##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------



For the fiscal year ended DECEMBER 31, 2003



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from  to



Commission File No. 0-18014



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PAMRAPO BANCORP, INC.

(Exact name of registrant as specified in its charter)



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|                                                                          |  |                                                
|------------------------------------------------------------------------- |  | -----------------------------------------------
|NEW JERSEY (State or other jurisdiction of incorporation or organization) |  | 22-2984813 (I.R.S. Employer Identification No.)



611 AVENUE C,
BAYONNE, NEW JERSEY 07002

(Address and zip code of principal executive offices)



Registrants telephone number, including area code: (201) 339-4600

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:



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Common Stock, par value $0.01 per share

(Title of class)



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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. x



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ̈No x



The aggregate market value, based upon the last sales price as quoted on The Nasdaq Stock Market for June 30, 2003, of the voting stock held by non-affiliates of the registrant, i.e., persons other than directors and
executive officers of the registrant, is approximately $65,276,000. The aggregate market value, based upon the last sales price as quoted on The Nasdaq Stock Market for March 3, 2004, of the voting stock held by non-affiliates of the registrant is
$106,364,233. The Registrant had shares of Common Stock outstanding as of March 3, 2004.



DOCUMENTS INCORPORATED BY REFERENCE



Portions of the Annual Report to Stockholders for the year ended December 31, 2003 are incorporated by reference into Parts I and II of this Form 10-K.



Portions of the Proxy Statement for the 2004 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form
10-K.



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##### Table of Contents

INDEX



|           |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                       |  | PAGE
|           |  |                                                                                      
|PART I     |  |                                                                                       |  |     
|           |  |                                                                                      
|Item 1.    |  | Business                                                                              |  | 1   
|           |  |                                                                                      
|Item 2.    |  | Properties                                                                            |  | 35  
|           |  |                                                                                      
|Item 3.    |  | Legal Proceedings                                                                     |  | 36  
|           |  |                                                                                      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                   |  | 36  
|           |  |                                                                                      
|PART II    |  |                                                                                       |  |     
|           |  |                                                                                      
|Item 5.    |  | Market for Registrants Common Equity and Related Stockholder Matters                 |  | 36  
|           |  |                                                                                      
|Item 6.    |  | Selected Financial Data                                                               |  | 36  
|           |  |                                                                                      
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 36  
|           |  |                                                                                      
|Item 7A.   |  | Quantitative and Qualitative Disclosure about Market Risk                             |  | 36  
|           |  |                                                                                      
|Item 8.    |  | Consolidated Financial Statements and Supplementary Data                              |  | 38  
|           |  |                                                                                      
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 38  
|           |  |                                                                                      
|Item 9A.   |  | Controls and Procedures                                                               |  | 38  
|           |  |                                                                                      
|PART III   |  |                                                                                       |  |     
|           |  |                                                                                      
|Item 10.   |  | Directors and Executive Officers of the Registrant                                    |  | 38  
|           |  |                                                                                      
|Item 11.   |  | Executive Compensation                                                                |  | 38  
|           |  |                                                                                      
|Item 12.   |  | Security Ownership of Certain Beneficial Owners                                       |  | 39  
|           |  |                                                                                      
|Item 13.   |  | Certain Relationships and Related Transactions                                        |  | 39  
|           |  |                                                                                      
|Item 14.   |  | Principal Accounting Fees and Services                                                |  | 39  
|           |  |                                                                                      
|PART IV    |  |                                                                                       |  |     
|           |  |                                                                                      
|Item 15.   |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 40  
|           | 
|SIGNATURES |  | 42                                                                                   



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##### Table of Contents

PART I



|Item 1. | Business.
|------- | ---------



Pamrapo Bancorp, Inc. (also referred to as the Company or the Registrant) was incorporated under Delaware law on June 26, 1989 and changed its state of incorporation from Delaware to New Jersey
on March 29, 2001. On November 10, 1989, the Registrant acquired Pamrapo Savings Bank, S.L.A. (the Bank or Pamrapo) as a part of the Banks conversion from a New Jersey chartered savings association in mutual form to a
New Jersey chartered stock savings association. The Registrant is a savings and loan holding company and is subject to regulation by the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC) and
the Securities and Exchange Commission (SEC). Currently, the Registrant does not transact any material business other than through its sole subsidiary, the Bank.



Pamrapo was organized in 1887 as Pamrapo Building and Loan Association. On October 6, 1952, it changed its name to Pamrapo Savings and Loan
Association, a New Jersey chartered savings and loan association in mutual form, and in 1988 it changed its name to Pamrapo Savings Bank, S.L.A. The Banks principal office is located in Bayonne, New Jersey. Its deposits are insured up to
applicable limits by the Savings Association Insurance Fund (the SAIF) which is administered by the FDIC. At December 31, 2003, the Bank had total assets of $636.9 million, deposits of $496.4 million and stockholders equity of
$46.8 million before elimination of intercompany accounts with the Company.



As
a community-oriented institution, the Bank is principally engaged in attracting retail deposits from the general public and investing those funds in fixed-rate one- to four-family residential mortgage loans and, to a lesser extent, in multi-family
residential mortgage loans, commercial real estate loans, home equity and second mortgage loans, consumer loans and mortgage-backed securities. The Banks revenues are derived principally from interest on loans and mortgage-backed securities,
interest and dividends on investment securities and short-term investments, and other fees and service charges. The Banks primary sources of funds are deposits and, to a lesser extent, Federal Home Loan Bank of New York (FHLB-NY)
advances and other borrowings.



Market Area



The Bank, which is headquartered in Bayonne, New Jersey, conducts its business through nine
retail banking offices, six of which are located in Bayonne, New Jersey, one in Hoboken, New Jersey, one in Fort Lee, New Jersey, and one in Monroe, New Jersey. The Banks deposit base is located primarily in Hudson County, with a large
concentration in Bayonne, an older, stable, residential community of one-family and two-family residences and middle income families who have lived in the area for many years. The communities in which the Banks branches are located are
strategically located in the New York City metropolitan area and many residents of these communities commute to Manhattan to work on a daily basis. The Banks lending activities have also been concentrated in Hudson County and to a lesser
extent in Bergen, Monmouth, Middlesex and Ocean Counties, areas which have had a high level of new development in recent years.



1



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##### Table of Contents

Lending Activities



General.    Pamrapo principally originates fixed-rate mortgage loans on one- to four-family residential dwellings for retention in its own
portfolio. The Bank also originates acquisition, development and construction loans in addition to multi-family and commercial real estate loans. At December 31, 2003, the Banks total gross loans outstanding amounted to $385.7 million, of
which $268.2 million consisted of loans secured by one- to four-family residential properties, $13.7 million consisted of construction and land loans, and $100.9 million consisted of loans secured by multi-family and commercial real estate.
Substantially all of the Banks real estate loan portfolio consists of conventional mortgage loans, of which $75,000 are either insured by the Federal Housing Administration (FHA) or partially guaranteed by the Veterans
Administration (VA).





2



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##### Table of Contents

LOAN PORTFOLIO COMPOSITION



The following table sets forth the composition of the Banks loan and mortgage-backed securities portfolios in dollar amounts and in
percentages at the dates indicated:



|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|------------------------------------------------------- |  | --------------- | ------- | - | ------- | ------ | - | ------ | - | ------- | ------- |  | ------ | ------ |  | ------- | ------- |  | ------ | - |  | ------- | ------- | - | ------ | ------ | - | ------- | - | ------- | - |  | ------ | -
|                                                        |  | At December 31, |        
|                                                        |  | 1999            |         |   | 2000    |        |   | 2001   |   |         | 2002    |  |        | 2003   | 
|                                                        |  | Amount          |         |   | Percent |        |   | Amount |   |         | Percent |  |        | Amount |  | Percent |         |  | Amount |   |  | Percent |         |   | Amount |        |   | Percent |  
|Real Estate Mortgage Loans:                             |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Permanent:                                              |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Fixed-rate                                              |  | $               | 212,435 |   |         | 79.19  | % |        | $ | 242,327 |         |  | 78.40  | %      |  | $       | 300,492 |  | 81.38  | % |  | $       | 320,529 |   |        | 82.21  | % |         | $ | 308,362 |   |  | 81.44  | %
|Adjustable rate                                         |  |                 | 4,493   |   |         | 1.67   |   |        |   | 3,900   |         |  | 1.26   |        |  |         | 2,757   |  | .75    |   |  |         | 2,137   |   |        | .55    |   |         |   | 1,804   |   |  | .48    |  
|Construction(1)                                         |  |                 | 8,869   |   |         | 3.31   |   |        |   | 10,594  |         |  | 3.43   |        |  |         | 8,471   |  | 2.29   |   |  |         | 7,893   |   |        | 2.02   |   |         |   | 12,599  |   |  | 3.32   |  
|Guaranteed by VA or insured by FHA                      |  |                 | 602     |   |         | .22    |   |        |   | 442     |         |  | .14    |        |  |         | 286     |  | .08    |   |  |         | 186     |   |        | .05    |   |         |   | 75      |   |  | .02    |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total mortgage loans                                    |  |                 | 226,399 |   |         | 84.39  |   |        |   | 257,263 |         |  | 83.23  |        |  |         | 312,006 |  | 84.50  |   |  |         | 330,745 |   |        | 84.83  |   |         |   | 322,840 |   |  | 85.26  |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|                                                        |  |                 |         |   |         |        |   |        |   |        
|Commercial Loans                                        |  |                 | 61      |   |         | .02    |   |        |   | 928     |         |  | .30    |        |  |         | 1,263   |  | .34    |   |  |         | 658     |   |        | .17    |   |         |   | 407     |   |  | .11    |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|                                                        |  |                 |         |   |         |        |   |        |   |        
|Consumer Loans:                                         |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Passbook or certificate                                 |  |                 | 511     |   |         | .19    |   |        |   | 691     |         |  | .22    |        |  |         | 689     |  | .19    |   |  |         | 552     |   |        | .14    |   |         |   | 586     |   |  | .16    |  
|Home improvement                                        |  |                 | 560     |   |         | .21    |   |        |   | 561     |         |  | .18    |        |  |         | 576     |  | .16    |   |  |         | 336     |   |        | .09    |   |         |   | 229     |   |  | .06    |  
|Equity and second mortgages                             |  |                 | 43,227  |   |         | 16.11  |   |        |   | 52,255  |         |  | 16.91  |        |  |         | 56,958  |  | 15.42  |   |  |         | 59,234  |   |        | 15.19  |   |         |   | 59,758  |   |  | 15.78  |  
|Education                                               |  |                 | 58      |   |         | .02    |   |        |   |        |         |  |       |        |  |         |        |  |       |   |  |         |        |   |        |       |   |         |   |        |   |  |       |  
|Automobile                                              |  |                 | 1,162   |   |         | .44    |   |        |   | 1,545   |         |  | .50    |        |  |         | 1,484   |  | .40    |   |  |         | 1,243   |   |        | 32     |   |         |   | 734     |   |  | .19    |  
|Personal                                                |  |                 | 1,869   |   |         | .70    |   |        |   | 1,785   |         |  | .58    |        |  |         | 1,294   |  | .35    |   |  |         | 1,298   |   |        | .33    |   |         |   | 1,194   |   |  | .30    |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total consumer loans                                    |  |                 | 47,387  |   |         | 17.67  |   |        |   | 56,837  |         |  | 18.39  |        |  |         | 61,001  |  | 16.52  |   |  |         | 62,663  |   |        | 16.07  |   |         |   | 62,451  |   |  | 16.49  |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total loans                                             |  |                 | 273,847 |   |         | 102.08 |   |        |   | 315,028 |         |  | 101.92 |        |  |         | 374,270 |  | 101.36 |   |  |         | 394,066 |   |        | 101.07 |   |         |   | 385,698 |   |  | 101.86 |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|                                                        |  |                 |         |   |         |        |   |        |   |        
|Less:                                                   |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Allowance for loan losses                               |  |                 | 2,000   |   |         | .83    |   |        |   | 1,950   |         |  | .63    |        |  |         | 2,150   |  | .58    |   |  |         | 2,550   |   |        | .65    |   |         |   | 2,515   |   |  | .66    |  
|Loans in process                                        |  |                 | 2,217   |   |         | .75    |   |        |   | 2,925   |         |  | .94    |        |  |         | 2,272   |  | .62    |   |  |         | 1,882   |   |        | .48    |   |         |   | 5,168   |   |  | 1.36   |  
|Deferred loan fees (costs) and discounts                |  |                 | 1,350   |   |         | .50    |   |        |   | 1,071   |         |  | .35    |        |  |         | 609     |  | .16    |   |  |         | (231    | ) |        | (.06   | ) |         |   | (626    | ) |  | (.16   | )
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total                                                   |  |                 | 5,567   |   |         | 2.08   |   |        |   | 5,946   |         |  | 1.92   |        |  |         | 5,031   |  | 1.36   |   |  |         | 4,201   |   |        | 1.07   |   |         |   | 7,057   |   |  | 1.86   |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total net loans                                         |  | $               | 268,280 |   |         | 100.00 | % |        | $ | 309,082 |         |  | 100.00 | %      |  | $       | 369,239 |  | 100.00 | % |  | $       | 389,865 |   |        | 100.00 | % |         | $ | 378,641 |   |  | 100.00 | %
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|                                                        |  |                 |         |   |         |        |   |        |   |        
|Mortgage-Backed Securities:                             |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|GNMA(2)                                                 |  | $               | 3,366   |   |         | 2.67   | % |        | $ | 2,768   |         |  | 2.25   | %      |  | $       | 2,046   |  | 1.63   | % |  | $       | 1,214   |   |        | .82    | % |         | $ | 682     |   |  | .31    | %
|FHLMC(3)(6)                                             |  |                 | 98,506  |   |         | 78.25  |   |        |   | 93,218  |         |  | 75.81  |        |  |         | 81,581  |  | 64.98  |   |  |         | 99,981  |   |        | 67.38  |   |         |   | 147,341 |   |  | 66.98  |  
|FNMA(4)(6)                                              |  |                 | 23,712  |   |         | 18.84  |   |        |   | 26,864  |         |  | 21.85  |        |  |         | 41,649  |  | 33.17  |   |  |         | 38,846  |   |        | 26.18  |   |         |   | 55,246  |   |  | 25.12  |  
|CMO(5)                                                  |  |                 |        |   |         |       |   |        |   |        |         |  |       |        |  |         |        |  |       |   |  |         | 7,670   |   |        | 5.17   |   |         |   | 15,054  |   |  | 6.84   |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total mortgage-backed securities                        |  |                 | 125,584 |   |         | 99.76  |   |        |   | 122,850 |         |  | 99.91  |        |  |         | 125,276 |  | 99.78  |   |  |         | 147,711 |   |        | 99.55  |   |         |   | 218,323 |   |  | 99.25  |  
|                                                        |  |                 |         |   |         |        |   |        |   |        
|Add/Less:                                               |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Premiums (discounts), net (6)                           |  |                 | 489     |   |         | .39    |   |        |   | 2,025   |         |  | .17    |        |  |         | 24      |  | .18    |   |  |         | 617     |   |        | .41    |   |         |   | 1,632   |   |  | .74    |  
|Unrealized (loss) gain on securities available for sale |  |                 | (184    | ) |         | (.15   | ) |        |   | (91     | )       |  | (.08   | )      |  |         | 46      |  | .04    |   |  |         | 58      |   |        | .04    |   |         |   | 25      |   |  | .01    |  
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Net mortgage-backed securities                          |  | $               | 125,889 |   |         | 100.00 | % |        | $ | 122,964 |         |  | 100.00 | %      |  | $       | 125,556 |  | 100.00 | % |  | $       | 148,386 |   |        | 100.00 | % |         | $ | 219,980 |   |  | 100.00 | %
|                                                        |  |                 |         |   |         |        |   |        |   |         |         |  |        |        |  |         |         |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  



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##### Table of Contents

---

|(1) | Includes acquisition, development and land loans.
|--- | -------------------------------------------------



|(2) | Government National Mortgage Association (GNMA).
|--- | --------------------------------------------------



|(3) | Federal Home Loan Mortgage Corporation (FHLMC).
|--- | -------------------------------------------------



|(4) | Federal National Mortgage Association (FNMA).
|--- | -----------------------------------------------



|(5) | Collateralized Mortgage Obligations.
|--- | ------------------------------------



|(6) | Includes available for sale securities having a principal balance of $5,115,000 and a net premium of $134,000 for 1999, a principal balance of $4,165,000 and a net premium of
$98,000 for 2000, a principal balance of $3,084,000 and a net premium of $9,000 for 2001, a principal balance of $2,188,000 and a net premium of $2,000 for 2002, and a principal balance of $1,537,000 for 2003.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

The following table sets forth the composition of the Banks gross loan portfolio by type of security at the dates
indicated.



|                               |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  
|------------------------------ |  | ---------------------- | ------- | ---------------- | ------ | - | ------ | ---- | ---------------- |  | ------ | ------ |  | ---------------- | ------- |  | ------ | -
|                               |  | As of December 31,     |        
|                               |  | 2001                   |         |                  | 2002   |   |        | 2003 |                 
|                               |  | (Dollars in thousands) |        
|                               |  | Amount                 |         | Percent of Total |        |   | Amount |      | Percent of Total |  |        | Amount |  | Percent of Total |        
|One-to four-family             |  | $                      | 275,056 |                  | 73.49  | % |        | $    | 295,781          |  | 75.06  | %      |  | $                | 268,243 |  | 69.55  | %
|Multi-family                   |  |                        | 51,498  |                  | 13.76  |   |        |      | 46,224           |  | 11.73  |        |  |                  | 51,048  |  | 13.23  |  
|Commercial real estate         |  |                        | 33,863  |                  | 9.05   |   |        |      | 38,526           |  | 9.78   |        |  |                  | 49,808  |  | 12.91  |  
|Construction and land          |  |                        | 9,123   |                  | 2.44   |   |        |      | 9,782            |  | 2.48   |        |  |                  | 13,729  |  | 3.56   |  
|Commercial                     |  |                        | 1,262   |                  | .34    |   |        |      | 658              |  | .17    |        |  |                  | 407     |  | .11    |  
|Consumer-secured and unsecured |  |                        | 3,468   |                  | .92    |   |        |      | 3,095            |  | .78    |        |  |                  | 2,463   |  | .64    |  
|                               |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  
|Total gross loans              |  | $                      | 374,270 |                  | 100.00 | % |        | $    | 394,066          |  | 100.00 | %      |  | $                | 385,698 |  | 100.00 | %
|                               |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  



ORIGINATION, PURCHASE AND SALE OF
LOANS AND MORTGAGE-BACKED SECURITIES.    The following table sets forth the Banks loan originations, purchases, sales and principal repayments for the periods indicated.



|                                               |  |                         |         |      |   |         |  |   |        
|---------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                               |  | Year Ended December 31,
|                                               |  | 2001                    |         | 2002 |   | 2003   
|                                               |  | (Dollars in thousands) 
|Mortgage Loans (gross):                        |  |                         |         |      |   |         |  |   |        
|At beginning of period                         |  | $                       | 257,263 |      | $ | 312,006 |  | $ | 330,745
|                                               |  |                         |         |      |   |         |  |   |        
|Mortgage loans originated:                     |  |                         |         |      |   |         |  |   |        
|One- to four-family residential                |  |                         | 107,471 |      |   | 113,096 |  |   | 106,685
|Multi-family residential                       |  |                         | 13,210  |      |   | 16,221  |  |   | 11,906 
|Commercial                                     |  |                         | 5,209   |      |   | 5,368   |  |   | 7,066  
|Construction(1)                                |  |                         | 4,757   |      |   | 4,693   |  |   | 9,050  
|                                               |  |                         |         |      |   |         |  |   |        
|Total mortgage loans originated                |  |                         | 130,647 |      |   | 139,378 |  |   | 134,707
|                                               |  |                         |         |      |   |         |  |   |        
|Loans purchased                                |  |                         |        |      |   |        |  |   |       
|                                               |  |                         |         |      |   |         |  |   |        
|Transfer to REO                                |  |                         | 33      |      |   |        |  |   |       
|Charge-offs                                    |  |                         | 65      |      |   | 143     |  |   | 35     
|Repayments                                     |  |                         | 75,806  |      |   | 120,496 |  |   | 142,577
|                                               |  |                         |         |      |   |         |  |   |        
|Total mortgage repayments and other reductions |  |                         | 75,904  |      |   | 120,639 |  |   | 142,612
|                                               |  |                         |         |      |   |         |  |   |        
|At end of period                               |  | $                       | 312,006 |      | $ | 330,745 |  | $ | 322,840
|                                               |  |                         |         |      |   |         |  |   |        
|Commercial Loans (gross):                      |  |                         |         |      |   |         |  |   |        
|At beginning of period                         |  | $                       | 928     |      | $ | 1,263   |  | $ | 658    
|Commercial loans originated                    |  |                         | 1,152   |      |   | 275     |  |   | 280    
|Charge-offs                                    |  |                         | 25      |      |   |        |  |   |       
|Repayments                                     |  |                         | 792     |      |   | 880     |  |   | 531    
|                                               |  |                         |         |      |   |         |  |   |        
|At end of period                               |  | $                       | 1,263   |      | $ | 658     |  | $ | 407    
|                                               |  |                         |         |      |   |         |  |   |        
|Consumer Loans (gross):                        |  |                         |         |      |   |         |  |   |        
|At beginning of period                         |  | $                       | 56,837  |      | $ | 61,001  |  | $ | 62,663 
|Consumer loans originated                      |  |                         | 32,716  |      |   | 32,962  |  |   | 33,668 
|Consumer loans sold                            |  |                         |        |      |   | 148     |  |   |       
|Charge-offs                                    |  |                         | 183     |      |   | 101     |  |   | 92     
|Repayments                                     |  |                         | 28,369  |      |   | 31,051  |  |   | 33,788 
|                                               |  |                         |         |      |   |         |  |   |        
|At end of period                               |  | $                       | 61,001  |      | $ | 62,663  |  | $ | 62,451 
|                                               |  |                         |         |      |   |         |  |   |        
|Mortgage-backed securities (gross):            |  |                         |         |      |   |         |  |   |        
|At beginning of period                         |  | $                       | 122,850 |      | $ | 125,276 |  | $ | 147,711
|Mortgage-backed securities purchased           |  |                         | 34,156  |      |   | 68,422  |  |   | 160,854
|Repayments                                     |  |                         | 31,730  |      |   | 45,987  |  |   | 90,242 
|                                               |  |                         |         |      |   |         |  |   |        
|At end of period                               |  | $                       | 125,276 |      | $ | 147,711 |  | $ | 218,323
|                                               |  |                         |         |      |   |         |  |   |        

---

|(1) | Includes acquisition, development and land loans.
|--- | -------------------------------------------------



5



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##### Table of Contents

LOAN MATURITY.    The following table sets forth the maturity of the Banks gross loan
portfolio at December 31, 2003. The table does not include prepayments or scheduled principal repayments. Prepayments and scheduled principal repayments on loans totaled $105.0 million, $152.4 million, and $176.9 million for the years ended December
31, 2001, 2002 and 2003, respectively.



|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|---------------------------------------- |  | -------------------------------------------------- | ------- | ------------------------------------------------- | - | ---------------------- |  | ------------------------------------ | ------ | ---------------- | - | ----- |  | - | --- |  | - | ------- | -
|                                         |  | One- to four- family residentialmortgage loans (1) |         | Multi-family and commercial real estate loans (1) |   | Construction Loans (2) |  | Consumer-secured and unsecured loans |        | Commercial Loans |   | Total | 
|                                         |  | (In thousands)                                     |        
|Amounts due:                             |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Within 1 year                            |  | $                                                  | 453     |                                                   | $ | 927                    |  | $                                    | 10,238 |                  | $ | 141   |  | $ | 239 |  | $ | 11,998  |  
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|After 1 year:                            |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|1 to 3 years                             |  |                                                    | 1,383   |                                                   |   | 644                    |  |                                      | 1,585  |                  |   | 816   |  |   | 50  |  |   | 4,478   |  
|3 to 5 years                             |  |                                                    | 6,864   |                                                   |   | 3,488                  |  |                                      |       |                  |   | 767   |  |   | 23  |  |   | 11,142  |  
|5 to 10 years                            |  |                                                    | 22,111  |                                                   |   | 9,453                  |  |                                      | 87     |                  |   | 522   |  |   | 95  |  |   | 32,268  |  
|10 to 20 years                           |  |                                                    | 93,054  |                                                   |   | 83,189                 |  |                                      | 532    |                  |   | 217   |  |   |    |  |   | 176,992 |  
|Over 20 years                            |  |                                                    | 144,378 |                                                   |   | 3,155                  |  |                                      | 1,287  |                  |   |      |  |   |    |  |   | 148,820 |  
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Total due after 1 year                   |  |                                                    | 267,790 |                                                   |   | 99,929                 |  |                                      | 3,491  |                  |   | 2,322 |  |   | 168 |  |   | 373,700 |  
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Total amounts due                        |  | $                                                  | 268,243 |                                                   | $ | 100,856                |  | $                                    | 13,729 |                  | $ | 2,463 |  | $ | 407 |  |   | 385,698 |  
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Less:                                    |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Allowance for loan losses                |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   | 2,515   |  
|Loans in process                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   | 5,168   |  
|Deferred loan fees (costs) and discounts |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   | (626    | )
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  
|Total                                    |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  | $ | 378,641 |  
|                                         |  |                                                    |         |                                                   |   |                        |  |                                      |        |                  |   |       |  |   |     |  |   |         |  

---

|(1) | Includes equity, second mortgage and home improvement loans.
|--- | ------------------------------------------------------------



|(2) | Includes acquisition, development and land loans.
|--- | -------------------------------------------------



6



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##### Table of Contents

The following table sets forth at December 31, 2003, the dollar amount of all mortgage, consumer and construction loans,
due after December 31, 2004, which have fixed interest rates or adjustable interest rates:



|                                            |  |                             |         |                             |   |                          |  |   |        
|------------------------------------------- |  | --------------------------- | ------- | --------------------------- | - | ------------------------ |  | - | -------
|                                            |  | Due after December 31, 2004
|                                            |  | Fixed Rates                 |         | Floating or AdjustableRates |   | Total Due After One Year
|                                            |  | (In thousands)             
|One- to four-family residential (1)         |  | $                           | 264,531 |                             | $ | 3,259                    |  | $ | 267,790
|Construction loans                          |  |                             | 2,959   |                             |   | 532                      |  |   | 3,491  
|Multi-family and commercial real estate (1) |  |                             | 96,149  |                             |   | 3,948                    |  |   | 100,097
|Consumer-secured and unsecured loans        |  |                             | 1,767   |                             |   | 555                      |  |   | 2,322  
|                                            |  |                             |         |                             |   |                          |  |   |        
|Totals                                      |  | $                           | 365,406 |                             | $ | 8,294                    |  | $ | 373,700
|                                            |  |                             |         |                             |   |                          |  |   |        

---

|(1) | Includes equity, second mortgage and home improvement loans.
|--- | ------------------------------------------------------------



Residential Mortgage Lending.    Pamrapo presently originates first mortgage loans, equity loans, second mortgage loans and improvement loans
secured by one- to four-family residences, multi-family residences and commercial real estate. As of December 31, 2003, 97.8% of the gross loan portfolio were fixed-rate loans and 2.2% were ARMs, and were originated for the Banks
portfolio. Residential loan originations are generally obtained from existing or past customers and members of the local community. As of December 31, 2003, $319.3 million or 82.8% of the Banks total gross loan portfolio consisted of one- to
four-family and multi-family residential mortgage loans. Of this amount $268.2 million were one- to four-family and $51.0 million were multi-family.



The one- to four-family residential loans originated by the Bank are primarily fixed-rate mortgages, generally with terms of 15 or 25 years. Typically, such homes in the
Bayonne area are one- or two-family owner-occupied dwellings. The Bank generally makes one- to four-family residential mortgage loans in amounts up to 80% of the appraised value of the secured property. The Bank will originate loans with
loan-to-value ratios up to 90% within the local community, provided that private mortgage insurance on the amount in excess of such 80% ratio is obtained. Mortgage loans in the Banks portfolio generally include due-on-sale clauses, which
provide the Bank with the contractual right to demand the loan immediately due and payable in the event that the borrower transfers ownership of the property that is subject to the mortgage. It is the Banks policy to enforce due-on-sale
provisions. As of December 31, 2003, the interest rate for one- to four-family residential fixed-rate mortgages offered by the Bank was 5.50% on 15-year loans and 5.75% on 25-year loans.



The Bank also originates loans on multi-family residences. Such residences generally consist of 6 to 24 units. Such loans are generally
fixed-rate loans with interest rates ranging from 1.0% to 1.5% higher than those offered on one- to four-family residences. The Bank generally makes multi family residential loans in amounts up to 75% of the appraised value of the secured property.
Such appraisals are based primarily on the income producing ability of the property. The terms of multi-family residential loans range from 10 to 15 years. As of December 31, 2003, $51.0 million or 13.2% of the Banks total gross loan portfolio
consisted of multi-family residential loans.



7



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##### Table of Contents

Upon receipt of an application for a mortgage loan from a prospective borrower, a credit report is ordered to verify
information relating to the applicants employment, income and credit standing. A preliminary inspection of the subject premises is made by at least one member of the Executive Committee. The report of that inspection is brought before the
Executive Committee or the full Board of Directors to approve the amount of the loan and the terms. Approval is given subject to a report of value from an independent appraiser and credit approval. Approval of credit is given by the Banks
president or loan officer. It is the Banks policy to obtain title insurance on all real estate loans. Borrowers also must obtain hazard insurance and flood insurance, if required, prior to closing. The Bank generally requires borrowers to
advance funds on a monthly basis together with each payment of principal and interest to a tax escrow account from which the Bank can make disbursements for items such as real estate taxes and certain insurance premiums, if any, as they become due.



Acquisition, Development, Construction and Land
Lending.    The Bank originates loans to finance the construction of one- to four-family dwellings, multi-family dwellings and, to a lesser extent, commercial real estate. It also originates loans for the acquisition and
development of unimproved property to be used principally for residential purposes in cases where the Bank is to provide the construction funds to improve the properties.



The interest rates and terms of the construction and land development loans vary, depending upon market conditions, the size of the
construction or development project and negotiations with the borrower. Advances are generally made to the borrower to cover actual construction costs incurred. On larger constructions loans, the Bank requires the project to be built out in phases.
Advancement of funds is dependent upon completion of the project stages. The Bank generally limits its exposure to 75% of the projected market value of the completed project. The amount of the loans are generally determined as follows: (i) land
acquisition loans with no immediate plans for construction are limited to 65% of the appraised value of the land; (ii) acquisition and development loans are limited to 65% of appraised value of the improved lot not to exceed 150% of the original
acquisition cost; (iii) in addition to the disbursement for acquisition and development, in an acquisition, development and construction loan, the Bank will not advance more than 90% of the construction costs; and (iv) loans secured by previously
owned vacant land are limited to 65%. Prior to making any disbursements, the Bank requires that the projects securing the construction and development loans be inspected. The Bank will finance the construction of properties without a prospective
buyer or without permanent take-out financing in place at the time of origination.



The underwriting criteria used by the Bank are designed to evaluate and minimize the risks of each construction loan. Among other things, the Bank generally considers an appraisal of the project, the reputation of the borrower and the
contractor, the amount of the borrowers equity in the project, independent valuations and review of cost estimates, plans and specifications, preconstruction sale and leasing information, current and expected economic conditions in the area of
the project, cash flow projections of the borrower, and, to the extent available, guarantees by the borrower and/or third parties. All of the Banks acquisition, development and construction loan portfolio is secured by real estate properties
located in northern and central New Jersey.



Acquisition, development
and construction lending is generally considered to involve a higher level of risk than one- to four-family permanent residential lending due to the concentration of principal in a limited number of loans and borrowers and the effects of general
economic conditions on development projects, real estate developers and managers. In addition, the nature of these loans is



8



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##### Table of Contents

such that they are generally less predictable and more difficult to evaluate and monitor. As of December 31, 2003, the Banks acquisition, development,
construction and land loans varied in size from $25,000 to $1,287,000, net of loans in process, and represented 3.6% of total gross loans.



Commercial Real Estate Lending.    Loans secured by commercial real estate totaled $49.8 million, or 12.9% of the Banks total gross loan
portfolio, at December 31, 2003. Commercial real estate loans are generally originated in amounts up to 70% of the appraised value of the property. Such appraised value is determined by an independent appraiser previously approved by the Bank. The
Banks commercial real estate loans are secured by improved property such as office buildings, retail stores, warehouses and other non-residential buildings. Once the loan has been determined to be creditworthy and of sufficient property value,
in the case of corporate borrowers, the Bank obtains a personal guaranty from third party principals of the corporate borrower as supplemental security on the loan. This enables the Bank to proceed against the guarantor in the event of default
without first exhausting remedies against the borrower. Inquiry as to collectibility pursuant to such third party guarantees may be made by means of review of other properties secured by the Bank, personal interviews with the applicants, review of
the applicants personal financial statements and income tax returns and review of credit bureau reports. Borrowers must personally guarantee loans made for commercial real estate. Commercial real estate loans have terms ranging from 5 to 15
years and are generally fixed-rate loans.



Loans secured by commercial real
estate properties are generally larger and involve a greater degree of risk than residential mortgage loans. Because payments on loans secured by commercial real estate properties are often dependent on successful operation or management of the
properties, repayment of such loans may be subject to adverse conditions in the real estate market or the economy. Emphasis is placed on the income producing capability of the collateral rather than on management-intensive projects.



Consumer and Commercial Lending.    The Bank offers various other
secured and unsecured consumer loan products such as automobile loans, personal loans and passbook loans, as well as commercial loans. At December 31, 2003, the balance of such loans was $2.9 million, or 0.8% of the Banks total gross loan
portfolio.



Loan Review.    The Bank has a
formalized loan review program, providing for detailed post-closing reviews for loans selected from all categories. After review, reports are made to the mortgage and loan officers and the Board of Directors. Classification determination is
presently the responsibility of the Asset Classification Committee. See Classification of Assets. The purpose of these procedures is to enhance the Banks ability to properly document the loans it originates and to improve the
performance of such loans.



Lending
Authority.    The Banks Executive Committee has the authority to approve loans up to $750,000, with the stipulation that loans approved in excess of $500,000 must be reported at the next Board of Directors meeting. The
Banks Vice President and Loan Officer has the authority to approve consumer and equity loans of up to $150,000.



Loan Servicing.    The Bank originated all of the loans it has sold and services those loans for other investors. Pamrapo receives fees for
these servicing activities, which include collecting and remitting loan payments, inspecting the properties and making certain insurance and tax payments are made



9



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##### Table of Contents

on behalf of the borrowers. At December 31, 2003, the Bank was servicing $665,000 of loans for others.



Loan Origination Fees and Other Fees.    Loan origination fees and
certain related direct loan origination costs are deferred and the resulting net amount is amortized over the life of the related loan as an adjustment to the yield of such loans. In addition, commitment fees are required to be offset against
related direct costs and the resulting net amount generally is recognized over the life of the related loans as an adjustment of yield or if the commitment expires unexercised, recognized upon expiration of the commitment. The Bank had $626,000 in
net deferred origination costs at December 31, 2003.



Non-Performing Assets



When a borrower fails to make a required payment by the fifteenth day of
the month in which the payment is due, the Bank sends a late notice advising the borrower that the payment has not been received. In most cases delinquencies are cured promptly; however, if a loan has been delinquent for more than 60 days, the Bank
reviews the loan status more closely and, where appropriate, appraises the condition of the property and the financial circumstances of the borrower. Based upon the results of any such investigation, the Bank (1) may accept a repayment program for
the arrearage from the borrower; (2) may seek evidence, in the form of a listing contract, of efforts by the borrower to sell the property if the borrower has stated that he is attempting to sell; (3) may request a deed in lieu of foreclosure or (4)
generally will initiate foreclosure proceedings when a loan payment is delinquent for more than three monthly installments.



The following table sets forth information regarding non-accrual loans, loans which are 90 days or more delinquent, but on which the Bank is accruing interest and other
real estate owned held by the Bank at the dates indicated:



|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|-------------------------------------------------------------- |  | ---------------------- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ----- |  | - | ---
|                                                               |  | At December 31,       
|                                                               |  | 1999                   |       | 2000 |   | 2001  |  | 2002 |       | 2003
|                                                               |  | (Dollars in thousands)
|One- to four-family residential real estate loans (1):         |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Non-accrual loans                                              |  | $                      | 2,204 |      | $ | 1,723 |  | $    | 1,552 |      | $ | 984   |  | $ | 511
|Accruing loans 90 days overdue                                 |  |                        | 736   |      |   | 1,217 |  |      | 641   |      |   | 633   |  |   | 378
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Total                                                          |  |                        | 2,940 |      |   | 2,940 |  |      | 2,193 |      |   | 1,617 |  |   | 889
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Multi-family residential and commercial real estate loans (1): |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Non-accrual loans                                              |  |                        | 834   |      |   | 862   |  |      | 662   |      |   | 468   |  |   | 298
|Accruing loans 90 days overdue                                 |  |                        | 321   |      |   | 28    |  |      | 362   |      |   | 440   |  |   | 236
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Total                                                          |  |                        | 1,155 |      |   | 890   |  |      | 1,024 |      |   | 908   |  |   | 534
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Construction loans (2):                                        |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Non-accrual loans                                              |  |                        |      |      |   |      |  |      |      |      |   |      |  |   |   
|Accruing loans 90 days overdue                                 |  |                        |      |      |   | 114   |  |      |      |      |   |      |  |   |   
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Total                                                          |  |                        |      |      |   | 114   |  |      |      |      |   |      |  |   |   
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Commercial loans:                                              |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Non-accrual loans                                              |  |                        |      |      |   | 25    |  |      |      |      |   |      |  |   |   
|Accruing loans 90 days overdue                                 |  |                        |      |      |   |      |  |      |      |      |   | 137   |  |   | 119
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    
|Total                                                          |  |                        |      |      |   | 25    |  |      |      |      |   | 137   |  |   | 119
|                                                               |  |                        |       |      |   |       |  |      |       |      |   |       |  |   |    





10



---

##### Table of Contents

(Table of non-accrual loans, continued)



|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|--------------------------------------------------------------------- |  | ---------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - |  | - | ----- | -
|                                                                      |  | At December 31,        |      
|                                                                      |  | 1999                   |       |   | 2000 |   |       | 2001 |  |   | 2002  |   |  | 2003 |      
|                                                                      |  | (Dollars in thousands) |      
|Consumer loans:                                                       |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Non-accrual loans                                                     |  |                        | 92    |   |      |   | 93    |      |  |   | 42    |   |  |      | 33    |   |  |   |      |  
|Accruing loans 90 days overdue                                        |  |                        | 6     |   |      |   | 23    |      |  |   | 1     |   |  |      | 6     |   |  |   | 15    |  
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total                                                                 |  |                        | 98    |   |      |   | 116   |      |  |   | 43    |   |  |      | 39    |   |  |   | 15    |  
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total non-performing loans:                                           |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Non-accrual loans                                                     |  |                        | 3,130 |   |      |   | 2,703 |      |  |   | 2,256 |   |  |      | 1,485 |   |  |   | 809   |  
|Accruing loans 90 days overdue                                        |  |                        | 1,063 |   |      |   | 1,382 |      |  |   | 1,004 |   |  |      | 1,216 |   |  |   | 748   |  
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total                                                                 |  | $                      | 4,193 |   |      | $ | 4,085 |      |  | $ | 3,260 |   |  | $    | 2,701 |   |  | $ | 1,557 |  
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total foreclosed real estate, net of related reserves                 |  | $                      | 456   |   |      | $ | 620   |      |  | $ | 238   |   |  | $    | 155   |   |  | $ |      |  
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total non-performing loans and foreclosed real estate to total assets |  |                        | 1.03  | % |      |   | 1.00  | %    |  |   | 0.65  | % |  |      | 0.49  | % |  |   | 0.24  | %
|                                                                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  

---

|(1) | Includes equity and second mortgage loans.
|--- | ------------------------------------------

|(2) | Includes acquisition and development loans.
|--- | -------------------------------------------



At December 31, 2001, 2002, and 2003, nonaccrual loans for which interest has been discontinued totaled approximately $2.3 million, $1.5 million and
$809 thousand, respectively. During the years ended December 31, 2001, 2002, and 2003, the Bank recognized interest income of approximately $88,000, $24,000 and $35,000, respectively, on these loans. Interest income that would have been
recorded, had the loans been on the accrual status, would have amounted to approximately $230,000, $151,000 and $79,000 for the years ended December 31, 2001, 2002, and 2003, respectively. The Bank is not committed to lend additional funds to
the borrowers whose loans have been placed on nonaccrual status.



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Delinquent Loans.    At December 31, 2001, 2002, and 2003, respectively, delinquencies in the
Banks portfolio were as follows:



|                                  |  |                        |  |                            |                      |   |                 |                      |                            |   |                 |                 |  |                            |  |   |                 |   |                            |    |  |                 |       |                            |  |    |                 |   |                            |   |  |    |  |   |       |  
|--------------------------------- |  | ---------------------- |  | -------------------------- | -------------------- | - | --------------- | -------------------- | -------------------------- | - | --------------- | --------------- |  | -------------------------- |  | - | --------------- | - | -------------------------- | -- |  | --------------- | ----- | -------------------------- |  | -- | --------------- | - | -------------------------- | - |  | -- |  | - | ----- | -
|                                  |  | At December 31, 2001   |  |                            | At December 31, 2002 |   |                 | At December 31, 2003 |                           
|                                  |  | 60   89 Days          |  |                            | 90 Days or more      |   |                 | 60   89 Days        |                            |   | 90 Days or more |                 |  | 60   89 Days              |  |   | 90 Days or more |  
|                                  |  | Number of Loans        |  | Principal Balance of Loans |                      |   | Number of Loans |                      | Principal Balance of Loans |   |                 | Number of Loans |  | Principal Balance of Loans |  |   | Number of Loans |   | Principal Balance of Loans |    |  | Number of Loans |       | Principal Balance of Loans |  |    | Number of Loans |   | Principal Balance of Loans |  
|                                  |  | (Dollars in thousands) | 
|Delinquent loans                  |  | 28                     |  | $                          | 2,291                |   |                 | 53                   |                            | $ | 3,260           |                 |  | 35                         |  | $ | 1,764           |   |                            | 35 |  | $               | 2,701 |                            |  | 18 |                 | $ | 1,574                      |   |  | 22 |  | $ | 1,557 |  
|As a percent of total gross loans |  |                        |  |                            | 0.61                 | % |                 |                      |                            |   | 0.87            | %               |  |                            |  |   | 0.45            | % |                            |    |  |                 | 0.69  | %                          |  |    |                 |   | 0.41                       | % |  |    |  |   | 0.40  | %





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As of December 31, 2003, the Bank had 22 loans which were 90 days or more past due totaling $1.6 million. The average
balance of such loans was approximately $71,000. Management is of the opinion that the Bank will not incur any additional substantial losses on such loans, giving consideration to existing loan loss reserves. Most of the loans are of moderate size;
with the largest balance being $208,000. All loans are within the Banks lending areas.



The Banks level of non-performing loans 90 days or more delinquent decreased from $2.7 million at December 31, 2002 to $1.6 million at December 31, 2003. The total of such loans in the lower risk one- to
four-family residential category decreased to $889,000 million or 57.1% of non-performing loans 90 days or more delinquent at December 31, 2003 when compared with $1.6 million or 59.9% of non-performing loans 90 days or more delinquent at
December 31, 2002. Non-performing multi-family residential, commercial real estate and construction loans, loans normally having greater elements of risk decreased from $908,000 at December 31, 2002 to $534,000 at December 31, 2003.



Classified Assets.    Federal regulations provide for the
classification of loans and other assets such as debt and equity securities considered to be of lesser quality as substandard, doubtful or loss assets. Assets which do not currently expose the insured institution
to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated special mention by management.



A classification of either substandard or doubtful requires the establishment of general allowances for loan losses in an amount deemed
prudent by management. Assets classified as loss require either a specific allowance for losses equal to 100% of the amount of the asset so classified or a charge off of such amount.



A savings institutions determination as to the classification of its assets and the
amount of its valuation allowances is subject to review by the OTS which can order the establishment of additional general or specific loss allowances. The OTS, in conjunction with the other federal banking agencies, has adopted an interagency
policy statement on the allowance for loan and lease losses. The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of adequate allowances and guidance for
banking agency examiners to use in determining the adequacy of general valuation allowances. Generally, the policy statement requires that institutions have effective systems and controls to identify, monitor and address asset quality problems; have
analyzed all significant factors that affect the collectibility of the portfolio in a reasonable manner; and have established acceptable allowance evaluation processes that meet the objectives set forth in the policy statement.



Management of the Bank has classified $1.4 million of its assets as substandard and
approximately $174,000 as loss based upon its review of the Banks loan and foreclosed real estate portfolios. Such review, among other things, takes into consideration the appraised value of underlying collateral, economic conditions and
paying capacity of the borrowers. However, the Banks Asset Classification Committee carefully monitors all of the Banks delinquent loans to determine whether or not they should be classified. At a minimum, the Bank classifies all
foreclosed real estate and non-performing loans 90 days or more delinquent as substandard assets. At December 31, 2003, the allowance for loan losses totaled $2.5 million.



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##### Table of Contents

Allowance for Loan Losses.    The allowance for loan losses is established through a provision
for loan losses based on managements evaluation of the risk inherent in its loan portfolio and changes in the nature and volume of its loan activity. Such evaluation, which includes a review of all loans of which full collectibility may not be
reasonably assured, considers among other matters, the estimated net realizable value of the underlying collateral, economic conditions, historical loan loss experience and other factors that warrant recognition in providing for an adequate loan
loss allowance.



During the years ended December 31, 2001, 2002, and 2003,
gross charge-offs totaled $273,000, $244,000 and $126,000, respectively.



The following table sets forth the activity of the Banks allowance for loan losses at the dates indicated:



|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|------------------------------------------------------------------------------------------ |  | ------------------------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - |  | - | ------ | -
|                                                                                           |  | At or for the year ended December 31, |      
|                                                                                           |  | 1999                                  |       |   | 2000 |   |       | 2001 |  |   | 2002  |   |  | 2003 |      
|                                                                                           |  | (Dollars in thousands)                |      
|                                                                                           |  |                                       |       |   |     
|Balance at beginning of period                                                             |  | $                                     | 2,300 |   |      | $ | 2,000 |      |  | $ | 1,950 |   |  | $    | 2,150 |   |  | $ | 2,550  |  
|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Provision for loan losses                                                                  |  |                                       | 299   |   |      |   | 208   |      |  |   | 459   |   |  |      | 634   |   |  |   | 84     |  
|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Net charge-offs:                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Real estate mortgage loans                                                                 |  |                                       | 212   |   |      |   | 235   |      |  |   | 65    |   |  |      | 143   |   |  |   | 35     |  
|Consumer loans                                                                             |  |                                       | 392   |   |      |   | 33    |      |  |   | 183   |   |  |      | 101   |   |  |   | 91     |  
|Commercial loans                                                                           |  |                                       |      |   |      |   |      |      |  |   | 25    |   |  |      |      |   |  |   |       |  
|Recoveries                                                                                 |  |                                       | 5     |   |      |   | 10    |      |  |   | 14    |   |  |      | 10    |   |  |   | 7      |  
|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Net charge-offs                                                                            |  |                                       | 599   |   |      |   | 258   |      |  |   | 259   |   |  |      | 234   |   |  |   | 119    |  
|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Balance at end of period                                                                   |  | $                                     | 2,000 |   |      | $ | 1,950 |      |  | $ | 2,150 |   |  | $    | 2,550 |   |  | $ | 2,515  |  
|                                                                                           |  |                                       |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |        |  
|Ratio of net charge offs during the period to average loans receivable during the period   |  |                                       | .23   | % |      |   | .09   | %    |  |   | .08   | % |  |      | .06   | % |  |   | .04    | %
|Ratio of allowance for loan losses to total outstanding loans (gross) at the end of period |  |                                       | .73   | % |      |   | .62   | %    |  |   | .57   | % |  |      | .65   | % |  |   | .65    | %
|Ratio of allowance for loan losses to non-performing loans                                 |  |                                       | 47.62 | % |      |   | 47.74 | %    |  |   | 65.95 | % |  |      | 94.41 | % |  |   | 161.53 | %





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The following table sets forth the breakdown of the allowance for loan losses by loan category for the periods indicated.
Management believes that the allowance can be allocated by category only on an approximate basis. The allocation to the allowance by category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb
losses in any category.



|                               |  |                 |       |        |   |        |  |        |       |        |   |       |  |   |      
|------------------------------ |  | --------------- | ----- | ------ | - | ------ |  | ------ | ----- | ------ | - | ----- |  | - | -----
|                               |  | At December 31,
|                               |  | 1999            |       | 2000   |   | 2001   |  | 2002   |       | 2003  
|                               |  | Amount          |       | Amount |   | Amount |  | Amount |       | Amount
|                               |  | (In thousands) 
|Real estate mortgage loans (1) |  | $               | 1,800 |        | $ | 1,750  |  | $      | 1,980 |        | $ | 2,150 |  | $ | 2,240
|Consumer loans                 |  |                 | 200   |        |   | 200    |  |        | 150   |        |   | 300   |  |   | 200  
|Commercial loans               |  |                 |      |        |   |       |  |        | 20    |        |   | 100   |  |   | 75   
|                               |  |                 |       |        |   |        |  |        |       |        |   |       |  |   |      
|Total allowance                |  | $               | 2,000 |        | $ | 1,950  |  | $      | 2,150 |        | $ | 2,550 |  | $ | 2,515
|                               |  |                 |       |        |   |        |  |        |       |        |   |       |  |   |      

---

|(1) | Includes equity and second mortgages.
|--- | -------------------------------------



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Mortgage-Backed Securities.    The Bank has significant investments in mortgage-backed
securities and has, during periods when loan demand was low and the interest yields on alternative investments was minimal, utilized such investments as an alternative to mortgage lending. All of the securities in the portfolio were insured or
guaranteed by GNMA, FNMA or FHLMC and have coupon rates as of December 31, 2003 ranging from 4.00% to 9.50%. At December 31, 2003, the unamortized principal balance of mortgage-backed securities, both held to maturity and available for sale, totaled
$218.3 million or 34.3% of total assets. The carrying value of such securities amounted to $125.6 million, $148.4 million and $220.0 million at December 31, 2001, 2002, and 2003, respectively, and the fair market value of such securities totaled
approximately $127.7 million, $154.2 million and $220.6 million at December 31, 2001, 2002, and 2003, respectively.



The following table sets forth the contractual maturities of the Banks gross mortgage-backed securities portfolio which includes available for sale and held to
maturity at December 31, 2003.



|                            |  |                                                          |     |            |   |            |  |            |       |                    |   |         |  |   |        |  |   |        
|--------------------------- |  | -------------------------------------------------------- | --- | ---------- | - | ---------- |  | ---------- | ----- | ------------------ | - | ------- |  | - | ------ |  | - | -------
|                            |  | Contractual Maturities Due in Year(s) Ended December 31,
|                            |  | 2003- 2004                                               |     | 2005- 2006 |   | 2007- 2011 |  | 2012- 2021 |       | 2022 andThereafter |   | Total  
|                            |  | (In thousands)                                          
|Mortgage-backed securities: |  |                                                          |     |            |   |            |  |            |       |                    |   |         |  |   |        |  |   |        
|Held to maturity            |  | $                                                        | 135 |            | $ | 60         |  | $          | 6,414 |                    | $ | 167,378 |  | $ | 42,799 |  | $ | 216,786
|Available for sale          |  |                                                          |    |            |   |           |  |            |      |                    |   | 1,193   |  |   | 344    |  |   | 1,537  
|                            |  |                                                          |     |            |   |            |  |            |       |                    |   |         |  |   |        |  |   |        
|Total                       |  | $                                                        | 135 |            | $ | 60         |  | $          | 6,414 |                    | $ | 168,571 |  | $ | 43,143 |  | $ | 218,323
|                            |  |                                                          |     |            |   |            |  |            |       |                    |   |         |  |   |        |  |   |        



Mortgage-backed securities are a low
risk investment for the Bank. The Banks substantial investment in mortgage-backed securities will significantly enhance the Banks ability to meet risk based capital requirements as mortgage-backed securities are assigned a risk rating,
generally from 0% to 20%. Based on historical experience, the Bank believes that the mortgage-backed securities will be repaid significantly in advance of the stated maturities reflected in the above table.



Investment Activities



SAIF-insured savings institutions have the authority to invest in various types of liquid assets, including United States Treasury
obligations, securities of various federal agencies, certain certificates of deposit of insured banks and savings institutions, certain bankers acceptances, repurchase agreements and federal funds. Subject to various restrictions, SAIF-insured
savings institutions may also invest their assets in commercial paper, corporate debt securities and mutual funds whose assets conform to the investments that a SAIF-insured savings institution is otherwise authorized to make directly.



The Board of Directors sets the investment policy of the Bank. This policy dictates that
investments will be made based on the safety of the principal, liquidity requirements of the Bank and the return on the investment and capital appreciation. The Banks Chief Executive Officer may make investments up to $10 million, subject to
ratification by the Banks Board of Directors.



The Banks
conservative policy does not permit investment in junk bonds or speculative strategies based upon the rise and fall of interest rates. Pamrapos goal, however, has always been to realize



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the greatest possible return commensurate with its interest rate risk. Pamrapo has emphasized shorter term securities for their liquidity to increase
sensitivity of its investment securities to changes in interest rates.



As a
member of the FHLB-NY, the Bank is required to maintain liquid assets which meet regulatory safety and soundness standards. See Regulation Federal Home Loan Bank System.



Investment Portfolio



The following table sets forth certain information regarding the Banks investment portfolio, which includes available for sale
securities carried at fair value and held to maturity, at the dates indicated:



|                                                                                     |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|------------------------------------------------------------------------------------ |  | --------------- | ------ | ---------- | - | ------------- |  | ---------- | ------ | ------------- | - | ---------- |  | - | ------ |  | - | ------
|                                                                                     |  | At December 31,
|                                                                                     |  | 2001            |        | 2002       |   | 2003         
|                                                                                     |  | AmortizedCost   |        | Fair Value |   | AmortizedCost |  | Fair Value |        | AmortizedCost |   | Fair Value
|                                                                                     |  | (In thousands) 
|Investments:                                                                         |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|U.S. Government (including federal agencies) available for sale and held to maturity |  | $               | 2,000  |            | $ | 2,013         |  | $          |       |               | $ |           |  | $ |       |  | $ |      
|Mutual Funds available for sale                                                      |  |                 | 1,398  |            |   | 1,397         |  |            | 1,442  |               |   | 1,442      |  |   | 1,474  |  |   | 1,464 
|Equity securities available for sale                                                 |  |                 | 7      |            |   | 265           |  |            | 7      |               |   | 327        |  |   | 7      |  |   | 356   
|FHLB-NY stock                                                                        |  |                 | 3,796  |            |   | 3,796         |  |            | 4,403  |               |   | 4,403      |  |   | 4,744  |  |   | 4,744 
|Subordinated Notes                                                                   |  |                 | 3,000  |            |   | 3,005         |  |            | 7,095  |               |   | 7,461      |  |   | 9,422  |  |   | 9,950 
|Trust originated preferred security                                                  |  |                 | 500    |            |   | 503           |  |            | 500    |               |   | 525        |  |   | 500    |  |   | 540   
|Net unrealized gain on available for sale securities                                 |  |                 | 260    |            |   |              |  |            | 346    |               |   |           |  |   | 379    |  |   |      
|                                                                                     |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|Total investment securities                                                          |  | $               | 10,961 |            | $ | 10,979        |  | $          | 13,793 |               | $ | 14,158     |  | $ | 16,526 |  | $ | 17,054
|                                                                                     |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|Other interest-earning assets:                                                       |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|Interest bearing deposits                                                            |  | $               | 17,872 |            | $ | 17,872        |  | $          | 17,685 |               | $ | 17,685     |  | $ | 4,197  |  | $ | 4,197 
|                                                                                     |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       
|Total investment portfolio                                                           |  | $               | 28,833 |            | $ | 28,851        |  | $          | 31,478 |               | $ | 31,843     |  | $ | 20,749 |  | $ | 21,251
|                                                                                     |  |                 |        |            |   |               |  |            |        |               |   |            |  |   |        |  |   |       



The Bank has no investments with any
one issuer which exceeded 10% of stockholders equity.



Sources of
Funds



General.    Deposits are the primary
source of the Banks funds for use in lending and for other general business purposes. In addition to deposits, the Bank obtains funds from advances from the FHLB-NY and other borrowings.



Deposits.    Pamrapo offers a variety of deposit accounts having a
wide range of interest rates and terms. The Banks deposits consist of regular savings, non-interest bearing demand, NOW and Super NOW, money market and certificate accounts. Pamrapos deposits are obtained primarily from the Hudson County
area. Pamrapo had no brokered deposits at December 31, 2003, as compared to $99,000 at December 31, 2002. The Bank relies primarily on customer service and long-standing relationships with customers to attract and retain deposits. Deposits increased
by $46.7 million or 10.5% from $445.5 million at December 31, 2002 to $492.2 million at December 31, 2003.



17



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The flow of deposits is influenced significantly by general economic conditions, changes in the money market and
prevailing interest rates and competition.



Deposit
Portfolio.    The following table sets forth the distribution and weighted average nominal interest rate of the Banks deposit accounts at the dates indicated:



|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|---------------------------------------------------- |  | --------------- | ------- | ------------------- | ------ | - | ----------------------------- | ---- | - | ---------------------- | - | ------------------- |  | ------ | ----------------------------- |  | ---- | ------ |  | ------------------- | ------- |  | ----------------------------- | - |  | ---- | -
|                                                     |  | At December 31, |        
|                                                     |  | 2001            |         |                     | 2002   |   |                               | 2003 |  
|                                                     |  | Amount          |         | % of Total Deposits |        |   | Weighted Average Nominal Rate |      |   | Amount                 |   | % of Total Deposits |  |        | Weighted Average Nominal Rate |  |      | Amount |  | % of Total Deposits |         |  | Weighted Average Nominal Rate |  
|                                                     |  |                 |         |                     |        |   |                               |      |   | (Dollars in thousands) |   |                     |  |        |                               |  |      |        | 
|Passbook and club Accounts                           |  | $               | 137,113 |                     | 32.92  | % |                               | 2.33 | % |                        | $ | 155,431             |  | 34.89  | %                             |  | 2.34 | %      |  | $                   | 179,463 |  | 36.46                         | % |  | 1.35 | %
|0.00% demand                                         |  |                 | 26,248  |                     | 6.30   |   |                               | 0.00 |   |                        |   | 26,314              |  | 5.91   |                               |  | 0.00 |        |  |                     | 30,255  |  | 6.15                          |   |  | 0.00 |  
|NOW                                                  |  |                 | 32,176  |                     | 7.72   |   |                               | 1.50 |   |                        |   | 32,813              |  | 7.37   |                               |  | 1.26 |        |  |                     | 41,433  |  | 8.42                          |   |  | 1.00 |  
|Super NOW                                            |  |                 | 158     |                     | .04    |   |                               | 1.50 |   |                        |   | 387                 |  | .09    |                               |  | 1.26 |        |  |                     | 159     |  | .03                           |   |  | 1.00 |  
|Money market demand                                  |  |                 | 28,293  |                     | 6.79   |   |                               | 2.22 |   |                        |   | 32,594              |  | 7.31   |                               |  | 2.11 |        |  |                     | 38,495  |  | 7.82                          |   |  | 1.33 |  
|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|Total passbook, club, NOW, and money market accounts |  |                 | 223,988 |                     | 53.77  |   |                               | 1.92 |   |                        |   | 247,539             |  | 55.57  |                               |  | 1.92 |        |  |                     | 289,805 |  | 58.88                         |   |  | 1.16 |  
|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|Certificate accounts:                                |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|91-day money market                                  |  |                 | 1,582   |                     | .38    |   |                               | 2.56 |   |                        |   | 2,730               |  | .61    |                               |  | 2.14 |        |  |                     | 1,713   |  | .35                           |   |  | 1.26 |  
|26-week money market                                 |  |                 | 29,538  |                     | 7.09   |   |                               | 3.43 |   |                        |   | 26,300              |  | 5.90   |                               |  | 2.55 |        |  |                     | 21,443  |  | 4.36                          |   |  | 1.62 |  
|12- to 30-month money market                         |  |                 | 120,569 |                     | 28.94  |   |                               | 4.35 |   |                        |   | 124,535             |  | 27.95  |                               |  | 3.07 |        |  |                     | 129,345 |  | 26.28                         |   |  | 2.25 |  
|30- to 48-month money market                         |  |                 | 11,735  |                     | 2.82   |   |                               | 5.26 |   |                        |   | 13,054              |  | 2.93   |                               |  | 4.77 |        |  |                     | 16,633  |  | 3.38                          |   |  | 3.93 |  
|IRA and KEOGH                                        |  |                 | 28,991  |                     | 6.96   |   |                               | 4.63 |   |                        |   | 31,250              |  | 7.02   |                               |  | 3.55 |        |  |                     | 33,222  |  | 6.75                          |   |  | 2.68 |  
|Negotiated rate                                      |  |                 | 184     |                     | .04    |   |                               | 3.80 |   |                        |   | 99                  |  | .02    |                               |  | 2.25 |        |  |                     |        |  |                              |   |  |     |  
|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|Total certificates                                   |  |                 | 192,599 |                     | 46.23  |   |                               | 4.29 |   |                        |   | 197,968             |  | 44.43  |                               |  | 3.18 |        |  |                     | 202,356 |  | 41.12                         |   |  | 2.39 |  
|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  
|Total deposits                                       |  | $               | 416,587 |                     | 100.00 | % |                               | 3.02 | % |                        | $ | 445,507             |  | 100.00 | %                             |  | 2.48 | %      |  | $                   | 492,161 |  | 100.00                        | % |  | 1.66 | %
|                                                     |  |                 |         |                     |        |   |                               |      |   |                        |   |                     |  |        |                               |  |      |        |  |                     |         |  |                               |   |  |      |  



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The following table sets forth the deposit activity of the Bank for the periods indicated:



|                            |  |                         |        |      |   |        |  |   |       
|--------------------------- |  | ----------------------- | ------ | ---- | - | ------ |  | - | ------
|                            |  | Year Ended December 31,
|                            |  | 2001                    |        | 2002 |   | 2003  
|                            |  | (In thousands)         
|Deposits net of withdrawals |  | $                       | 22,268 |      | $ | 17,438 |  | $ | 36,962
|Interest credited           |  |                         | 14,909 |      |   | 11,483 |  |   | 9,692 
|                            |  |                         |        |      |   |        |  |   |       
|Net increase in deposits    |  | $                       | 37,177 |      | $ | 28,921 |  | $ | 46,654
|                            |  |                         |        |      |   |        |  |   |       



The following table sets forth, by
various rate categories, the amount of certificate accounts outstanding as of the dates indicated and the periods to maturity of the certificate accounts outstanding at December 31, 2003.



|               |  |                 |         |                                   |   |         |  |                  |         |           |   |             |  |                          |        |  |   |       |  |   |      
|-------------- |  | --------------- | ------- | --------------------------------- | - | ------- |  | ---------------- | ------- | --------- | - | ----------- |  | ------------------------ | ------ |  | - | ----- |  | - | -----
|               |  | At December 31, |         | At December 31, 2003, Maturing in
|               |  | 2001            |         | 2002                              |   | 2003    |  | One Year or Less |         | Two Years |   | Three Years |  | Greater than Three Years
|               |  | (In thousands) 
|2.99% or less  |  | $               | 12,798  |                                   | $ | 74,055  |  | $                | 168,371 |           | $ | 152,637     |  | $                        | 10,687 |  | $ | 4,518 |  | $ | 529  
|3.00% to 4.99% |  |                 | 128,536 |                                   |   | 115,030 |  |                  | 27,494  |           |   | 19,214      |  |                          | 2,779  |  |   | 1,820 |  |   | 3,681
|5.00% to 5.99% |  |                 | 39,479  |                                   |   | 6,049   |  |                  | 4,137   |           |   | 1,973       |  |                          | 850    |  |   | 728   |  |   | 586  
|6.00% to 6.99% |  |                 | 11,757  |                                   |   | 2,627   |  |                  | 2,353   |           |   | 2,074       |  |                          | 243    |  |   | 36    |  |   |     
|7.00% to 7.99% |  |                 | 29      |                                   |   | 207     |  |                  |        |           |   |            |  |                          |       |  |   |      |  |   |     
|               |  |                 |         |                                   |   |         |  |                  |         |           |   |             |  |                          |        |  |   |       |  |   |      
|Total          |  | $               | 192,599 |                                   | $ | 197,968 |  | $                | 202,355 |           | $ | 175,898     |  | $                        | 14,559 |  | $ | 7,102 |  | $ | 4,796
|               |  |                 |         |                                   |   |         |  |                  |         |           |   |             |  |                          |        |  |   |       |  |   |      



At December 31, 2003, the Bank had
outstanding $65.5 million in certificate accounts in amounts of $100,000 or more maturing as follows:



|                               |  |                |       
|------------------------------ |  | -------------- | ------
|                               |  | Amount        
|                               |  | (In thousands)
|Three months or less           |  | $              | 12,239
|Over three through six months  |  |                | 11,612
|Over six through twelve months |  |                | 32,538
|Over twelve months             |  |                | 9,134 
|                               |  |                |       
|Total                          |  | $              | 65,523
|                               |  |                |       



Borrowings.    Although deposits are the Banks primary source of funds, the Bank utilizes borrowings when they are a less costly source of funds or can be invested at a positive rate of return.



Pamrapo obtains advances from the FHLB-NY upon the security of its capital stock of the
FHLB-NY and a blanket assignment of the Banks unpledged qualifying mortgage loans, mortgage-backed securities and investment securities. Such advances are made pursuant to several different credit programs, each of which has its own interest
rate and range of maturities. As of December 31, 2003, outstanding advances from the FHLB-NY amounted to $87.0 million.



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The following table sets forth certain information regarding FHLB-NY advances, all of which are at fixed rates, at the
dates indicated:



|                                |  |                 |        |      |   |        |  |   |       
|------------------------------- |  | --------------- | ------ | ---- | - | ------ |  | - | ------
|                                |  | At December 31,
|                                |  | 2001            |        | 2002 |   | 2003  
|                                |  | (In thousands) 
|Maturity                        |  |                 |        |      |   |        |  |   |       
|6.51% due 2002                  |  | $               | 5,000  |      | $ |       |  | $ |      
|4.00% due 2002                  |  |                 | 3,000  |      |   |       |  |   |      
|5.36% due 2003                  |  |                 | 15,340 |      |   | 15,340 |  |   |      
|7.15% due 2003                  |  |                 | 5,000  |      |   | 5,000  |  |   |      
|4.65% due 2003                  |  |                 | 7,000  |      |   | 7,000  |  |   |      
|1.14% due 2004                  |  |                 |       |      |   |       |  |   | 5,000 
|4.04% due 2004                  |  |                 | 5,000  |      |   | 5,000  |  |   | 5,000 
|3.10% due 2004                  |  |                 |       |      |   | 7,000  |  |   | 7,000 
|1.76% due 2005                  |  |                 |       |      |   |       |  |   | 7,000 
|4.54% due 2005                  |  |                 | 5,000  |      |   | 5,000  |  |   | 5,000 
|3.64% due 2005                  |  |                 |       |      |   | 8,000  |  |   | 8,000 
|2.32% due 2006                  |  |                 |       |      |   |       |  |   | 13,000
|4.84% due 2006                  |  |                 | 5,000  |      |   | 5,000  |  |   | 5,000 
|4.20% due 2006                  |  |                 |       |      |   | 7,000  |  |   | 7,000 
|2.31% due 2007                  |  |                 |       |      |   |       |  |   | 5,000 
|3.50% due 2007                  |  |                 |       |      |   | 3,000  |  |   | 3,000 
|4.85% due 2008                  |  |                 | 7,000  |      |   | 7,000  |  |   | 7,000 
|6.19% due 2010                  |  |                 | 10,000 |      |   | 10,000 |  |   | 10,000
|                                |  |                 |        |      |   |        |  |   |       
|Total advances from the FHLB-NY |  | $               | 67,340 |      | $ | 84,340 |  | $ | 87,000
|                                |  |                 |        |      |   |        |  |   |       



The Bank has a mortgage loan of
$325,000 in connection with the purchase of premises. The mortgage loan carries an interest rate of 8% and is amortized over a 12 year term. The unpaid mortgage loan balance at December 31, 2003 amounted to $118,000.



Competition



Pamrapo has substantial competition for both loans and deposits. The New York City metropolitan area has a high density of financial
institutions, many of which are significantly larger and have substantially greater financial resources than the Bank, and all of which are competitors of the Bank to varying degrees. The Bank faces significant competition both in making mortgage
loans and in attracting deposits. The Banks competition for loans comes principally from savings and loan associations, savings banks, mortgage banking companies, insurance companies, commercial banks and other institutional lenders. Its most
direct competition for deposits has historically come from savings and loan associations, savings banks, commercial banks, credit unions and other financial institutions. The Bank faces additional competition for deposits from short-term money
market funds and other corporate and government securities funds. The Bank faces increased competition among financial institutions for deposits. Competition also may increase as a result of the continuing reduction in the effective restrictions on
the interstate operations of financial institutions and legislation authorizing the acquisition of thrifts by Banks.



The Bank competes for loans principally through the interest rates and loan fees it charges and the efficiency and quality of services it provides borrowers and real
estate brokers. It competes for deposits through pricing, service and by offering a variety of deposit accounts. New powers for thrift institutions provided by New Jersey and federal legislation enacted in recent years have



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resulted in increased competition between savings banks and other financial institutions for both deposits and loans. Management believes that implementation
of new powers set forth in such recent legislation is expected to intensify this competition.



Subsidiaries



Pamrapo is generally
permitted under New Jersey law and the regulations of the Commissioner of the New Jersey Department of Banking and Insurance (the Commissioner) to invest an amount equal to 3% of its assets in subsidiary service corporations. As of
December 31, 2003, Pamrapo had $365,000 of its assets invested in Pamrapo Service Corporation (the Corporation), a wholly owned subsidiary of the Bank. In the past, the Corporation has entered into real estate joint ventures for the
principal purpose of land acquisition and development. However, the Corporation has disposed of all such real estate joint ventures. Currently, the Corporations only investments are in bank premises and real estate held for investment.



Under OTS regulation, investments in and loans to subsidiaries not engaged in
activities permissible to national banks, such as the real estate investment activities previously entered into by the Bank, generally are required to be deducted from capital. Although the Bank will continue to consider joint venture opportunities,
it will do so with the effects of the OTS regulations in mind. The Bank currently has no plans to enter into any joint ventures.



Yields Earned and Rates Paid



The Banks earnings depend primarily on its net interest income. Net interest income is affected by (i) the volume of interest-earning assets and interest-bearing
liabilities, (ii) rates of interest earned on interest-earning assets and rates paid on interest-bearing liabilities and (iii) the difference (interest rate spread) between rates of interest earned on interest-earning assets and rates
paid on interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.



A large portion of the Banks real estate loans are long-term, fixed-rate loans. Accordingly, the average yield recognized by the Bank
on its total loan portfolio changes slowly and generally does not keep pace with changes in interest rates on deposit accounts and borrowings. At December 31, 2003, approximately 97.8% of the Banks gross mortgage loan portfolio, excluding
mortgage-backed securities, consisted of fixed-rate mortgage loans with original terms consisting primarily of 15 to 30 years. Accordingly, when interest rates rise, the Banks yield on its loan portfolio increases at a slower pace than the
rate by which its cost of funds increases, which may adversely impact the Banks interest rate spread.





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The following tables set forth for the periods indicated information regarding the average balances of interest-earning
assets and interest-bearing liabilities, the dollar amount of interest income earned on such assets and the resultant yields, the dollar amount of interest expense paid on such liabilities and the resultant costs. The tables also reflect the
interest rate spread for such periods, the net yield on interest-earning assets (i.e., net interest income as a percentage of average interest-earning assets) and the ratio of average interest-earning assets to average interest-bearing liabilities.
Average balances are based on month-end amounts.



|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|-------------------------------------------------------------------------------- |  | ----------------------- | ------- | -------- | ---- | ----------- |  | ---- | ---------------------- |  | -------- | ------- | ----------- | - | ------ | --------------- | ---- | -------- |  | ----------- | ------- |  | - | ------ |  | ---- | -
|                                                                                 |  | Year Ended December 31, |        
|                                                                                 |  | 2001                    |         |          | 2002 |             |  | 2003 |                       
|                                                                                 |  | Average Balance         |         | Interest |      | Yield/ Cost |  |      | Average Balance        |  | Interest |         | Yield/ Cost |   |        | Average Balance |      | Interest |  | Yield/ Cost |        
|                                                                                 |  |                         |         |          |      |             |  |      | (Dollars in thousands) |  |          |         |             |   |        |                 |     
|Interest-earning assets:                                                         |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Loans (1)                                                                        |  | $                       | 340,340 |          | $    | 27,480      |  | 8.07 | %                      |  | $        | 384,671 |             | $ | 29,267 |                 | 7.61 | %        |  | $           | 376,029 |  | $ | 26,102 |  | 6.94 | %
|Mortgage-backed securities                                                       |  |                         | 121,596 |          |      | 7,925       |  | 6.52 |                        |  |          | 127,674 |             |   | 7,765  |                 | 6.08 |          |  |             | 199,551 |  |   | 9,570  |  | 4.80 |  
|Investments                                                                      |  |                         | 8,840   |          |      | 597         |  | 6.75 |                        |  |          | 7,163   |             |   | 518    |                 | 7.23 |          |  |             | 10,523  |  |   | 737    |  | 7.00 |  
|Other interest-earning assets                                                    |  |                         | 11,841  |          |      | 623         |  | 5.26 |                        |  |          | 25,534  |             |   | 508    |                 | 1.99 |          |  |             | 18,506  |  |   | 346    |  | 1.87 |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total interest-earning assets                                                    |  |                         | 482,617 |          |      | 36,625      |  | 7.59 |                        |  |          | 545,042 |             |   | 38,058 |                 | 6.98 |          |  |             | 604,609 |  |   | 36,755 |  | 6.08 |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Non-interest-earning assets                                                      |  |                         | 23,164  |          |      |             |  |      |                        |  |          | 18,397  |             |   |        |                 |      |          |  |             | 18,348  |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total assets (1)                                                                 |  | $                       | 505,781 |          |      |             |  |      |                        |  | $        | 563,439 |             |   |        |                 |      |          |  | $           | 622,957 |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Interest-bearing liabilities:                                                    |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Passbook and club account                                                        |  | $                       | 128,648 |          |      | 3,281       |  | 2.55 |                        |  | $        | 145,051 |             |   | 3,428  |                 | 2.36 |          |  | $           | 169,415 |  |   | 3,118  |  | 1.84 |  
|NOW and money market accounts                                                    |  |                         | 57,742  |          |      | 1,148       |  | 1.99 |                        |  |          | 62,683  |             |   | 1,081  |                 | 1.72 |          |  |             | 73,798  |  |   | 1,029  |  | 1.39 |  
|Certificates of Deposits                                                         |  |                         | 195,106 |          |      | 10,481      |  | 5.37 |                        |  |          | 193,654 |             |   | 6,974  |                 | 3.60 |          |  |             | 202,513 |  |   | 5,544  |  | 2.74 |  
|Advances and other borrowings                                                    |  |                         | 45,548  |          |      | 2,635       |  | 5.79 |                        |  |          | 75,525  |             |   | 3,807  |                 | 5.04 |          |  |             | 90,222  |  |   | 3,742  |  | 4.15 |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total interest-bearing liabilities                                               |  |                         | 427,044 |          |      | 17,545      |  | 4.11 |                        |  |          | 476,913 |             |   | 15,290 |                 | 3.21 |          |  |             | 535,948 |  |   | 13,433 |  | 2.51 |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Non-interest-bearing liabilities:                                                |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Non-interest-bearing demand accounts                                             |  |                         | 21,604  |          |      |             |  |      |                        |  |          | 27,363  |             |   |        |                 |      |          |  |             | 29,601  |  |   |        |  |      |  
|Other                                                                            |  |                         | 10,376  |          |      |             |  |      |                        |  |          | 10,120  |             |   |        |                 |      |          |  |             | 7,045   |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total non-interest-bearing liabilities                                           |  |                         | 31,980  |          |      |             |  |      |                        |  |          | 37,483  |             |   |        |                 |      |          |  |             | 36,646  |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total liabilities                                                                |  |                         | 459,024 |          |      |             |  |      |                        |  |          | 514,396 |             |   |        |                 |      |          |  |             | 572,594 |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Stockholders equity                                                             |  |                         | 46,757  |          |      |             |  |      |                        |  |          | 49,043  |             |   |        |                 |      |          |  |             | 50,363  |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Total liabilities and stockholders equity                                       |  | $                       | 505,781 |          |      |             |  |      |                        |  | $        | 563,439 |             |   |        |                 |      |          |  | $           | 622,957 |  |   |        |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Net interest income/interest rate spread                                         |  |                         |         |          | $    | 19,080      |  | 3.48 | %                      |  |          |         |             | $ | 22,768 |                 | 3.77 | %        |  |             |         |  | $ | 23,322 |  | 3.57 | %
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Net interest-earning assets/net yield on Interest-earning assets                 |  | $                       | 55,573  |          |      |             |  | 3.95 | %                      |  | $        | 68,129  |             |   |        |                 | 4.18 | %        |  | $           | 68,661  |  |   |        |  | 3.86 | %
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  
|Ratio of average interest-earning assets to Average interest-bearing liabilities |  |                         |         |          |      | 1.13x       |  |      |                        |  |          |         |             |   | 1.14x  |                 |      |          |  |             |         |  |   | 1.13x  |  |      |  
|                                                                                 |  |                         |         |          |      |             |  |      |                        |  |          |         |             |   |        |                 |      |          |  |             |         |  |   |        |  |      |  

---

|(1) | Non-accruing loans are part of the average balances of loans outstanding.
|--- | -------------------------------------------------------------------------



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Interest Rate Sensitivity Analysis



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 an institution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. 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. During a period of rising interest rates, a negative gap would tend to adversely affect net interest income while a positive gap would tend to result in an increase in net interest income. During a period of
falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to adversely affect net interest income.



The following table sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at December 31, 2003,
which are expected to reprice or mature in each of the future time periods shown. Except as stated below, the amount of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the
contractual terms of the asset or liability. Loans and mortgage-backed securities that have adjustable rates are shown as being due in the period during which the interest rates are next subject to change. The Bank has assumed that its passbook
savings and club accounts which totaled $179.5 million at December 31, 2003, are withdrawn at the following rates, 17.00%, 31.11%, 29.44%, 52.96%, 77.87% and 100.00% on the cumulative declining balance of such accounts during the periods shown. The
Bank has further assumed that its money market accounts which totaled $38.5 million at December 31, 2003, are withdrawn at the following rates, 79.00%, 52.39%, 52.39%, 84.36%, 97.62% and 100.00% on the cumulative declining balance of such accounts
during the periods shown.



Additionally, the Bank has assumed that its
non-interest bearing demand, NOW and Super NOW accounts which totaled $71.8 million at December 31, 2003, are withdrawn at the following rates, 37.00%, 53.76%, 31.11%, 60.62%, 84.47% and 100.00% on the cumulative declining balance of such
accounts during the periods shown.



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|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|----------------------------------------------------------------------------------- |  | -------------- | -------- | -- | --------------------------- | - | -------- | ---------------------------- |  | - | ----------------------------- | -- |  | ------------------------------ | -------- | -- | ----------------- | - | -------- | ----- |  | - | ------- | -- |  | - | -------
|                                                                                    |  | 1 Year or Less |          |    | More than 1 Year to 3 Years |   |          | More than 3 Years to 5 Years |  |   | More than 5 Years to 10 Years |    |  | More than 10 Years to 20 Years |          |    | More than20 Years |   |          | Total
|                                                                                    |  | (In thousands)
|Interest-earning Assets:                                                            |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Loans                                                                               |  | $              | 11,998   |    |                             | $ | 4,478    |                              |  | $ | 11,142                        |    |  | $                              | 32,268   |    |                   | $ | 176,992  |       |  | $ | 148,820 |    |  | $ | 385,698
|Mortgage-backed securities (1)                                                      |  |                | 135      |    |                             |   | 60       |                              |  |   | 311                           |    |  |                                | 13,927   |    |                   |   | 197,137  |       |  |   | 6,753   |    |  |   | 218,323
|Investments (1)                                                                     |  |                | 1,481    |    |                             |   |         |                              |  |   |                              |    |  |                                | 9,422    |    |                   |   |         |       |  |   | 500     |    |  |   | 11,403 
|Other interest-earning assets (2)                                                   |  |                | 4,744    |    |                             |   |         |                              |  |   |                              |    |  |                                |         |    |                   |   |         |       |  |   |        |    |  |   | 4,744  
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Total interest-earning assets                                                       |  |                | 18,358   |    |                             |   | 4,538    |                              |  |   | 11,453                        |    |  |                                | 55,617   |    |                   |   | 374,129  |       |  |   | 156,073 |    |  |   | 620,168
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Interest-bearing Liabilities:                                                       |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|NOW and Super NOW accounts                                                          |  |                | 18,647   |    |                             |   | 28,600   |                              |  |   | 7,653                         |    |  |                                | 10,273   |    |                   |   | 5,637    |       |  |   | 1,036   |    |  |   | 71,847 
|Money market accounts                                                               |  |                | 20,288   |    |                             |   | 9,539    |                              |  |   | 4,541                         |    |  |                                | 3,482    |    |                   |   | 630      |       |  |   | 15      |    |  |   | 38,495 
|Passbook and club accounts                                                          |  |                | 30,509   |    |                             |   | 46,340   |                              |  |   | 30,210                        |    |  |                                | 38,346   |    |                   |   | 26,522   |       |  |   | 7,537   |    |  |   | 179,463
|Certificate accounts                                                                |  |                | 175,898  |    |                             |   | 21,661   |                              |  |   | 4,796                         |    |  |                                |         |    |                   |   |         |       |  |   |        |    |  |   | 202,355
|Advances and other borrowings                                                       |  |                | 17,000   |    |                             |   | 45,000   |                              |  |   | 15,000                        |    |  |                                | 10,000   |    |                   |   |         |       |  |   |        |    |  |   | 87,000 
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Total interest-bearing liabilities                                                  |  |                | 262,342  |    |                             |   | 151,140  |                              |  |   | 62,200                        |    |  |                                | 62,100   |    |                   |   | 32,789   |       |  |   | 8,589   |    |  | $ | 579,160
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Interest sensitivity gap per period                                                 |  | $              | (243,984 | )  |                             | $ | (146,602 | )                            |  | $ | (50,747                       | )  |  | $                              | (6,483   | )  |                   | $ | 341,340  |       |  | $ | 147,484 |    |  |   |        
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Cumulative interest sensitivity gap                                                 |  | $              | (243,984 | )  |                             | $ | (390,585 | )                            |  | $ | (441,332                      | )  |  | $                              | (447,816 | )  |                   | $ | (106,476 | )     |  | $ | 41,008  |    |  |   |        
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Cumulative gap as a percent of total assets                                         |  |                | (38.31   | %) |                             |   | (61.33   | %)                           |  |   | (69.29                        | %) |  |                                | (70.31   | %) |                   |   | (16.72   | %)    |  |   | 6.44    | %  |  |   |        
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        
|Cumulative interest-sensitive assets as a percent of interest-sensitive liabilities |  |                | (7.00    | %) |                             |   | (5.54    | %)                           |  |   | (7.22                         | %) |  |                                | (16.73   | %) |                   |   | (81.34   | %)    |  |   | (107.08 | %) |  |   |        
|                                                                                    |  |                |          |    |                             |   |          |                              |  |   |                               |    |  |                                |          |    |                   |   |          |       |  |   |         |    |  |   |        

---

|(1) | Includes available for sale securities.
|--- | ---------------------------------------

|(2) | Includes FHLB-NY stock which has no stated maturity.
|--- | ----------------------------------------------------



Rate/Volume Analysis



Changes in net interest income are attributable to three factors: (i) a change in volume or amount of an interest-earning asset or interest-bearing liability, (ii) a change in interest rates or (iii) a change caused
by a combination of changes in volume and interest rate. The table below sets forth certain information regarding changes in interest income and interest expense of the Bank for the periods indicated, reflecting the extent to which such changes are
attributable to changes in volume and changes in rate. The amount attributable to a change in volume or amount is calculated by multiplying the average interest rate for the prior period by the increase (decrease) in the average balance of the
related asset or liability. The amount attributable to a change in rate is calculated by multiplying the increase (decrease) in the average interest rate from the prior period by the average balance of the related asset or liability for the prior
period. The rate/volume change represents a change in rate multiplied by a change in volume and is allocated proportionately to volume and rate changes.



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|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|----------------------------- |  | -------------------------- | ----- | - | -------------------------- | - | ------ | -------------- |  | - | ------ | - |  | ---- | ----- | - | --- | - | ------ | - |  | - | ------ | -
|                              |  | Year Ended December 31,    |      
|                              |  | 2002 v. 2001               |       |   | 2003 v. 2002               |  
|                              |  | Increase (decrease) due to |       |   | Increase (decrease) due to |  
|                              |  | Volume                     |       |   | Rate                       |   |        | Net            |  |   | Volume |   |  | Rate |       |   | Net |  
|                              |  |                            |       |   |                            |   |        | (In thousands) |  |   |        |   |  |      |      
|Interest income:              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Loans                         |  | $                          | 3,557 |   |                            | $ | (1,769 | )              |  | $ | 1,787  |   |  | $    | (646  | ) |     | $ | (2,519 | ) |  | $ | (3,165 | )
|Mortgaged-backed securities   |  |                            | 401   |   |                            |   | (562   | )              |  |   | (160   | ) |  |      | 4,359 |   |     |   | (2,554 | ) |  |   | 1,805  |  
|Investments                   |  |                            | (113  | ) |                            |   | 34     |                |  |   | (79    | ) |  |      | 243   |   |     |   | (24    | ) |  |   | 219    |  
|Other interest-earning assets |  |                            | 720   |   |                            |   | (835   | )              |  |   | (115   | ) |  |      | (140  | ) |     |   | (22    | ) |  |   | (162   | )
|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Total interest income         |  |                            | 4,565 |   |                            |   | (3,132 | )              |  |   | 1,433  |   |  |      | 3,816 |   |     |   | (5,119 | ) |  |   | (1,303 | )
|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Interest expense:             |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Passbook and club accounts    |  |                            | 422   |   |                            |   | (276   | )              |  |   | 147    |   |  |      | 571   |   |     |   | (881   | ) |  |   | (310   | )
|NOW and money market accounts |  |                            | 102   |   |                            |   | (169   | )              |  |   | (67    | ) |  |      | 191   |   |     |   | (243   | ) |  |   | (52    | )
|Certificates of deposit       |  |                            | (79   | ) |                            |   | (3,428 | )              |  |   | (3,507 | ) |  |      | 312   |   |     |   | (1,742 | ) |  |   | (1,430 | )
|Advance and other borrowings  |  |                            | 1,739 |   |                            |   | (566   | )              |  |   | 1,172  |   |  |      | 738   |   |     |   | (803   | ) |  |   | (65    | )
|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Total interest expense        |  |                            | 2,184 |   |                            |   | (4,439 | )              |  |   | (2,255 | ) |  |      | 1,812 |   |     |   | (3,669 | ) |  |   | (1,857 | )
|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  
|Net change in net interest    |  | $                          | 2,381 |   |                            | $ | 1,307  |                |  | $ | 3,688  |   |  | $    | 2,005 |   |     | $ | (1,451 | ) |  | $ | 554    |  
|                              |  |                            |       |   |                            |   |        |                |  |   |        |   |  |      |       |   |     |   |        |   |  |   |        |  



REGULATION AND
SUPERVISION



General



The Company, as a savings and loan holding company, is required to file certain reports
with, and otherwise comply with the rules and regulations of the Office of Thrift Supervision (OTS) under the Home Owners Loan Act, as amended (the HOLA). In addition, the activities of savings institutions, such as the
Bank, are governed by the HOLA and the Federal Deposit Insurance Act (FDI Act).



The Bank is subject to extensive regulation, examination and supervision by the OTS, as its primary federal regulator, and the Federal Deposit Insurance Corporation (FDIC), as the deposit insurer. The Bank
is a member of the Federal Home Loan Bank (FHLB) System and its deposit accounts are insured up to applicable limits by the Savings Association Insurance Fund (SAIF) managed by the FDIC. The Bank must file reports with the
OTS and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions such as mergers with, or acquisitions of, other savings institutions. The OTS and/or the
FDIC conduct periodic examinations to test the Banks safety and soundness and compliance with various regulatory requirements. This regulation and supervision establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the insurance fund and depositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in such regulatory requirements and policies, whether by the OTS, the FDIC
or the Congress, could have a material adverse impact on the Company, the Bank and their operations. Certain of the regulatory



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requirements applicable to the Bank and to the Company are referred to below or elsewhere herein. The description of statutory provisions and regulations
applicable to savings institutions and their holding companies set forth in this Form 10-K does not purport to be a complete description of such statutes and regulations and their effects on the Bank and the Company.



Holding Company Regulation



The Company is a nondiversified unitary savings and loan holding company within the meaning
of the HOLA. As a unitary savings and loan holding company, the Company generally is not restricted under existing laws as to the types of business activities in which it may engage, provided that the Bank continues to be a qualified thrift lender
(QTL). Upon any non-supervisory acquisition by the Company of another savings institution or savings bank that meets the QTL test and is deemed to be a savings institution by the OTS, the Company would become a multiple savings and loan
holding company (if the acquired institution is held as a separate subsidiary) and would be subject to extensive limitations on the types of business activities in which it could engage. The HOLA limits the activities of a multiple savings and loan
holding company and its non-insured institution subsidiaries primarily to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act (BHC Act), subject to the prior approval of the OTS, and
certain activities authorized by OTS regulation, and no multiple savings and loan holding company may acquire more than 5% the voting stock of a company engaged in impermissible activities.



The HOLA prohibits a savings and loan holding company, directly or indirectly, or through one
or more subsidiaries, from acquiring more than 5% of the voting stock of another savings institution or holding company thereof, without prior written approval of the OTS or acquiring or retaining control of a depository institution that is not
insured by the FDIC. In evaluating applications by holding companies to acquire savings institutions, the OTS must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the
acquisition on the risk to the insurance funds, the convenience and needs of the community and competitive factors.



The OTS is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one
state, subject to two exceptions: (i) the approval of interstate supervisory acquisitions by savings and loan holding companies and (ii) the acquisition of a savings institution in another state if the laws of the state of the target savings
institution specifically permit such acquisitions. The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.



Although savings and loan holding companies are not subject to specific capital requirements or specific restrictions on the payment of dividends or other capital
distributions, HOLA does prescribe such restrictions on subsidiary savings institutions as described below. The Bank must notify the OTS within 30 days before declaring any dividend to the Company. In addition, the financial impact of a holding
company on its subsidiary institution is a matter that is evaluated by the OTS, and the agency has authority to order cessation of activities or divestiture of subsidiaries deemed to pose a threat to the safety and soundness of the subsidiary
institution.



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Federal Savings Institution Regulation



Capital Requirements.    The OTS capital regulations require savings institutions to meet three minimum capital
standards: a 1.5% tangible capital ratio, a 4% leverage (core) capital ratio and an 8% risk-based capital ratio. Core capital is defined as common stockholders equity (including retained earnings), certain noncumulative perpetual preferred
stock and related surplus, minority interests in equity accounts of consolidated subsidiaries less intangibles other than certain mortgage servicing rights and credit card relationships. The OTS regulations require that, in meeting the tangible,
leverage (core) and risk-based capital standards, institutions must generally deduct investments in and loans to subsidiaries engaged in activities that are not permissible for a national bank.



The risk-based capital standard for savings institutions requires the maintenance of total
capital (which is defined as core capital and supplementary capital) to risk-weighted assets of 8%. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of
0% to 100%, as assigned by the OTS capital regulation based on the risks the OTS believes are inherent in the type of asset. The components of core capital are equivalent to those discussed earlier under the 4% leverage standard. The components of
supplementary capital currently include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock and, within specified limits, the allowance for loan and
lease losses. Overall, the amount of supplementary capital included as part of total capital cannot exceed 100% of core capital.



The OTS regulatory capital requirements also incorporate an interest rate risk component. Savings institutions with above normal interest rate risk exposure
are subject to a deduction from total capital for purposes of calculating their risk-based capital requirements. A savings institutions interest rate risk is measured by the decline in the net portfolio value of its assets (i.e., the
difference between incoming and outgoing discounted cash flows from assets, liabilities and off-balance sheet contracts) that would result from a hypothetical 200 basis point increase or decrease in market interest rates divided by the estimated
economic value of the institutions assets, as calculated in accordance with guidelines set forth by the OTS. A savings institution whose measured interest rate risk exposure exceeds 2% must deduct an amount equal to one-half of the difference
between the institutions measured interest rate risk and 2%, multiplied by the estimated economic value of the institutions total assets. That dollar amount is deducted from an institutions total capital in calculating compliance
with its risk-based capital requirement. Under the rule, there is a two quarter lag between the reporting date of an institutions financial data and the effective date for the new capital requirement based on that data. A savings institution
with assets of less than $300 million and risk-based capital ratios in excess of 12% is not subject to the interest rate risk component, unless the OTS determines otherwise. The Director of the OTS may waive or defer a savings institutions
interest rate risk component on a case-by-case basis. For the present time, the OTS has deferred implementation of the interest rate risk component. At December 31, 2003, the Bank met each of its capital requirements.



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The following table presents the Banks capital position at December 31, 2003:



|                |  |                        |        |                |   |              |  |               |        |                 |        |  |      
|--------------- |  | ---------------------- | ------ | -------------- | - | ------------ |  | ------------- | ------ | --------------- | ------ |  | -----
|                |  | ActualAmount           |        | RequiredAmount |   | ExcessAmount |  | ActualPercent |        | RequiredPercent
|                |  | (Dollars in thousands)
|Tangible        |  | $                      | 46,166 |                | $ | 9,544        |  | $             | 36,622 |                 | 7.26%  |  | 1.50%
|Core (Leverage) |  |                        | 46,166 |                |   | 25,451       |  |               | 20,715 |                 | 7.26%  |  | 4.00%
|Risk-based      |  |                        | 48,507 |                |   | 25,645       |  |               | 22,862 |                 | 15.13% |  | 8.00%



Prompt Corrective Regulatory
Action.    Under the OTS prompt corrective action regulations, the OTS is required to take certain supervisory actions against undercapitalized institutions, the severity of which depends upon the institutions degree of
undercapitalization. Generally, a savings institution that has a total risk-based capital of less than 8% or a leverage ratio or a Tier 1 capital ratio that is less than 4% is considered to be undercapitalized. A savings institution that
has a total risk-based capital ratio less than 6%, a Tier 1 capital ratio of less than 3% or a leverage ratio that is less than 3% is considered to be significantly undercapitalized and a savings institution that has a tangible capital
to assets ratio equal to or less than 2% is deemed to be critically undercapitalized. Subject to a narrow exception, the banking regulator is required to appoint a receiver or conservator for an institution that is critically
undercapitalized. The regulation also provides that a capital restoration plan must be filed with the OTS within 45 days of the date a savings institution receives notice that it is undercapitalized, significantly
undercapitalized or critically undercapitalized. Compliance with the plan must be guaranteed by any parent holding company. In addition, numerous mandatory supervisory actions become immediately applicable to the institution
depending upon its category, including, but not limited to, increased monitoring by regulators and restrictions on growth, capital distributions and expansion. The OTS could also take any one of a number of discretionary supervisory actions,
including the issuance of a capital directive and the replacement of senior executive officers and directors.



Insurance of Deposit Accounts.    Deposits of the Bank are presently insured by SAIF. The FDIC maintains a risk-based assessment system by which institutions are assigned to one of three
categories based on their capitalization and one of three subcategories based on examination ratings and other supervisory information. An institutions assessment rate depends upon the categories to which it is assigned. Assessment rates for
SAIF member institutions are determined semiannually by the FDIC and currently range from zero basis points for the healthiest institutions to 27 basis points for the riskiest.



In addition to the assessment for deposit insurance, institutions are required to pay on bonds issued in the late 1980s by the Financing
Corporation (FICO) to recapitalize the predecessor to the SAIF. The BIF and SAIF have equal sharing of FICO payments between the members of both insurance funds.



The Banks assessment rate for the year ended December 31, 2003 was 0 basis points and no premiums were paid for this period. Payments
on the FICO bonds amounted to $73,000. A significant increase in SAIF insurance premiums would likely have an adverse effect on the operating expenses and results of operations of the Bank.



Insurance of deposits may be terminated by the FDIC upon a finding that the institution has
engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or the



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OTS. The management of the Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.



Thrift Rechartering Legislation.    Various
proposals to eliminate the federal thrift charter, create a uniform financial institutions charter and abolish the OTS have been introduced in past sessions of Congress. The Bank is unable to predict whether such legislation would be enacted or the
extent to which the legislation would restrict or disrupt its operations.



Loans to One Borrower.    Under the HOLA, savings institutions are generally subject to the limits on loans to one borrower applicable to national banks. Generally, savings institutions may not make a loan or
extend credit to a single or related group of borrowers in excess of 15% of its unimpaired capital and surplus. An additional amount may be lent, equal to 10% of unimpaired capital and surplus, if such loan is fully secured by readily-marketable
collateral, which is defined to include certain financial instruments and bullion. At December 31, 2003, the Banks limit on loans to one borrower was $7.0 million. At December 31, 2003, the Banks largest aggregate outstanding balance of
loans to one borrower was $5.9 million.



QTL
Test.    The HOLA requires savings institutions to meet a QTL test. Under the QTL test, a savings association is required to maintain at least 65% of its portfolio assets (total assets less: (i) specified liquid
assets up to 20% of total assets; (ii) intangibles, including goodwill; and (iii) the value of property used to conduct business) in certain qualified thrift investments (primarily residential mortgages and related investments, including
certain mortgage-backed and related securities) in at least 9 months out of each 12 month period. A savings association that fails the QTL test must either convert to a bank charter or operate under certain restrictions. As of December 31, 2003, the
Bank maintained 85.8% of its portfolio assets in qualified thrift investments and, therefore, met the QTL test.



Limitation on Capital Distributions.    OTS regulations impose limitations upon all capital distributions by savings institutions, such as cash
dividends, payments to repurchase or otherwise acquire its shares, payments to shareholders of another institution in a cash-out merger and other distributions charged against capital. The rule establishes three tiers of institutions, which are
based primarily on an institutions capital level. An institution that exceeds all fully phased-in capital requirements before and after a proposed capital distribution (Tier 1 Bank) and has not been advised by the OTS that it is in
need of more than normal supervision, could, after prior notice but without obtaining approval of the OTS, make capital distributions during a calendar year equal to the greater of (i) 100% of its net earnings to date during the calendar year plus
the amount that would reduce by one-half its surplus capital ratio (the excess capital over its fully phased-in capital requirements) at the beginning of the calendar year or (ii) 75% of its net earnings for the previous four quarters.
Any additional capital distributions would require prior regulatory approval. In the event the Banks capital fell below its regulatory requirements or the OTS notified it that it was in need of more than normal supervision, the Banks
ability to make capital distributions could be restricted. In addition, the OTS could prohibit a proposed capital distribution by any institution, which would otherwise be permitted by the regulation, if the OTS determines that such distribution
would constitute an unsafe or unsound practice. At December 31, 2003, the Bank was classified as a Tier 1 Bank.



Under OTS capital distribution regulations, an application to and the prior approval of the OTS is required before an institution makes a capital distribution if (1) the
institution does not meet certain criteria for expedited treatment for applications under the regulations, (2) the total capital



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distributions by the institution for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years,
(3) the institution would be undercapitalized following the distribution or (4) the distribution would otherwise be contrary to a statute, regulation or agreement with the OTS. If an application is not required, the institution may still need to
give advance notice to the OTS of the capital distribution.



Liquidity.    Until recently, the Bank is required to maintain an average daily balance of specified liquid assets equal to a monthly average of not less than a specified percentage of its net withdrawable deposit
accounts plus short-term borrowings. Effective March 15, 2001, the liquidity requirement to which the Bank is held under HOLA was amended to eliminate the specific percentage requirement, but retained the requirement that an institution
maintain sufficient liquidity to ensure its safe and sound operation. The Banks average liquidity ratio for the month of December 2003 calculated using the ratio calculation of HOLA prior to March 15, 2001 was 2.1%, and in the
opinion of management meets current requirements for Banks safe and sound operation. The Bank has never been subject to monetary penalties for failure to meet its liquidity requirements.



Assessments.    Savings institutions are required to pay
assessments to the OTS to fund the agencys operations. The general assessments, paid on a semi-annual basis, are based upon the savings institutions total assets, including consolidated subsidiaries, as reported in the Banks latest
quarterly thrift financial report. The assessments paid by the Bank for the fiscal year ended December 31, 2003 totaled $123,000.



Branching.    OTS regulations permit nationwide branching by federally chartered savings institutions to the extent allowed by federal statute.
This permits federal savings institutions to establish interstate networks and to geographically diversify their loan portfolios and lines of business. The OTS authority preempts any state law purporting to regulate branching by federal savings
institutions.



Transactions with Related
Parties.    The Banks authority to engage in transactions with related parties or affiliates (i.e., any company that controls or is under common control with an institution, including the Company and
its non-savings institution subsidiaries) is limited by Sections 23A and 23B of the Federal Reserve Act (FRA). Section 23A restricts the aggregate amount of covered transactions with any individual affiliate to 10% of the capital and
surplus of the savings institution. The aggregate amount of covered transactions with all affiliates is limited to 20% of the savings institutions capital and surplus. Certain transactions with affiliates are required to be secured by
collateral in an amount and of a type described in Section 23A and the purchase of low quality assets from affiliates is generally prohibited. Section 23B generally requires that certain transactions with affiliates, including loans and asset
purchases, be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the institution as those prevailing at the time for comparable transactions with non-affiliated companies.



Enforcement.    Under the FDI Act, the OTS has
primary enforcement responsibility over savings institutions and has the authority to bring actions against the institution and all institution-affiliated parties, including stockholders, and any attorneys, appraisers and accountants who knowingly
or recklessly participate in wrongful action likely to have an adverse effect on an insured institution. Formal enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors
to institution of receivership, conservatorship or termination of deposit insurance. Civil penalties cover a wide range of violations and can amount to



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$25,000 per day, or even $1 million per day in especially egregious cases. Under the FDI Act, the FDIC has the authority to recommend to the Director of the
OTS enforcement action to be taken with respect to a particular savings institution. If action is not taken by the Director, the FDIC has authority to take such action under certain circumstances. Federal law also establishes criminal penalties for
certain violations.



Standards for Safety and
Soundness.    The FDI Act requires each federal banking agency to prescribe for all insured depository institutions standards relating to, among other things, internal controls, information systems and audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth, and compensation, fees and benefits and such other operational and managerial standards as the agency deems appropriate. The federal banking agencies have adopted final
regulations and Interagency Guidelines Prescribing Standards for Safety and Soundness (Guidelines) to implement these safety and soundness standards. The Guidelines set forth the safety and soundness standards that the federal banking
agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the Guidelines, the
agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard, as required by the FDI Act. The final rule establishes deadlines for the submission and review of such safety and soundness
compliance plans.



Standards for Safeguarding Customer
Information.    In 1999, the President signed the Gramm-Leach-Bliley Act was into law. Section 501 of the Act requires that bank regulatory agencies establish appropriate standards for financial institutions relating to the
administrative, technical, and physical safeguards for customer records and information. Accordingly, the OTS, the FDIC, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System published Interagency
Guidelines for Safeguarding Customer Information in February of 2001. The Customer Information Guidelines require the Bank to adopt a comprehensive written information security program that is designed to protect against unauthorized access to or
use of customers nonpublic personal information. All elements of the security program must be coordinated among all parts of the bank. The Board of Directors of the Bank must approve the written information security program and oversee its the
development, implementation and maintenance. The Bank must identify reasonably foreseeable internal and external threats that could result in unauthorized disclosure, misuse, alteration or destruction of customer information or customer information
systems, assess the likelihood and potential damage of these threats (taking into consideration the sensitivity of customer information), and assess the sufficiency of policies, procedures, customer information systems, and other arrangements in
place to control risks. In order to manage and control any risk, the Bank should design its information security program to control the identified risks, commensurate with the sensitivity of the information as well as the complexity and scope of the
banks activities and adopt such measures listed in the Guidelines regarding access, controls, encryption and other procedures that the bank concludes are appropriate. In addition, Banks are required to exercise due diligence in selecting
service providers having access to customer information, require such service providers by contract to implement appropriate measures designed to meet the objectives of the Guidelines, and monitor such service providers to confirm that they have
satisfied their obligations under the contract. The Bank must report to its board at least annually describing the overall status of the information security program and the Banks compliance with the Guidelines.



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Federal Reserve System



The Federal Reserve Board regulations require savings institutions to maintain non-interest earning reserves against their transaction accounts. The Federal Reserve
Board regulations generally require that reserves be maintained against aggregate transaction accounts as follows: for accounts aggregating $44.3 million or less (subject to adjustment by the Federal Reserve Board) the reserve requirement was 3%;
and for accounts aggregating greater than $44.3 million, the reserve requirement was $1.395 million plus 10% (subject to adjustment by the Federal Reserve Board) against that portion of total transaction accounts in excess of $46.5 million. The
first $4.9 million of otherwise reservable balances (subject to adjustments by the Federal Reserve Board) were exempted from the reserve requirements. The Bank maintained compliance with the foregoing requirements. The balances maintained to meet
the reserve requirements imposed by the Federal Reserve Board may be used to satisfy liquidity requirements imposed by the OTS.



New Jersey Law



The Commissioner regulates, among other things, the Banks internal business procedures as well as its deposits, lending and investment activities. The Commissioner must approve changes to the Banks
Certificate of Incorporation, establishment or relocation of branch offices, mergers and the issuance of additional stock. In addition, the Commissioner conducts periodic examinations of First Savings. Certain of the areas regulated by the
Commissioner are not subject to similar regulation by the FDIC.



Recent federal
and state legislative developments have reduced distinctions between commercial banks and SAIF-insured savings institutions in New Jersey with respect to lending and investment authority, as well as interest rate limitations. As federal law has
expanded the authority of federally chartered savings institutions to engage in activities previously reserved for commercial banks, New Jersey legislation and regulations (parity legislation) have given New Jersey chartered savings
institutions, such as the Bank, the powers of federally chartered savings institutions.



New Jersey law provides that, upon satisfaction of certain triggering conditions, as determined by the Commissioner, insured institutions or savings and loan holding companies located in a state which has reciprocal legislation in effect on
substantially the same terms and conditions as stated under New Jersey law may acquire, or be acquired by New Jersey insured institutions or holding companies on either a regional or national basis. New Jersey law explicitly prohibits interstate
branching.



Sarbanes-Oxley Act of 2002



On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the
Act). The Act represents a comprehensive revision of laws affecting corporate governance, accounting obligations and corporate reporting. The Act is applicable to all companies with equity or debt securities registered under the
Securities Exchange Act of 1934. Some provisions of the Act took effect upon passage while the rest took effect over a period of 30 to 270 days after passage and are subject to continuing rulemaking by the Securities and Exchange Commission and the
self regulatory organizations. Some of the changes included in the new, amended and proposed regulations are:



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|· | Require accelerated annual and quarterly reporting for certain filers and require the CEOs and CFOs to certify their companys financial reports, filings & control systems;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· | Require increased disclosure and reporting obligations for the company, its officers and directors, and its affiliates;
|- | -----------------------------------------------------------------------------------------------------------------------

|· | Require that the company comply with new audit committee independence and auditor independence requirements; and
|- | ----------------------------------------------------------------------------------------------------------------

|· | Implement new corporate responsibility requirements and provide additional corporate and criminal fraud accountability.
|- | -----------------------------------------------------------------------------------------------------------------------



The Company is continuing to monitor the passage of the new and amended regulations and is
taking appropriate measures to comply with them. Although the Company will incur additional expense in complying with the various provisions of the Act and the new and amended regulations, management does not expect that such compliance will have a
material impact on the Companys results of operations or financial condition.



The USA Patriot Act of 2001



The USA Patriot Act of 2001, as
amended (the Patriot Act), has imposed substantial new record-keeping and due diligence obligations on banks and other financial institutions, with a particular focus on detecting and reporting money-laundering transactions involving
domestic or international customers. The U.S. Treasury Department has issued and will continue to issue regulations clarifying the Patriot Acts requirements. The Patriot Act requires all financial institutions, as defined, to
establish certain anti-money laundering compliance and due diligence programs.



FEDERAL AND STATE TAXATION



Federal
Taxation



General.    The Company and the Bank
report their income on a consolidated basis and the accrual method of accounting, and are subject to federal income taxation in the same manner as other corporations with some exceptions, including particularly the Banks reserve for bad debts
discussed below. The following discussion of tax matters is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to the Bank or the Company. The Bank has not been audited by the IRS in the
past nine years. For its 2003 taxable year, the Bank is subject to a maximum federal income tax rate of 35%.



Bad Debt Reserves.    For fiscal years beginning prior to December 31, 1995, thrift institutions which qualified under certain definitional
tests and other conditions of the Internal Revenue Code of 1986 (the Code) were permitted to use certain favorable provisions to calculate their deductions from taxable income for annual additions to their bad debt reserve. A reserve
could be established for bad debts on qualifying real property loans (generally secured by interests in real property improved or to be improved) under (i) the Percentage of Taxable Income Method (the PTI Method) or (ii) the Experience
Method. The Banks reserve for nonqualifying loans was computed using the Experience Method.



The Small Business Job Protection Act of 1996 (the 1996 Act), which was enacted on August 20, 1996, requires savings institutions to recapture (i.e., take into income) certain portions of their accumulated
bad debt reserves. The 1996 Act repeals the reserve method of accounting for bad



33



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##### Table of Contents

debts effective for tax years beginning after 1995. Thrift institutions that would be treated as small banks are allowed to utilize the Experience Method
applicable to such institutions, while thrift institutions that are treated as large banks (those generally exceeding $500 million in assets) are required to use only the specific charge-off method. Thus, the PTI Method of accounting for bad debts
is no longer available for any financial institution.



A thrift institution
required to change its method of computing reserves for bad debts will treat such change as a change in method of accounting, initiated by the taxpayer, and having been made with the consent of the IRS. Any Section 481(a) adjustment required to be
taken into income with respect to such change generally will be taken into income ratably over a six-taxable year period, beginning with the first taxable year beginning after 1995, subject to the residential loan requirement.



Under the 1996 Act, for its current and future taxable years, the Bank is not permitted to
make additions to its tax bad debt reserves. In addition, the Bank is required to recapture (i.e., take into income) over a six year period the excess of the balance of its tax bad debt reserves as of December 31, 1995, other than its supplemental
reserve for losses on loans, if any, over the balance of such reserves as of December 31, 1987. As a result of such recapture, the Bank incurred an additional tax payment of approximately $150,000 in 1996, which was paid over a six year period
ending with the final payment in 2001.



Distributions.    Under the 1996 Act, if the Bank makes non-dividend distributions to the Company, such distributions will be considered to have been made from the Banks unrecaptured tax bad debt
reserves (including the balance of its reserves as of December 31, 1987) to the extent thereof, and then from the Banks supplemental reserve for losses on loans, to the extent thereof, and an amount based on the amount distributed (but not in
excess of the amount of such reserves) will be included in the Banks income. Non-dividend distributions include distributions in excess of the Banks current and accumulated earnings and profits, as calculated for federal income tax
purposes, distributions in redemption of stock, and distributions in partial or complete liquidation. Dividends paid out of the Banks current or accumulated earnings and profits will not be so included in the Banks income.



The amount of additional taxable income triggered by a non-dividend is an amount that, when
reduced by the tax attributable to the income, is equal to the amount of the distribution. Thus, if the Bank makes a non-dividend distribution to the Company, approximately one and one-half times the amount of such distribution (but not in excess of
the amount of such reserves) would be includable in income for federal income tax purposes, assuming a 35% federal corporate income tax rate. The Banks does not intend to pay dividends that would result in a recapture of any portion of its bad debt
reserves.



State and Local Taxation



New Jersey Taxation.    The Bank, its subsidiary, Pamrapo Service
Corporation, and the Company file separate New Jersey income tax returns. For New Jersey income tax purposes, savings institutions are presently taxed at a rate equal to 9% of taxable income. For this purpose, taxable income generally
means federal taxable income, subject to certain adjustments (including addition of interest income on state and municipal obligations). For New Jersey tax purposes, regular corporations are presently taxed at a rate equal to 9% of taxable income
(7.5% is the rate if taxable income is less than $100,000).



34



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##### Table of Contents

Personnel



As of December 31, 2003, the Bank had 93 full-time employees and 18 part-time employees. The employees are not represented by a collective bargaining unit and the Bank
considers its relationship with its employees to be good.



|Item 2. | Properties.
|------- | -----------



The Bank conducts its business through nine branch offices and one administrative office. Three offices have drive-up facilities. The Bank has automatic teller machines at eight of its nine branch facilities and four
other off-site locations. The following table sets forth information relating to each of the Banks offices as of December 31, 2003. The total net book value of the Banks premises and equipment at December 31, 2003 was $4.1 million.



|                                                      |  |                    |  |                |       |    
|----------------------------------------------------- |  | ------------------ |  | -------------- | ----- | ---
|Location                                              |  | Year Office Opened |  | Net Book Value |      
|                                                      |  | (In thousands)     | 
|Executive Office 591-597 Avenue C Bayonne, New Jersey |  | 1985               |  | $              | 1,674 |    
|Branch Offices                                        |  |                    |  |                |       |    
|611 Avenue C Bayonne, New Jersey                      |  | 1984               |  |                | 650   |    
|155 Broadway Bayonne, New Jersey                      |  | 1973               |  |                | 104   |    
|175 Broadway Bayonne, New Jersey                      |  | 1985               |  |                |      | (1)
|861 Broadway Bayonne, New Jersey                      |  | 1962               |  |                | 107   |    
|987 Broadway Bayonne, New Jersey                      |  | 1977               |  |                | 249   |    
|1475 Bergen Boulevard Fort Lee, New Jersey            |  | 1990               |  |                |      | (2)
|544 Broadway Bayonne, New Jersey                      |  | 1995               |  |                | 16    | (2)
|401 Washington Street Hoboken, New Jersey             |  | 1990               |  |                | 204   | (2)
|473 Spotswood-Englishtown Road Monroe, New Jersey     |  | 1998               |  |                | 334   | (2)
|                                                      |  |                    |  |                |       |    
|Net book value of properties                          |  |                    |  |                | 3,338 |    
|Furnishings and equipment (3)                         |  |                    |  |                | 755   |    
|                                                      |  |                    |  |                |       |    
|Total premises and equipment                          |  |                    |  | $              | 4,093 |    
|                                                      |  |                    |  |                |       |    

---

|(1) | The net book value of the property is included in investment in real estate.
|--- | ----------------------------------------------------------------------------



|(2) | Leased Property.
|--- | ----------------



|(3) | Includes off-site ATMs.
|--- | -----------------------



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##### Table of Contents

|Item 3. | Legal Proceedings.
|------- | ------------------



The Company is from time to time a party to litigation which arises primarily in the ordinary course of business. In the opinion of management, the ultimate disposition of any such existing litigation should not have
material effect on the consolidated financial position of the Company.



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



None.



PART II



|Item 5. | Market for Registrants Common Equity and Related Stockholder Matters.
|------- | ----------------------------------------------------------------------



Information relating to the market for Registrants common stock and related stockholder matters appears under Market for Common Stock
and Related Matters in the Registrants 2003 Annual Report to Stockholders on page 43 and is incorporated herein by reference.



|Item 6. | Selected Financial Data.
|------- | ------------------------



The selected financial data appears under Selected Consolidated Financial Condition and Operating Data of the Company in the Registrants 2003 Annual Report to
Stockholders on pages 41 and 42 and is incorporated herein by reference.



|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------



The above-captioned information appears under Managements Discussion and Analysis of Financial Condition and Results of Operations in
the Registrants 2003 Annual Report to Stockholders on pages 9 through 13 and is incorporated herein by reference.



|Item 7A. | Quantitative and Qualitative Disclosure about Market Risk
|-------- | ---------------------------------------------------------



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



36



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##### Table of Contents

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



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



Net Portfolio Value.    The Banks interest
rate sensitivity is monitored by management through the use of the OTS model which estimates the change in the Banks net portfolio value (NPV) over a range of interest rate scenarios. NPV is the present value of expected cash flows
from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The OTS produces its analysis based upon
data submitted on the Banks quarterly Thrift Financial Reports. The following table, which sets forth the Banks NPV as of December 31, 2003, was calculated by the OTS:



|                                                      |        |                        |               |  |                                             |                |   |  |           |   |                        |        |  |      |  
|----------------------------------------------------- | ------ | ---------------------- | ------------- |  | ------------------------------------------- | -------------- | - |  | --------- | - | ---------------------- | ------ |  | ---- | -
|Change in Interest Rates In Basis Points (Rate Shock) |        | Net Portfolio Value    |               |  | NPV as Percent of Portfolio Value of Assets |               
|                                                      | Amount |                        | Dollar Change |  |                                             | Percent Change |   |  | NPV Ratio |   | Change In Basis Points |       
|                                                      |        | (Dollars in Thousands) |              
|                                                      |        |                        |               |  |                                            
|300                                                   |        | $                      | 30,032        |  | $                                           | (58,406        | ) |  | (66       | ) |                        | 4.88%  |  | (809 | )
|200                                                   |        |                        | 48,877        |  |                                             | (39,561        | ) |  | (45       | ) |                        | 7.67%  |  | (529 | )
|100                                                   |        |                        | 69,034        |  |                                             | (19,404        | ) |  | (22       | ) |                        | 10.46% |  | (250 | )
|Static                                                |        |                        | 88,438        |  |                                             |               |   |  |          |   |                        | 12.96% |  |     |  
|-100                                                  |        |                        | 99,258        |  |                                             | 10,820         |   |  | 12        |   |                        | 14.25% |  | 129  |  



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.



37



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##### Table of Contents

|Item 8. | Consolidated Financial Statements and Supplementary Data.
|------- | ---------------------------------------------------------



The Consolidated Statements of Financial Condition, and related notes thereto, of Pamrapo Bancorp, Inc. and its subsidiaries, together with the report thereon by Radics
& Co., LLC appears in the Registrants 2003 Annual Report to Stockholders on pages 14 through 39 and are incorporated herein by reference.



|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------



Not Applicable.



|Item 9A. | Controls and Procedures
|-------- | -----------------------



As of a date within 90 days of the filing date of this report, based on an evaluation of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) each of the chief executive officer and the chief financial officer of the Company has concluded that the Companys disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the applicable time periods specified by the SECs rules and forms.



There were no significant changes in the Companys internal controls or in any other
factors that could significantly affect those controls subsequent to the date of the most recent evaluation of the Companys internal controls by the Company, including any corrective actions with regard to any significant deficiencies or
material weaknesses.



PART III



|Item 10. | Directors and Executive Officers of the Registrant.
|-------- | ---------------------------------------------------



On March 9, 2004, the Company adopted a Code of Ethics for its Principal Executive Officer and Senior Financial Officer (the Code of Ethics). A copy of the
Code of Ethics is filed as an exhibit to this Form 10-K. The Code of Ethics is also available free of charge by writing to the Secretary of the Companys office, 611 Avenue C, Bayonne, New Jersey 07002.



Other information relating to Directors and Executive Officers of the Registrant is
incorporated herein by reference to the Registrants Proxy Statement for the Annual Meeting of Stockholders to be held on April 21, 2004 (Proxy Statement) at pages 4 through 6.



|Item 11. | Executive Compensation.
|-------- | -----------------------



The information relating to executive compensation is incorporated herein by reference to the Registrants Proxy at pages 9 through 16.



38



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##### Table of Contents

|Item 12. | Security Ownership of Certain Beneficial Owners.
|-------- | ------------------------------------------------



The information relating to security ownership of certain beneficial owners is incorporated herein by reference to the Registrants Proxy Statement on pages 3
through 6 and 16.



|Item 13. | Certain Relationships and Related Transactions.
|-------- | -----------------------------------------------



The information relating to certain relationships and related transactions is incorporated herein by reference to the Registrants Proxy Statement on page 16.



|Item 14. | Principal Accounting Fees and Services.
|-------- | ---------------------------------------



The information relating to principal accounting fees and services is incorporated herein by reference to the Registrants Proxy Statement on page 17.



39



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##### Table of Contents

PART IV



|Item 15. | Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
|-------- | -----------------------------------------------------------------



|                                                                                                                                                                     |  |     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                     |  | Page
|(a)    The following documents are filed as a part of this report:                                                                                                   |  |     
|                                                                                                                                                                     | 
|(1)    Consolidated Financial Statements of Pamrapo Bancorp, Inc. are incorporated by reference to the indicated pages of
the 2003 Annual Report to Stockholders.    |  |     
|                                                                                                                                                                     | 
|Consolidated Statements of Financial Condition as of December 31, 2002 and 2003                                                                                      |  | 14  
|                                                                                                                                                                     | 
|Consolidated Statements of Income for the Years Ended December 31, 2001, 2002, and 2003                                                                              |  | 15  
|                                                                                                                                                                     | 
|Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2001, 2002, and 2003                                                                |  | 16  
|                                                                                                                                                                     | 
|Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2001, 2002, and 2003                                                     |  | 17  
|                                                                                                                                                                     | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2002, and 2003                                                                          |  | 18  
|                                                                                                                                                                     | 
|Notes to Consolidated Financial Statements                                                                                                                           |  | 20  
|                                                                                                                                                                     | 
|Independent Auditors Report                                                                                                                                         |  | 39  
|                                                                                                                                                                     | 
|Management Responsibility Statement                                                                                                                                  |  | 40  
|                                                                                                                                                                     | 
|The remaining information appearing in the 2003 Annual Report to Stockholders is not deemed to be filed as part of this report, except as expressly provided herein. |  |     



| | (2) | All schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|(3) | Exhibits.
|--- | ---------



|(a) | The following exhibits are filed as part of this report.
|--- | --------------------------------------------------------



|      |  |                                                                                                                                                                    
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|3.1   |  | Certificate of Incorporation of Pamrapo Bancorp, Inc., as filed with the State of New Jersey on February 7, 2001.*                                                 
|      | 
|3.2   |  | Bylaws of Pamrapo Bancorp, Inc.*                                                                                                                                   
|      | 
|4     |  | Stock Certificate of Pamrapo Bancorp, Inc.**                                                                                                                       
|      | 
|10.1  |  | Employment Agreement between the Bank and William J. Campbell.**                                                                                                   
|      | 
|10.2  |  | Employment Agreement between the Company and William J. Campbell.**                                                                                                
|      | 
|10.3  |  | Special Termination Agreement (Hughes).***                                                                                                                         
|      | 
|10.5  |  | Special Termination Agreement (Russo).**                                                                                                                           
|      | 
|10.6  |  | Change of Control Agreement (Walter).****                                                                                                                          
|      | 
|10.7  |  | Management Recognition and Retention Plan and Trust.**                                                                                                             
|      | 
|10.11 |  | Board of Directors Compensation and Trust Agreement.**                                                                                                            
|      | 
|11    |  | Computation of earnings per share (filed herewith).                                                                                                                
|      | 
|13    |  | Portions of the 2003 Annual Report to Stockholders (filed herewith).                                                                                               
|      | 
|14    |  | Code of Ethics (filed herewith).                                                                                                                                   
|      | 
|21    |  | Subsidiary information is incorporated herein by reference to Part ISubsidiaries.                                                                               
|      | 
|23    |  | Consent of Auditors (filed herewith).                                                                                                                              
|      | 
|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 Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|      | 
|32.2  |  | Certification of 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).

---

|* | Incorporated herein by reference to the Form 10-K Annual Report, filed on April 30, 2001, SEC file No. 000-18014.
|- | -----------------------------------------------------------------------------------------------------------------



|** | Incorporated herein by reference to the Form S-1, Registration Statement, as amended, filed on August 11, 1989, Registration No. 33-30370.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------



|*** | Incorporated herein by reference to the Form 10-Q, Quarterly Report, filed on May 6, 1997, Registration No. 000-18014.
|--- | ----------------------------------------------------------------------------------------------------------------------



|**** | Incorporated herein by reference to the Form 10-K Annual Report, filed on March 27, 2002, SEC file No. 000-18014.
|---- | -----------------------------------------------------------------------------------------------------------------



|(b) | Reports on Form 8-K. The Company did not file any reports on Form 8-K during the fourth quarter of the 2003 fiscal year.
|--- | ------------------------------------------------------------------------------------------------------------------------





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SIGNATURES



Pursuant to the requirements of
Section 13 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.



PAMRAPO BANCORP, INC.By:

/s/    William J. CampbellWilliam J. CampbellPresident




Dated:    March 15, 2004



Pursuant to the
requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.



|                                                |  |                                                                                |  |               
|----------------------------------------------- |  | ------------------------------------------------------------------------------ |  | --------------
|Name                                            |  | Title                                                                          |  | Date          
|                                                |  |                                                                               
|/s/    William J. CampbellWilliam J. Campbell   |  | President, Chief Executive Officer and
Director (Principal Executive Officer)  |  | March 15, 2004
|                                                |  |                                                                               
|/s/    Kenneth D. WalterKenneth D. Walter       |  | Treasurer/Chief Financial Officer (Principal
Financial and Accounting Officer) |  | March 15, 2004
|                                                |  |                                                                               
|/s/    Daniel J. MassarelliDaniel J. Massarelli |  | Chairman of the Board and Director                                             |  | March 15, 2004
|                                                |  |                                                                               
|/s/    John A. MorecraftJohn A. Morecraft       |  | Vice Chairman of the Board and Director                                        |  | March 15, 2004
|                                                |  |                                                                               
|/s/    Patrick D. ConaghanPatrick D. Conaghan   |  | Director                                                                       |  | March 15, 2004
|                                                |  |                                                                               
|/s/    James J. KennedyJames J. Kennedy         |  | Director                                                                       |  | March 15, 2004
|                                                |  |                                                                               
|/s/    Dr. Jaime PortelaDr. Jaime Portela       |  | Director                                                                       |  | March 15, 2004
|                                                |  |                                                                               
|/s/    Francis J. ODonnellFrancis J. ODonnell |  | Director                                                                       |  | March 15, 2004



42