation, amortization and
       accretion, net                                  629           337
      Earned SIP shares                                 69           121
      Appreciation in fair value of shares
       charged to expense for compensation plans        75           158
      Income from bank owned life insurance           (314)            -
      Provision for loan losses                        251           430
      Provision for valuation allowance for
       real estate owned                                 6             -
      Loans originated for sale                    (61,081)      (80,743)
      Proceeds from sale of loans                   62,636        75,943
      Gain on sale of loans                         (1,908)         (764)
      Increase in accrued interest receivable         (237)         (220)
      Increase in prepaid expenses
       and other assets, net                          (712)         (544)
      Increase (Decrease)in accrued expenses and
       other liabilities, net                          251        (1,312)
                                                   --------       -------
          Net cash provided by (used in)
           operating activities                      1,947        (4,590)
                                                   --------       -------

Cash flows from investing activities:
  Net cash paid for Forward Financial                (994)            -
  Proceeds from maturities of investment
   securities held to maturity                           -         3,000
  Proceeds from maturities of investment
   securities available for sale                     1,000         5,075
  Purchase of investment securities
   available for sale                               (4,311)      (11,249)
  Purchase of FHLB and Federal Reserve Stock          (338)       (1,179)
  Principal payments on mortgage-backed
   securities available for sale                       398         2,492
  Principal payments on mortgage-
   backed securities held to maturity                  826         4,478
  Principal payments on investment
   securities available for sale                       140             -
  Increase in loans, net                           (26,631)      (33,841)
  Purchases of premises and equipment               (1,131)         (187)
  Proceeds from sale of real estate owned                -            47
                                                    -------       -------
       Net cash used in
         investing activities                      (31,041)      (31,364)
                                                    -------     ---------
                          -Continued on next page-
                                       5

<PAGE>
           BOSTONFED BANCORP, INC. AND SUBSIDIARIES
            Consolidated Statements of Cash Flows
                        (In Thousands)

                                                 For the Three Months Ended
                                                          March 31,
                                                    2000            1999
                                                   -------        -------
                                                      (Unaudited)

Cash flows from financing activities:
    Increase in deposit accounts                    38,417         1,700
    Repayments of Federal Home Loan
     Bank advances                                 (76,123)      (41,632)
    Proceeds from Federal Home Loan
     Bank advances                                  66,124        64,291
    Proceeds from other borrowings                   1,945             -
    Cash dividends paid                               (587)         (511)
    Common stock repurchased                        (1,073)       (1,188)
    Options exercised                                   39             -
    Decrease in advance payments by
     borrowers for taxes and insurance                  78           324
                                                  --------       -------

         Net cash provided by
            financing activities                    28,820        22,984
                                                   -------       -------

         Net decrease
          in cash and cash equivalents                (274)      (12,970)


Cash and cash equivalents at beginning of quarter   34,696        37,201
                                                   -------       -------

Cash and cash equivalents at end of quarter      $  34,422     $  24,231
                                                   =======       =======

Supplemental disclosure of cash flow
 information:
     Payments during
      the quarter for:

       Interest                                 $   12,630     $  10,543
                                                   =======       =======

       Taxes                                    $      351     $   2,621
                                                   =======       =======


See accompanying condensed notes to consolidated financial statements.
                                       6


<PAGE>
                         BOSTONFED BANCORP INC. AND SUBSIDIARIES
                 CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)


NOTE 1:  BASIS OF PRESENTATION

     The unaudited  consolidated  financial  statements as of March 31, 2000 and
December 31, 1999 and for the three-month  periods ended March 31, 2000 and 1999
of BostonFed Bancorp, Inc.,  ("BostonFed" or the "Company") and its wholly-owned
subsidiaries,  Boston  Federal  Savings Bank  ("BFS"),  Broadway  National  Bank
("BNB")  and BF  Funding  Corporation,  presented  herein,  should  be  read  in
conjunction with the consolidated  financial statements of the Company as of and
for the year  ended  December  31,  1999.

     The  unaudited  consolidated  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management, all necessary adjustments,  consisting
only of normal recurring accruals  necessary for a fair presentation,  have been
included.  The results of operations for the three-month periods ended March 31,
2000 and 1999 are not necessarily indicative of the results that may be expected
for the entire fiscal year.

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities."  This  statement  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, (collectively referred to as
"derivatives") and for hedging activities.  It requires that an entity recognize
all derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Under this statement,  an entity that elects to
apply hedge  accounting  is required to establish at the  inception of the hedge
the method it will use for assessing the effectiveness of the hedging derivative
and the  measurement  approach for  determining  the  ineffective  aspect of the
hedge.  In June 1999, the FASB issued SFAS No. 137,  "Accounting  for Derivative
Instruments and Hedging  Activities - Deferral of the Effective Date of SFAS No.
133",  which  defers  the  effective  date of SFAS No.  133 to  fiscal  quarters
beginning after June 15, 2000. The adoption of these  statements is not expected
to have a material impact on the Company.


NOTE 2:  COMMITMENTS,  CONTINGENCIES AND CONTRACTS

     At March  31,  2000,  the  Company  had  commitments  of $72.2  million  to
originate  mortgage loans and $10.9 million to purchase loans from correspondent
lenders. Of these $83.1 million commitments,  $76.4 million were adjustable rate
mortgage loans with interest rates ranging from 6.75% to 10.00% and $6.7 million
were fixed rate mortgage  loans with interest rates ranging from 7.60% to 9.88%.
The Company also had commitments to sell $26.8 million of mortgage loans.

     At March 31,  2000,  the  Company was  servicing  first  mortgage  loans of
approximately  $853.6  million,  which are either  partially or  wholly-owned by
others.


NOTE 3:  LEGISLATIVE MATTERS

     Federal  Financial  Modernization   legislation,   formally  known  as  the
"Gramm-Leach-Bliley Act" was recently enacted by Congress and signed into law by
the  President  on November  12,  1999,  eliminates  many  federal and state law
barriers to affiliations among banks and other financial services providers. The
legislation,   which  takes  effect  120  days  after  the  date  of  enactment,
establishes a statutory  framework pursuant to which full affiliations can occur
between banks and securities  firms,  insurance  companies,  and other financial
companies.  The  legislation  provides some degree of flexibility in structuring
these  new  affiliations,  although  certain  activities  may only be  conducted
through a holding company structure. The legislation,  preserves the role of the
Board of Governors of the Federal Reserve System as the umbrella  supervisor for
holding companies,  but incorporates a system of functional  regulation pursuant
to which the various  federal and state financial  supervisors  will continue to
regulate  the  activities   traditionally   within  their   jurisdictions.   The
legislation  specifies that banks may not  participate  in the new  affiliations
unless the banks are  well-capitalized and well-managed or if any bank affiliate
had  received  a less than  "satisfactory"  Community  Reinvestment  Act of 1977
rating as of its most recent examination.

                                       7
<PAGE>

NOTE 4:  Business Segments

     The Company's  wholly-owned  bank  subsidiaries,  BFS and BNB (collectively
"the  Banks"),   have  been  identified  as  reportable  operating  segments  in
accordance with the provisions of SFAS No. 131,  "Disclosures  About Segments of
an  Enterprise  and  Related  Information."  BF Funding  Corp.,  a  wholly-owned
subsidiary of the Company,  and various  subsidiaries  of the Banks did not meet
the  quantitative  thresholds for  determining  reportable  segments.  The Banks
provide general banking services to their customers, including deposit accounts,
residential,  commercial, consumer and business loans. Each Bank also invests in
mortgage-backed  securities and other financial instruments.  In addition to its
own operations, the Company provides managerial expertise and other professional
services.  The  results of the  Company  and BF  Funding  comprise  the  "other"
category.

     The Company  evaluates  performance  and allocates  resources  based on the
Banks' net income,  net interest margin,  return on average assets and return on
average equity.  The Banks follow generally  accepted  accounting  principles as
described in the summary of  significant  accounting  policies.  The Company and
Banks  have  inter-company   expense  and  tax  allocation   agreements.   These
inter-company expenditures are allocated at cost. Inter-company asset sales were
accounted  for at  current  market  prices at the time of sale and  approximated
cost.

     Each Bank is managed separately. BNB is managed by a President and CEO, who
reports  directly to BNB's Board of  Directors.  BFS is managed by a CEO, who is
also the Company's CEO, and reports directly to BFS' and the Company's  Board of
Directors,  as applicable.  The following  table sets forth certain  information
about and the  reconciliation  of reported net income for each of the reportable
segments.
                                      8
<PAGE>
<TABLE>

<CAPTION>                                             (Dollars In Thousands)
                                                                TOTAL
                                                              REPORTABLE                                      CONSOLIDATED
                                      BFS         BNB          SEGMENTS         OTHER      ELIMINATIONS          TOTALS
                                   --------     --------     ------------      -------    --------------      ------------
<S>                             <C>             <C>         <C>               <C>           <C>                <C>
At or for the three-months
ended March 31, 2000:
     Interest income            $   19,557        2,185         21,742            47            (43)              21,746
     Interest expense               12,243          592         12,835           104            (43)              12,896
     Provision for loan losses         221           30            251                                               251
     Non-interest income             2,937          276          3,213                          (47)               3,166
     Non-interest expense            6,909        1,208          8,117           157            (47)               8,227
     Income tax expense              1,104          220          1,324           (68)                              1,256
     Net income                      2,017          411          2,428          (146)                              2,282
     Total assets                1,142,673      141,728      1,284,401        94,187        (92,540)           1,286,048
Net interest margin                  2.81%        5.22%           n.m.          n.m.            n.m.               3.04%
Return on average assets              .72%        1.18%           n.m.          n.m.            n.m.                .73%
Return on average equity            10.30%       13.97%           n.m.          n.m.            n.m.              10.41%

At or for the three-months
ended March 31, 1999:
     Interest income            $   17,240        2,152         19,392           284           (145)              19,531
     Interest expense               10,984          524         11,508                         (145)              11,363
     Provision for loan losses         400           30            430                                               430
     Non-interest income             1,366          181          1,547                                             1,547
     Non-interest expense            4,855        1,086          5,941           102                               6,043
     Income tax expense                893          273          1,166            72                               1,238
     Net income                      1,474          420          1,894           110                               2,004
     Total assets                1,015,285      135,755      1,151,040        85,692        (74,169)           1,162,563
Net interest margin                  2.49%        4.86%           n.m.          n.m.            n.m.               2.95%
Return on average assets              .59%        1.25%           n.m.          n.m.            n.m.                .70%
Return on average equity            10.90%       13.50%           n.m.          n.m.            n.m.               9.48%

n.m. = not meaningful

                                      9
</TABLE>
<PAGE>
<TABLE>

                                                   BOSTONFED BANCORP, INC. AND SUBSIDIARIES
                                                      Average Balances and Yields / Costs
                                                                     (Unaudited)
<CAPTION>
For the three months ended March 31:                              2000                                      1999
                                                -------------------------------------       ------------------------------
                                                                             Average                                  Average
                                                  Average                     Yield/         Average                   Yield/
                                                  Balance       Interest       Cost          Balance      Interest      Cost
                                                ----------     ----------   ---------       ---------    ----------  ---------
                                                                             (Dollars in thousands)
Assets:
<S>                                            <C>              <C>          <C>          <C>              <C>           <C>
Interest-earning assets:
 Investment securities (1)                     $    82,990      $ 1,387      6.69%        $   87,078       $ 1,257       5.77%
 Loan, net and mortgage loans held for sale (2)  1,039,444       19,661      7.57%           977,834        17,658       7.22%
 Mortgage-backed securities (3)                     43,234          698      6.46%            40,838           616       6.03%
                                                ----------    ---------                     ---------    ----------
   Total interest-earning assets                 1,165,668       21,746      7.46%         1,105,750        19,531       7.07%
                                                              ---------     ---------                    ----------  ---------
 Non-interest-earning assets                        92,905                                    45,290
                                                ----------                                  ---------
   Total assets                                $ 1,258,573                                $1,151,040
                                                ==========                                  =========

Liabilities and Stockholders' Equity:

Interest-bearing Liabilities:
 Money market deposit accounts                 $   56,205          398      2.83%        $   59,832           426       2.85%
 Savings accounts                                 149,999          980      2.61%           132,372           779       2.35%
 NOW accounts                                     112,907          216      0.77%           108,568           261       0.96%
 Certificate accounts                             399,253        5,586      5.60%           341,398         4,809       5.63%
                                                ----------    ---------                    ---------    ----------
   Total                                          718,364        7,180      4.00%           642,170         6,275       3.91%
 Borrowed Funds (4)                               387,068        5,716      5.91%           357,564         5,088       5.69%
                                                ----------    ---------                    ---------    ----------
   Total interest-bearing liabilities           1,105,432       12,896      4.67%           999,734        11,363       4.55%
                                                              ---------    ---------                    ----------  ---------
 Non-interest-bearing liabilities                  65,435                                    66,735
                                                ----------                                 ---------
   Total liabilities                            1,170,867                                 1,066,469
                                                ----------                                 ---------
 Stockholders' equity                              87,706                                    84,571
                                                ----------                                 ---------
   Total liabilities and
    stockholders' equity                       $1,258,573                                $1,151,040
                                                ==========                                 =========
 Net interest rate spread (5)                                  $ 8,850      2.79%                         $ 8,168       2.52%
                                                              =========    =========                    ==========  =========
 Net interest margin (6)                                                    3.04%                                       2.95%
                                                                           =========                                =========
Ratio of interest-earning assets to
 interest-bearing liabilities                     105.45%                                   110.60%
                                                 =========                                 =========
<FN>
(1) Includes investment securities available for sale and held to maturity,
    short-term investments, stock in FHLB-Boston and daily federal funds sold.
(2) Amount is net of deferred loan origination costs, construction loans in
    process, net unearned discount on loans purchased and allowance for loan
    losses and includes non-performing loans.
(3) Includes mortgage-backed securities available for sale and held to maturity.
(4) Interest paid on borrowed funds for the periods presented includes
    interest expense on FNMA deposits held in escrow accounts with the
    Company related to the Company's FNMA servicing, which, if such interest
    expense were excluded, would result in an average cost of borrowed funds
    of 5.90% and 5.65% for the three months ended March 31, 2000 and
    March 31, 1999, respectively.
(5) Net interest rate spread represents the difference between the weighted
    average yield on interest-earning assets and the weighted average cost of
    interest-bearing liabilities.
(6) Net interest margin represents net interest income as a percentage of
    average interest-earning assets.

</FN>
</TABLE>

                                       10
<PAGE>

          MANAGEMENTS'S DISCUSSTION AND ANALYSIS OF FINACNCIAL CONDITION
                           AND RESULTS OF OPERATIONS

A.  GENERAL

     The Company is the holding  company  for two banking  subsidiaries,  Boston
Federal Savings Bank, a federally  chartered savings bank, and Broadway National
Bank, a nationally  chartered  commercial  bank.  Each is  considered a business
segment and  accordingly  the Company has  complied  with the segment  reporting
requirement in Note 4 of this document and in discussion  herein as appropriate.
On  February  7,  1997,  the  Company  acquired  BNB  and  as a  result  of  the
acquisition,  the Company became a bank holding company subject to regulation by
the Federal  Reserve Bank ("FRB").  Boston Federal  Savings Bank is regulated by
the Office of Thrift  Supervision and Broadway National Bank is regulated by the
Office of the  Comptroller  of the  Currency  ("OCC").  On August 4,  1999,  the
Company  entered  into a Purchase  and Sale  Agreement by and among the Company,
Diversified   Ventures,   Inc.,  d/b/a  Forward   Financial   Company  ("Forward
Financial"),  Ellsmere Insurance Agency, Inc. ("Ellsmere") and Gene J. DeFeudis,
pursuant to which BFS purchased all of the outstanding  capital stock of Forward
Financial and BNB purchased all of the outstanding  capital stock of Ellsmere in
a  cash  transaction  for  approximately  $38.3  million.  The  transaction  was
consummated at the close of business on December 6, 1999 and was recorded by the
use of the  purchase  method of  accounting.  During March 2000,  an  additional
$975,000  was paid by BFS to Mr.  DeFeudis  in order to  satisfy  the  remaining
payments due Mr. DeFeudis in connection with the acquisition,  which payment was
based on certain performance agreed to by the parties.  Substantially all of the
Company's  business is coordinated  through its subsidiary  banks and references
herein to "Company"  include the banks as appropriate.  The Company's  principal
business  has been and  continues  to be  attracting  retail  deposits  from the
general public in the areas  surrounding  its branch offices and investing those
deposits,   together  with  funds  generated  from  operations  and  borrowings,
primarily in one- to four-family residential mortgage loans. To a lesser extent,
the  Company  invests  in  multi-family   mortgages,   commercial  real  estate,
construction   and  land,   consumer  loans,   business  loans,  and  investment
securities.  The Company  originates  loans for investment and loans for sale in
the secondary market,  generally  retaining the servicing rights for loans sold.
Through Forward Financial,  the Company also originates consumer loans primarily
with  customers  purchasing  or  refinancing  manufactured  homes,  recreational
vehicles,  marine and leased equipment and subsequently sells  substantially all
of such loans,  servicing  released.  Loan sales are made from loans held in the
Company's  portfolio  designated as being held for sale or  originated  for sale
during the period. The Company's revenues are derived  principally from interest
on its mortgage  loans,  and to a lesser  extent,  interest and dividends on its
investments and  mortgage-backed  securities,  fees,  gains on sale of loans and
loan  servicing  income.  The  Company's  primary  sources  of funds are  retail
deposits,  wholesale brokered deposits, principal and interest payments on loans
and  mortgage-backed  securities,  FHLB advances,  other borrowings and proceeds
from the sale of loans.



B. YEAR 2000 ISSUE

     Due to the  extensive  planning and testing  during the  three-years  ended
December  31,  1999,  the  Company  was able to begin the Year 2000  without any
interruption  in its  operations,  whatsoever.  Included  in other  non-interest
expenses  during the  three-month  period  ended March 31,  1999,  were  charges
incurred in connection  with the  modification  or  replacement  of software and
hardware in order for the Company's  computer systems to properly  recognize the
Year  2000.  The  expense  incurred  totaled   approximately   $50,000  for  the
three-month  period ended March 31, 1999.  No Year 2000  related  expenses  were
incurred in the period ended March 31, 2000.

C. FINANCIAL CONDITION


Total assets at March 31, 2000 were $1.286  billion,  compared to $1.254 billion
at December  31,  1999,  an increase  of $32 million or 2.6%.  Asset  growth was
primarily attributable to a $50.1 million increase in mortgage-backed securities
held to maturity,  partially offset by a $24.6 million decrease in loans, net of
allowance for loan losses. Mortgage-backed securities held to maturity increased
from $13.9  million at December 31, 1999 to $64.1 million at March 31, 2000 due
to the  securitization of $51.0 million of loans into Federal Home Loan Mortgage
Corporation  ("FHLMC")  securities.  Loans, net, declined from $1.033 billion at
December  31, 1999 to $1.008  billion at March 31, 2000.  Investment  securities
available for sale also  contributed to asset growth by increasing  $4.2 million
form $53.2 million at December 31, 1999 to $57.4 million at March 31, 2000.

                                      11
<PAGE>

Deposit accounts  increased by $38.4 million,  or 5.0%, from a balance of $770.0
million at December  31, 1999 to a balance of $808.5  million at March 31, 2000.
Approximately  $10.8 million of the deposit account balance  increase was due to
the Company's acquisition of wholesale brokered certificates of deposit. Federal
Home Loan Bank advances and other  borrowings  decreased by $8.1  million,  to a
balance of $379.5  million at March 31, 2000 from a balance of $387.6 million at
December 31, 1999.

D.  LIQUIDITY AND CAPITAL RESOURCES

The  Company's  primary  sources  of funds  are  deposits,  (including  brokered
deposits),    principal   and   interest   payments   on   loans,   investments,
mortgage-backed  and  related  securities  and loan  sales,  FHLB  advances  and
repurchase agreements.  While maturities and scheduled amortization of loans are
predictable sources of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates,  economic conditions and competition.  The
Company has maintained in excess of the required minimum levels of liquid assets
at BFS as defined by OTS regulations.  This requirement,  which may be varied at
the direction of the OTS depending  upon economic  conditions and deposit flows,
is based upon a  percentage  of the BFS's  deposits and  short-term  borrowings.
BFS's current required liquidity ratio is 4%. At March 31, 2000 and December 31,
1999  BFS's  liquidity  ratio was 10.8% and 6.9%  respectively.  Management  has
maintained  liquidity as close as possible to the minimum requirement so that it
may invest any excess  liquidity in higher yielding  interest-earning  assets or
use  such  funds to  repay  higher  cost  FHLB  advances.  The OCC does not have
specific  guidance  for  liquidity  ratios for BNB,  but does  require  banks to
maintain  reasonable  and prudent  liquidity  levels.  Management  believes such
levels have been maintained.

     The Company's  most liquid assets are cash,  overnight  federal funds sold,
and loans and  investments  available  for sale.  The levels of these assets are
dependent  on  the  Company's  operating,   financing,   lending  and  investing
activities  during any given  period.  At March 31, 2000,  BFS' cash,  loans and
investments  available for sale totaled $77.1 million or 6.7% of BFS's total
assets.  While not all of these  liquid  assets  qualify  for  BFS's  regulatory
liquidity  requirements,  other assets in the held to maturity  category qualify
for regulatory liquidity requirements.

     The Company has other sources of liquidity if a need for  additional  funds
arises,  including  FHLB  advances.  At March 31,  2000,  the Company had $374.5
million in advances  outstanding  from the FHLB. The Company  generally does not
pay the highest deposit rates in its market and accordingly utilizes alternative
sources  of  funds  such as  FHLB  advances,  wholesale  brokered  deposits  and
repurchase agreements to supplement cash flow needs.

     At March 31,  2000,  the Company had  commitments  to  originate  loans and
unused  outstanding  lines of  credit  totaling  $193.50  million.  The  Company
anticipates  that it will have  sufficient  funds  available to meet its current
loan origination commitments. Certificate accounts which are scheduled to mature
in less than one year from March 31, 2000, totaled $265.4 million.

     At March 31, 2000, the  consolidated  stockholders'  equity to total assets
ratio was 6.8%. As of March 31, 2000,  the Company,  BFS and BNB exceeded all of
their  regulatory  capital  requirements.  The  Company's  consolidated  tier  1
capital,  total  capital and Tier 1 leverage  ratios were 9.0%,  10.2% and 5.4%,
respectively.  BFS's tier 1, total  risk-based,  tier 1 risk-based  and tangible
equity capital ratios were 5.5%, 10.1%, 9.0% and 5.5%, respectively. BNB's total
risk-based,  tier 1 risk-based  and tier 1 leverage  capital  ratios were 12.8%,
12.0%, and 6.4%, respectively.

                                      12

<PAGE>
E.  COMPARISON OF THREE-MONTHS ENDED MARCH 31, 2000 AND 1999

   General

     Earnings for the quarter  ended March 31, 2000 were $2.3  million,  or $.48
basic and diluted earnings per share,  compared to earnings of $2.0 million,  or
$.41 basic and $.40 diluted  earnings  per share for the first  quarter of 1999.
The current  quarter's  earnings  amount to a 17% increase in basic earnings per
share and a 20% increase in diluted  earnings per share  compared to last year's
first quarter.  The Company's  annualized  return on average assets was .73% and
the  annualized  return on average  stockholders'  equity  was 10.4%  during the
three-months ended March 31, 2000, compared to .70% and 9.5%, respectively,  for
the  three-months  ended March 31, 1999  (annualized).  Comments  regarding  the
components of net income are detailed in the following paragraphs.

   Interest Income

     Total  interest  income on  interest-earning  assets for the quarter  ended
March 31, 2000 increased by $2.2 million,  or 11.3%, to $21.7 million,  compared
to the  quarter  ended March 31,  1999.  The  increase  in  interest  income was
attributable  to the  combined  effects of a $59.9  million  increase in average
interest-earning  assets and a 39 basis point increase in the average yield. The
average yield on interest-earning assets increased to 7.46% for the three months
ended March 31, 2000 from 7.07% for the three months ended March 31, 1999.


     Interest on mortgage-backed securities for the quarter ended March 31, 2000
increased by $82,000 to  $698,000,  compared to $616,000 for the same quarter in
1999. This decrease in income was due to the combined  effects of a $2.4 million
higher average balance,  which increased to $43.2 million,  and a 43 basis point
increase in the average yield, which increased to 6.46% during the quarter ended
March 31, 2000, compared to the quarter ended March 31, 1999.


     Income from investment securities was $130,000 higher for the quarter ended
March 31, 2000  compared to the quarter  ended March 31, 1999.  The increase was
due  to a 92  basis  point  improvement  in  the  average  yield  on  investment
securities  in the current  quarter,  partially  offset by the effects of a $4.1
million  decrease in the average  balance in the quarter  ended March 31,  2000,
compared to the quarter ended March 31, 1999.

                                      13
<PAGE>

   Interest Expense

     Total  interest  expense on  interest-bearing  liabilities  for the quarter
ended  March 31,  2000  increased  by $1.5  million or 13.5%,  to $12.9  million
compared to the quarter ended March 31, 1999.  The increase in interest  expense
for the quarter  ended March 31, 2000 was due primarily to an increase of $105.7
million in the average balance of interest-bearing  liabilities,  which averaged
$1.105 billion  during the current  quarter,  compared to an average  balance of
$999.7 million during the quarter ended March 31, 1999. The increase in interest
expense  was also  partially  caused by an  increase  of 12 basis  points in the
average cost of interest-bearing  liabilities during the quarter ended March 31,
2000. The average cost of interest-bearing liabilities increased to 4.67% during
the quarter ended March 31, 2000,  compared to 4.55% for last year's  comparable
quarter. The increase was due to generally rising market interest rates.


     Interest expense on deposit accounts was $7.2 million for the quarter ended
March 31,  2000,  an increase of $905,000  from the $6.3 million for the quarter
ended March 31,  1999.  The  increase in the  expense  was  primarily  due to an
increase in the deposit  account  balances of $76.2 million.  A major portion of
the deposit growth was attributable to the Company's  wholesale brokered deposit
acquisition  program.  Also contributing to the increase in the interest expense
on deposit  accounts  was a nine basis point  increase  in the  average  cost of
deposits during the quarter ended March 31, 2000,  compared to the quarter ended
March 31, 1999.  Average  deposit  balances  increased to $718.4 million for the
quarter ended March 31, 2000 from $642.2  million for the prior year  comparable
quarter.  The cost of funds  increased due to rising interest rates paid on most
types of deposit accounts.


     Interest  expense on borrowed  funds  increased  from $5.1  million for the
quarter  ended March 31,  1999 to $5.7  million  for the  current  quarter.  The
increased  interest expense was due to the combined effects of an increase of 22
basis  points in the  average  cost of  borrowed  funds  and the  $29.5  million
increase in the average balance during the quarter ended March 31, 2000 compared
to the quarter  ended March 31, 1999.  During the quarter  ended March 31, 2000,
average borrowed funds were $387.1 million and cost an average of 5.91%, whereas
the average  balance of borrowed  funds were $357.6 million with an average cost
of 5.69% during the quarter ended March 31, 1999.


Net Interest Income

     Net  interest  income  during the first  quarters of 2000 and 1999 was $8.9
million and $8.2 million,  respectively,  as increased net interest rate spreads
and margins combined with increases in  interest-earning  assets  contributed to
the improvement in net interest income.  The net interest  margin,  at 3.04% for
the quarter  ended March 31, 2000 was nine basis points  higher than last year's
comparable quarter.

                                      14
<PAGE>

Provision for Loan Losses

     The  Company's  provision  for loan losses  amounted  to  $251,000  for the
quarter ended March 31, 2000,  compared to the $430,000 loan loss  provision for
the comparable  quarter last year. A lower provision was recorded in the current
quarter  as the  current  level of the  allowance  for loan  losses  was  deemed
adequate.  The allowance for loan losses was $10.7 million at March 31, 2000 and
December 31, 1999.


     The Company  establishes  provisions for loan losses,  which are charged to
operations,  in order to maintain the allowance for loan losses at a level which
is deemed to be appropriate  based upon size and type of loans and  management's
assessment  of the risk  inherent  in its  loan  portfolio  in light of  current
economic conditions,  actual loss experience,  industry trends and other factors
which may  affect  the real  estate  values in the  Company's  market  area.  In
addition,  various regulatory agencies, as an integral part of their examination
process,  periodically  review the  Company's  allowance  for loan losses.  Such
agencies may require the Company to make  additional  provisions  for  estimated
loan losses based upon  judgements  different  from those of  management.  While
management  believes the current  allowance for loan losses is adequate,  actual
losses are dependent upon future events, and as such, future provisions for loan
losses may be necessary.  As part of the Company's determination of the adequacy
of the  allowance  for loan  losses,  the Company  monitors  its loan  portfolio
through its Asset  Classification  Committee.  The  Committee  classifies  loans
depending on risk of loss characteristics. The most severe classification before
a  charge-off  is required is  "sub-standard."  At March 31,  2000,  the Company
classified  $4.4  million of loans ($3.8  million at BFS and $604,000 at BNB) as
sub-standard  compared to $3.6 million ($3.0 million of BFS and $579,000 of BNB)
at December 31, 1999. The Asset Classification Committee, which meets quarterly,
determines  the  adequacy  of the  allowance  for loan  losses  through  ongoing
analysis of historical loss experience,  the composition of the loan portfolios,
delinquency levels,  underlying collateral values, cash flow values and state of
the real estate economy.  Utilizing these procedures,  management  believes that
the  allowance  for loan losses at March 31, 2000 was  sufficient to provide for
anticipated losses inherent in the loan portfolio.

     The  Company's  allowance  for loan  losses  at March  31,  2000 was  $10.7
million,  which  represented  1,039% of  non-performing  loans or 1.04% of total
loans,   compared  to  $10.7   million  at  December  31,  1999,  or  1,428%  of
non-performing loans and 1.01% of total loans. Management believes this coverage
ratio  is  prudent  due  to  the  balance  increase  in the  combined  total  of
construction  and land,  commercial real estate,  multi-family,  home equity and
improvement,  consumer and business loans. These combined balances  approximated
$236 million at March 31, 2000 and December 31 1999.

     Non-performing  loans at March 31, 2000  amounted to  $1,032,000 or .10% of
total loans, compared to $746,000, or .07% of total loans, at December 31, 1999.

     The amount of interest income on non-performing  loans that would have been
recorded had these loans been current in accordance  with their original  terms,
was $21,000 and $26,000  for the  three-month  periods  ended March 31, 2000 and
1999,  respectively.  The amount of interest  income that was  recorded on these
loans was $7,000 and $11,000 for the  three-month  periods  ended March 31, 2000
and 1999, respectively.

     At March 31,  2000,  loans  characterized  as impaired,  totaled  $234,000.
During the  three-months  ended March 31, 2000,  the average  recorded  value of
impaired loans was $234,000, $3,000 interest income was recognized and $4,000 of
interest income would have been recognized under the loans' original terms.

     At March 31, 2000 and at December  31,  1999,  the Company had $370,000 and
$376,000 in real estate owned,  respectively.  Further,  at March 31, 2000,  the
Company also had restructured  real estate loans amounting to $234,000 for which
interest is being recorded in accordance with the loans' restructured terms. The
amount of the interest income lost on these  restructured  loans is not material
to the Company's financial statements.

                                      15
<PAGE>

Non-Interest Income

     Total  non-interest  income in the first quarter of 2000  increased by $1.6
million, or 104.7%, to $3.2 million from $1.5 million for the three months ended
March 31, 1999. The largest component of non-interest income was gain on sale of
loans, which increased to $1.9 million for the quarter ended March 31, 2000 from
$764,000  for the quarter  ended March 31,  1999.  The gain on sale of loans was
higher due to the  inclusion of $1.6 million of gain on sale of loans by Forward
Financial.  The gains on sale of mortgage loans that BFS recorded in the quarter
ended  March 31,  2000 were lower  than last  year's  comparable  quarter as the
volume of mortgage loans sold  declined.  Additionally,  a higher  percentage of
mortgage loans sold have been adjustable-rate loans, which generally are sold at
lower  profit  margins.  BFS sold $41.7  million of  mortgage  loans  during the
quarter  ended  March 31,  2000  compared  to $75.2  million  during last year's
comparable quarter.  Other non-interest income increased to $1.1 million for the
quarter  ended  March 31,  2000 from  $622,000  for the  prior  year  comparable
quarter.  The primary reason for this increase was due to the Company's purchase
of a $20 million  bank-owned  life insurance  policy  ("BOLI")in  July 1999. The
increase in the cash surrender  value of the policy is recorded as  non-interest
income.


Non-Interest Expense

     Total non-interest expenses increased to $8.2 million for the quarter ended
March 31, 2000 from $6.0 million for the quarter ended March 31, 1999, primarily
due to the  inclusion of Forward  Financial's  expenses in the current  quarter.
Compensation  and  benefits  expense  increased  from $3.6 million for the first
quarter  of  1999  to  $5.1  million  for the  current  quarter  due to  Forward
Financial's  compensation  and benefits  expenses of $763,000,  normal year over
year increases and BFS' higher compensation levels due to additional staff hired
to expand the Company's  corporate lending  department.  Occupancy and equipment
expenses  increased  from  $797,000 for the quarter ended March 31, 1999 to $1.0
million  for the  current  quarter  primarily  due to the  inclusion  of Forward
Financial's  expenses.  Federal deposit insurance premiums declined from $94,000
for the quarter  ended March 31, 1999 to $39,000 for the current  quarter due to
the  Federal  Deposit  Insurance  Corporation's  ("FDIC")  change  in  assessing
insurance  premiums.  Real estate operations  provided income of $287,000 in the
quarter  ended March 31, 2000 compared to income of $21,000 in the first quarter
of 1999. The current  quarter's income is larger due to income recognized in the
dissolution of a real estate subsidiary of BFS. Other non-interest expenses were
$2.3 million for the quarter ended March 31, 2000,  compared to $1.5 million for
the  quarter  ended  March 31,  1999.  The  increase  was  primarily  due to the
inclusion  of Forward  Financial's  non-interest  expenses  during  the  current
quarter.


Income Tax Expense

     Income tax expense for the quarters  ended March 31, 2000 and 1999 was $1.3
million and $1.2 million,  respectively. The effective income tax rate was 35.5%
during the current  quarter,  compared to 38.2% for the quarter  ended March 31,
1999.  The  effective  tax rate was lower during the current  quarter due to the
effects  of BOLI  and a  lower  non-deductible  Employee  Stock  Ownership  Plan
("ESOP") expense.

                                      16

<PAGE>
Item 3. MARKET RISK AND MANAGEMENT OF INTEREST RATE RISK


     The principal  market risk affecting the Company is interest rate risk. The
objective of the Company's interest rate risk management function is to evaluate
the interest rate risk included in certain balance sheet accounts, determine the
level of risk  appropriate  given the  Company's  business  strategy,  operating
environment,  capital and liquidity requirements and performance objectives, and
manage the risk consistent with Board of Directors' approved guidelines. Through
such management, the Company seeks to reduce the vulnerability of its operations
to changes in interest  rates.  The Company  monitors its interest  rate risk as
such risk relates to its operating strategies.  The Company's Board of Directors
has established a management  Asset/Liability  Committee that is responsible for
reviewing  the  Company's  asset/  liability  policies  and  interest  rate risk
position.  The Committee  meets  frequently and reports trends and interest rate
risk position to the Board of Directors on a quarterly  basis. The extent of the
movement of interest rates is an uncertainty  that could have a negative  impact
on the earnings of the Company.

     In recent  years,  the Company has utilized  the  following  strategies  to
manage  interest rate risk: (1)  emphasizing  the  origination  and retention of
adjustable-rate,  mortgage loans; (2) generally  selling in the secondary market
substantially all fixed-rate mortgage loans originated with terms of 15 years or
greater while generally  retaining the servicing  rights thereof;  (3) primarily
investing in short-term investment securities or mortgage-backed securities with
adjustable  interest  rates;  and (4) attempting to reduce the overall  interest
rate sensitivity of liabilities by emphasizing  longer-term retail and wholesale
deposits and utilizing  longer-term  FHLB advances to replace  short-term,  rate
sensitive deposits.

     The matching of assets and  liabilities  may be analyzed by  examining  the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring the Company's  interest rate sensitivity "gap." An asset or liability
is said to be interest rate  sensitive  within a specific time period if it will
mature or reprice within that time period.  The interest rate sensitivity gap is
defined as the difference between the amount of interest-earning assets maturing
or repricing  within a specific  time period and the amount of  interest-bearing
liabilities maturing or repricing within that time period. These differences are
a primary  component of the risk to net  interest  income.  A gap is  considered
positive when the amount of interest rate sensitive assets exceeds the amount of
interest  rate  sensitive  liabilities.  A gap is  considered  negative when the
amount of interest  rate  sensitive  liabilities  exceeds the amount of interest
rate sensitive assets. Accordingly, during a period of rising interest rates, an
institution with a positive gap position would be in a better position to invest
in higher  yielding assets which,  consequently,  may result in the yield on its
assets  increasing  at a pace more closely  matching the increase in the cost of
its interest-bearing  liabilities than if it had a negative gap. During a period
of falling interest rates, an institution with a positive gap would tend to have
its  assets  repricing  at a faster  rate than one with a  negative  gap  which,
consequently, may tend to restrain the growth of its net interest income.

     Certain  shortcomings are inherent in gap analysis.  For example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods to
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Also, the interest rates on certain types of assets and  liabilities may
fluctuate in advance of changes in market interest  rates,  while interest rates
on other types may lag behind  changes in market  rates.  Additionally,  certain
assets,  such as adjustable-rate  loans, have features which restrict changes in
interest  rates  both on a  short-term  basis  and over  the life of the  asset.
Further,  in the  event of  change  in  interest  rates,  prepayment  and  early
withdrawal  levels  would likely  deviate  significantly  from those  assumed in
calculating the table.  Finally,  the ability of many borrowers to service their
adjustable-rate loans may decrease in the event of an interest rate increase.

     At March 31, 2000, the Company's one year gap was a negative  6.29% of
total assets, compared to a positive 8.5% of total assets at December 31, 1999.

     The Company's  interest rate  sensitivity  is also  monitored by management
through the use of a model which internally generates estimates of the change in
net portfolio value (NPV") over a range of interest rate change  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.

                                      17

<PAGE>

     As in the case with the gap analysis,  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 used assumes that the composition
of the  Company'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 Company'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 Company's net interest  income and will differ from actual
results.  See the Company's Form 10-K for the year ended December 31, 1999 for a
detail of the GAP and NPV tables. There have been no material changes in the net
portfolio value since December 31, 1999.

     In  addition  to  historical   information,   this  10-Q  includes  certain
forward-looking statements based on current management expectations.  Generally,
verbs in the future  tense and the  words,  "believe",  "expect",  "anticipate",
"intends",   "opinion",    "potential",   and   similar   expressions   identify
forward-looking statements.  Examples of this forward-looking information can be
found  in,  but are  not  limited  to,  the  allowance  for  losses  discussion,
subsequent  events and any quantitative and qualitative  disclosure about market
risk. 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 the Company'
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.  These  risks and  uncertainties  should  be  considered  in  evaluating
forward-looking  statements  and  undue  reliance  should  not be placed on such
statements.  Further  information  concerning  the  Company  and  its  business,
including   additional  factors  that  could  materially  affect  the  Company's
financial results,  is included in the Company's filings with the Securities and
Exchange Commission.

     The Company does not undertake,  and specifically disclaims any obligation,
to  publicly  release  the  result  of any  revisions,  which may be made to any
forward-looking statements, to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.


                                      18
<PAGE>

                         PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     Except as  described  below,  the  Company is not  involved  in any pending
material legal proceedings other than routine legal proceedings occurring in the
ordinary course of business.  Such routine legal proceedings,  in the aggregate,
are believed by management to be immaterial to the Company's financial condition
or results of operations.  Broadway National Bank, a national bank subsidiary of
the Company,  was named a defendant in the  Superior  Court for Suffolk  County,
Massachusetts,  civil  action No.  SUCV  99-018F  served on April 12,  1999 in a
matter  captioned  "Glyptal,  Inc. v. John  Hetherton,  Jr.,  Fleet Bank, NA and
Broadway  National  Bank of  Chelsea."  The suit  alleges that an officer of the
Plaintiff,  Glyptal,  embezzled  funds from  Plaintiff,  by making  unauthorized
transfers from Plaintiff's corporate accounts and subsequently  deposited checks
drawn on such  account  into an account at  Broadway  National  Bank.  Plaintiff
alleges  that  Broadway  National  Bank knew or should have known of the alleged
fraudulent actions of Plaintiff's  Officer, and that Broadway National Bank owed
a duty to Plaintiff to investigate the transactions  and protect  Plaintiff from
the alleged fraudulent actions. The Plaintiff is seeking damages for the alleged
breach of duty by the  defendants.  Broadway  National  Bank intends to deny the
allegations  that it owed or breached any duty to Plaintiff or that it is liable
for any  losses  incurred  by  Plaintiff.  Broadway  National  Bank  intends  to
vigorously  defend the action and believes the action is not likely to result in
any material loss or adverse effect on the financial condition of the Company.


Item 2.  Changes in Securities and Use of Proceeds

       Not applicable

Item 3.  Defaults Upon Senior Securities

       Not applicable

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

        None

Item 5.  Other Information

        None

Item 6.  Exhibits and Reports on Form 8-K

    (a) Exhibits
          3.1  Restated Certificate of Incorporation*
          3.2  Amended and Restated Bylaws as of February 23, 2000**
          27   Financial Data Schedule

     *  Incorporated  herein by reference  into this document from Exhibits 3.1,
4.0  and  10.5 to the  Form  S-1,  Registration  Statement,  and any  amendments
thereto, originally filed on July 21, 1995, as amended and declared effective on
September 11, 1995. Registration No. 333-94860.

     **  Incorporated  herein by reference in to this  document from Exhibit 3.2
filed with Form 10-K on March 30, 2000.

                                      19

<PAGE>

                                  SIGNATURES



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the

registrant  has duly  caused  this  report  to be  signed  on its  behalf by the

undersigned thereunto duly authorized.


                                           BOSTONFED BANCORP, INC.
                                                  (Registrant)


Date:  May 11, 2000                         By:     /s/ David F. Holland
                                        __________________________________
                                                     David F. Holland
                                                     President and
                                                 Chief Executive Officer


Date:  May 11, 2000                         By:     /s/ John A. Simas
                                        __________________________________
                                                     John A. Simas
                                                  Executive Vice President,
                                                  Corporate Secretary and Chief
                                                  Financial Officer (Principal
                                                  financial and accounting
                                                  Officer)

                                       20