<PAGE>

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                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-K

                  Annual report pursuant to Section 13 of the
                        Securities Exchange Act of 1934

                   For the fiscal year ended March 31, 1999

                         Commission File No.: 1-12305

                        FIRSTFED AMERICA BANCORP, INC.
            (exact name of registrant as specified in its charter)

              DELAWARE                                 04-3331237
                                              (IRS Employer Identification)
    (State or other jurisdiction
  of incorporation or organization)

                ONE FIRSTFED PARK, Swansea, Massachusetts 02777
                   (Address of principal executive offices)

      Registrant's telephone number, including area code: (508) 679-8181
          Securities registered pursuant to Section 12(b) of the Act:

                    Common Stock, par value $0.01 per share
                               (Title of class)

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

                          The American Stock Exchange
                    (Name of exchange on which registered)

  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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  X .

  The aggregate market value of the voting stock held by non-affiliates of the
registrant, i.e., persons other than directors and executive officers of the
registrant was $84.9 million and is based upon the last sales price as listed
on The American Stock Exchange for June 15, 1999.

  The number of shares of Common Stock outstanding as of June 15, 1999 is
7,092,030.

                      DOCUMENTS INCORPORATED BY REFERENCE

  Portions of the Annual Report to Stockholders for the fiscal year ended
March 31, 1999 are incorporated by reference into Part II of this Form 10-K.

  Portions of the Proxy Statement for the 1999 Annual Meeting of Shareholders
are incorporated by reference into Part III of this Form 10-K.

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<PAGE>

                                     INDEX

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
PART I....................................................................   1
  Item 1. Business. ......................................................   1
  Additional Item. Executive Officers of the Registrant...................  33
  Item 2. Properties......................................................  33
  Item 3. Legal Proceedings...............................................  34
  Item 4. Submission of Matters to a Vote of Security Holders.............  34
PART II...................................................................  35
  Item 5. Market for Registrant's Common Equity and Related Stockholder
          Matters.........................................................  35
  Item 6. Selected Financial Data.........................................  35
  Item 7. Management's Discussion and Analysis of Financial Condition and
          Results of Operations...........................................  35
  Item 7A. Quantitative and Qualitative Disclosures About Market Risk.....  35
  Item 8. Financial Statements and Supplementary Data.....................  35
  Item 9. Change In and Disagreements with Accountants on Accounting and
          Financial Disclosure............................................  35
PART III..................................................................  36
  Item 10. Directors and Executive Officers of the Registrant.............  36
  Item 11. Executive Compensation.........................................  36
  Item 12. Security Ownership of Certain Beneficial Owners and
           Management.....................................................  36
  Item 13. Certain Relationships and Related Transactions.................  36
PART IV...................................................................  36
  Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-
           K..............................................................  36
SIGNATURES................................................................  39
</TABLE>
<PAGE>

                                    PART I

Item 1. Business.

General

  FIRSTFED AMERICA BANCORP, INC. (also referred to as the "Company" or
"Registrant") was organized by the Board of Directors of First Federal Savings
Bank of America (the "Bank") for the purpose of acquiring all of the capital
stock of the Bank issued in connection with the Bank's conversion from mutual
to stock form. The conversion was completed on January 15, 1997. At March 31,
1999, the Company had consolidated total assets of $1.393 billion and total
stockholders' equity of $103.0 million. The Company was incorporated under
Delaware law and is a savings and loan holding company subject to regulation
by the Office of Thrift Supervision ("OTS"), the Federal Deposit Insurance
Corporation ("FDIC") and the Securities and Exchange Commission ("SEC").

  The Bank was originally organized in 1946 and operated as First Federal
Savings and Loan Association of Fall River. In 1982, the Bank merged with
First Federal Savings and Loan Association of Attleboro, which was originally
organized in 1854 and became a federally-chartered savings and loan
association in 1959. In 1983, the Bank became a federally-chartered savings
bank, changing its name to First Federal Savings Bank of America. In 1984, the
Bank added mortgage banking activities to its operations. The Company conducts
business from its administrative and operations offices located in Swansea,
Massachusetts and its 14 banking offices located in the municipalities of Fall
River, Attleboro, New Bedford, Seekonk, Somerset, Swansea and Taunton,
Massachusetts and Pawtucket, East Providence, Warwick, and Cranston, Rhode
Island, and its five loan origination centers located in Yarmouth, Auburn,
Agawam and Burlington, Massachusetts and East Greenwich, Rhode Island.

  The Company's principal business has been and continues to be attracting
retail and business deposits in the areas surrounding its banking offices and
investing those deposits, together with funds generated from operations and
borrowings, primarily in residential, commercial, and consumer loans and
mortgage-backed securities ("MBS"). Through its 14 banking offices and five
loan origination offices, the Company originates loans for investment and
loans for sale in the secondary market, generally retaining the servicing
rights to loans sold. Loan sales are made from loans designated as being held
for sale or originated for sale during the period. The Company's revenues are
derived principally from interest on its loan portfolios, and interest and
dividends on its investment and mortgage-backed securities and loan servicing
income. The Company's primary sources of funds are deposits, principal and
interest payments on loans and mortgage-backed securities, proceeds from the
sale of loans, Federal Home Loan Bank ("FHLB") advances and other borrowings.
In January, 1999 the Company formed the FIRSTFED INSURANCE AGENCY, LLC
("Agency"). The Agency offers a comprehensive insurance product line including
auto, home, life, accident and health insurance to consumers and businesses.
At the time of conversion, the Company's Board of Directors authorized
management to establish a trust services department to provide future trust
services to customers. To date, the trust services department has not been
established. The establishment of additional banking offices and trust
services by the Company would result in additional capital expenditures and
other costs associated with the establishment of such banking offices and
services which the Company has not yet currently estimated.

  The Company's and Bank's executive offices are located at ONE FIRSTFED PARK,
Swansea Mall Drive, Swansea, Massachusetts 02777. The telephone number is
(508) 679-8181.

  Information required by Guide 3 to be contained in the description of
business which is not contained in Item 1 is incorporated by referenced from
Item 7 herein.

Market Area and Competition

  The Company is a community-oriented financial institution offering a variety
of financial products and services to meet the needs of the communities it
serves. The Company's deposit gathering is concentrated in the communities
surrounding its 14 full service banking offices located in the Southeastern
Massachusetts

                                       1
<PAGE>

municipalities of Fall River, Attleboro, New Bedford, Seekonk, Somerset,
Swansea and Taunton, and the Rhode Island municipalities of Pawtucket, East
Providence, Warwick, and Cranston. The Company also maintains loan origination
centers in the municipalities of Yarmouth, Auburn, Agawam and Burlington,
Massachusetts and East Greenwich, Rhode Island. The Company primarily invests
in loans secured by first or second mortgages on properties located in
Southern New England and in AAA-rated mortgage-backed securities.

  The Company's main banking office is located in Fall River, Massachusetts.
Fall River is located in the Southeastern region of Massachusetts and is
adjacent to Rhode Island. All of the Company's 14 banking offices are located
within 30 miles of Fall River. The Southeastern Massachusetts and Rhode Island
suburbs are generally low to middle income residential communities with
individuals employed primarily in Fall River and New Bedford, Massachusetts
and Providence, Rhode Island and areas along Interstates 195, 95 and 495 and
Route 24.

  While the economy in Southeastern New England has generally been positive in
recent years, the area still lags behind the rest of New England and the rest
of the nation. Unemployment rates in the Providence-Fall River area and in New
Bedford are currently higher than the national and state averages but have
improved from the mid-1990s. Small businesses, service firms and tourism form
the backbone of the region's economy. Cuts to the defense industry, changes in
the costume jewelry industry and uncertainty in the technology industry have
resulted in decreased employment opportunities in the region. However, many
significant employers, such as The Acushnet Company, Fidelity Investments,
Textron, American Power Conversion, Globe Manufacturing, Cherry Semiconductor
and Hasbro are located in the region.

  The Company faces significant competition both in generating loans and in
attracting deposits. The Company's primary market area is highly competitive
and the Company faces direct competition from a significant number of
financial institutions, many with a state-wide or regional presence and, in
some cases, a national presence. Some of these financial institutions are
significantly larger and have greater financial resources than the Company.
The Company's competition for loans comes principally from commercial banks,
savings banks, credit unions, mortgage brokers, mortgage banking companies and
insurance companies. Its most direct competition for deposits has historically
come from local savings, cooperative and commercial banks and credit unions.
In addition, the Company faces increasing competition for deposits from non-
bank institutions such as brokerage firms and insurance companies in such
instruments as short-term money market funds, corporate and government
securities funds, mutual funds and annuities. Competition may also increase as
a result of the lifting of restrictions on the interstate operations of
financial institutions. In the areas of Fall River and Rhode Island, the
Company has experienced significant competition from credit unions which have
a competitive advantage because they do not pay state or federal income taxes.
Such competitive advantage has placed increased pressure on the Bank with
respect to its loan and deposit pricing.

  From the mid-1980s through the early 1990s, the Bank's operating strategy
was to control growth while building its loan servicing portfolio and the
resultant fee income. As part of this strategy, the Bank increased market
share through its mortgage banking activities. Interest-rate risk was managed
by generally retaining all adjustable rate one- to four-family loans and
selling all longer term fixed-rate one- to four-family loans in the secondary
market on a servicing retained basis. Beginning in 1993, the Bank began to
focus more heavily on building its loan and deposit franchise and increasing
its level of interest-earning assets and retail deposits. At that time, the
Bank began to expand its franchise in its existing market area and other areas
in Southeastern Massachusetts and Rhode Island through the establishment of de
novo banking offices and new loan origination facilities. Since 1994, the Bank
has opened seven new banking offices in Seekonk, Swansea and New Bedford,
Massachusetts and East Providence, Pawtucket, Warwick and Cranston, Rhode
Island and one new loan origination office in Burlington, Massachusetts. In
addition, the Company opened a new centralized administrative and operations
center in October, 1997 in Swansea, Massachusetts. Pursuant to this expansion
strategy, the Company is currently seeking new banking offices within its
primary market areas as well as considering sites for loan production offices
within its existing market area and Connecticut.


                                       2
<PAGE>

Lending Activities

  Loan Portfolio Composition. The Company's loan portfolio consists primarily
of first mortgage loans secured by one- to four-family residences. At March
31, 1999, total loans receivable was $787.4 million, of which $583.7 million
were one- to four-family residential mortgage loans, or 74.1% of the Company's
total loans receivable. At such date, the remainder of the loan portfolio
consisted of: $3.1 million of multi-family residential loans, or .4% of total
loans receivable; $38.8 million of commercial real estate loans, or 4.9% of
total loans receivable; $31.7 million of construction and land loans, or 4.0%
of total loans receivable; $56.2 million of commercial loans, or 7.1% of total
loans receivable; and $74.0 million of consumer loans, or 9.4% of total loans
receivable, consisting of $25.5 million of home equity lines of credit, $40.6
million of second mortgages and $7.9 million of other consumer loans. After
including allowance for loan losses, undisbursed proceeds of construction
mortgages in process, and deferred loan origination fees, loans receivable,
net was $766.7 million at March 31, 1999. At that same date, 47.8% of the
Company's residential mortgage loans and construction and land loans,
excluding mortgage loans held for sale, had adjustable interest rates, most of
which are indexed to the one-year Constant Maturity Treasury ("CMT") Index.
The Company had $52.3 million of mortgage loans held for sale at March 31,
1999, consisting of one- to four-family fixed-rate mortgage loans.

  The types of loans that the Company may originate are subject to federal and
state laws and regulations. Interest rates charged by the Company on loans are
affected by the demand for such loans and the supply of money available for
lending purposes and the rates offered by competitors. These factors are, in
turn, affected by, among other things, economic conditions, monetary policies
of the federal government, including the Federal Reserve Board, and
legislative tax policies.

                                       3
<PAGE>

  The following table sets forth the composition of the Company's loan
portfolio in dollar amounts and as a percentage of the portfolio at the dates
indicated.

<TABLE>
<CAPTION>
                                                                At March 31,
                          ----------------------------------------------------------------------------------------------
                                1999               1998               1997               1996               1995
                          ------------------ ------------------ ------------------ ------------------ ------------------
                                    Percent            Percent            Percent            Percent            Percent
                           Amount   of Total  Amount   of Total  Amount   of Total  Amount   of Total  Amount   Of Total
                          --------  -------- --------  -------- --------  -------- --------  -------- --------  --------
                                                           (Dollars in thousands)
<S>                       <C>       <C>      <C>       <C>      <C>       <C>      <C>       <C>      <C>       <C>
Mortgage Loans:
 Residential:
 One- to four-family....  $583,692    74.13% $691,675    79.68% $666,942    82.08% $531,849    81.63% $405,747    79.20%
 Multi-family...........     3,082      .39     3,899      .45     4,416      .54     4,703      .72     5,157     1.00
 Commercial real
  estate................    38,760     4.92    45,723     5.27    33,057     4.07    23,368     3.59    19,968     3.90
 Construction and land..    31,671     4.02    27,145     3.13    23,919     2.95    25,297     3.88    26,337     5.14
                          --------   ------  --------   ------  --------   ------  --------   ------  --------   ------
  Total mortgage loans..   657,205    83.46   768,442    88.53   728,334    89.64   585,217    89.82   457,209    89.24
                          --------   ------  --------   ------  --------   ------  --------   ------  --------   ------
Commercial..............    56,196     7.14    26,689     3.07    20,062     2.47    14,473     2.22    12,756     2.49
                          --------   ------  --------   ------  --------   ------  --------   ------  --------   ------
Consumer Loans:
 Home equity lines......    25,482     3.24    26,252     3.02    25,021     3.08    27,995     4.30    29,373     5.73
 Second mortgages.......    40,630     5.16    38,862     4.48    32,122     3.95    18,064     2.77     9,111     1.78
 Other consumer loans...     7,872     1.00     7,828      .90     6,985      .86     5,813      .89     3,874      .76
                          --------   ------  --------   ------  --------   ------  --------   ------  --------   ------
  Total consumer loans..    73,984     9.40    72,942     8.40    64,128     7.89    51,872     7.96    42,358     8.27
                          --------   ------  --------   ------  --------   ------  --------   ------  --------   ------
  Total loans
   receivable...........   787,385   100.00%  868,073   100.00%  812,524   100.00%  651,562   100.00%  512,323   100.00%
                                     ======             ======             ======             ======             ======
 Less:
 Allowance for loan
  losses................   (12,016)           (10,937)            (8,788)            (5,607)            (4,239)
 Undisbursed proceeds of
  construction mortgages
  in process............    (7,903)            (7,164)            (5,274)            (6,568)            (5,511)
 Deferred loan
  origination fees,
  net...................      (779)            (1,420)            (2,107)            (1,795)            (2,596)
                          --------           --------           --------           --------           --------
 Loans receivable, net..   766,687            848,552            796,355            637,592            499,977
 Mortgage loans held for
  sale..................    52,334             84,867             23,331             17,747              6,816
                          --------           --------           --------           --------           --------
  Loans receivable, net
   and mortgage loans
   held for sale........  $819,021           $933,419           $819,686           $655,339           $506,793
                          ========           ========           ========           ========           ========
</TABLE>

                                       4
<PAGE>

  Loan Maturity. The following table shows the remaining contractual maturity
of the Company's loans at March 31, 1999. The table does not include the
effect of future principal prepayments.

<TABLE>
<CAPTION>
                                                  At March 31, 1999
                         --------------------------------------------------------------------
                         One- to         Commercial
                          Four-   Multi-    Real    Construction                      Total
                          Family  Family   Estate     and Land   Commercial Consumer  Loans
                         -------- ------ ---------- ------------ ---------- -------- --------
                                                (Dollars in thousands)
<S>                      <C>      <C>    <C>        <C>          <C>        <C>      <C>
Amounts due:
 One year or less....... $    409 $  --   $ 6,221     $17,528     $16,987   $25,863  $ 67,008
                         -------- ------  -------     -------     -------   -------  --------
 After one year:
 More than one year to
  three years...........    2,297     22    9,685          17       9,127     4,748    25,896
 More than three years
  to five years.........   13,209    110   12,931          25      21,978    10,999    59,252
 More than five years
  to 10 years...........  101,414    710    6,958         358       7,561    15,427   132,428
 More than 10 years to
  20 years..............  182,347  1,283    2,489       8,765         543    13,803   209,230
 More than 20 years.....  284,016    957      476       4,978         --      3,144   293,571
                         -------- ------  -------     -------     -------   -------  --------
 Total due after one
  year..................  583,283  3,082   32,539      14,143      39,209    48,121   720,377
                         -------- ------  -------     -------     -------   -------  --------
 Total amount due....... $583,692 $3,082  $38,760     $31,671     $56,196   $73,984   787,385
                         ======== ======  =======     =======     =======   =======
  Less:
   Allowance for loan
    losses..............                                                              (12,016)
   Undisbursed proceeds
    of construction mort-
    gages in process....                                                               (7,903)
   Deferred loan origi-
    nation fees, net....                                                                 (779)
                                                                                     --------
 Loans receivable,
  net...................                                                             $766,687
                                                                                     ========
</TABLE>

  The following table sets forth, at March 31, 1999, the dollar amount of
loans, excluding mortgage loans held for sale, contractually due after March
31, 2000, and whether such loans have fixed interest rates or adjustable
interest rates.

<TABLE>
<CAPTION>
                                                      Due After March 31, 2000
                                                    ----------------------------
                                                     Fixed   Adjustable  Total
                                                    -------- ---------- --------
                                                       (Dollars in thousands)
<S>                                                 <C>      <C>        <C>
Mortgage loans:
  One- to four-family.............................. $311,760  $271,523  $583,283
  Multi-family.....................................      189     2,893     3,082
  Commercial real estate...........................   28,987     3,552    32,539
  Construction and land............................    1,616    12,527    14,143
                                                    --------  --------  --------
    Total mortgage loans...........................  342,552   290,495   633,047
Commercial loans...................................   35,145     4,064    39,209
Consumer loans.....................................   48,121       --     48,121
                                                    --------  --------  --------
    Total loans.................................... $425,818  $294,559  $720,377
                                                    ========  ========  ========
</TABLE>

  Origination, Sale and Servicing of Loans. The Company's mortgage lending
activities are conducted primarily by its loan personnel operating at its 14
banking offices and five loan origination centers and through a network of
approximately 65 active loan correspondents, wholesale loan brokers and other
financial institutions approved by the Company. All loans originated by the
Company, either through internal sources or through loan correspondents are
underwritten by the Company pursuant to the Company's policies and procedures.
For the fiscal year ended March 31, 1999, the Company's loan correspondents
originated $371.5 million in loans. The Company originates both adjustable-
rate and fixed-rate loans. The Company's ability to originate fixed- or
adjustable-rate loans is dependent upon the relative customer demand for such
loans, which is affected by the current and expected future level of interest
rates.


                                       5
<PAGE>

  Generally, all loans originated by the Company are originated for investment
with the exception of longer-term fixed-rate one- to four-family mortgage
loans. While the Company has in the past, from time to time, retained fixed-
rate one- to four-family loans and sold adjustable-rate one-to four-family
loans, it is the general policy of the Company to sell substantially all of
the one- to four-family fixed-rate mortgage loans with maturities over 12
years that it originates and to retain substantially all fixed-rate loans with
maturities of up to 12 years and all adjustable-rate one- to four-family
mortgage loans which it originates. The one- to four-family loan products
currently originated for sale by the Company include a variety of mortgage
loans which conform to the underwriting standards specified by the Federal
National Mortgage Association ("FNMA") and Federal Home Loan Mortgage
Corporation ("FHLMC") ("conforming loans") and, to a lesser extent, loans
which do not conform to FNMA or FHLMC standards due to loan amounts ("jumbo
loans"), or which otherwise vary from agency underwriting standards. The
Company also sells all mortgage loans insured by the Federal Housing
Administration ("FHA") and the Veterans' Administration ("VA"). All one- to
four-family loans sold by the Company are sold pursuant to master commitments
negotiated with FNMA, FHLMC and other investors to purchase loans meeting such
investors' defined criteria. Although the Company has entered into master
commitment contracts, such contracts generally do not require the purchasers
to buy or the Company to deliver a specific amount of mortgage loans.

  The Company currently sells substantially all longer-term fixed-rate
conforming mortgage loans it originates to FNMA and FHLMC. Sales of loans are
made without recourse to the Company in the event of default by the borrower,
except, in the case of VA loans, which are subject to limitations on the VA's
loan guarantees. The Company generally retains the servicing rights on the
mortgage loans sold to FNMA and FHLMC but generally sells all VA, FHA, long-
term jumbo loans and non-conforming loans to institutional investors on a
servicing released basis.

  Between the time the Company issues loan commitments and the time such loans
or the securities into which they are converted are sold, the Company is
exposed to movements in the market price due to changes in market interest
rates. The Company manages this risk by utilizing forward cash sales of loans
or mortgage-backed securities primarily to FNMA and FHLMC (such forward sales
of loans or mortgage-backed securities are collectively referred to as
"forward sale commitments"). Generally, the Company attempts to cover between
60% and 70% of the principal amount of the loans that it has committed to fund
at specified interest rates with forward sale commitments. However, the type,
amount and delivery date of forward sale commitments the Company will enter
into is based upon anticipated movements in market interest rates, bond market
conditions and management's estimates of closing volumes and the length of the
origination or purchase commitments. Differences between the volume and timing
of actual loan origination and purchases and management's estimates can expose
the Company to losses. If the Company is not able to deliver the mortgage
loans or mortgage-backed securities during the appropriate delivery period
called for by the forward sale commitment, the Company may be required to pay
a non-delivery fee, repurchase the delivery commitments at current market
prices or purchase whole loans at a premium for delivery. The above activity
is managed continually; however, there can be no assurances that the Company
will be successful in its effort to minimize interest-rate risk between the
time origination or purchase commitments are issued and the ultimate sale of
the loan. At March 31, 1999, the Company had $71.0 million of forward sales
commitments.

  At March 31, 1999, the Company was servicing its portfolio of $819.0 million
of loans receivable, net and mortgage loans held for sale and $1.564 billion
of loans for others, primarily consisting of conforming fixed-rate loans sold
by the Company. Loan servicing includes collecting and remitting loan
payments, accounting for principal and interest, contacting delinquent
mortgagors, supervising foreclosures and property dispositions in the event of
unremedied defaults, making certain insurance and tax payments on behalf of
the borrowers and generally administering the loans. All of the loans
currently being serviced for others are loans which have been sold by the
Company. The gross servicing fee income from loans originated and purchased is
generally .25 to .38% of the total balance of the loan serviced.

  During the fiscal years ended March 31, 1999 and March 31, 1998, the Company
originated $664.0 million and $463.8 million of fixed-rate and adjustable-rate
one- to four-family loans, respectively, of which $63.8

                                       6
<PAGE>

million and $136.2 million, respectively, were retained by the Company. The
fixed-rate loans retained by the Company consisted primarily of loans with
terms of 12 years or less. The Company recognizes, at the time of sale, the
cash gain or loss on the sale of the loans based on the difference between the
net cash proceeds received and the carrying value of the loans sold. On April
1, 1996, the Company implemented Statement of Financial Accounting Standards
("SFAS") No. 122, "Accounting for Mortgage Servicing Rights" ("SFAS No. 122")
as amended by SFAS No. 125, pursuant to which the value of servicing rights
are recognized as an asset of the Company. The book value of this asset at
March 31, 1999, net of amortization, was $6.5 million.

  The Company has, in the past, from time to time, purchased loans or
participations in loans, primarily one- to four-family mortgage loans, and had
$4.5 million of purchased loans at March 31, 1999. Purchases of loans from
correspondent financial institutions are underwritten pursuant to the
Company's policies and are closed in the name of the correspondent financial
institution but immediately purchased by the Company for its mortgage banking
activities. At March 31, 1999, the Company had $52.3 million in mortgage loans
held for sale consisting of fixed-rate one- to four-family loans.

  The following table sets forth the Company's loan originations,
participations, sales and principal repayments for the periods indicated:

<TABLE>
<CAPTION>
                                             For the Year Ended March 31,
                                           ----------------------------------
                                              1999        1998        1997
                                           ----------  ----------  ----------
                                                (Dollars in thousands)
<S>                                        <C>         <C>         <C>
Beginning balance(1)...................... $  933,419  $  819,686  $  655,339
Loans originated:
  Mortgage loans:
    One- to four-family...................    663,999     463,765     421,088
    Multi-family..........................        --          220         189
    Commercial real estate................     31,601      25,599      17,809
    Construction and land.................     36,985      32,677      27,316
                                           ----------  ----------  ----------
      Total mortgage loans................    732,585     522,261     466,402
                                           ----------  ----------  ----------
  Commercial..............................     19,851      11,539      11,316
                                           ----------  ----------  ----------
  Consumer loans:
    Home equity lines.....................     17,185      13,537       5,516
    Second mortgages......................     20,869      19,224      21,636
    Other consumer loans..................      6,028       3,794       2,956
                                           ----------  ----------  ----------
      Total consumer loans................     44,082      36,555      30,108
                                           ----------  ----------  ----------
  Total loans originated..................    796,518     570,355     507,826
                                           ----------  ----------  ----------
      Total...............................  1,729,937   1,390,041   1,163,165
Less:
  Principal repayments and other, net.....   (277,623)   (188,899)   (124,482)
  Loan charge-offs, net...................       (121)       (201)       (569)
  Proceeds from sale of mortgage loans....   (632,737)   (266,109)   (217,591)
  Transfer of mortgage loans to REO.......       (435)     (1,413)       (837)
                                           ----------  ----------  ----------
Loans receivable, net and mortgage loans
 held for sale............................    819,021     933,419     819,686
  Mortgage loans held for sale............    (52,334)    (84,867)    (23,331)
                                           ----------  ----------  ----------
Ending balance, loans receivable, net..... $  766,687  $  848,552  $  796,355
                                           ==========  ==========  ==========
</TABLE>
--------
(1) Includes mortgage loans held for sale.


                                       7
<PAGE>

  One- to Four-Family Mortgage Lending. The Company offers both fixed-rate and
adjustable-rate mortgage ("ARM") loans secured by one- to four-family
residences with maturities of up to 30 years. Substantially all of such loans
are secured by property located in Southern New England. Loan originations are
generally obtained from the Company's commissioned loan representatives,
correspondent banking relationships and wholesale brokers and their contacts
with the local real estate industry, existing or past customers, and members
of the local communities. At March 31, 1999, residential one- to four-family
mortgage loans totaled $583.7 million, or 74.1% of the Company's total loans
receivable. Of the Company's one-to-four family residential mortgage loans,
$312.2 million, or 53.5%, were fixed-rate loans and $271.5 million, or 46.5%,
were adjustable-rate loans.

  The Company's fixed-rate mortgage loans currently are made for terms from
seven to 30 years. The Company sells substantially all fixed-rate residential
mortgage loans that it originates with a maturity greater than 12 years and
retains the servicing on all loans sold to FNMA and FHLMC. The Company
generally retains for its portfolio shorter-term, fixed-rate loans with a
maturity of 12 years or less and all adjustable-rate one- to four-family
loans.

  The Company currently offers a number of ARM loan programs with interest
rates which are fixed for a period of one, three, four, five or seven years
and adjust annually thereafter. The Company's ARM loans generally provide for
periodic (not more than 2%) and overall (not more than 6%) caps on the
increase or decrease in the interest rate at any adjustment date and over the
life of the loan, respectively. The interest rate adjustment on these loans is
generally indexed to the one-year U.S. Treasury CMT Index.

  The Company's policy is to originate one- to four-family residential first-
mortgage loans in amounts up to 80% of the lower of the appraised value or the
selling price of the property securing the loan and up to 95% of the appraised
value or selling price if private mortgage insurance is obtained with the
exception of FHA and VA loans. Mortgage loans originated by the Company
include due-on-sale clauses which provide the Company with the contractual
right to deem the loan immediately due and payable in the event the borrower
transfers ownership of the property without the Company's consent. Due-on-sale
clauses are an important means of adjusting the rates on the Company's fixed-
rate mortgage loan portfolio and the Company has generally exercised its
rights under these clauses.

  The origination of adjustable-rate residential mortgage loans, as opposed to
fixed-rate residential mortgage loans, helps reduce the Company's exposure to
increases in interest rates. However, adjustable-rate loans may pose credit
risks not inherent in fixed-rate loans, primarily because as interest rates
rise, the underlying payments of the borrower rise, thereby increasing the
potential for default. Periodic and lifetime caps on interest rate increases
reduce the credit risk associated with its adjustable-rate loans but also
limit the interest rate sensitivity of its adjustable-rate mortgage loans.

  In an effort to provide financing for first-time and moderate income home
buyers, the Company offers FHA and VA loans and also has its own first-time
home buyer program. These programs offer single-family residential mortgage
loans to qualified individuals. These loans are offered with terms of up to 30
years. Such loans must be secured by a one- to four-family owner-occupied
unit. These loans are originated using modified underwriting guidelines with
reduced down payments and loan fees. Such loans are originated in amounts up
to 97% of the lower of the property's appraised value or the sale price.
Private mortgage insurance is normally required. The Company expects to
achieve a lower rate of return on loans originated under the first time home
buyer program when compared to other residential mortgage loans because the
Company typically charges: a lower rate of interest; a lower mortgage
origination fee or; lower closing costs on such loan programs.

  Commercial Real Estate Lending. The Company originates commercial real
estate loans that are generally secured by properties used for business
purposes such as manufacturing, office buildings, retail facilities,
recreation facilities, or apartment buildings located in the Company's primary
market area. To a lesser extent, the Company originates construction,
acquisition and development loans to experienced developers known to the

                                       8
<PAGE>

Company for the construction of residential or commercial developments. The
Company's commercial real estate underwriting policy provides that commercial
real estate loans may generally be made in amounts up to 80% of the appraised
value of the property. Commercial real estate lending is limited by the Bank's
regulatory loans-to-one borrower limit which at March 31, 1999 was $15.4
million. The Company currently originates commercial real estate loans,
generally with terms of up to 10 years and amortizations of up to 20 years
with the outstanding balance due and payable at the end of the loan term. The
Company's adjustable-rate loans generally have interest rates that adjust
daily and are indexed to the prime rate of interest. In reaching its decision
on whether to make a commercial real estate loan, the Company considers the
net operating income of the property, the borrower's expertise, credit history
and profitability and the value of the underlying property. The Company has
generally required that the properties securing commercial real estate loans
have debt service coverage ratios (the ratio of earnings before debt service
to debt service) of at least 1.20x. In addition, environmental assessments are
generally required for all commercial real estate loans in excess of $500,000.
Generally, all commercial real estate loans made to corporations, partnerships
and other business entities require personal guarantees by the principals. On
an exception basis, the Company may waive a personal guarantee on such loans
depending on the creditworthiness of the borrower, the amount of the down
payment, and other mitigating circumstances. The Company's commercial real
estate loan portfolio at March 31, 1999 was $38.8 million, or 4.9% of total
loans receivable. At March 31, 1999, the largest commercial real estate loan
in the Company's portfolio had an outstanding principal balance of $2.0
million.

  Loans secured by commercial real estate properties are generally larger and
involve a greater degree of risk than one- to four-family 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 a greater extent to prevailing
conditions in the real estate market or the economy. The Company seeks to
minimize these risks through its underwriting standards.

  Commercial Lending. The Company also originates commercial loans to
businesses generally operating in the Company's primary market area. Such
loans are generally secured by equipment, inventory, accounts receivable, and
real estate, in the case of owner-occupied commercial property where repayment
is significantly dependent on the underlying business. The Company offers
commercial loans in the form of term loans and lines of credit. Term loans are
generally offered with either fixed or adjustable rates of interest and terms
of up to ten years. Most term loans fully amortize during the term of such
loan. Business lines of credit generally have terms of one-year and are
indexed to the Company's prime rate of interest or the prime rate as published
in The Wall Street Journal. These lines of credit are renewable annually.

  In making commercial loans, the Company considers primarily the financial
resources of the borrower, the borrower's ability to repay the loan out of net
operating income, the Company's lending history with the borrower and the
value of the collateral. Generally, if the borrower is a corporation,
partnership or other business entity, personal guarantees by the principals
are required. However, on an exception basis, personal guarantees may be
waived on such loans depending on the creditworthiness of the borrower and
other mitigating circumstances. The Company's largest commercial loan at March
31, 1999 was a $2.0 million line of credit of which no funds were advanced at
March 31, 1999. At such date, the Company had $16.1 million of unadvanced
commercial lines of credit. At March 31, 1999, the Company had $56.2 million
of commercial loans which amounted to 7.1% of the Company's total loans
receivable.

  Unlike mortgage loans, which generally are made on the basis of the
borrower's ability to make repayment from his or her employment or other
income, and which are secured by real property whose value tends to be more
easily ascertainable, commercial loans are of higher risk and typically are
made on the basis of the borrower's ability to make repayment from the cash
flow of the borrower's business. As a result, the availability of funds for
the repayment of commercial loans may be substantially dependent on the
success of the business itself. Further, any collateral securing such loans
may depreciate over time, may be difficult to appraise and may fluctuate in
value based on the success of the business.


                                       9
<PAGE>

  Multi-Family Lending.  The Company originates adjustable-rate multi-family
mortgage loans generally secured by five to 12 unit residential apartment
buildings located in the Company's primary market area. Such loans adjust
annually, have a 25 year term and are indexed to the one year FHLB advance
rate. As a result of uncertain market conditions in its primary market area,
the Company currently originates multi-family loans on a limited and highly
selective basis. In reaching its decision on whether to make a multi-family
loan, the Company considers the value of the underlying property as well as
the qualifications of the borrower. Other factors relating to the property to
be considered are: the net operating income of the mortgaged premises before
debt service and depreciation; the debt service ratio; and the ratio of the
loan amount to appraised value. Pursuant to the Company's current underwriting
policies, a multi-family mortgage loan may only be made in an amount up to 60%
of the appraised value of the underlying property. The maximum amount of a
multi-family loan is limited by the Company's loans-to-one borrower limit
which, at March 31, 1999, was $15.4 million.

  When evaluating the qualifications of the borrower for a multi-family loan,
the Company considers the financial resources and income level of the
borrower, the borrower's experience in owning or managing similar property,
and the Company's lending experience with the borrower. The Company's
underwriting guidelines require that the borrower be able to demonstrate
strong management skills and the ability to maintain the property from current
rental income. The borrower is required to present evidence of the ability to
repay the mortgage and a history of making mortgage payments on a timely
basis. In making its assessment of the creditworthiness of the borrower, the
Company generally reviews the financial statements, employment and credit
history of the borrower, as well as other related documentation. All multi-
family loans made to corporations, partnerships and other business entities
require personal guarantees by the principal borrowers. The Company's multi-
family loan portfolio at March 31, 1999, totaled $3.1 million, or .4% of total
loans receivable. At March 31, 1999, the Company had no multi-family loans
with an outstanding carrying balance in excess of $150,000.

  Loans secured by apartment buildings and other multi-family residential
properties generally involve a greater degree of risk than one- to four-family
residential mortgage loans. Because payments on loans secured by multi-family
properties are often dependent on successful operation or management of the
properties, repayment of such loans may be subject to a greater extent to
prevailing conditions in the real estate market or the economy. The Company
seeks to minimize these risks through its underwriting policies.

  Construction and Land Lending. The Company originates construction and land
loans primarily for the development of single-family residences. Such loans
are made principally to individuals building their primary residence and, to a
lesser extent, to licensed and experienced developers known to the Company in
its primary market area for the construction of single-family developments.
The Company generally does not originate loans secured by raw land. In the
case of construction and land mortgage loans to individuals building their
primary residence, such loans are originated in amounts up to 90% of the
appraised value of the property, as improved. Construction and land loans to
commercial developers are originated in amounts up to 70% of the lesser of the
appraised value of the property, as improved, or the sales price. Proceeds of
construction and land loans are disbursed as phases of the construction are
completed. Generally, if the borrower is a corporation, partnership or other
business entity, personal guarantees by the principals are required. The
Company's largest construction and land loan at March 31, 1999 was a
performing loan with a $600,000 carrying balance secured by a single-family
home located in Shrewsbury, Massachusetts. At March 31, 1999, the Company had
$31.7 million of construction and land loans which amounted to 4.0% of the
Company's total loans receivable.

  Construction and land financing is generally considered to involve a higher
degree of credit risk than long-term financing on improved, owner-occupied
real estate. Risk of loss on a construction loan is dependent largely upon the
accuracy of the initial estimate of the property's value at completion of
construction or development compared to the estimated cost (including
interest) of construction. If the estimate of value proves to be inaccurate,
the Company may be confronted with a project, when completed, having a value
which is insufficient to assure full repayment.

  Consumer Lending. Consumer loans at March 31, 1999 amounted to $74.0
million, or 9.4% of the Company's total loans receivable, and consisted
primarily of home equity lines of credit and second mortgage

                                      10
<PAGE>

loans, and, to a significantly lesser extent, secured and unsecured personal
loans and new and used automobile loans. Such loans are generally originated
in the Company's primary market area and generally are secured by real estate,
deposit accounts, personal property and automobiles. These loans are typically
shorter term and generally have higher interest rates than one- to four-family
mortgage loans.

  The Company offers two types of home equity loans: a variable-rate "open-end
line of credit" and a fixed-rate "second mortgage". Substantially all of the
Company's home equity loans are secured by second liens on one- to four-family
residences located in the Company's primary market area. At March 31, 1999,
home equity loans totaled $66.1 million, or 8.4% of the Company's total loans
and 89.4% of total consumer loans. Home equity lines of credit have variable
rates of interest which can generally adjust on a monthly basis. The interest
rate on such loans is indexed to the prime rate as reported in The Wall Street
Journal and generally have an 18% lifetime limit on interest rates. Generally,
the maximum combined loans-to-value ratio ("LTV") on home equity loans is 80%;
however, fixed-rate second mortgage loans up to $50,000 and lines of credit up
to $25,000 can have an LTV of up to 100% on the property as long as other
underwriting criteria are satisfied. At March 31, 1999, the Company had $61.9
million of variable-rate home equity lines of credit with an outstanding
balance of $25.5 million, which was 3.2% of total loans receivable and 34.4%
of total consumer loans. Second mortgage loans are generally offered with
terms of up to 15 years and only with fixed-rates of interest which vary
depending on the amortization period chosen by the borrower. At March 31,
1999, fixed-rate second mortgage loans totaled $40.6 million, or 5.2% of the
Company's total loans receivable and 54.9% of total consumer loans. The
underwriting standards employed by the Company for home equity lines of credit
and second mortgage loans include a determination of the applicant's credit
history and an assessment of the applicant's ability to meet existing
obligations and payments on the proposed loan and the value of the collateral
securing the loan. The stability of the applicant's monthly income may be
determined by verification of gross monthly income from primary employment
and, additionally, from any verifiable secondary income. Creditworthiness of
the applicant is of primary consideration.

  The Company also originates other types of consumer loans consisting of
secured and unsecured personal loans and new and used automobile loans.
Secured personal loans are generally secured by deposit accounts, stocks or
bonds. Unsecured personal loans generally have a maximum borrowing limitation
of $10,000 and generally allow a maximum debt ratio (the ratio of debt service
to net earnings) of 40%. Automobile loans have a maximum borrowing limitation
of 95% of the sale price of a new automobile and 80% of the lesser of the
purchase price or fair market value of a used automobile. At March 31, 1999,
personal loans totaled $4.4 million, or 0.6% of the Company's total loans
receivable and 5.9% of consumer loans; and automobile loans totaled $3.5
million, or 0.4% of total loans receivable and 4.8% of consumer loans.

  Loans secured by rapidly depreciable assets such as automobiles or that are
unsecured entail greater risks than one- to four-family residential mortgage
loans. In such cases, repossessed collateral for a defaulted loan may not
provide an adequate source of repayment of the outstanding loan balance, since
there is a greater likelihood of damage, loss or depreciation of the
underlying collateral. Further, consumer loan collections on these loans are
dependent on the borrower's continuing financial stability and, therefore, are
more likely to be adversely affected by job loss, divorce, illness or personal
bankruptcy. Finally, the application of various federal and state laws,
including federal and state bankruptcy and insolvency laws, may limit the
amount which can be recovered on such loans in the event of a default. At
March 31, 1999, consumer loans 90 days or more delinquent totaled $40,000.

  Loan Approval Procedures and Authority. The Board of Directors establishes
the lending policies and loan approval limits of the Company. In connection
with one- to four-family mortgage loans, the Board of Directors has authorized
the following persons and committees to approve loans up to the amounts
indicated: owner-occupied mortgages that meet the general underwriting
standards of FNMA and FHLMC, with an 80% or lower LTV ratio and which do not
exceed FNMA and FHLMC maximum limits, may be approved by the Company's
underwriters; all other mortgage loans in amounts up to $300,000 must be
approved by the Company's Director of Residential Loan Production. The Senior
Vice President of the Mortgage Banking Group or Senior Vice

                                      11
<PAGE>

President of Banking Group must approve mortgage loans in excess of $300,000
and up to $500,000. The Company's Retail Loan Committee must approve loans in
excess of $500,000 and up to $750,000. Approval of the Board of Directors'
Executive Committee is required for any loan in excess of $750,000.

  With respect to multi-family and construction and land loans, the Board of
Directors has authorized the following persons and committees to approve loans
up to the amounts indicated: mortgage loans in amounts up to $250,000 must be
approved by the Company's Director of Residential Loan Production; mortgage
loans in excess of $250,000 and up to $400,000 require the approval of either
the Company's Senior Vice President of Mortgage Banking Group or Senior Vice
President of Banking Group; mortgage loans in excess of $400,000 and up to
$500,000 require the approval of the Company's Retail Loan Committee; loans in
excess of $500,000 require the approval of the Board of Directors' Executive
Committee.

  In connection with consumer loans, the Board of Directors has authorized the
following persons and committees to approve loans up to the amounts indicated:
consumer loans up to $100,000 and which meet certain lending criteria may be
approved by the Company's Consumer Loan Manager; any consumer loan up to
$250,000 may be approved by either the Company's Senior Vice President of
Mortgage Banking Group, Senior Vice President of Banking Group, Director of
Residential Loan Production or Director of Commercial Services; loans in
excess of $250,000 and up to $400,000 must be approved by the Company's Retail
Loan Committee; and loans in excess of $400,000 must be approved by the Board
of Directors' Executive Committee.

  With respect to commercial and commercial real estate loans to borrowers
with total credit exposure of up to $600,000, the Board of Directors has
authorized the approval of these loans by commercial lending officers of the
Company with progressively higher levels of responsibility as the amount of
aggregate credit exposure increases. Loans to borrowers with total credit
exposure in excess of $600,000 and up to $3 million require the approval of
the Commercial Loan Committee and loans to borrowers with total credit
exposure in excess of $3 million require the approval of the Board of
Directors' Executive Committee. Additionally, the President and CEO has
lending authority up to $4 million.

  Pursuant to OTS regulations, loans to one borrower cannot, subject to
certain exceptions, exceed 15% of the Bank's unimpaired capital and surplus.
At March 31, 1999, the loans to one borrower limit was $15.4 million.

Delinquent Loans, Classified Assets and Real Estate Owned

  Delinquencies and Classified Assets. Reports listing all delinquent accounts
are generated and reviewed by management on a monthly basis and the Board of
Directors performs a monthly review of all loans or lending relationships
delinquent 90 days or more and all real estate owned ("REO"). The procedures
taken by the Company with respect to delinquencies vary depending on the
nature of the loan, period and cause of delinquency and whether the borrower
is habitually delinquent. When a borrower fails to make a required payment on
a loan, the Company takes a number of steps to have the borrower cure the
delinquency and restore the loan to current status. The Company generally
sends the borrower a written notice of non-payment after the loan is first
past due. The Company's guidelines provide that telephone, written
correspondence and/or face-to-face contact will be attempted to ascertain the
reasons for delinquency and the prospects of repayment. When contact is made
with the borrower at any time prior to foreclosure, the Company will attempt
to obtain full payment, offer to provide budget and finance counseling
services, work out a repayment schedule with the borrower to avoid foreclosure
or, in some instances, accept a deed in lieu of foreclosure. In the event
payment is not then received or the loan not otherwise satisfied, additional
letters and telephone calls generally are made. If the loan is still not
brought current or satisfied and it becomes necessary for the Company to take
legal action, which typically occurs after a loan is 90 days or more
delinquent, the Company will commence foreclosure proceedings against any real
property that secures the loan. If a foreclosure action is instituted and the
loan is not brought current, paid in full, or refinanced before the
foreclosure sale, the property securing the loan generally is sold at
foreclosure and, if purchased by the Company, becomes REO.


                                      12
<PAGE>

  Federal regulations and the Company's Credit Risk Review Policy require that
the Company utilize an internal asset classification system as a means of
reporting problem and potential problem assets. The Company has incorporated
the OTS internal asset classifications as a part of its credit monitoring
system. The Company currently classifies problem and potential problem assets
as "Substandard," "Doubtful" or "Loss" assets. An asset is considered
"Substandard" if it is inadequately protected by the current net worth and
paying capacity of the obligor or of the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the insured institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as "Doubtful" have all of the weaknesses
inherent in those classified "Substandard" with the added characteristic that
the weaknesses present make "collection or liquidation in full," on the basis
of currently existing facts, conditions, and values, "highly questionable and
improbable." Assets classified as "Loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted. 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 required to be designated "Special Mention."

  When an insured institution classifies one or more assets, or portions
thereof, as Substandard or Doubtful, it is required to establish a general
valuation allowance for loan losses in an amount deemed prudent by management.
General valuation allowances represent loss allowances which have been
established to recognize the inherent risk associated with lending activities,
but which, unlike specific allowances, have not been allocated to particular
problem assets. When an insured institution classifies one or more assets, or
portions thereof, as "Loss", it is required either to establish a specific
allowance for losses equal to 100% of the amount of the asset so classified or
to charge off 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 guidelines. Generally,
the policy statement recommends that institutions have effective systems and
controls to identify, monitor and address asset quality problems; that
management has analyzed all significant factors that affect the collectibility
of the portfolio in a reasonable manner; and that management has established
acceptable allowance evaluation processes that meet the objectives set forth
in the policy statement. Although management believes that, based on
information currently available to it at this time, its allowance for loan
losses is adequate, actual losses are dependent upon future events and, as
such, further additions to the level of allowances for loan losses may become
necessary.

  The Company's Credit Risk Review Committee reviews and classifies the
Company's assets on a quarterly basis and the Board of Directors reviews the
results of the reports on a quarterly basis. The Company classifies assets in
accordance with the management guidelines described above. At March 31, 1999,
the Company had $3.9 million of loans designated as Substandard. As of March
31, 1999, the Company had 18 loans totaling $3.2 million designated as Special
Mention. These loans are designated as Special Mention because of inherent
weaknesses that currently exist but might be correctable in a twelve month
cycle. Accordingly, they require additional monitoring. At March 31, 1999, the
largest loan designated as Special Mention was a commercial loan with a
carrying balance of $723,000, and was secured by all business assets and a
mortgage lien.

                                      13
<PAGE>

  The following table sets forth delinquencies in the Company's loan portfolio
as of the dates indicated:

<TABLE>
<CAPTION>
                             At March 31, 1999                     At March 31, 1998
                   ------------------------------------- -------------------------------------
                       60-89 Days      90 Days or More       60-89 Days      90 Days or More
                   ------------------ ------------------ ------------------ ------------------
                            Principal          Principal          Principal          Principal
                    Number   Balance   Number   Balance   Number   Balance   Number   Balance
                   of Loans of Loans  of Loans of Loans  of Loans of Loans  of Loans of Loans
                   -------- --------- -------- --------- -------- --------- -------- ---------
                                                                (Dollars in thousands)
<S>                <C>      <C>       <C>      <C>       <C>      <C>       <C>      <C>
Mortgage Loans:
 One- to four-
 family..........      6      $283       16     $  971      11      $683       17     $1,073
 Multi-family....    --        --       --         --      --        --         1        101
 Commercial real
 estate..........    --        --         3      1,142       2       176        3      1,199
 Construction and
 land............    --        --         1        117     --        --         2        169
                     ---      ----      ---     ------     ---      ----      ---     ------
 Total mortgage
 loans...........      6       283       20      2,230      13       859       23      2,542
                     ---      ----      ---     ------     ---      ----      ---     ------
Commercial
Loans............      1         9        3        280       1        16        4         74
                     ---      ----      ---     ------     ---      ----      ---     ------
Consumer Loans:
 Home equity
 lines...........      1       162        2         36       1        15        5        425
 Second
 mortgages.......    --        --       --         --        5        59      --         --
 Other consumer
 loans...........      1         1        3          4       4         6        6          7
                     ---      ----      ---     ------     ---      ----      ---     ------
 Total consumer
 loans...........      2       163        5         40      10        80       11        432
                     ---      ----      ---     ------     ---      ----      ---     ------
 Total loans
 (1).............      9      $455       28     $2,550      24      $955       38     $3,048
                     ===      ====      ===     ======     ===      ====      ===     ======
 Delinquent loans
 to loans
 receivable,
 net.............             0.06%               0.33%             0.11%               0.36%
<CAPTION>
                             At March 31, 1997
                   -------------------------------------
                       60-89 Days      90 Days or More
                   ------------------ ------------------
                            Principal          Principal
                    Number   Balance   Number   Balance
                   of Loans of Loans  of Loans of Loans
                   -------- --------- -------- ---------
<S>                <C>      <C>       <C>      <C>
Mortgage Loans:
 One- to four-
 family..........     12     $  525      33     $1,908
 Multi-family....      1        202       2        268
 Commercial real
 estate..........    --         --        1        976
 Construction and
 land............    --         --        2        232
                   -------- --------- -------- ---------
 Total mortgage
 loans...........     13        727      38      3,384
                   -------- --------- -------- ---------
Commercial
Loans............      1         23     --         --
                   -------- --------- -------- ---------
Consumer Loans:
 Home equity
 lines...........      6        180       4        114
 Second
 mortgages.......      3         34       3         95
 Other consumer
 loans...........     10         57       9         69
                   -------- --------- -------- ---------
 Total consumer
 loans...........     19        271      16        278
                   -------- --------- -------- ---------
 Total loans
 (1).............     33     $1,021      54     $3,662
                   ======== ========= ======== =========
 Delinquent loans
 to loans
 receivable,
 net.............              0.13%              0.46%
</TABLE>
----
(1) Loans in the 90 days or more column consist of those loans 90 days or more
    past due and other loans which have been identified by the Company as
    presenting uncertainty with respect to the collectability of interest or
    principal.

                                       14
<PAGE>

  Non-Performing Assets. The following table sets forth information regarding
non-accrual loans and REO. At March 31, 1999, REO totaled $344,000 consisting
of 3 properties, 2 of which were secured by commercial real estate and 1 of
which was secured by a multi-family home. It is the policy of the Company to
cease accruing interest on loans 90 days or more past due and to reverse all
accrued interest.

<TABLE>
<CAPTION>
                                                   At March 31,
                                        --------------------------------------
                                         1999    1998    1997    1996    1995
                                        ------  ------  ------  ------  ------
                                              (Dollars in thousands)
<S>                                     <C>     <C>     <C>     <C>     <C>
Non-accrual loans:
  Mortgage loans:
    One- to four-family...............  $  971  $1,073  $1,908  $2,469  $2,501
    Multi-family......................     --      101     268     334      51
    Commercial real estate............   1,142   1,199     976     --       85
    Construction and land.............     117     169     232     --      --
                                        ------  ------  ------  ------  ------
      Total mortgage loans............   2,230   2,542   3,384   2,803   2,637
                                        ------  ------  ------  ------  ------
  Commercial loans....................     280      74     --       87     --
                                        ------  ------  ------  ------  ------
  Consumer loans:
    Home equity lines.................      36     425     114     956     386
    Second mortgages..................     --      --       95     196     --
    Other consumer loans..............       4       7      69       3      10
                                        ------  ------  ------  ------  ------
      Total consumer loans............      40     432     278   1,155     396
                                        ------  ------  ------  ------  ------
      Total nonaccrual loans..........   2,550   3,048   3,662   4,045   3,033
Real estate owned, net(1).............     344     595     665     643     296
                                        ------  ------  ------  ------  ------
      Total non-performing assets.....  $2,894  $3,643  $4,327  $4,688  $3,329
                                        ======  ======  ======  ======  ======
Allowance for loan losses as a percent
 of loans(2)..........................    1.54%   1.27%   1.09%   0.87%   0.84%
Allowance for loan losses as a percent
 of non-performing loans(3)...........  471.22% 358.83% 239.98% 138.62% 139.76%
Non-performing loans as a percent of
 loans(2)(3)..........................    0.33%   0.35%   0.45%   0.63%   0.60%
Non-performing assets as a percent of
 total assets(4)......................    0.21%   0.28%   0.44%   0.65%   0.59%
</TABLE>
--------
(1) REO balances are shown net of related valuation allowances.
(2) Loans includes loans receivable, net, excluding allowance for loan losses.
(3) Non-performing loans consist of those loans 90 days or more past due and
    other loans which have been identified by the Company as presenting
    uncertainty with respect to the collectability of interest or principal.
(4) Non-performing assets consist of non-performing loans and REO.

  Impaired Loans. The Company adopted a new accounting method for measuring
loan impairment on April 1, 1995. Adoption of this accounting standard did not
have a material effect on the comparability of the above tables. Impaired
loans are commercial and commercial real estate loans for which it is probable
that the Company will not be able to collect all amounts due according to the
contractual terms of the loan agreement. The definition of "impaired loans" is
not the same definition of "non-accrual loans," although the two categories
overlap. Non-accrual loans include impaired loans and are those on which the
accrual of interest is discontinued when collectibility of principal or
interest is uncertain or payments of principal or interest have been
contractually past due 90 days. The Company may choose to place a loan on non-
accrual status due to payment delinquency or uncertain collectibility, while
not classifying the loan as impaired, if (i) it is not probable that the
Company will collect all amounts due in accordance with the contractual terms
of the loan or (ii) the loan is not a commercial or a commercial real estate
loan. Factors considered by management in determining impairment include
payment status and collateral value. The amount of impairment for these types
of impaired loans is determined by the difference between the present value of
the expected cash flows related to the loan, using the original contractual
interest rate, and its recorded value, or, in the case of collateralized
loans, the difference between the fair value of the collateral and the
recorded amount of the loan. When foreclosure is

                                      15
<PAGE>

probable, impairment is measured based on the fair value of the collateral.
Residential mortgage and consumer loans are measured for impairment
collectively. Loans that experience insignificant payment delays and
insignificant shortfalls in payment amounts generally are not classified as
impaired. Management determines the significance of payment delays and payment
shortfalls on a case-by-case basis, taking into consideration all of the
circumstances surrounding the loan and the borrower, including the length of
the delay, the reasons for the delay, the borrower's prior payment record and
the amount of the shortfall in relation to the principal and interest owed.

  At March 31, 1999 and March 31, 1998, total impaired loans were $1.6 million
and $1.5 million, respectively. At March 31, 1999, impaired loans of $1.6
million required an impairment allowance of $919,000. All impaired loans have
been measured using the fair value of the collateral method. During the fiscal
year ended March 31, 1999, the average recorded value of impaired loans was
$1.5 million. For these loans, $122,000 of interest income was recognized
while $227,000 of interest income would have been recognized under the
original terms.

  Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the
risks inherent in its loan portfolio and the general economy. The allowance
for loan losses is maintained at an amount management considers adequate to
cover estimated losses in loans receivable which are deemed probable and
estimable based on information currently known to management. The allowance is
based upon a number of factors, including current economic conditions, actual
loss experience and industry trends. In addition, the OTS and FDIC, as an
integral part of their examination process, periodically review the Company's
allowance for loan losses. The OTS and FDIC may require the Company to make
additional provisions for estimated loan losses based upon judgments different
from those of management. As of March 31, 1999, the Company's allowance for
loan losses was 1.54% of total loans receivable as compared to 1.27% as of
March 31, 1998. The increase in allowance for loan losses of $1.1 million
reflects management's assessment of the loan portfolio and its composition.
The Company had non-accrual loans of $2.6 million and $3.0 million at March
31, 1999 and March 31, 1998, respectively. The Company will continue to
monitor and modify its allowances for loan losses as conditions dictate. While
management believes the Company's allowance for loan losses is sufficient to
cover losses inherent in its loan portfolio at this time, no assurances can be
given that the Company's level of allowance for loan losses will be sufficient
to cover future loan losses incurred by the Company or that future adjustments
to the allowance for loan losses will not be necessary if economic and other
conditions differ substantially from those assumed by management to determine
the current level of the allowance for loan losses.

                                      16
<PAGE>

  The following table sets forth activity in the Company's allowance for loan
losses for the years set forth in the following table.

<TABLE>
<CAPTION>
                                       At or For the Year Ended March 31,
                                      ----------------------------------------
                                       1999     1998     1997    1996    1995
                                      -------  -------  ------  ------  ------
                                             (Dollars in thousands)
<S>                                   <C>      <C>      <C>     <C>     <C>
Balance at beginning of year......... $10,937  $ 8,788  $5,607  $4,239  $3,964
Provision for loan losses............   1,200    2,350   3,750   2,626     653
Charge-offs:
  Mortgage loans:
    One- to four-family..............      12      188     331     218     168
    Multi-family.....................     --       --       82     --      --
    Commercial real estate...........     --       --      --      967      25
    Construction and land............     --       --      --      --      --
  Commercial loans...................      74      --       87     --       15
  Consumer loans:
    Home equity lines................      30      --      116      68     113
    Second mortgages.................       9       15      10     --      --
    Other consumer loans.............      13        9      11      35      79
                                      -------  -------  ------  ------  ------
      Total..........................     138      212     637   1,288     400
Recoveries...........................      17       11      68      30      22
                                      -------  -------  ------  ------  ------
Balance at end of year............... $12,016  $10,937  $8,788  $5,607  $4,239
                                      =======  =======  ======  ======  ======
Ratio of net charge-offs during the
 year to average loans outstanding
 during the year.....................    0.01%    0.02%   0.07%   0.23%   0.08%
                                      =======  =======  ======  ======  ======
</TABLE>

                                      17
<PAGE>

  The following tables set forth the Company's percent of allowance for loan
losses to total allowance for loan losses and the percent of loans to total
loans in each of the categories listed at the dates indicated.

<TABLE>
<CAPTION>
                                                                                 At March 31,
                   -------------------------------------------------------------------------------------------------------------
                              1999                        1998                        1997                       1996
                   --------------------------- --------------------------- -------------------------- --------------------------
                                      Percent                     Percent                    Percent                    Percent
                                      of Loans                    of Loans                   of Loans                   of Loans
                           Percent of in Each          Percent of in Each         Percent of in Each         Percent of in Each
                           Allowance  Category         Allowance  Category        Allowance  Category        Allowance  Category
                            to Total  to Total          to Total  to Total         to Total  to Total         to Total  to Total
                   Amount  Allowance   Loans   Amount  Allowance   Loans   Amount Allowance   Loans   Amount Allowance   Loans
                   ------- ---------- -------- ------- ---------- -------- ------ ---------- -------- ------ ---------- --------
                                                                            (Dollars in thousands)
<S>                <C>     <C>        <C>      <C>     <C>        <C>      <C>    <C>        <C>      <C>    <C>        <C>
Mortgages:
 Residential.....  $ 2,517    20.95%    78.54% $ 2,959    27.05%    83.26% $2,769    31.51%    85.57% $2,175    38.79%    86.23%
 Commercial......    2,725    22.68      4.92    3,023    27.64      5.27   2,239    25.48      4.07   1,195    21.31      3.59
                   -------   ------    ------  -------   ------    ------  ------   ------    ------  ------   ------    ------
 Total...........    5,242    43.63     83.46    5,982    54.69     88.53   5,008    56.99     89.64   3,370    60.10     89.82
 Commercial......    3,111    25.89      7.14    1,309    11.97      3.07     932    10.60      2.47     621    11.08      2.22
 Consumer........    1,320    10.99      9.40    1,358    12.42      8.40   1,151    13.10      7.89     829    14.79      7.96
 Unallocated.....    2,343    19.49       --     2,288    20.92       --    1,697    19.31       --      787    14.03       --
                   -------   ------    ------  -------   ------    ------  ------   ------    ------  ------   ------    ------
 Total allowance
 for loan
 losses..........  $12,016   100.00%   100.00% $10,937   100.00%   100.00% $8,788   100.00%   100.00% $5,607   100.00%   100.00%
                   =======   ======    ======  =======   ======    ======  ======   ======    ======  ======   ======    ======
<CAPTION>
                              1995
                   --------------------------
                                     Percent
                                     of Loans
                          Percent of in Each
                          Allowance  Category
                           to Total  to Total
                   Amount Allowance   Loans
                   ------ ---------- --------
<S>                <C>    <C>        <C>
Mortgages:
 Residential.....  $1,223    28.85%    85.34%
 Commercial......   1,265    29.84      3.90
                   ------ ---------- --------
 Total...........   2,488    58.69     89.24
 Commercial......     600    14.16      2.49
 Consumer........     473    11.16      8.27
 Unallocated.....     678    15.99       --
                   ------ ---------- --------
 Total allowance
 for loan
 losses..........  $4,239   100.00%   100.00%
                   ====== ========== ========
</TABLE>

                                       18
<PAGE>

Investment Activities

  Federally-chartered savings institutions have the authority to invest in
various types of liquid assets, including United States Treasury obligations,
securities of various federal agencies, certificates of deposit of insured
banks and savings institutions, bankers' acceptances, repurchase agreements
and federal funds. Subject to various restrictions, federally-chartered
savings institutions may also invest their assets in commercial paper,
investment-grade corporate debt securities and mutual funds whose assets
conform to the investments that a federally-chartered savings institution is
otherwise authorized to make directly. Additionally, the Company must maintain
minimum levels of investments that qualify as liquid assets under OTS
regulations. Historically, the Company has maintained liquid assets above the
minimum OTS requirements and at a level considered to be adequate to meet its
normal daily activities.

  The investment policy of the Company, as approved by the Board of Directors,
requires management to maintain adequate liquidity, generate a favorable
return on investments without incurring undue interest rate and credit risk
and to complement the Company's lending activities. Generally, the Company's
investment policy is more restrictive than the OTS regulations allow and,
accordingly, the Company has invested primarily in AAA-rated mortgage-related
securities (consisting of mortgage-backed pass-through securities and
collateralized mortgage obligations) and U.S. government and federal agency
securities, all of which qualify as liquid assets under the OTS liquidity
regulations. As required by SFAS No. 115, Accounting for Certain Investments
in Debt and Equity Securities ("SFAS No. 115"), the Company designates
investment securities as held to maturity, available for sale, or held for
trading. The Company generally invests in securities as part of a wholesale
leverage strategy as well as to manage interest-rate risk and to maintain
liquidity levels deemed appropriate by management. At March 31, 1999, the
Company had short-term investments of $14.4 million, or 1.0% of assets,
consisting of short-term commercial paper and overnight deposits. As of the
same date, the Company also maintained investments in trading securities of
$94,000. At March 31, 1999, the Company's investment securities available for
sale portfolio totaled $5.6 million, or 0.4% of assets, consisting of
marketable equity securities with a fair value of $5.6 million. At March 31,
1999, the Company's investment securities held to maturity portfolio totaled
$10.0 million, or 0.7% of assets, consisting of U.S. government securities
with a weighted average remaining maturity of 3 months.

  At March 31, 1999, the Company had invested $414.1 million, or 29.7% of
assets, in mortgage-backed securities issued by either by the Government
National Mortgage Association ("GNMA"), FNMA, FHLMC or by private mortgage
security issuers. The portfolio consisted of $408.5 million of mortgage-backed
securities classified as available for sale, or 98.6% of total mortgage-backed
securities, and $5.6 million of mortgage-backed securities classified as held
to maturity, or 1.4% of total mortgage-backed securities. Of the $414.1
million in mortgage-backed securities, $334.9 million were adjustable-rate
securities and $79.2 million were fixed-rate securities.

  Of the $334.9 million of adjustable-rate securities, $179.5 million were
GNMA one year CMT indexed ARMs with 1% maximum annual rate adjustments and 5%
maximum lifetime rate adjustments, $35.9 million were FNMA and FHLMC one year
CMT indexed ARMs with initial fixed-rate periods of one to five years, and 2%
maximum annual rate adjustments and 6% maximum lifetime rate adjustments,
$33.1 million were FNMA and FHLMC Eleventh District Cost of Funds ("COFI")
indexed monthly resetting ARMs with no annual rate caps, but with lifetime
caps of 9.28% to 13.07%, $57.6 were FNMA and AAA-rated privately issued COFI
indexed collateralized mortgage obligation ("CMO") bonds, $16.9 million were
GNMA and AAA-rated privately issued LIBOR indexed CMO bonds, and $11.9 million
were AAA-rated privately issued CMO bonds with a 5 year initial fixed-rate
period that will then be indexed to monthly floating LIBOR.

  Of the $79.2 million of fixed-rate securities, $56.7 million were AAA-rated
privately issued CMO bonds with average lives of approximately 5 years or
less, $21.4 million were FNMA and FHLMC 7 year securities with approximately 5
years until the required repayment, and $1.1 million were GNMA and FHLMC pass-
through securities with an average remaining term of 99 months.


                                      19
<PAGE>

  Investments in mortgage-backed securities involve a risk that actual
prepayments will differ from estimated prepayments over the life of the
security. Mortgage-backed securities may require adjustments to the
amortization of any premium or accretion of any discount relating to such
instruments thereby changing the net yield on such securities. There is also
reinvestment risk associated with the cash flows from such securities or in
the event such securities are redeemed by the issuer. In addition, the market
value and/or interest rates of such securities may be adversely affected by
changes in interest rates.

  The following table sets forth certain information regarding the amortized
cost and fair value of the Company's short-term investments and investment
securities at the dates indicated:

<TABLE>
<CAPTION>
                                              At March 31,
                          -----------------------------------------------------
                                1999              1998              1997
                          ----------------- ----------------- -----------------
                          Amortized  Fair   Amortized  Fair   Amortized  Fair
                            Cost     Value    Cost     Value    Cost     Value
                          --------- ------- --------- ------- --------- -------
                                         (Dollars in thousands)
<S>                       <C>       <C>     <C>       <C>     <C>       <C>
Short-term investments...  $14,422  $14,422  $   --   $   --   $39,410  $39,410
                           =======  =======  =======  =======  =======  =======
Investment securities:
  Trading:
    Limited Partnership..  $    94  $    94  $   --   $   --   $   --   $   --
  Available for sale:
    Marketable equity
     securities..........    5,660    5,575    1,815    3,701        5      888
    U.S. Government and
     agency obligations..      --       --     4,001    4,011      --       --
                           -------  -------  -------  -------  -------  -------
      Total available for
       sale..............    5,660    5,575    5,816    7,712        5      888
                           -------  -------  -------  -------  -------  -------
  Held to maturity:
    U.S. Government and
     agency obligations..    9,998   10,030   20,490   20,584   20,991   20,958
    Federal Home Loan
     Bank note...........      --       --     2,001    2,001      --       --
                           -------  -------  -------  -------  -------  -------
      Total held to
       maturity..........    9,998   10,030   22,491   22,585   20,991   20,958
                           -------  -------  -------  -------  -------  -------
  Total investment
   securities............  $15,752  $15,699  $28,307  $30,297  $20,996  $21,846
                           =======  =======  =======  =======  =======  =======
</TABLE>

                                      20
<PAGE>

  The following table sets forth certain information regarding the amortized
cost and fair values of the Company's mortgage-backed securities at the dates
indicated:

<TABLE>
<CAPTION>
                                                            At March 31,
                         ----------------------------------------------------------------------------------
                                    1999                        1998                        1997
                         --------------------------- --------------------------- --------------------------
                         Amortized Percent    Fair   Amortized Percent    Fair   Amortized Percent   Fair
                           Cost    of Total  Value     Cost    of Total  Value     Cost    of Total  Value
                         --------- -------- -------- --------- -------- -------- --------- -------- -------
                                                       (Dollars in thousands)
<S>                      <C>       <C>      <C>      <C>       <C>      <C>      <C>       <C>      <C>
Mortgage-backed
 securities and
 collateralized mortgage
 obligations:
Available for sale:
  Fixed-rate............ $ 78,661    19.0%  $ 78,071 $ 39,922    17.6%  $ 40,411  $32,059    67.5%  $31,732
  Adjustable-rate.......  329,822    79.6    330,380  174,283    76.9    174,732      --      --        --
                         --------   -----   -------- --------   -----   --------  -------   -----   -------
    Total available for
     sale...............  408,485    98.6    408,451  214,205    94.5    215,143   32,059    67.5    31,732
                         --------   -----   -------- --------   -----   --------  -------   -----   -------
Held to maturity:
  Fixed-rate............    1,055      .1      1,127    1,502      .7      1,594    1,953     4.1     2,043
  Adjustable-rate.......    4,553      .3      4,606   10,993     4.8     11,094   13,482    28.4    13,535
                         --------   -----   -------- --------   -----   --------  -------   -----   -------
    Total held to
     maturity...........    5,608      .4      5,733   12,495     5.5     12,688   15,435    32.5    15,578
                         --------   -----   -------- --------   -----   --------  -------   -----   -------
Total mortgage-backed
 securities and
 collateralized mortgage
 obligations............ $414,093   100.0%  $414,184 $226,700   100.0%  $227,831  $47,494   100.0%  $43,310
                         ========   =====   ======== ========   =====   ========  =======   =====   =======
</TABLE>

  The following table sets forth the Company's mortgage-backed securities
activities for the periods indicated.

<TABLE>
<CAPTION>
                                                         For the Year
                                                       Ended March 31,
                                                  ----------------------------
                                                    1999       1998     1997
                                                  ---------  --------  -------
                                                    (Dollars in thousands)
<S>                                               <C>        <C>       <C>
Beginning balance................................ $ 226,700  $ 47,494  $ 7,248
  Mortgage-backed securities and collateralized-
   mortgage obligations purchased:
    Held to maturity.............................       --        --     9,996
    Available for sale...........................   346,219   201,533   32,061
  Collateralized-mortgage obligations sold.......    (3,883)      --       --
  Collateralized-mortgage obligation maturities..   (19,473)      --       --
  Principal repayments of securities.............  (134,316)  (22,366)  (1,805)
  Net accretion (amortization) of discount
   (premium).....................................    (1,154)       39       (6)
                                                  ---------  --------  -------
Ending balance................................... $ 414,093  $226,700  $47,494
                                                  =========  ========  =======
</TABLE>

                                      21
<PAGE>

  The table below sets forth certain information regarding the carrying value,
weighted average yields and contractual maturities of the Company's investment
securities and mortgage-backed securities as of March 31, 1999.

<TABLE>
<CAPTION>
                                                                At March 31, 1999
                         ---------------------------------------------------------------------------------------------------------
                                              More than One         More than Five
                         One Year or Less  Year to Five Years     Years to Ten Years     More than Ten Years           Total
                         ----------------- ---------------------  ---------------------  ---------------------   -----------------
                                  Weighted             Weighted               Weighted               Weighted             Weighted
                         Carrying Average  Carrying     Average   Carrying     Average   Carrying     Average    Carrying Average
                          Value    Yield     Value       Yield      Value       Yield      Value       Yield      Value    Yield
                         -------- -------- ----------  ---------  ----------  ---------  ----------- ---------   -------- --------
                                                             (Dollars in thousands)
<S>                      <C>      <C>      <C>         <C>        <C>         <C>        <C>         <C>         <C>      <C>
Investment
 securities(1):
 Held to maturity:
 U.S. Government and
  agency obligations...   $9,998    6.10%  $      --       -- %   $      --          --% $       --         --%  $  9,998   6.10%
                          ------    ----   ----------    -------  ----------    -------  -----------  --------   --------   ----
Total investment
 securities............   $9,998    6.10%  $      --       -- %   $      --          --% $       --         --%  $  9,998   6.10%
                          ======    ====   ==========    =======  ==========    =======  ===========  ========   ========   ====
Mortgage-backed
 securities and
 collateralized-
 mortgage obligations:
 Available for sale:
 Fixed rate............   $  --      -- %  $       14       7.71% $      815       8.45% $       225     10.00%  $  1,054   8.77%
 Adjustable rate.......      --      --           --         --          --         --         4,554      6.52      4,554   6.52
                          ------    ----   ----------    -------  ----------    -------  -----------  --------   --------   ----
 Total mortgage-backed
  securities held to
  maturity.............      --      --            14       7.71         815       8.45        4,779      6.69      5,608   6.96
                          ------    ----   ----------    -------  ----------    -------  -----------  --------   --------   ----
 Held to maturity:
 Fixed-rate............      --      --        18,837       6.97       2,570       6.98          --        --      21,407   6.98
 Adjustable-rate.......      --      --           --         --       23,213       5.76      363,831      6.09    387,044   6.07
                          ------    ----   ----------    -------  ----------    -------  -----------  --------   --------   ----
 Total mortgage-backed
  securities available
  for sale.............      --      --        18,837       6.97      25,783       5.88      363,831      6.09    408,451   6.16
                          ------    ----   ----------    -------  ----------    -------  -----------  --------   --------   ----
Total mortgage-backed
 securities and
 collateralized-
 mortgage obligations..   $  --      -- %  $   18,851       6.98% $   26,598       5.96% $   368,610      6.10%  $414,059   6.17%
                          ======    ====   ==========    =======  ==========    =======  ===========  ========   ========   ====
</TABLE>
--------
(1) Does not include $5,575 of marketable equity securities available for sale
    at fair value at March 31, 1999.

Sources of Funds

  General. Deposits, loan and mortgage-backed security repayments and
prepayments, proceeds from sales of loans, cash flows generated from
operations and FHLB advances and other borrowings are the primary sources of
the Company's funds for use in lending, investing and for other general
purposes.

  Deposits. The Company offers a variety of deposit accounts with a range of
interest rates and terms. The Company's deposits consist of business checking,
money market, savings, NOW and certificate accounts. For the fiscal year ended
March 31, 1999, core deposits (defined as total deposits less certificate
accounts) represented 34.6% of total average deposits. The flow of deposits is
influenced significantly by general economic conditions, changes in money
market rates, prevailing interest rates and competition. The Company's
deposits are obtained predominantly from the areas in which its banking
offices are located. The Company has historically relied primarily on customer
service and long-standing relationships with customers to attract and retain
these deposits; however, market interest rates and rates offered by competing
financial institutions significantly affect the Company's ability to attract
and retain deposits. The Company uses traditional means of advertising its
deposit products, including radio and print media and generally does not
solicit deposits from outside its market area. While the Company does not
actively solicit certificate accounts in excess of $100,000 or use brokers to
obtain deposits, the Company may, from time to time, solicit such deposits or
utilize brokered deposits depending upon market conditions. In recent years,
the Company, in connection with its growth strategy, has significantly

                                      22
<PAGE>

increased its deposit base by establishing new banking offices in and around
its primary market area, primarily in Rhode Island, and competitively pricing
its deposit products to attract and retain deposit accounts and build its
market share of deposits. However, a less aggressive deposit pricing strategy
during 1999 caused the Company's average certificate balances to decrease from
$506.4 million, or 71.0% of total average deposits, during the year ended
March 31, 1998 to $441.6 million, or 65.4% of total average deposits, during
the year ended March 31, 1999. The Company's cost of average interest-bearing
deposits decreased from 4.93% for the year ended March 31, 1998 to 4.47% for
the year ended March 31, 1999. At March 31, 1999, the weighted average
remaining maturity of the Company's certificate accounts was 8.6 months.

  The following table presents the deposit activity of the Company for the
periods indicated:

<TABLE>
<CAPTION>
                                                For the Year Ended March 31,
                                                -------------------------------
                                                  1999       1998       1997
                                                ---------  ---------  ---------
                                                   (Dollars in thousands)
   <S>                                          <C>        <C>        <C>
   Net deposits................................ $ (61,201) $ (48,513) $ 109,952
   Interest credited on deposit accounts.......    27,583     33,025     30,274
                                                ---------  ---------  ---------
     Total increase (decrease) in deposit
      accounts................................. $ (33,618) $ (15,488) $ 140,226
                                                =========  =========  =========
</TABLE>

  At March 31, 1999, the Company had $55.6 million in certificate accounts in
amounts of $100,000 or more maturing as follows:

<TABLE>
<CAPTION>
                                                                   Weighted
     Maturity Period                                 Amount      Average Rate
     ---------------                                ------------ --------------
                                                    (Dollars in thousands)
   <S>                                              <C>          <C>
   Three months or less............................ $     13,713          4.91%
   Over 3 through 6 months.........................       14,994          4.88
   Over 6 through 12 months........................       16,366          5.45
   Over 12 months..................................       10,507          5.66
                                                    ------------     ---------
     Total......................................... $     55,580          5.20%
                                                    ============     =========
</TABLE>

                                      23
<PAGE>

  The following table sets forth the distribution of the Company's average
deposit accounts for the periods indicated and the weighted average interest
rates on each category of deposits presented. Averages for the periods
presented utilize average month-end balances.

<TABLE>
<CAPTION>
                                                  For the Year Ended March 31,
                          -----------------------------------------------------------------------------
                                    1999                      1998                      1997
                          ------------------------- ------------------------- -------------------------
                                   Percent                   Percent                   Percent
                                   of Total                  of Total                  of Total
                          Average  Average  Average Average  Average  Average Average  Average  Average
                          Balance  Deposits  Cost   Balance  Deposits  Cost   Balance  Deposits  Cost
                          -------- -------- ------- -------- -------- ------- -------- -------- -------
                                                     (Dollars in thousands)
<S>                       <C>      <C>      <C>     <C>      <C>      <C>     <C>      <C>      <C>
Business checking
 accounts...............  $ 58,408    8.6%    -- %  $ 44,064    6.2%    -- %  $ 38,428    6.0%    -- %
Money market accounts...    31,871    4.7    2.66     30,788    4.3    2.87     28,967    4.5    2.86
Savings accounts........    93,118   13.8    2.01     86,915   12.2    2.41     82,536   12.9    2.50
NOW accounts............    50,760    7.5    0.98     45,619    6.4    1.76     38,801    6.0    1.97
                          --------  -----    ----   --------  -----    ----   --------  -----    ----
 Total..................   234,157   34.6    1.37    207,386   29.1    1.82    188,732   29.4    1.94
                          --------  -----    ----   --------  -----    ----   --------  -----    ----
Certificate accounts(1):
 Less than six
  months(2).............   214,975   31.8    5.38    228,480   32.0    5.59    184,111   28.7    5.60
 Over six through
  12 months(2)..........    85,409   12.7    5.48    105,989   14.8    5.82     94,439   14.7    5.82
 Over 12 through
  36 months.............    50,758    7.5    5.84     79,289   11.1    6.14     84,341   13.1    6.20
 Over 36 months.........     5,625    0.8    6.12      6,771    1.0    6.20     12,479    1.9    6.68
 IRA and KEOGH..........    84,789   12.6    5.63     85,911   12.0    5.89     78,084   12.2    6.08
                          --------  -----    ----   --------  -----    ----   --------  -----    ----
 Total certificate
  accounts..............   441,556   65.4    5.51    506,440   70.9    5.78    453,454   70.6    5.87
                          --------  -----    ----   --------  -----    ----   --------  -----    ----
 Total average
  deposits..............  $675,713  100.0%   4.08%  $713,826  100.0%   4.63%  $642,186  100.0%   4.71%
                          ========  =====    ====   ========  =====    ====   ========  =====    ====
</TABLE>
--------
(1) Based on remaining contractual maturity of certificates.
(2) Includes the net effect of interest rate swaps.

  The following table presents, by various rate categories, the amount of
certificate accounts outstanding at the dates indicated and the periods to
maturity of the certificate accounts outstanding at March 31, 1999.

<TABLE>
<CAPTION>
                                 Period to Maturity from March 31, 1999                At March 31,
                          ----------------------------------------------------- --------------------------
                          Less than  One to     Two to     Three to   Four to
                          One Year  Two Years Three Years Four Years Five Years   1999     1998     1997
                          --------- --------- ----------- ---------- ---------- -------- -------- --------
                                                       (Dollars in thousands)
<S>                       <C>       <C>       <C>         <C>        <C>        <C>      <C>      <C>
Certificate accounts:
 0 to 4.00%.............  $  2,788   $ 1,397    $   --      $  --      $  --    $  4,185 $    --  $    260
 4.01 to 5.00%..........   197,760    27,446      1,168        166         72    226,612    8,783   18,741
 5.01 to 6.00%..........   118,324    27,869      8,209      1,353      1,313    157,068  370,626  396,283
 6.01 to 7.00%..........    12,888     5,831      2,837      6,421        --      27,977   76,392   82,551
 7.01 to 8.00%..........     7,876     4,267        --         --         --      12,143   18,732   26,975
 Over 8.01%.............         4       --         --         --         --           4        4        4
                          --------   -------    -------     ------     ------   -------- -------- --------
 Total..................  $339,640   $66,810    $12,214     $7,940     $1,385   $427,989 $474,537 $524,814
                          ========   =======    =======     ======     ======   ======== ======== ========
</TABLE>

  Borrowings. The Company utilizes advances from the FHLB and reverse
repurchase agreements with securities dealers as alternatives to retail
deposits to fund its operations as part of its operating strategy. During the
year ended March 31, 1999, the Company used FHLB borrowings to a greater
extent to fund its purchase of mortgage-backed securities. FHLB advances are
collateralized primarily by certain of the Company's mortgage loans and
mortgage-backed securities. FHLB advances are made pursuant to several
different credit programs, each of which has its own interest rate and range
of maturities. The maximum amount that the FHLB will advance to member
institutions, including the Bank, fluctuates from time to time in accordance
with the policies of the Federal Housing Finance Board ("FHFB") and the FHLB.
At March 31, 1999, the Company had $530.7 million in outstanding advances from
the FHLB as compared to $356.6 million at March 31, 1998.

                                      24
<PAGE>

  The following table sets forth certain information regarding the Company's
FHLB Advances at or for the periods ended on the dates indicated:

<TABLE>
<CAPTION>
                                                      At or For the Year
                                                       Ended March 31,
                                                  ----------------------------
                                                    1999      1998      1997
                                                  --------  --------  --------
                                                    (Dollars in thousands)
<S>                                               <C>       <C>       <C>
FHLB advances:
  Average balance outstanding.................... $464,404  $214,278  $131,523
                                                  ========  ========  ========
  Maximum amount outstanding at any month-end
   during the period............................. $558,286  $356,615  $177,580
                                                  ========  ========  ========
  Balance outstanding at end of period........... $530,655  $356,615  $111,062
                                                  ========  ========  ========
  Weighted average interest rate during the peri-
   od............................................     5.64%     6.05%     6.25%
                                                  ========  ========  ========
  Weighted average interest rate at end of peri-
   od............................................     5.30%     5.87%     6.13%
                                                  ========  ========  ========
</TABLE>

  The following table sets forth certain information regarding the Company's
reverse repurchase agreements and other borrowings at or for the periods ended
on the dates indicated:

<TABLE>
<CAPTION>
                                                       At or For the Year
                                                         Ended March 31,
                                                     ---------------------------
                                                       1999      1998    1997
                                                     --------  --------  -------
                                                     (Dollars in Thousands)
<S>                                                  <C>       <C>       <C>
Reverse repurchase agreements and other borrowings:
  Average balance outstanding....................... $ 50,103  $ 10,173  $ --
                                                     ========  ========  =====
  Maximum amount outstanding at any month-end during
   the period....................................... $ 73,299  $ 47,250  $ --
                                                     ========  ========  =====
  Balance outstanding at end of period.............. $ 55,326  $ 47,250  $ --
                                                     ========  ========  =====
  Weighted average interest rate during the period..     5.30%     5.63%   -- %
                                                     ========  ========  =====
  Weighted average interest rate at end of period...     4.83%     5.58%   -- %
                                                     ========  ========  =====
</TABLE>

Subsidiary Activities

  First Federal Savings Bank of America includes its wholly-owned
subsidiaries: FIRSTFED MORTGAGE CORPORATION, a Massachusetts corporation which
is currently inactive; FIRSTFED INVESTMENT CORPORATION, a Massachusetts
security corporation; and CELMAC INVESTMENT CORPORATION, also a Massachusetts
security corporation.

  FAB FUNDING CORPORATION ("FAB FUNDING"), a Massachusetts corporation, is a
wholly-owned subsidiary of the Company formed primarily to finance stock
purchases by the Company's Employee Stock Ownership Plan and related trust
("ESOP"). The financing from FAB FUNDING is collateralized by the shares of
stock of the Company purchased by the ESOP, which are released for
distribution to eligible employees of the Company as payments are made on the
loan. Except for the loan to the ESOP, FAB FUNDING has no significant
operations.

  FIRSTFED INSURANCE AGENCY, LLC, a Massachusetts corporation, was formed on
January 7, 1999 and is jointly owned by the Company and FAB FUNDING. The
Agency offers a comprehensive insurance product line including auto, home,
life, accident and health insurance to consumers and businesses. The Agency is
licensed to sell insurance in both Massachusetts and Rhode Island and is
subject to regulations of, and periodic examinations by, both of these states.


                                      25
<PAGE>

Personnel

  As of March 31, 1999, the Company had 284 authorized full-time employee
positions and 51 authorized part-time employee positions, for a total of
approximately 309.5 full time equivalents. The employees are not represented
by a collective bargaining unit and the Company considers its relationship
with its employees to be good.

                          REGULATION AND SUPERVISION

General

  As a savings and loan holding company, the Company is required by federal
law to file reports with, and otherwise comply with, the rules and regulations
of the Office of Thrift Supervision ("OTS"). The Bank is subject to extensive
regulation, examination and supervision by the OTS, as its primary federal
regulator, and the FDIC, as the deposit insurer. The Bank is a member of the
Federal Home Loan Bank 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 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 federal law. 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. See "Federal Savings Institution
Regulation--QTL Test." Upon any non-supervisory acquisition by the Company of
another savings institution or savings bank that meets the qualified thrift
lender 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 generally be limited
to activities permissible for bank holding companies under Section 4(c)(8) of
the Bank Holding Company Act, subject to the prior approval of the OTS, and
certain activities authorized by OTS regulation.

  A savings and loan holding company is prohibited from, directly or
indirectly, acquiring more than 5% of the voting stock of another savings
institution or savings and loan holding company, without prior written
approval of the OTS and from 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 considers the
financial and managerial resources and future prospects of the company and
institution involved, the effect of the acquisition on the risk to the deposit
insurance funds, the convenience and needs of the community and competitive
factors.

  The OTS may not approve 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

                                      26
<PAGE>

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, federal regulations do prescribe such
restrictions on subsidiary savings institutions as described below. The Bank
must notify the OTS 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 institution.

Federal Savings Institution Regulation

  Business Activities. The activities of federal savings institutions are
governed by federal law and regulations. These laws and regulations delineate
the nature and extent of the activities in which federal associations may
engage. In particular, many types of lending authority for federal
association, e.g., commercial, non-residential real property loans and
consumer loans, are limited to a specified percentage of the institution's
capital or assets.

  Capital Requirements. During fiscal 1998, the OTS capital regulations
require savings institutions to meet three minimum capital standards: a 1.5%
tangible capital ratio, a 3% leverage ratio and an 8% risk-based capital
ratio. Effective April 1, 1999, the leverage ratio was changed to require 4%
core capital to adjusted assets (3% for the strongest institutions receiving
the highest rating on the CAMELS financial institution rating system). In
addition, the prompt corrective action standards discussed below also
establish, in effect, a minimum 2% tangible capital standard, a 4% leverage
ratio (3% for institutions receiving the highest rating on the CAMEL financial
institution rating system), and, together with the risk-based capital standard
itself, a 4% Tier 1 risk-based capital standard. The OTS regulations also
require that, in meeting the tangible, leverage and risk-based capital
standards, institutions must generally deduct investments in and loans to
subsidiaries engaged in activities as principal that are not permissible for a
national bank.

  The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core
capital and supplementary capital) to risk-weighted assets of at least 4% and
8%, respectively. 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%, assigned by the OTS capital regulation based on
the risks believed inherent in the type of asset. Core (Tier 1) capital is
defined as common stockholders' equity (including retained earnings), certain
noncumulative perpetual preferred stock and related surplus, and minority
interests in equity accounts of consolidated subsidiaries less intangibles
other than certain mortgage servicing rights and credit card relationships.
The components of supplementary capital currently include cumulative preferred
stock, long-term perpetual preferred stock, mandatory convertible securities,
subordinated debt and intermediate preferred stock, the allowance for loan and
lease losses limited to a maximum of 1.25% of risk-weighted assets and up to
45% of unrealized gains on available-for-sale equity securities with readily
determinable fair values. Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital.

  The capital regulations 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. For the present time, the OTS has deferred
implementation of the interest rate risk component. At March 31, 1999, the
Bank met each of its capital requirements.

                                      27
<PAGE>

  The following table presents the Bank's capital position at March 31, 1999.

<TABLE>
<CAPTION>
                                                                    Capital
                                                                ----------------
                                       Actual  Required Excess  Actual  Required
                                      Capital  Capital  Amount  Percent Percent
                                      -------- -------- ------- ------- --------
                                                (Dollars in thousands)
<S>                                   <C>      <C>      <C>     <C>     <C>
Tangible............................. $ 97,544 $27,767  $69,777   7.03%   2.00%
Core (Leverage)......................   97,544  55,534   42,010   7.03    4.00
Tier 1 Risk-based....................   97,544  26,125   71,419  14.93    4.00
Risk-based...........................  105,684  52,250   53,434  16.18    8.00
</TABLE>

  Prompt Corrective Regulatory Action. 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 ratio of total capital to risk weighted
assets of less than 8%, a ratio of Tier 1 (core) capital to risk-weighted
assets of less than 4% or a ratio of core capital to total assets of less than
4% (3% or less for institutions with the highest examination rating) 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 OTS 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 an
undercapitalized institution, 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
the 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 make payments on bonds issued in the late 1980s by the Financing
Corporation ("FICO") to recapitalize the predecessor to the SAIF. During 1998,
FICO payments for SAIF members approximated 6.10 basis points, while Bank
Insurance Fund ("BIF") members paid 1.22 basis points. By law, there will be
pro rata sharing of FICO payments between SAIF and BIF members on the earlier
of January 1, 2000 or the date the SAIF and BIF are merged.

  The Bank's assessment rate for year end 1999 ranged from 5.88 to 9.10 basis
points and the premium paid for this period was $588,000. Payments toward the
FICO bonds amounted to $393,000. The FDIC has authority to increase insurance
assessments. A significant increase in SAIF insurance premiums would likely
have an adverse effect on the operating expenses and results of operations of
the Bank. Management cannot predict what insurance assessment rates will be in
the future.

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

                                      28
<PAGE>

  Thrift Rechartering Legislation. Legislation enacted in 1996 provided that
the BIF and SAIF were to have merged on January 1, 1999 if there were no more
savings associations as of that date. Various proposals to eliminate the
federal savings association charter, create a uniform financial institutions
charter, abolish the OTS and restrict savings and loan holding company
activities have been introduced in Congress. The Bank is unable to predict
whether such legislation will be enacted or the extent to which the
legislation would restrict or disrupt its operations.

  Loans to One Borrower. Federal law provides that savings institutions are
generally subject to the limits on loans to one borrower applicable to
national banks. A savings institution 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 secured by specified readily-marketable
collateral. At March 31, 1999, the Bank's limit on loans to one borrower was
$15.4 million, and the Bank's largest aggregate outstanding balance of loans
to one borrower was $2.8 million.

  QTL Test. The HOLA requires savings institutions to meet a qualified thrift
lender test. Under the test, a savings association is required to either
qualify as a "domestic building and loan association" under the Internal
Revenue Code or 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 securities) in at least
9 months out of each 12 month period.

  A savings institution that fails the qualified thrift lender test is subject
to certain operating restrictions and may be required to convert to a bank
charter. As of March 31, 1999, the Bank maintained 84.7% of its portfolio
assets in qualified thrift investments and, therefore, met the qualified
thrift lender test. Recent legislation has expanded the extent to which
education loans, credit card loans and small business loans may be considered
"qualified thrift investments."

  Limitation on Capital Distributions. OTS regulations impose limitations upon
all capital distributions by a savings institution, including cash dividends,
payments to repurchase its shares and payments to shareholders of another
institution in a cash-out merger. The rule in effect during fiscal 1998
established three tiers of institutions based primarily on an institution's
capital level. An institution that exceeded all capital requirements before
and after a proposed capital distribution ("Tier 1 Bank") and had not been
advised by the OTS that it was in need of more than normal supervision, could,
after prior notice but without obtaining approval of the OTS, make capital
distributions during the 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 the excess capital over its capital requirements at the
beginning of the calendar year or (ii) 75% of its net income for the previous
four quarters. Any additional capital distributions required prior regulatory
approval. At March 31, 1999, the Bank was a Tier 1 Bank. Effective April 1,
1999, the OTS's capital distribution regulation changed. Under the new
regulation, an application to and the prior approval of the OTS is required
prior to any capital distribution if the institution does not meet the
criteria for "expedited treatment" of applications under OTS regulations
(i.e., generally, examination ratings in the two top categories), the total
capital distributions for the calendar year exceed net income for that year
plus the amount of retained net income for the preceding two years, the
institution would be undercapitalized following the distribution or the
distribution would otherwise be contrary to a statute, regulation or agreement
with OTS. If an application is not required, the institution must still
provide prior notice to OTS of the capital distribution. 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.

  Liquidity. 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. This liquidity requirement is currently 4%, but may be changed
from time to time by the OTS to

                                      29
<PAGE>

any amount within the range of 4% to 10%. Monetary penalties may be imposed
for failure to meet these liquidity requirements. The Bank's liquidity ratio
for March 31, 1999 was 30.4%, which exceeded the applicable requirements. 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 computed 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 March 31, 1999 totaled $230,000.

  Transactions with Related Parties. The Bank's authority to engage in
transactions with "affiliates" (e.g., any company that controls or is under
common control with an institution, including the Company and its non-savings
institution subsidiaries) is limited by federal law. The aggregate amount of
covered transactions with any individual affiliate is limited 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
federal law. The purchase of low quality assets from affiliates is generally
prohibited. The transactions with affiliates must be on terms and under
circumstances, that are at least as favorable to the institution as those
prevailing at the time for comparable transactions with non-affiliated
companies. In addition, savings institutions are prohibited from lending to
any affiliate that is engaged in activities that are not permissible for bank
holding companies and no savings institution may purchase the securities of
any affiliate other than a subsidiary.

  The Bank's authority to extend credit to executive officers, directors and
10% shareholders ("insiders"), as well as entities such persons control, is
also governed by federal law. Such loans are required to be made on terms
substantially the same as those offered to unaffiliated individuals and not
involve more than the normal risk of repayment. Recent legislation created an
exception for loans made pursuant to a benefit or compensation program that is
widely available to all employees of the institution and does not give
preference to insiders over other employees. The law limits both the
individual and aggregate amount of loans the Bank may make to insiders based,
in part, on the Bank's capital position and requires certain board approval
procedures to be followed.

  Enforcement. 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
$25,000 per day, or even $1 million per day in especially egregious cases. The
FDIC has the authority to recommend to the Director of the OTS that
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 federal banking agencies have
adopted Interagency Guidelines prescribing Standards for Safety and Soundness.
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 OTS determines that a
savings institution fails to meet any standard prescribed by the guidelines,
the OTS may require the institution to submit an acceptable plan to achieve
compliance with the standard.

Federal Reserve System

  The Federal Reserve Board regulations require savings institutions to
maintain non-interest earning reserves against their transaction accounts
(primarily NOW and regular checking accounts). The regulations generally

                                      30
<PAGE>

provide that reserves be maintained against aggregate transaction accounts as
follows: for accounts aggregating $46.5 million or less (subject to adjustment
by the Federal Reserve Board), the reserve requirement is 3%; and for accounts
aggregating greater than $46.5 million, the reserve requirement is $1.395
million plus 10% (subject to adjustment by the Federal Reserve Board between
8% and 14%) 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) are exempted from the
reserve requirements. The Bank complies with the foregoing requirements.

                          FEDERAL AND STATE TAXATION

Federal Taxation

  General. The Company and the Bank report their income on a fiscal year,
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 since 1983, which covered the tax years 1980 to 1981. For its 1999 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 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, repeals the reserve method of accounting for bad
debts for tax years beginning after 1995 and requires savings institutions to
recapture (i.e., take into income) certain portions of their accumulated bad
debt reserves. Thrift institutions eligible to be treated as "small banks"
(assets of $500 million or less) are allowed to use the Experience Method
applicable to such institutions, while thrift institutions that are treated as
large banks (assets exceeding $500 million) 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.

  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 will incur an additional tax liability of approximately
$750,000 which is generally expected to be taken into income beginning in 1996
over a six year period.

  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.

                                      31
<PAGE>

  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.

  SAIF Recapitalization Assessment. The Funds Act levied a 65.7-cent fee on
every $100 of thrift deposits held on March 31, 1995. For financial statement
purposes, this assessment was reported as an expense for the quarter ended
September 30, 1996. The Funds Act includes a provision which states that the
amount of any special assessment paid to capitalize SAIF under this
legislation is deductible under Section 162 of the Code in the year of
payment.

State and Local Taxation

  Commonwealth of Massachusetts Taxation. On July 27, 1995, the Governor of
Massachusetts approved legislation to reduce the tax rate applicable to
financial institutions, including savings banks, from 12.54% on their net
income to 10.50% on their net income apportioned to Massachusetts. The reduced
rate is to be phased-in over a five year period whereby the rate was 12.15%
for 1995, 11.71% for 1996, 11.32% for 1997, 10.91% for 1998, and 10.50% for
1999 and thereafter. Net income for years beginning before January 1, 1999
includes gross income as defined under the provisions of the Code, plus
interest from bonds, notes and evidences of indebtedness of any state,
including Massachusetts, less the deductions, excluding the deductions for
dividends received, state taxes, and net operating losses, as defined under
the provisions of the Code. For taxable years beginning on or after January 1,
1999, the definition of state taxable income is modified to allow a deduction
for 95% of dividends received from stock where the Company owns 15% or more of
the voting stock of the institution paying the dividend and to allow
deductions from certain expenses allocated to federally tax exempt
obligations. Subsidiary corporations of the Company conducting business in
Massachusetts must file separate Massachusetts state tax returns and are taxed
as financial institutions, with certain modifications and grandfathering for
taxable years before 1996. The net worth or tangible property of such
grandfathered subsidiaries is taxed at a rate of 0.26%. Such grandfathered
subsidiaries may file consolidated tax returns on the net earnings portion of
the corporate tax.

  Corporations which qualify as "securities corporations," as defined by the
Massachusetts tax code, are taxed at a special rate of 0.33% of their gross
income if they qualify as a "bank-holding company" under the Massachusetts tax
code. The Company qualified for this reduced tax rate through December 31,
1998.

  Rhode Island Taxation. Subsidiary corporations of the Company conducting
business in Rhode Island are subject to a Rhode Island excise tax and must
file separate Rhode Island state tax returns. The tax is based upon an
apportioned percentage of net income related to activities conducted within
the State. The apportionment percentage is determined by adding the taxpayer's
receipts factor, property factor, and payroll factor and dividing the sum by
three. For fiscal year 1999, the tax rate was 9%.

  Delaware Taxation. As a Delaware holding company not earning income in
Delaware, the Company is exempt from Delaware corporate income tax but is
required to file an annual report with and pay an annual franchise tax to the
State of Delaware.

                                      32
<PAGE>

Additional Item.--Executive Officers of the Registrant

  The following table sets forth certain information regarding the executive
officers of the Company and the Bank who are not also directors.

<TABLE>
<CAPTION>
                             Age at
  Name                   March 31, 1999                  Position
  ----                   --------------                  --------
<S>                      <C>            <C>
Edward A. Hjerpe, III...       40       Executive Vice President, Treasurer, Chief
                                         Operating Officer, and Chief Financial
                                         Officer of the Company and the Bank
Kevin J. McGillicuddy...       59       Senior Vice President of the Company and
                                         the Bank
Frederick R. Sullivan...       57       Senior Vice President of the Company and
                                         the Bank
Terrence M. Tyrrell.....       49       Senior Vice President of the Company and
                                         the Bank
</TABLE>

Item 2. Properties.

  The Company currently conducts its business through a centralized
administrative and operations center located in Swansea and 14 full service
banking offices and five loan origination centers, most of which are located
in Southeastern Massachusetts and Rhode Island.

<TABLE>
<CAPTION>
                                                                   Net Book Value
                                                                   of Property or
                                                                     Leasehold
                                   Leased Original Year  Date of    Improvements
                                     or     Leased or     Lease          at
 Location                          Owned    Acquired    Expiration March 31, 1999
 --------                          ------ ------------- ---------- --------------
                                                                   (In thousands)
<S>                                <C>    <C>           <C>        <C>
Administrative/Operations/Banking
 Office:
 ONE FIRSTFED PARK...............  Owned      1994         --          $7,688
 Swansea, MA 02777
Banking Offices:
 27 Park Street..................  Owned      1990         --           1,653
 Attleboro, MA 02703
 33 Sullivan Drive...............  Owned      1979         --           1,417
 Fall River, MA 02721
 1450 Plymouth Avenue............  Owned      1972         --             324
 Fall River, MA 02721
 278 Union Street................  Owned      1972         --             406
 New Bedford, MA 02740
 254 Rockdale Avenue.............  Owned      1983         --             697
 New Bedford, MA 02740
 265 Newport Avenue..............  Owned      1996         --             688
 Pawtucket, RI 02860
 741 Willett Avenue..............  Owned      1995         --             671
 East Providence, RI 02915
 1519 Newman Avenue..............  Owned      1994         --             522
 Seekonk, MA 02771
 149 Grand Army Highway..........  Owned      1963         --             411
 Somerset, MA 02725
 2 Washington Street.............  Owned      1976         --             665
 Taunton, MA 02780
</TABLE>


                                      33
<PAGE>

<TABLE>
<CAPTION>
                                                                  Net Book Value
                                                                  of Property or
                                                                    Leasehold
                           Leased Original Year                    Improvements
                             or     Leased or     Date of Lease         at
 Location                  Owned    Acquired       Expiration     March 31, 1999
 --------                  ------ ------------- ----------------- --------------
                                                                  (In thousands)
<S>                        <C>    <C>           <C>               <C>
 2100 Warwick Avenue.....   Owned     1996                    --     $   630
 Warwick, RI 02889
 975 Ashley
  Boulevard(1)...........  Leased     1996                    --         669
 New Bedford, MA 02745
 1215 Park Avenue........   Owned     1998                    --       1,444
 Cranston, RI 02910
Loan Origination Centers:
 12 White's Path, Unit
  7......................  Leased     1992      October 1999(2)          --
 Yarmouth, MA 02664
 62 Auburn Street........  Leased     1990      June 1999(2)             --
 Auburn, MA 01501
 1325 Springfield
  Street.................  Leased     1992      June 1999(2)             --
 Agawam, MA 01089
 10 Wall Street..........  Leased     1994      January 2000             --
 Burlington, MA 01803
 333 Main Street.........  Leased     1990      September 1999(2)        --
 East Greenwich, RI 02818
Other Facilities:
 1 North Main Street(3)..   Owned     1956                    --         601
 Fall River, MA 02720
                                                                     -------
   Total.................                                            $18,486
                                                                     =======
</TABLE>
--------
(1) In 1996, the Company entered into a lease agreement for the land. The
    lease has a commencement date of November 1, 1996 and a term of 20 years
    with four five-year renewal options. Subsequent to entering into the lease
    agreement, the Company constructed a banking office location which
    structure the Company owns.
(2) The Company has options to renew this lease which range from 1 to 3 years.
(3) The Company has leased this property to a third party under a 2 year lease
    agreement with three 2 year renewal options. The lease period commenced in
    April, 1998.

Item 3. Legal Proceedings.

  The Company is not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business. Such
routine legal proceedings, in the aggregate, are believed by management to be
immaterial to the Company's financial condition or results of operations.

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

  None.

                                      34
<PAGE>

                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

  Information relating to the market for Registrant's common equity and
related stockholder matters appears under "Shareholder Information" opposite
the inside back cover in the Registrant's 1999 Annual Report to Stockholders
is incorporated herein by reference.

Item 6. Selected Financial Data.

  The above-captioned information appears under "Selected Consolidated
Financial and Other Data of the Company" in the Registrant's 1999 Annual
Report to Stockholders on pages 10 and 11 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
1999 Annual Report to Stockholders on pages 13 through 30 and is incorporated
herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

  This information contained in the Section captioned, "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Market Risk and Management of Interest-Rate Risk" on pages 16 through 20 of
the 1999 Annual Report to Stockholders is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

  The Consolidated Financial Statements of FIRSTFED AMERICA BANCORP, INC. and
its subsidiaries, together with the report thereon by KPMG LLP appears in the
Registrant's 1999 Annual Report to Stockholders on pages F-1 through F-36 and
are incorporated herein by reference.

Item 9. Change In and Disagreements with Accountants on Accounting and
Financial Disclosure.

  None.

                                      35
<PAGE>

                                   PART III

Item 10. Directors and Executive Officers of the Registrant.

  The information relating to Directors and Executive Officers of the
Registrant is incorporated herein by reference to "Additional Item--Executive
Officers of the Registrant" contained herein and the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on July 29, 1999,
at pages 5 through 7.

Item 11. Executive Compensation.

  The information relating to executive compensation is incorporated herein by
reference to the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on July 29, 1999, at pages 9 through 19 (excluding the
Compensation Committee Report on Executive Compensation and Stock Performance
Graph).

Item 12. Security Ownership of Certain Beneficial Owners and Management.

  The information relating to security ownership of certain beneficial owners
and management is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on July 29, 1999,
at pages 3 through 7.

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 for
the Annual Meeting of Stockholders to be held on July 29, 1999, at page 19.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

  (a) The following documents are filed as a part of this report:

    (1) Consolidated Financial Statements of the Company are incorporated
        by reference to the following indicated pages of the 1999 Annual
        Report to Stockholders:

<TABLE>
<CAPTION>
                                                                       Page
                                                                    -----------
      <S>                                                           <C>
      Independent Auditors' Report.................................         F-1
      Consolidated Balance Sheets as of March 31, 1999 and 1998....         F-2
      Consolidated Statements of Operations for the Fiscal Years
       Ended March 31, 1999, 1998 and 1997.........................         F-3
      Consolidated Statements of Changes in Stockholders' Equity
       for the Fiscal Years Ended March 31, 1999, 1998 and 1997....  F-4 to F-5
      Consolidated Statements of Cash Flows for the Fiscal Years
       Ended March 31, 1999, 1998 and 1997.........................  F-6 to F-7
      Notes to Consolidated Financial Statements................... F-8 to F-36
</TABLE>

  The remaining information appearing in the 1999 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.

                                      36
<PAGE>

    (3) Exhibits

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

<TABLE>
         <C>   <S>
          3.1  Certificate of Incorporation of FIRSTFED AMERICA BANCORP, INC.*
          3.2  Bylaws of FIRSTFED AMERICA BANCORP, INC.*
          4.0  Stock Certificate of FIRSTFED AMERICA BANCORP, INC.*
         10.1  Form of Employment Agreement between the Bank and Robert F.
                Stoico*
         10.2  Forms of Employment Agreement between Company and Kevin J.
                McGillicuddy and Employment Agreement between the Bank and
                Kevin J. McGillicuddy*
         10.3  Forms of Employment Agreement between Company and Frederick R.
                Sullivan and Employment Agreement between the Bank and
                Frederick R. Sullivan*
         10.4  Forms of Employment Agreement between Company and Terrence M.
                Tyrrell and Employment Agreement between the Bank and Terrence
                M. Tyrrell*
         10.5  Form of Change in Control Agreement between the Bank and Certain
                Executive Officers*
         10.6  First Federal Savings Bank of America Employee Severance
                Compensation Plan*
         10.7  First Federal Savings Bank of America Employee Stock Ownership
                Plan and Trust*
         10.8  FIRSTFED AMERICA BANCORP, INC. 1997 Stock-Based Incentive Plan
                (As amended and restated as of October 29, 1998)****
         10.9  First Federal Savings Bank of America 1997 Supplemental
                Executive Retirement Plan*
         10.10 Form of Employment Agreement between the Bank and
                Edward A. Hjerpe, III *****
         10.11 FIRSTFED AMERICA BANCORP, INC. 1998 Stock Option Plan ***
         10.12 Employment Agreement between Company and Robert F. Stoico (filed
                herewith)
         10.13 Employment Agreement between Company and Edward A. Hjerpe, III
                (filed herewith)
         11.0  Computation of earnings per share is incorporated by reference
                to the Consolidated Statements of Operations on page F-3 of the
                1999 Annual Report to Stockholders.
         13.0  Portions of the 1999 Annual Report to Stockholders (filed
                herewith)
         21.0  Subsidiary information is incorporated herein by reference to
                "Part I--Subsidiary Activities" and "Item 1. Business--General"
         23.1  Consent of Independent Accountant (filed herewith)
         27.0  Financial Data Schedule (filed herewith)
         99.0  Proxy Statement for 1999 Annual Meeting (filed herewith)
</TABLE>
--------
    * Incorporated by reference into this document from the Exhibits to Form
      S-1, Registration Statement, and any amendments thereto, filed on
      September 27, 1996, Registration No. 333-12855
   ** Incorporated by reference into this document from the Proxy Statement
      for the 1997 Annual Meeting of Stockholders dated June 20, 1997.
  *** Incorporated by reference into this document from the Proxy Statement
      for the 1998 Annual Meeting of Stockholders dated June 15, 1998.
 **** Incorporated by reference into this document from the Quarterly Report
      on Form 10-Q for the quarter ended September 30, 1998.
***** Incorporated by reference into the Annual Report on Form 10-K for the
      fiscal year ended March 31, 1998.

      (b)Reports on Form 8-K.

        None.

                                      37
<PAGE>

                                  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.

                                          Firstfed America Bancorp, Inc.

                                          By: _________________________________
                                                      Robert F. Stoico
                                               President and Chief Executive
                                                          Officer

DATED: June 29, 1999

  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.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----
<S>                                    <C>                        <C>
                                       President, Chief Executive    June 29, 1999
______________________________________  Officer and Chairman of
           Robert F. Stoico             the Board (Principal
                                        Executive Officer)

                                       Executive Vice President,     June 29, 1999
______________________________________  Treasurer, Chief
        Edward A. Hjerpe, III           Operating Officer, and
                                        Chief Financial Officer
                                        (Principal Accounting and
                                        Financial Officer)

                                       Director                      June 29, 1999
______________________________________
         Gilbert C. Oliveira

                                       Director                      June 29, 1999
______________________________________
        Thomas A. Rodgers, Jr.

                                       Director                      June 29, 1999
______________________________________
         Richard W. Cederberg

                                       Director                      June 29, 1999
______________________________________
         John S. Holden, Jr.

                                       Director                      June 29, 1999
______________________________________
         Dr. Paul A. Raymond

                                       Director                      June 29, 1999
______________________________________
          Anthony L. Sylvia
</TABLE>

                                      38
<PAGE>

                                  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.

                                          Firstfed America Bancorp, Inc.

                                                   /s/ Robert F. Stoico
                                          By: _________________________________
                                                      Robert F. Stoico
                                               President and Chief Executive
                                                          Officer

DATED: June 29, 1999

  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.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----
<S>                                    <C>                        <C>
       /s/ Robert F. Stoico            President and Chief           June 29, 1999
______________________________________  Executive Officer and
           Robert F. Stoico             Chairman of the Board
                                        (Principal Executive
                                        Officer)

    /s/ Edward A. Hjerpe, III          Executive Vice President,     June 29, 1999
______________________________________  Treasurer, Chief
        Edward A. Hjerpe, III           Operating Officer, and
                                        Chief Financial Officer
                                        (Principal Accounting and
                                        Financial Officer)

     /s/ Gilbert C. Oliveira           Director                      June 29, 1999
______________________________________
         Gilbert C. Oliveira

    /s/ Thomas A. Rodgers, Jr.         Director                      June 29, 1999
______________________________________
        Thomas A. Rodgers, Jr.

     /s/ Richard W. Cederberg          Director                      June 29, 1999
______________________________________
         Richard W. Cederberg

     /s/ John S. Holden, Jr.           Director                      June 29, 1999
______________________________________
         John S. Holden, Jr.

     /s/ Dr. Paul A. Raymond           Director                      June 29, 1999
______________________________________
         Dr. Paul A. Raymond

      /s/ Anthony L. Sylvia            Director                      June 29, 1999
______________________________________
          Anthony L. Sylvia
</TABLE>

                                      39