U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

        [X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 For the quarter period ended December 31, 1997

                                       OR

        [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                                  EXCHANGE ACT


               For the transition period from            to
                                              ---------     ---------


                           Commission File No. 0-28200


                         Westwood Financial Corporation
                         ------------------------------
             (Exact name of registrant as specified in its charter)

            New Jersey                                  22-3413572
   --------------------------------------------------------------------
   (State or other jurisdiction of                   (I.R.S. Employer
   incorporation or organization)                   Identification No.)

                   700-88 Broadway, Westwood, New Jersey 07675
                   -------------------------------------------
                    (Address of principal executive offices)

                                  201-666-5002
                                  ------------
              (Registrant's telephone number, including area code)

Check whether the issuer (1) filed all reports  required to be filed by Sections
13 or 15(d) of the  Exchange  Act during the past 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
                                                                 -----     -----

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.

                Class: Common Stock, par value $0.10 per share
               Outstanding shares at February 9, 1998:  645,296


Transitional small business disclosure format:

        Yes        X      No
 ------         ------
<PAGE>



                         WESTWOOD FINANCIAL CORPORATION

                              INDEX TO FORM 10-QSB

<TABLE>
<CAPTION>
                                                                                 Page

<S>                                                                                  
          PART 1. FINANCIAL INFORMATION

          Item 1. Financial Statements                                           <C>

                  Consolidated statements of Financial Condition at December 31,
                  1997 (unaudited) and March 31, 1997                              2

                  Consolidated  Statements  of  Income  for the  three  and nine
                  months ended December 31, 1997 and 1996 (unaudited)              3

                  Consolidated  Statements  of Cash Flows for the three and nine
                  months ended December 31, 1997 and 1996 (unaudited)              4

                  Notes to Consolidated Financial Statements (unaudited)           5

          Item 2. Management's  Discussion  and Analysis of Financial  Condition
                  and Results of Operations                                        6


                  PART II. OTHER INFORMATION

                  Item 1. Legal Proceedings                                       11

                  Item 2. Changes in Securities                                   11

                  Item 3. Default Upon Senior Securities                          11

                  Item 4. Submission of Matters to a Vote of Security Holders     11

                  Item 5. Other Information                                       11

                  Item 6. Exhibits and Reports on Form 8-K                        11

                  SIGNATURES

</TABLE>

<PAGE>



                  WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (UNAUDITED)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 1997         MARCH 31, 1997
                                                        -----------------         --------------

                                ASSETS
                                ------
<S>                                                          <C>                     <C>      
Cash and cash equivalents                                    $   7,688               $   5,408
Loans receivable, net                                           40,398                  40,340
Interest receivable on loans                                       257                     256
FHLB stock, at cost                                                576                     576
Mortgage-backed securities held-to-maturity,                                        
  (market value of $17,599 and $19,581, respectively)           17,360                  19,728
Investment securities held-to-maturity,                                             
  (market value of $43,002 and $38,124, respectively)           42,891                  38,903
Investment securities available-for-sale,                                           
  (at market value)                                                  2                       2
Interest receivable on investments                                 747                     852
Property and equipment, net                                        694                     734
Goodwill                                                         1,061                   1,132
Prepaid expenses and other assets                                   28                      50
                                                             ---------               ---------
                                                                                    
       TOTAL ASSETS                                          $ 111,702               $ 107,981
                                                             =========               =========
                                                                                    
               LIABILITIES AND SHAREHOLDERS' EQUITY      
               ------------------------------------                           
Liabilities:                                                                        
  Demand deposits                                            $  14,908               $  13,111
  Savings deposits                                              75,897                  74,622
  Interest payable on deposits                                     154                     124
  Loans and advances payable                                    10,000                  10,000
  Other liabilities                                                260                     142
  Dividends payable                                                 32                      32
                                                             ---------               ---------
                                                                                    
       Total Liabilities                                       101,251                  98,031
                                                             ---------               ---------
                                                                                    
Commitments and Contingencies (Note 4)                                              
                                                                                    
Shareholders' equity:                                                               
  Common stock ($.10 par value, 747,500                                             
    authorized, 645,296 issued and                                                  
    outstanding at December 31, 1997                                                
    and March 31, 1997)                                             65                      65
  Paid in capital                                                3,212                   3,212
  Retained earnings                                              7,174                   6,753
  Unearned stock bonus plan shares (at cost)                         0                     (80)
                                                             ---------               ---------
         Total Shareholders' Equity                             10,451                   9,950
                                                             ---------               ---------
                                                                                    
       TOTAL LIABILITIES AND                                                        
         SHAREHOLDERS' EQUITY                                $ 111,702               $ 107,981
                                                             =========               =========

</TABLE>



                                        2

<PAGE>
                  WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                       FOR THE THREE MONTHS   FOR THE NINE MONTHS
                                                         ENDED DECEMBER 31,    ENDED DECEMBER 31,
                                                       --------------------  --------------------
                                                         1997       1996       1997       1996
                                                       --------   --------   --------   --------

<S>                                                    <C>        <C>        <C>        <C>     
INTEREST INCOME AND DIVIDEND INCOME
Loans receivable                                       $    771   $    773   $  2,341   $  2,213
Mortgage-backed securities                                  290        352        962        801
Investment securities, including overnight deposits         800        614      2,326      1,772
Dividends on FHLB stock                                      10          8         29         22
                                                       --------   --------   --------   --------

Total interest income and dividend income                 1,871      1,747      5,658      4,808
                                                       --------   --------   --------   --------

INTEREST EXPENSE
Deposits                                                    989        922      2,925      2,638
Borrowings                                                  150         66        449         66
                                                       --------   --------   --------   --------
                                                          1,139        988      3,374      2,704
                                                       --------   --------   --------   --------

Net interest income                                         732        759      2,284      2,104
                                                       --------   --------   --------   --------

Provision for loan losses                                    10          4         27         44
                                                       --------   --------   --------   --------

Net interest income after
provision for loan losses                                   722        755      2,257      2,060
                                                       --------   --------   --------   --------

NONINTEREST INCOME
Miscellaneous charges and fees                               45         37        138         99
Late charges                                                  1          2          5          5
                                                       --------   --------   --------   --------

Total noninterest income                                     46         39        143        104
                                                       --------   --------   --------   --------

NONINTEREST EXPENSE
Compensation and employee benefits                          162        174        585        504
FDIC insurance and regulatory expenses                       22         54         71        154
SAIF Special Assessment                                       0          0          0        454
Depreciation and amortization                                35         34        116        115
Data Processing                                              39         40        110        109
Occupancy                                                    31         36         95         93
Loss on sale of securities                                    0          0          0         17
Merger acquisition costs                                     40          0        109          0
Other                                                       114        113        367        325
                                                       --------   --------   --------   --------

Total noninterest expense                                   443        451      1,453      1,771
                                                       --------   --------   --------   --------

INCOME (LOSS) BEFORE INCOME TAXES                           325        343        947        393

INCOME TAX EXPENSE                                          133        128        398        159
                                                       --------   --------   --------   --------

NET INCOME (LOSS)                                      $    192   $    215   $    549   $    234
                                                       ========   ========   ========   ========

Basic Earnings Per Share                               $   0.30   $   0.33   $   0.85   $   0.40
                                                       ========   ========   ========   ========

Diluted Earnings Per Share                             $   0.28   $   0.32   $   0.82   $   0.39
                                                       ========   ========   ========   ========

Weighted Average Shares Outstanding (Basic)             645,296    646,672    645,269    581,701
                                                       ========   ========   ========   ========

Weighted Average Shares Outstanding (Diluted)           674,828    665,824    669,764    599,054
                                                       ========   ========   ========   ========
</TABLE>
                                        3

<PAGE>



                  WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>

                                                         THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                            DECEMBER 31,                          DECEMBER 31,
                                                       --------------------                   ---------------------
                                                          1997       1996                       1997         1996
                                                       --------    --------                   --------    ---------

<S>                                                    <C>         <C>                        <C>         <C>     
INTEREST OPERATING ACTIVITIES
  NET INCOME                                           $    192    $    215                   $    549    $    234
                                                       --------    --------                   --------    --------
  ADJUSTMENTS TO RECONCILE NET INCOME TO
    NET CASH PROVIDED BY OPERATING ACTIVITIES:
    Depreciation                                             18          17                         53          51
    Amortization of goodwill                                 23          24                         70          71
    Amortization of stock bonus plan                          0          12                         80          36
    Provision for loan losses                                10           4                         27          44
    Loss on sale of securities                                0           0                          0          17
  (INCREASE) DECREASE IN ASSETS:
    Interest receivable                                     111         (96)                       104        (218)
    Prepaid income taxes                                      0          63                          0         (18)
    Prepaid expenses                                         28          60                         21         247
  INCREASE (DECREASE) IN LIABILITIES:
    Interest payable                                         23          25                         30          26
    Taxes payable                                            60           0                        121         (23)
    Accrued expenses                                          6        (462)                        (3)        (15)
                                                       --------    --------                   --------    --------
          TOTAL ADJUSTMENTS                                 279        (353)                       503         218
                                                       --------    --------                   --------    --------
          NET CASH PROVIDED BY OPERATING ACTIVITIES         471        (138)                     1,052         452
                                                       --------    --------                   --------    --------

INVESTING ACTIVITIES:
    Loans made net of repayments                           (339)     (1,699)                       (83)     (5,728)
    Purchase of investments - net of sales                  259     (11,549)                    (1,620)    (14,789)
    Reduction of goodwill                                     0           0                          0          12
    Purchase of office property and equipment                (1)         (7)                       (13)        (49)
                                                       --------    --------                   --------    --------
           NET CASH PROVIDED (USED BY)
            INVESTING ACTIVITIES                            (81)    (13,255)                    (1,716)    (20,554)
                                                       --------    --------                   --------    --------

FINANCING ACTIVITIES:
    Net increase in deposit accounts                      1,060       1,690                      3,072       4,875
    Proceeds from sale of stock and reorganization,
       net of conversion costs                                0           0                          0       3,428
    Dividends paid                                          (64)        (32)                      (128)        (64)
    Loan Proceeds Received                                    0      10,000                          0      10,000
                                                       --------    --------                   --------    --------
     NET CASH PROVIDED
       FINANCING ACTIVITIES                                 996      11,658                      2,944      18,239
                                                       --------    --------                   --------    --------

     INCREASE (DECREASE) IN CASH
       AND CASH EQUIVALENTS                               1,386      (1,735)                     2,280      (1,863)

     CASH AND CASH EQUIVALENTS - Beginning of period      6,302       5,080                      5,408       5,208
                                                       --------    --------                   --------    --------

     CASH AND CASH EQUIVALENTS - End of period         $  7,688    $  3,345                   $  7,688    $  3,345
                                                       ========    ========                   ========    ========

CASH PAID DURING THE PERIOD FOR:
   Interest                                            $    667    $    963                   $  2,771    $  2,678
   Income taxes                                        $     73    $     65                   $    277    $    200

</TABLE>


                                        4

<PAGE>



          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1997

NOTE 1:  BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Westwood Financial
Corporation  (the  "Corporation")  and its a wholly-owned  subsidiary,  Westwood
Savings Bank. All significant  intercompany  balances and transactions have been
eliminated in consolidation.

These  consolidated  financial  statements  were  prepared  in  accordance  with
instructions  for Form 10-QSB and  therefore,  do not  include  all  disclosures
necessary  for a  complete  presentation  of  the  statement  of  the  financial
condition,  statement of  operations,  and statement of cash flows in conformity
with generally accepted accounting  principles.  However,  all adjustments which
are, in the opinion of management,  necessary for the fair  presentation  of the
interim financial  statements have been included and all such adjustments are of
a normal recurring  nature.  The results of operations for the nine months ended
December  31, 1997 are not  necessarily  indicative  of the results  that may be
expected  for the fiscal year March 31, 1998 or any other  interim  period.  The
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and related notes which are  incorporated by
reference in the  Corporation's  Annual Report on Form 10-KSB for the year ended
March 31, 1997.

NOTE 2:  PROPOSED MERGER

On September  10, 1997,  the  Corporation  and  Lakeview  Financial  Corporation
("Lakeview") the holding company of Lakeview Savings Bank ("Lakeview  Savings"),
Paterson,  New Jersey,  signed a definitive  merger agreement  providing for the
merger of the Corporation into Lakeview and the merger of the Bank into Lakeview
Savings.  Shares of the Corporation will be exchanged for $29.25, payable in the
aggregate  in the form of 49.9%  cash  and  50.1%  Lakeview  Common  Stock.  The
transaction is subject to certain contingencies  including satisfaction of state
and  federal  regulatory   approvals,   approval  of  the  shareholders  of  the
Corporation  and a receipt  of a  fairness  opinion  by the  Corporation.  It is
anticipated  that the  transaction  will occur in the first calendar  quarter of
1998. The transaction is expected to be accounted for under the purchase method.

NOTE 3:  EARNINGS PER SHARE

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128 ("Statement 128), "Earnings Per Share."
As required,  the  Corporation  adopted  Statement  128 during the quarter ended
December 31, 1997. This statement  redefines the standards of computing earnings
per share (EPS) previously found in Accounting  Principles Board Opinion No. 15,
Earnings Per Share.  Statement 128  establishes  new standards for computing and
presenting  EPS and requires dual  presentation  of "basic" and "diluted" EPS on
the face of income  statement for all entities with complex capital  structures.
Under Statement 128, basic EPS is to be computed based upon income  available to
common shareholders and the weighted average number of common shares outstanding
for the period.  Diluted EPS is to reflect the potential  dilution  exercised or
converted  into common  stock or resulted in the  issuance of common  stock that
then shared in the  earnings of the  Company.  Statement  128 also  requires the
restatement of all prior-period EPS data presented.

NOTE 4:  COMMITMENTS AND CONTINGENCIES

On July 2, 1997, the Savings Bank entered into a contract to purchase a tract of
land for $280,000.  The contract is contingent  upon receiving all municipal and
government  approvals,  as required.  The land may be used as a possible  branch
site.


                                        5

<PAGE>



                       MANAGEMENT DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Westwood  Financial  Corporation,  Inc,  (the  "Corporation")  is a  New  Jersey
corporation  organized  in  December  1995  at the  direction  of the  Board  of
Directors of the Westwood  Savings Bank of New Jersey (the "Bank") to facilitate
the conversion of Bergen North Financial,  M.H.C.  (the Mutual Holding Company")
from the mutual to the stock form of  ownership  and to acquire  and hold all of
the   capital   stock   of  the  Bank   (collectively,   the   "Conversion   and
Reorganization").   Prior   to   the   consummation   of  the   Conversion   and
Reorganization,  the Mutual Holding Company was the majority  stockholder of the
Bank and upon  consummation  of the  Conversion and  Reorganization,  the Mutual
Holding Company was merged into the Bank. The Corporation acquired the Bank as a
wholly-owned   subsidiary   upon  the   consummation   of  the   Conversion  and
Reorganization on June 6, 1996.

On September 10, 1997, the Corporation and Lakeview Financial Corp. ("Lakeview")
the holding company of Lakeview Savings Bank ("Lakeview Savings"), Paterson, New
Jersey,  signed a definitive  merger  agreement  providing for the merger of the
Corporation  into  Lakeview  and the merger of the Bank into  Lakeview  Savings.
Shares of the Corporation will be exchanged for $29.25, payable in the aggregate
in the form of 49.9% cash and 50.1% Lakeview  Common Stock.  The  transaction is
subject to certain  contingencies  including  satisfaction  of state and federal
regulatory  approvals,  approval of the  shareholders  of the  Corporation and a
receipt of a fairness  opinion by the  Corporation.  It is anticipated  that the
transaction will occur in the first calendar quarter of 1998. The transaction is
expected to be accounted for under the purchase method.

Financial Condition at December 31, 1997
----------------------------------------

Total assets at December  31, 1997  amounted to $111.7  million,  an increase of
$3.7  million,  or 3.45% over total assets at March 31, 1997.  This increase was
due  primarily  to a $4.0  million net  increase  in  investment  securities  an
increase  of $2.3  million  in cash and cash  equivalents  offset  by a net $2.4
decrease in  mortgage-backed  securities.  Funding of asset  growth was provided
from  the  increase  in  deposit   accounts  and  the  principal   collected  on
mortgage-backed  securities.  Total  liabilities  amounted to $101.3  million at
December 31, 1997, an increase of $3.2 million, or 3.28%, over total liabilities
at March 31,  1997.  The  increase in  liabilities  is due  primarily  to a $3.1
million net increase in deposits,  which resulted in the Bank's  response to the
general increase in rates offered by other bank's in the market area.

Results of Operations - Comparison  For the Three Months Ended December 31, 1997
--------------------------------------------------------------------------------
and 1996
--------

Net Interest Income.  Net interest income decreased  $27,000,  or 3.56%, for the
three  months  ended  December  31, 1997 as  compared  to the same period  ended
December 31, 1996. The decrease in net interest  income was primarily the result
of the decline in our interest rate spread and net interest  margin to 2.36% and
2.70%, respectively, during the three months ended December 31, 1997 as compared
to 2.64%  and  2.95%,  respectively,  for the same  period  in 1996.  The  lower
interest rate spread and net interest  margin was primarily due to a lower yield
on our average  interest  earning  assets and higher costs of funds in the third
quarter of 1997. For the three months ended December 31, 1997, our average yield
decreased  to 6.90% from  6.95%,  respectively,  and our  average  cost of funds
increased to 4.54% from 4.31%, respectively, from the comparable 1996 period.


                                        6

<PAGE>



Provision  for Loan  Losses.  At  December  31,  1997,  the Bank  increased  its
provision for loan losses by $6,000, from the comparable period in December 1996
due to a potential loss on a consumer loan. The loan was written off in January,
1998 in the amount of $8,300.

Non-Interest Income.  Non-interest income increased $7,000, or 17.95% during the
period ended  December 31, 1997,  as compared to the same period ended  December
31,  1996.  This  increase was  primarily  due to an increase in fee income from
additional   checking  account  activity,   increased  ATM  fees  and  increased
prepayment penalties.

Non-Interest  Expense.  Non-interest  expense  decreased  $8,000  or 1.77%  from
$451,000 for the three months ended  December 31, 1996 to $443,000 for the three
months ended  December 31, 1997.  This decrease in expenses was primarily due to
the decrease in FDIC  insurance and  regulatory  expenses of $32,000;  a $12,000
decrease in compensation and employee benefits;  a decrease in occupancy expense
of $5,000;  and an increase of $40,000 in merger expenses  relating to legal and
accounting  expenses regarding the proposed merger. The decrease in compensation
and employee  benefits was primarily due to the  elimination  of amortizing  the
stock bonus plans in the amount of $4,000 per month.

Results of  Operations - Comparison  of Nine Months Ended  December 31, 1997 and
--------------------------------------------------------------------------------
December 31, 1996
-----------------

Net Interest Income. Net interest income increased  $180,000,  or 8.56%, for the
nine months  ended  December  31,  1997 as  compared  to the same  period  ended
December 31, 1996. Our interest rate spread and net interest  margin declined to
2.49% and 2.82%,  respectively  during the nine months  ended  December 31, 1997
compared to 2.77% and 3.07%, respectively for the same period in 1996. The lower
interest rate spread and net interest  margin was primarily due to a lower yield
on earning  assets and higher  costs of funds for the first nine months of 1997.
For the nine months  ended  December 31, 1997,  our average  yield  decreased to
6.93% from 7.01%, respectively, and our average cost of funds increased to 4.46%
from 4.25%, respectively, from the comparable 1996 period.

Provision  for Loan  Losses.  At  December  31,  1997,  the Bank  decreased  its
provision for loan losses by $17,000 or 38.64%,  from the  comparable  period in
December,  1996.  The Bank  maintains a provision for losses on loans based upon
management's  periodic  evaluation  of  known  and  inherent  risks  in the loan
portfolio,  the Bank's past loss experience,  adverse situations that may affect
the  borrower's  ability  to repay  loans,  estimated  value  of the  underlying
collateral and current and expected  market  conditions.  Based upon a review of
these factors,  management  determined that the Bank's allowance for loan losses
was  adequate  in view of the  composition  of the  Bank's  loan  portfolio.  At
December 31, 1997, the Bank had no non-performing  assets and its loan portfolio
consisted  of  91.27%  of  loans  secured  by  one-to-four   family  residential
properties.

Non-Interest Income. Non-interest income increased $39,000 from $104,000 for the
nine  months  ended  December  31, 1996 to  $143,000  for the nine months  ended
December 31, 1997,  primarily due to a $20,000 increase in checking account fees
and a $16,000 increase in ATM fees.

Non-Interest Expense.  Non-interest expense decreased $318,000 from $1.8 million
to $1.5 million during the comparable periods ending December 31, 1996 and 1997,
respectively.  This  decrease was  primarily  due to the  one-time  SAIF special
assessment  of  $454,000  made in 1996  and a  decrease  in FDIC  insurance  and
regulatory expenses totalling $83,000.  These were offset by an $81,000 increase
in compensation and employee  benefits,  $109,000 in merger expenses relating to
legal and  accounting  expenses  of the  proposed  merger  and  $42,000 in other
expenses. The increase in compensation and employee benefits

                                        7

<PAGE>



was  primarily  due to  amortization  of the stock bonus plans and the hiring of
additional  staff.  In regard to the  increase in other  expenses,  there was no
expense included in the category that increased materially.

Liquidity Resources
-------------------

The Bank's  liquidity is a measure of its ability to fund loans, pay withdrawals
of deposits, and other cash outflows in an efficient, cost effective manner. The
Bank's  primary  sources of funds are deposits and  scheduled  amortization  and
prepayment  of loans and  mortgage-backed  securities.  During the past  several
years,  the Bank has used such funds  primarily to fund maturing time  deposits,
pay savings withdrawals, fund lending commitments, purchase new investments, and
increase  liquidity.   The  Bank  is  currently  able  to  fund  its  operations
internally.  Additionally,  sources  of funds  include  the  ability  to utilize
Federal Home Loan Bank of New York  advances  and the ability to borrow  against
mortgage-backed and investment securities. As of December 31, 1997, the Bank had
$10 million in borrowed funds.

The Bank  anticipates  that it will have sufficient  funds available to meet its
current commitments.  As of December 31, 1997, the Bank had mortgage commitments
to fund loans of $418,000. Also, at December 31, 1997, there were commitments on
unused  lines  of  credit  relating  to  home  equity  loans  of  $2.6  million.
Certificates of deposit  scheduled to mature in one year or less at December 31,
1997  totaled  $51.5  million.  Based  on  historical  deposit  withdrawals  and
outflows,  and on internal  monthly  deposit  reports  monitored by  management,
management  believes that a majority of such deposits will remain with the Bank.
As a result, no adverse  liquidity  effects are expected.  At December 31, 1997,
the Bank's total liquidity was 55.60%.

                                        8

<PAGE>




Capital Compliance
------------------

The following table sets forth the  institution's  capital  position at December
31, 1997 as compared to the minimum regulatory capital  requirements  imposed on
the  institution  by the  FDIC at that  date.  The  Bank  also  met the  capital
requirements of the New Jersey Department of Banking.


                                                  At December 31, 1997
                                             -----------------------------
                                              Amount             of Assets
                                             -------             ---------
GAAP Capital:                                $10,451                 9.36%
                                             =======                ===== 
                                                                  
Leverage Capital:(1)(2)                                           
Actual Leverage Capital                      $ 7,989                 7.36%
Leverage Capital Requirement                   3,258                 3.00%
                                             -------                ----- 
  Excess                                     $ 4,731                 4.36%
                                             =======                ===== 

Tier 1 Capital: (1)(3)                                            
  Actual Tier 1 Capital                      $ 7,989                20.00%
  Tier 1 Capital Requirement                   1,598                 4.00%
                                             -------                ----- 
   Excess                                    $ 6,391                16.00%
                                             =======                ===== 

Total Risk-Based Capital:(1)(3)                                  
  Actual Risk-Based Capital                  $ 8,234                20.62%
  Risk-Based Capital Requirement               3,195                 8.00%
                                             -------                ----- 
  Excess                                     $ 5,039                12.62%
                                             =======                ===== 
                                              

(1)   Regulatory  capital  reflects  modifications  from  GAAP  capital  due  to
      identifiable  intangible  assets and constraints on allowance for loan and
      lease losses.
(2)   Leverage  Capital is computed as a percentage  of Average  Total Assets of
      $108,598.
(3)   Tier 1 Capital and Total  Risk-Based  Capital are computed as a percentage
      of Total Risk-Weighted Assets of $39,941.

                                        9

<PAGE>




Key Operating Ratios
--------------------

THE TABLE  BELOW  SETS  FORTH  CERTAIN  RATIOS OF THE  COMPANY  FOR THE  PERIODS
INDICATED.

<TABLE>
<CAPTION>
                                                   AT OR FOR THE          AT OR FOR THE
                                                   THREE MONTHS            NINE MONTHS
                                                  ENDED DECEMBER 31,    ENDED DECEMBER 31,
                                                  ------------------    ------------------

                                                   1997       1996       1997       1996
                                                   ----       ----       ----       ----




<S>                                            <C>         <C>        <C>       <C>  
RETURN ON AVERAGE ASSETS (net income
  divided by average total assets) (1)             0.69%      0.84%      0.66%      0.33%

RETURN ON AVERAGE EQUITY (net income
  divided by average equity) (1)                   7.42%      8.91%      7.14%      3.51%

INTEREST RATE SPREAD (1) (2)                       2.36%      2.61%      2.50%      2.76%

NET INTEREST MARGIN (net yield on average
  interest-earning assets)                         2.70%      3.22%      2.82%      3.17%

AVERAGE INTEREST-EARNING ASSETS TO
  AVERAGE INTEREST-BEARING LIABILITIES           108.06%    116.40%    107.91%    110.55%

NET INTEREST INCOME AFTER PROVISION FOR
  LOAN LOSSES TO NON-INTEREST EXPENSE            125.53%    130.39%    121.93%    106.73%

NON-INTEREST EXPENSE TO AVERAGE ASSETS (1)         1.59%      1.77%      1.75%      2.50%

BOOK VALUE PER SHARE                           $  16.20    $ 15.06    $ 16.20   $  15.06

AVERAGE EQUITY TO AVERAGE ASSETS (average
  equity dividend by average total assets)         9.34%      9.50%      9.26%      9.43%

EQUITY TO ASSETS AT PERIOD END                     9.36%      9.27%      9.36%      9.27%

</TABLE>

(1)   ANNUALIZED.

(2)   INTEREST  RATE SPREAD  REPRESENTS  THE  DIFFERENCE  BETWEEN  THE  WEIGHTED
      AVERAGE YIELD ON INTEREST-EARNING  ASSETS AND THE WEIGHTED AVERAGE RATE ON
      INTEREST-BEARING  LIABILITIES.  COMPUTED  ON THE BASIS OF AVERAGE  MONTHLY
      VALUES.




                                       10

<PAGE>



                           PART II - OTHER INFORMATION
                           ---------------------------


Item 1.     Legal Proceedings
            -----------------

            The Corporation  was not involved in any material legal  proceedings
            at December 31,  1997.  The Bank,  from time to time,  is a party to
            litigation, which arises in the ordinary course of business, such as
            claims to enforce liens,  claims  involving the making and servicing
            of loans, claims relating to the hiring or termination of employees,
            and other  issues  incident  to the  business  of the  Bank.  In the
            opinion of  management,  the  resolution of these lawsuits would not
            have a material adverse effect on the financial condition or results
            of operations of the Bank or the Corporation.

Item 2.     Changes in Securities
            ---------------------

            Not applicable.

Item 3.     Defaults Upon Senior Securities
            -------------------------------

            Not applicable.

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

            Not applicable.

Item 5.     Other Information
            -----------------

            Not applicable.

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

            (a)   List of Exhibits
            3.1   Articles of Incorporation of Westwood Financial Corporation*
            3.2   Bylaws of Westwood Financial Corporation*
            4     Specimen Stock Certificate*
            27    Financial Data Schedule (electronic filing only)

-----------------------------
*     Incorporated by reference to Registrant's  Registration  Statement on Form
      S-1 initially filed with the SEC on December 20, 1995 (File No. 33-28200).

            (b) Not applicable.

                                       11

<PAGE>




                         WESTWOOD FINANCIAL CORPORATION

                                   SIGNATURES



      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                       Westwood Financial Corporation



Date:    2/10/98              By: /s/ William J. Woods
      ----------------            -----------------------------------------
                                  William J. Woods
                                  Chief Executive Officer
                                  (Principal Executive Officer)



Date:    2/10/98              By: /s/ George E. Niemczyk
      -----------------           -----------------------------------------
                                  George E. Niemczyk
                                  Controller
                                  (Principal Accounting and Financial Officer)