U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2001

                          Commission File No.: 0-26681

                              PULASKI BANCORP, INC.
                 (name of small business issuer in its charter)

         United States                                    22-3652847
(State or other jurisdiction of            (I.R.S. Employer Identification  No.)
incorporation or organization)

   130 Mountain Avenue, Springfield, New Jersey                   07081
     (Address of principal executive offices)                   (Zip Code)

         Issuer's telephone number, including area code: (973) 564-9000
       Securities registered under Section 12(b) of the Exchange Act: None

                Securities registered under Section 12(g) of the
                                 Exchange Act:

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

     Check whether the issuer (1) filed all reports required to be filed by
Section 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 [ _ ] .

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [ _ ]

     The issuer's revenues for its most recent fiscal year ended December 31,
2001 were $16,332,000.

     The aggregate market value of the voting stock held by non-affiliates of
the issuer, based upon the closing price of its Common Stock on March 14, 2002,
as quoted on the Nasdaq SmallCap Market, was approximately $22,409,000. Solely
for purposes of this calculation, the shares held by directors and executive
officers of the registrant are deemed to be shares held by affiliates.

     The number of shares of Common Stock outstanding as of March 14, 2002 was:
1,920,845.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the 2001 Annual Report to Stockholders and the definitive Proxy
Statement for the Annual Meeting of Stockholders to be held on May 22, 2002 are
incorporated by reference into Part II and Part III, respectively, of this Form
10-KSB.

           Transitional Small Business Disclosure Format Yes [ _ ]  No [ X ]




<PAGE>



                                      INDEX


PART I                                                                      PAGE
                                                                            ----

  Item 1.     Description of Business......................................    1

  Additional Item.  Executive Officers of the Registrant....................  30

  Item 2.     Description of Property.......................................  32

  Item 3.     Legal Proceedings.............................................  33

  Item 4.     Submission of Matters to a Vote of Security Holders...........  33


PART II

  Item 5.     Market for Common Equity and Related Stockholder
              Matters.......................................................  33

  Item 6.     Management's Discussion and Analysis or Plan of Operation.....  33

  Item 7.     Financial Statements..........................................  33

  Item 8.     Changes in and Disagreements With Accountants
              on Accounting and Financial Disclosure........................  33

PART III

  Item 9.     Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act.............  34

  Item 10.    Executive Compensation........................................  34

  Item 11.    Security Ownership of Certain Beneficial Owners
              and Management................................................  34

  Item 12.    Certain Relationships and Related Transactions................  34

  Item 13.    Exhibits and Reports on Form 8-K..............................  34

SIGNATURES


<PAGE>



         This report contains certain "forward-looking statements" within the
meaning of the federal securities laws. These statements are not historical
facts, rather statements based on Pulaski Bancorp, Inc.'s current expectations
regarding its business strategies, intended results and future performance.
Forward-looking statements are preceded by terms such as "expects," "believes,"
"anticipates," "intends" and similar expressions.

         Management's ability to predict results or the effect of future plans
or strategies is inherently uncertain. Factors which could affect actual results
include interest rate trends, the general economic climate in the market area in
which Pulaski Bancorp, Inc. operates, as well as nationwide, Pulaski Bancorp,
Inc.'s ability to control costs and expenses, competitive products and pricing,
loan delinquency rates and changes in federal and state legislation and
regulation. These factors should be considered in evaluating the forward-looking
statements and undue reliance should not be placed on such statements. Pulaski
Bancorp, Inc. assumes no obligation to update any forward-looking statements.


                                     PART I

Item 1.  Description of Business
--------------------------------

General

         On July 12, 1999, Pulaski Savings Bank (the "Bank") reorganized into a
two-tier mutual holding company structure pursuant to an Agreement and Plan of
Reorganization which was unanimously adopted by the Board of Directors of the
Bank on January 28, 1999 ("Plan of Reorganization") and approved by the
shareholders of the Bank on April 23, 1999. Under the Plan of Reorganization
(the "Reorganization"), the Bank became a wholly owned subsidiary of Pulaski
Bancorp, Inc. (the "Company"), a federally chartered stock holding company, a
majority of the Common Stock of which is now owned by the Pulaski Bancorp,
M.H.C. (the "MHC"), the Bank's parent mutual holding company. In the
Reorganization, each outstanding share of Bank common stock was converted into
one share of Company common stock and the holders of Bank common stock became
the holders of all of the outstanding shares of Company common stock.
Accordingly, as a result of the Reorganization, the Bank's minority stockholders
became minority stockholders of the Company and the Bank's majority stockholder,
the MHC, became the majority stockholder of the Company.

         The Company, the Bank and the MHC are regulated by the Office of Thrift
Supervision (the "OTS"). The Bank is a federally chartered savings bank and is
wholly owned by the Company. The Company is a savings and loan holding company
and is subject to regulation by the OTS, the Federal Deposit Insurance
Corporation (the "FDIC") and the Securities and Exchange Commission (the "SEC").
Currently, other than investing in various securities, the Company does not
directly transact any material business other than through the Bank.
Accordingly, the discussion herein addresses the operations of the Company as
they are conducted through the Bank. At December 31, 2001, the Company had total
assets of $237.0 million, total deposits of $198.4 million and total
stockholders' equity of $25.3 million.

         The Bank was originally organized in 1943 as a New Jersey-chartered
savings and loan association and, in 1995, became a federally-chartered savings
bank. The Bank conducts business from its administrative/branch office located
in Springfield, New Jersey and its five other branch offices located in the
municipalities of Bayville, Irvington, Milltown, Spotswood and Toms River, New
Jersey. The Bank is a community-oriented savings institution whose business
primarily consists of accepting deposits from customers and investing those
funds primarily in mortgage loans secured by one- to four-family residences and
construction and development loans located within its primary market area. To a
significantly lesser extent, the Bank invests in home equity, multi-family,
commercial real estate and consumer loans. The Bank generally retains for its
portfolio all one- to four-family mortgage loans which it originates.

         The Company's and Bank's executive office is located at 130 Mountain
Avenue, Springfield, New Jersey 07081 and its telephone number is (973)
564-9000.


                                        1

<PAGE>




Merger

         On January 10, 2002, Kearny Financial Corp. ("Kearny") and the Company
entered into an Agreement and Plan of Merger (the "Merger Agreement"). Kearny,
M.H.C. is a Federally chartered mutual holding company, which serves as the
majority owner of Kearny, a Federally chartered mid-tier stock holding company,
which wholly owns Kearny Federal Savings Bank, a Federally chartered savings
bank.

         Pursuant to the Merger Agreement, the mutual holding company structure
of the MHC will be eliminated and the Bank will merge with and into Kearny
Federal Savings Bank (the "Proposed Transaction"). The Proposed Transaction is
conditioned upon, among other things, approval by the stockholders of the
Company, the approval of the members of the MHC (if required), the approval of
the sole stockholder of Kearny and the receipt of certain regulatory approvals.

         In connection with the Proposed Transaction, each outstanding share of
common stock of the Company will be converted into the right to receive $32.90
in cash, upon the terms and conditions as set forth in the Merger Agreement.
Kearny will also establish an Advisory Board consisting of the Bank's current
directors.

Market Area and Competition

         The Bank has been, and intends to continue to be, a community-oriented
financial institution, offering a wide variety of financial services to meet the
needs of the communities it serves. The Bank conducts its business through its
administrative and branch office located in Springfield, New Jersey, and five
other branch offices located in Bayville, Irvington, Milltown, Spotswood and
Toms River, New Jersey. The Bank's deposit gathering base is concentrated in the
communities surrounding its offices. While its lending area extends throughout
New Jersey, most of the Bank's mortgage loans are secured by properties located
in Essex, Union, Middlesex, Monmouth and Ocean Counties and a portion of Hudson
County consisting of the municipalities of East Newark, Kearny and Harrison, New
Jersey.

         The economy in the Bank's primary market area is based upon a mixture
of service and retail trade. Other employment is provided by a variety of
wholesale trade, manufacturing, federal, state and local government, hospitals
and utilities. The area is also home to commuters working in the greater New
York City metropolitan area.

         The Bank faces significant competition both in making loans and in
attracting deposits. The State of New Jersey has a high density of financial
institutions, many of which are branches of significantly larger institutions
which have greater financial resources than the Bank, all of which are
competitors of the Bank to varying degrees. The Bank's competition for loans
comes principally from commercial banks, savings banks, savings and loan
associations, credit unions, mortgage banking companies and insurance companies.
Its most direct competition for deposits has historically come from commercial
banks, savings banks, savings and loan associations and credit unions. The Bank
faces additional competition for deposits from short-term money market funds,
other corporate and government securities funds and from other financial service
institutions such as brokerage firms and insurance companies.



                                        2

<PAGE>



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

<TABLE>
<CAPTION>

                                                             At December 31,
                                  ------------------------------------------------------------------
                                          2001                  2000                  1999
                                  --------------------  --------------------  ---------------------
                                              Percent               Percent               Percent
                                   Amount    of Total    Amount    of Total     Amount    of Total
                                  ---------  ---------  ---------  ---------  ---------- ----------
                                                         (Dollars in thousands)
<S>                                <C>         <C>       <C>          <C>       <C>          <C>
Mortgage Loans:
  Residential:
    One- to four-family ......     $ 93,853    59.69     $98,267      57.01%    $100,110     64.09%
    Multi-family .............        3,122     1.98       2,960       1.72        2,501      1.60
    Second mortgage ..........        8,811     5.60       7,718       4.48        6,576      4.21
    Home equity lines ........        5,411     3.44       3,958       2.30        3,028      1.94
  Commercial real estate .....       22,433    14.27      15,205       8.82        6,968      4.46
  Construction and development       23,336    14.84      44,000      25.53       36,901     23.62
                                   --------    -----     -------      -----     --------     -----
      Total mortgage loans ...      156,966    99.82     172,108      99.86      156,084     99.92
                                   --------    -----     -------      -----     --------     -----
Consumer Loans:
    Passbook or account ......          150     0.10         198      0.11          127      0.08
      Cash reserve ...........           18     0.01           2        --            --        --
      Automobile .............          115     0.07          44       0.03           --        --
                                   --------    -----     -------      -----     --------     -----
      Total consumer loans ...          283     0.18         244       0.14          127      0.08
                                   --------    -----     -------      -----     --------     -----
  Total loans receivable .....      157,249   100.00%    172,352     100.00%     156,211    100.00%
                                              ======                 ======                 ======
  Less:
    Allowance for loan losses         1,247                1,194                   1,135
    Loans in process .........        8,633               18,129                  19,760
    Deferred loan fees .......          444                  742                     794
                                   --------             --------             -----------
  Loans receivable, net ......     $146,925             $152,287             $   134,522
                                   ========             ========             ===========


<CAPTION>


                                                      At December 31,
                                  -----------------------------------------------
                                            1998                    1997
                                  -----------------------  ----------------------
                                                 Percent                 Percent
                                     Amount     of Total     Amount     of Total
                                  ------------  ---------  -----------  ---------
                                                      (Dollars in thousands)

<S>                                   <C>         <C>        <C>          <C>
Mortgage Loans:
  Residential:
    One- to four-family ......        $ 78,110    67.40%     $ 84,006     74.93%
    Multi-family .............           2,903     2.51         2,726      2.43
    Second mortgage ..........           4,831     4.17         3,798      3.39
    Home equity lines ........           2,168     1.87         1,275      1.14
  Commercial real estate .....           3,689     3.18         3,811      3.40
  Construction and development          23,898    20.62        16,408     14.63
                                      --------    -----      --------     -----
      Total mortgage loans ...         115,599    99.75       112,024     99.92
                                      --------    -----      --------     -----
Consumer Loans:
    Passbook or account ......             286     0.25            91      0.08
      Cash reserve ...........              --       --            --        --
      Automobile .............              --       --            --        --
                                      --------    -----      --------     -----
      Total consumer loans ...             286     0.25            91      0.08
                                      --------    -----      --------     -----
  Total loans receivable .....         115,885   100.00%      112,115    100.00%
                                                 ======                  ======
  Less:
    Allowance for loan losses            1,022                    913
    Loans in process .........          13,143                  7,823
    Deferred loan fees .......             826                  1,167
                                      --------            -----------
  Loans receivable, net ......        $100,894               $102,212
                                      ========            ===========
</TABLE>


                                       3

<PAGE>



     Loan Maturity. The following table shows the remaining contractual maturity
of the Bank's loans at December 31, 2001. The table does not include the effect
of future principal prepayments.

<TABLE>
<CAPTION>

                                                                       At December 31, 2001
                                               ---------------------------------------------------------------------
                                                 One- to
                                                  Four-       Multi-       Second        Equity      Commercial
                                                  Family      Family      Mortgages       Lines      Real Estate
                                               ------------  ---------   -----------   -----------  -------------
<S>                                                 <C>         <C>           <C>           <C>           <C>
                                                                         (In thousands)
Amounts due:
    One year or less........................       $    136     $  124       $     5      $     29   $         -
                                                   --------     ------       -------      --------   ------------

    After one year:
       More than one year to three years....            741        245           590           172          5,828
       More than three years to five years..          2,957        174         2,348            44          3,577
       More than five years to 10 years.....          7,231        525         2,672             -          9,802
       More than 10 years to 20 years.......         19,431        557         3,196         2,241          3,043
       More than 20 years...................         63,357      1,497            -          2,925            183
                                                     ------    -------       -------        ------     ----------

    Total due after one year................         93,717      2,998         8,806         5,382         22,433
                                                     ------    -------        ------       -------       --------

    Total due...............................        $93,853     $3,122        $8,811        $5,411        $22,433
                                                    =======     ======        ======        ======        =======
          Less:
              Loans in process..............
              Deferred loan fees............
              Allowance for loan losses.....


       Loans receivable, net................

<CAPTION>


                                                          At December 31, 2001
                                               -------------------------------------------
                                                 Construction
                                                     and                          Total
                                                 Development       Consumer       Loans
                                               ---------------   ------------  -----------
<S>                                                    <C>             <C>         <C>
                                                                (In thousands)
Amounts due:
    One year or less........................           $20,336       $    168    $  20,798
                                                       -------       --------    ---------

    After one year:
       More than one year to three years....             3,000            104       10,680
       More than three years to five years..                --             11        9,111
       More than five years to 10 years.....                --             --       20,230
       More than 10 years to 20 years.......                --             --       28,468
       More than 20 years...................                --             --       67,962
                                                  ------------      ---------   ----------

    Total due after one year................             3,000            115      136,451
                                                     ---------        -------    ---------

    Total due...............................           $23,336         $  283      157,249
                                                       =======         ======
          Less:
              Loans in process..............                                         8,633
              Deferred loan fees............                                           444
              Allowance for loan losses.....                                         1,247
                                                                               -----------

       Loans receivable, net................                                      $146,925
                                                                                  ========
</TABLE>


                                        4

<PAGE>



     The following table sets forth at December 31, 2001, the dollar amount of
all loans contractually due after December 31, 2002, and whether such loans have
fixed or adjustable interest rates.

<TABLE>
<CAPTION>

                                                                     Due after December 31, 2002
                                                ---------------------------------------------------------------------
                                                             Fixed                Adjustable                 Total
                                                --------------------    --------------------     --------------------
                                                                                (In thousands)
<S>                                                         <C>                      <C>                    <C>
Mortgage loans:
   One- to four-family.....................                 $ 82,550                 $11,169                  $93,719
   Multi-family............................                    1,199                   1,799                    2,998
   Second mortgages........................                    8,806                      --                    8,806
   Equity lines............................                       --                   5,381                    5,381
   Commercial real estate..................                    8,290                  14,143                   22,433
   Construction and development............                      --                    3,000                    3,000
                                                            --------                 -------                  -------
     Total mortgage loans..................                  100,845                  35,492                  136,337
                                                             -------                  ------                 --------
Consumer loans.............................                      115                     --                       115
                                                            --------                 -------                  -------
       Total loans ........................                 $100,960                 $35,492                 $136,452
                                                            ========                 =======                 ========
</TABLE>


     Origination, Sale and Servicing of Loans. The Bank's mortgage lending
activities are conducted primarily by its loan personnel operating at its
administrative and branch office in Springfield, New Jersey. All loans
originated by the Bank, either through internal sources or through loan
correspondents are underwritten by the Bank pursuant to the Bank's policies and
procedures. The Bank is an approved FNMA lender, and the Bank's internal
underwriting policies, guidelines and procedures are modeled after those of
FNMA. The Bank originates both adjustable-rate and fixed-rate loans. The Bank'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. It is the general policy of the Bank to
retain all loans originated in its portfolio.

     Based upon the Bank's investment needs and market opportunities, the Bank
has, on occasion, purchased loans or participated in loans, primarily
multi-family and commercial real estate mortgage loans. During the year ended
December 31, 2001, the Bank purchased or acquired new participations in the
amount of $2.8 million. The Bank has purchased loans from correspondent
financial institutions which were underwritten pursuant to the Bank's policies,
and closed in the name of correspondent financial institution but assigned to
the Bank for its own portfolio.



                                        5

<PAGE>



     The following table sets forth the Bank's loan originations, purchases and
principal repayments for the periods indicated. The Bank sold no loans during
the periods indicated.


<TABLE>
<CAPTION>
                                                                                Years Ended December 31,
                                                                    -------------------------------------------------
                                                                      2001                2000                1999
                                                                    --------            --------            --------
                                                                                 (In thousands)
<S>                                                                 <C>                 <C>                 <C>
Beginning balance......................................             $172,352            $156,211            $115,885
   Loans originated(1):
    Mortgage loans:
       One- to four-family.............................               13,103               8,951              32,332
       Multi-family....................................                  220               3,269                 373
       Second mortgages................................                3,740               2,387               2,834
       Equity lines....................................                5,431               3,794               2,835
       Commercial real estate..........................                8,024               9,199               4,093
       Construction and development....................               11,923              26,101              19,328
                                                                    --------            --------            --------
           Total mortgage loans........................               42,441              53,701              61,795
    Consumer loans.....................................                   40                  82                  78
                                                                    --------            --------            --------
    Total loans originated.............................               42,481              53,783              61,873
                                                                    --------            --------            --------
           Total.......................................              214,833             209,994             177,758

Less:
    Principal repayments and other, net................               57,584              37,588              21,514
    Transfer of mortgage loans to REO..................                   --                  54                  33
                                                                    --------            --------            --------
nding balance.........................................              $157,249            $172,352            $156,211
                                                                    ========            ========            ========
</TABLE>
------------------------------
(1)    Includes loan participations purchased.

         One- to Four-Family Mortgage Lending. The Bank offers both fixed-rate
and adjustable-rate mortgage loans ("ARM") 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 the Bank's primary market area. Loan
originations are generally obtained from the Bank's in-house 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. Of the Bank's mortgage loans secured by
one- to four- family residences, $82.7 million, or 88.10%, were fixed-rate
loans.

     The Bank originates all mortgage loans for its own portfolio. The Bank's
fixed-rate mortgage loans currently are made for terms from 5 to 30 years. The
Bank also offers ARM loan programs with interest rates which adjust every one or
three years. The Bank'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. The interest
rate adjustment on these loans is indexed to the applicable one- or three-year
U.S. Treasury CMT Index with a repricing margin of 2.75% above the index. The
Bank also offers a one-year ARM program that can be converted into a fixed-rate
loan one time during the second through fifth years of the loan. The Bank
charges a fee if such conversion feature is exercised. The Bank's policy is to
originate one- to four-family residential 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 90% of the

6
<PAGE>

appraised value or selling price if private mortgage insurance is obtained, with
the exception of certain loans secured by condominium units (which require a 75%
loan-to-value ("LTV") ratio) and loans originated pursuant to the Bank's
Affordable Housing Program and first-time homebuyers program (which allow for a
95% LTV ratio). Mortgage loans originated by the Bank include due-on-sale
clauses which provide the Bank with the contractual right to deem the loan
immediately due and payable in the event the borrower transfers ownership of the
property without the Bank's consent. Due-on-sale clauses are an important means
of adjusting the rates on the Bank's fixed-rate mortgage loan portfolio and the
Bank 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 Bank's exposure to
increases in interest rates. However, adjustable-rate loans generally 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
help to reduce the credit risk associated with the Bank's adjustable-rate loans
but also limit the interest rate sensitivity of its adjustable-rate mortgage
loans.

     In an effort to provide financing for moderate income and first-time home
buyers, the Bank offers its own Affordable Housing Program and first-time home
buyers program. These programs offer single-family residential mortgage loans
to qualified individuals. These loans are offered with fixed rates of interest
and 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 interest rates and loan fees. Such loans
are originated in amounts up to 95% of the lower of the property's appraised
value or the sale price. Private mortgage insurance is normally required. With
respect to loans originated under these programs, because the Bank typically
charges a lower rate of interest, lower mortgage origination fees or a discount
on closing costs on such loan programs, the Bank expects to achieve a lower rate
of return on such loans, as compared to other residential mortgage loans.

     Equity Lines of Credit and Second Mortgage Loans. The Bank offers equity
lines of credit and second mortgage loans in amounts of up to $300,000. The
Bank's second mortgage loans are secured by second liens on one- to four-family
residences located in the Bank's primary market area. These loans are typically
shorter term and generally have higher interest rates than one- to four-family
first mortgage loans. Generally, the maximum combined LTV ratio on second
mortgage loans is 75%. Second mortgage loans are generally offered with terms of
up to 15 years and only with fixed-rates of interest which rates will vary
depending on the amortization period chosen by the borrowers. Equity lines of
credit generally have adjustable-rates of interest which adjust on a monthly
basis. The adjustable-rate of interest charged on such loans is indexed to the
prime rate as published in The Wall Street Journal. These loans generally have
an 18% lifetime limit on interest rates. The underwriting standards employed by
the Bank for home equity 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 and value of underlying collateral are of primary considerations.

     Multi-Family and Commercial Real Estate Lending. The Bank also originates
multi-family and commercial real estate loans that are generally secured by five
or more unit apartment buildings and properties used for business purposes such
as small office buildings or retail facilities located in the Bank's primary
market area. The Bank's multi-family and commercial

                                       7
<PAGE>

real estate underwriting policy provides that such real estate loans may be made
in amounts up to 75% of the appraised value of the property. The Bank's
multi-family and commercial real estate lending is limited by the regulatory
loans-to-one borrower limit which at December 31, 2001 was $3.8 million. The
Bank currently originates multi-family and commercial real estate loans,
generally with terms of up to 25 years. The Bank's multi-family and commercial
real estate loans have fixed and adjustable rates of interest that adjust
periodically and are indexed to either the prime rate as published in The Wall
Street Journal, the Federal Home Loan Bank Advance Rates or similar index. In
reaching its decision on whether to make a multi-family or commercial real
estate loan, the Bank considers the net operating income of the property, the
borrower's expertise, credit history and profitability and the value of the
underlying property. The Bank has generally required that the properties
securing these real estate loans have debt service coverage ratios (the ratio of
earnings before debt service to debt service) of at least 120%. In addition,
environmental impact surveys are required for all multi-family and commercial
real estate loans. Generally, all multi-family and commercial real estate loans
made to corporations, partnerships and other business entities require personal
guarantees by the principals. On an exception basis, the Bank may not require a
personal guarantee on such loans depending on the creditworthiness of the
borrower, the amount of the down payment and other mitigating circumstances. In
order to meet diversification needs in its portfolio and to take advantage of
market opportunities, the Bank will, from time to time, participate in loans
originated and serviced by other financial institutions. When determining
whether to participate in such loans, the Bank will underwrite its participation
interest according to its own underwriting standards. The largest multi-family
or commercial real estate loan in the Bank's portfolio at December 31, 2001 was
a $3.0 million loan secured by a banquet hall in Manalapan, New Jersey.

     Loans secured by multi-family and 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 multi-family
and 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 the then prevailing conditions in the real estate
market or the economy. The Bank seeks to minimize these risks through its
underwriting standards.

     Construction and Development Lending. The Bank originates construction and
development loans exclusively for the development of one- to four-family
residences and multi-family real estate properties. Such loans are made
principally to individuals building their primary residence and to licensed and
experienced developers known to the Bank in its primary market area for the
construction of single and multi-family developments. The Bank generally does
not originate loans secured by undeveloped land. Construction and development
loans are originated in amounts up to 80% of the lesser of the appraised value
of the property, as improved, or the sales price. Such loans are offered with
one to two year terms and adjustable interest rates which adjust monthly and
float at margins which are generally 1% to 2% above the Citibank, New York prime
rate. Proceeds of construction and development loans are dispersed 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 Bank's largest construction and develop- ment loan at December 31,
2001 was a performing loan with a gross loan amount and carrying balance of $3.0
million and $1.3 million, respectively, secured by a hotel in Edison, New
Jersey.

     Construction and development 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 Bank may be confronted with a project, when completed, having a
value which is insufficient to assure full repayment.

                                       8
<PAGE>


     Consumer Lending. Consumer loans at December 31, 2001 consisted of passbook
or account loans, cash reserve (overdraft checking) and automobile loans. Such
loans are generally originated in the Bank's primary market area.

     Loan Approval Procedures and Authority. The Board of Directors establishes
the lending policies and loan approval limits of the Bank. Pursuant to OTS
regulations, loans to one borrower cannot exceed 15% of the Bank's unimpaired
capital and surplus. The Bank will not make loans to one borrower that are in
excess of the regulatory limits.

Delinquent Loans, Classified Assets and Real Estate Owned

     Delinquencies and Classified Assets. Reports listing all delinquent loans
are generated and reviewed by management on a monthly basis and the loans
delinquent in excess of 90 days, special mention loans and all REO are reported
to the Board of Directors for their review. The procedures taken by the Bank
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 Bank takes a number
of steps to have the borrower cure the delinquency and restore the loan to
current status. The Bank generally sends the borrower a written notice of
non-payment after the loan is first delinquent. The Bank'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 Bank will attempt to obtain full payment, offer to 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 Bank to take legal action, which typically occurs
after a loan is 90 days or more delinquent, the Bank 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 Bank, becomes REO.

     Federal regulations and the Bank's Asset Classification Policy require that
the Bank utilize an internal asset classification system as a means of reporting
problem and potential problem assets. The Bank has incorporated the OTS internal
asset classifications as a part of its credit monitoring system. The Bank
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

                                       9

<PAGE>



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 Bank reviews and classifies its assets on an ongoing basis and the
Board of Directors reviews the results of the reports on a monthly basis. The
Bank classifies assets in accordance with the management guidelines described
above. At December 31, 2001, the Bank had $388,000 and $168,000 of assets
designated as Substandard and Doubtful, respectively and no assets designated as
Loss. At December 31, 2001, the largest loan designated as Substandard had a
carrying balance of $208,000 and was secured by a one-to-four-family property.

                                       10

<PAGE>



     At December 31, 2001, 2000 and 1999, delinquencies in the Bank's loan
portfolio were as follows:


<TABLE>
<CAPTION>
                                           At December 31, 2001                    At December 31, 2000
                                   -------------------------------------  ---------------------------------------
                                      60-89 Days       90 Days or More        60-89 Days        90 Days or More
                                   -----------------  ------------------  ------------------  -------------------
                                    Number   Principal Number   Principal  Number   Principal  Number   Principal
                                    of Loans Balance  of Loans  Balance   of Loans  Balance   of Loans  Balance
                                   --------  -------  --------  --------  --------  --------  -------- ----------
                                                            (Dollars in thousands)

<S>                                       <C>   <C>          <C>    <C>          <C>    <C>          <C>     <C>
Loans:
   One- to four-family..........          6     $512         3      $213         3      $150         3       $309
   Construction and
development.....................          1      116        --        --        --       --          1        247
                                    -------    -----   -------   -------     -----     -----     -----       ----
     Total loans................          7     $628         3      $213         3      $150         4       $556
                                    =======     ====   =======      ====   =======      ====     =====       ====
Delinquent loans to total

    loans.......................                0.40%               0.14%               0.09%                0.32%
                                                ====                ====                ====                 ====

<CAPTION>


                                              At December 31, 1999
                                   ------------------------------------------
                                        60-89 Days          90 Days or More
                                   --------------------   -------------------
                                     Number    Principal   Number    Principal
                                    of Loans   Balance    of Loans   Balance
                                   ---------   --------   --------   --------
                                              (Dollars in thousands)
<S>                                        <C>     <C>           <C>     <C>
Loans:
   One- to four-family..........           2       $138          8       $676
   Construction and
development.....................         --         --         --         --
                                       -----    -------      -----      ----
     Total loans................           2       $138          8       $676
                                     =======       ====    =======       ====
Delinquent loans to total

    loans.......................                   0.09%                 0.43%
                                                   ====                  ====
</TABLE>



                                       11

<PAGE>



     Non-Performing Assets and Impaired Loans. The following table sets forth
information regarding non-accrual loans and REO. There was no REO at December
31, 2001. It is the policy of the Bank to cease accruing interest on loans 90
days or more past due and to fully reserve for all previously accrued interest.
For the fiscal years ended December 31, 2001, 2000 and 1999, the amount of
additional interest income that would have been recognized on non-accrual loans
if such loans had continued to perform in accordance with their contractual
terms was $9,600, $7,000 and $51,000, respectively.

<TABLE>
<CAPTION>


                                                                          At December 31,
                                                -------------------------------------------------------------------
                                                   2001          2000          1999          1998          1997
                                                ----------    -----------    ---------   ------------   -----------
                                                                         (Dollars in thousands)
<S>                                                   <C>            <C>          <C>          <C>             <C>
Non-accrual loans:
  Mortgage loans:
    One- to four-family.....................          $208           $309         $676         $  930          $891
    Construction and development............            --             --           --             --            --
    Other loans.............................            --             --           --             --            --
                                                     -----           ----       ------       --------        ------
      Total mortgage loans..................           208            309          676            930           891
    Real estate owned, net(1)...............            --             --           50            131            69
                                                     -----          -----       ------       --------        ------
    Total non-performing assets.............         $ 208           $309         $726         $1,061          $960
                                                     =====           ====         ====         ======          ====
Allowance for loan losses as a
  percent of total loans....................          0.79%          0.69%        0.73%          0.88%         0.81%
Allowance for loan losses as a
  percent of non-performing loans(2)........        599.52%        386.41%      167.90%        109.89%       102.47%
Non-performing loans as a
  percent of total loans(2).................          0.13%          0.18%        0.43%          0.80%         0.79%
Non-performing assets as                              0.09%          0.13%        0.31%          0.53%         0.53%
  a percent of total assets(3)..............
</TABLE>
-----------------------
(1)   REO balances are shown net of related valuation allowances.
(2)   Non-performing loans consist of all 90 days or more past due and other
      loans which have been identified by the Bank as presenting uncertainty
      with respect to the collectibility of interest or principal.
(3)   Non-performing assets consist of non-performing loans and REO.


         At December 31, 2001, 2000 and 1999, total impaired loans were
$268,000, $506,000 and $460,000, respectively, and the related allowance for
loan losses amounted to $8,000, $26,000 and $41,000, respectively. All impaired
loans are real estate mortgage loans which have been measured for impairment
using the fair value of the collateral method. During the fiscal years 2001,
2000 and 1999, the average recorded value of impaired loans was $273,000,
$516,000 and $465,000, respectively. For these loans $25,000, $60,000 and
$28,000 of interest income was recognized.

         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, various regulatory agencies, as an
integral part of their examination process, periodically review the Bank's
allowance for loan losses. Such agencies may require the Bank to make additional
provisions for estimated loan losses based upon judgments different from those
of management. As of December 31, 2001 and 2000, the Bank's allowance for loan
losses was 0.79% and 0.69%, respectively, of total loans receivable. The Bank
had non-accrual loans of $208,000 at

                                       12

<PAGE>



December 31, 2001. The Bank will continue to monitor and modify its allowances
for loan losses as conditions dictate. While management believes the Bank'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 Bank's level of
allowance for loan losses will be sufficient to cover future loan losses
incurred by the Bank or that future adjustments to the allowance for loan losses
will not be necessary if economic and other conditions differ substantially from
the economic and other conditions used by management to determine the current
level of the allowance for loan losses.

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

<TABLE>
<CAPTION>

                                                         At or For the Years Ended December 31,
                                        ------------------------------------------------------------------------
                                            2001           2000         1999            1998            1997
                                         ----------     ----------   ----------      ----------     ----------
                                                                     (In thousands)
<S>                                         <C>            <C>           <C>            <C>              <C>
Balance at beginning of period........      $1,194         $1,135        $1,022         $  913           $844
Provision for loan losses.............          53             91           113            114            168
Charge-offs:
  Mortgage loans:
   One -to-four-family................          --             32            --              5            125
   Other loans........................          --             --            --             --             --
                                          --------       --------     ---------        -------         ------
   Total charge-offs..................          --             32            --              5            125
Recoveries............................          --             --            --             --             26
                                          --------       --------     ---------        -------         ------
Balance at end of period..............      $1,247         $1,194        $1,135         $1,022           $913
                                            ======         ======        ======         ======           ====
Ratio of net charge-offs during
  the period to average loans
  outstanding during the
  period..............................          --           0.01%           --           0.01%          0.13%

</TABLE>

                                       13

<PAGE>



          The following table sets forth the Bank'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 December 31,
                       -------------------------------------------------------------------------------------
                                   2001                        2000                        1999
                       ---------------------------   --------------------------  ----------------------------

                                             Percent                    Percent                     Percent
                                             of Loans                   of Loans                    of Loans
                                  Percent of  in Each       Percent of  in Each         Percent of  in Each
                                  Allowance  Category       Allowance  Category         Allowance  Category
                                  to Total   to Total       to Total   to Total         to Total   to Total
                         Amount   Allowance   Loans  Amount Allowance    Loans   Amount  Allowance   Loans
                        -------   ---------  ------- ------ ---------  --------  ------  --------- --------
                                                       (Dollars in thousands)
<S>                     <C>         <C>       <C>    <C>         <C>      <C>    <C>       <C>      <C>
Mortgages:
    Residential (1)     $   365     29.27%    70.71% $  403    33.75%    65.51% $  602     53.04%    71.84%
    Commercial real
       estate.....          100      8.02     14.27     235    19.68      8.82      93      8.19      4.46
    Construction and
       Development          781     62.63     14.84     556    46.57     25.53     440     38.77     23.62
                        -------    ------    ------  ------   ------    ------  ------    ------    ------
         Total....        1,246     99.92     99.82   1,194   100.00%    99.86%  1,135    100.00     99.92
Consumer..........            1      0.08      0.18      --       --      0.14      --        --      0.08
                        -------    ------    ------  ------   ------    ------  ------    ------    ------
    Total allowance
                        $ 1,247    100.00%   100.00% $1,194   100.00%   100.00% $1,135    100.00%   100.00%
      for loan losses   =======    ======    ======  ======   ======    ======  ======    ======    ======

<CAPTION>

                                             At December 31,
                       -------------------------------------------------------------
                                   1998                          1997
                       ---------------------------   -------------------------------

                                            Percent                        Percent
                                            of Loans                       of Loans
                                Percent of   in Each           Percent of   in Each
                                Allowance   Category           Allowance   Category
                                to Total    to Total            to Total    to Total
                        Amount  Allowance    Loans    Amount    Allowance    Loans
                        ------  ---------  ---------  ------    --------   ---------
                                                 (Dollars in thousands)
<S>                     <C>       <C>       <C>       <C>      <C>           <C>
Mortgages:
    Residential (1)     $  553     54.11%    75.95%   $421      46.11%        81.89%
    Commercial real
       estate.......       108     10.57      3.18     153      16.76          3.40
    Construction and
       Development         361     35.32     20.62     339      37.13         14.63
                        ------    ------  --------   -----     ------        ------
         Total....       1,022    100.00     99.75     913     100.00         99.92
Consumer..........          --        --      0.25      --         --          0.08
                        ----------------- --------  ------     ------        ------
    Total allowance
      for loan losses   $1,022    100.00%   100.00%   $913     100.00%       100.00%
                        ======    ======    ======    ====     ======        ======
</TABLE>


------------------------------------
(1) Includes multi-family loans, second mortgage loans and home equity lines of
credit.



                                       14

<PAGE>



         Real Estate Owned. At December 31, 2001, the Bank had no REO. When the
Bank acquires property through foreclosure or deed in lieu of foreclosure, it is
initially recorded at the lower of the recorded investment in the corresponding
loan or the fair value of the related assets at the date of foreclosure, less
costs to sell. Thereafter, if there is a further deterioration in value, the
Bank provides for a specific valuation allowance and charges operations for the
diminution in value. It is the policy of the Bank to have obtained an appraisal
on all real estate subject to foreclosure proceedings prior to the time of
foreclosure. It is the Bank's policy to require appraisals on a periodic basis
on foreclosed properties and conducts inspections on foreclosed properties.

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 Bank must maintain minimum levels
of investments that qualify as liquid assets under OTS regulations.
Historically, the Bank 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 Bank's lending activities. The Company primarily
utilizes investments in securities for liquidity management and as a method of
deploying excess funding not utilized for loan originations. Generally, the
Company's investment policy is more restrictive than the OTS regulations allow.
The Company has invested primarily in U.S. Government and agency securities,
which qualify as liquid assets under the OTS regulations, federal funds and U.S.
government sponsored agency issued mortgage-backed securities. As required by
SFAS No. 115, the Company has established an investment portfolio of securities
that are categorized as held to maturity, available for sale or held for
trading. At December 31, 2001, the available for sale securities portfolio
consisted entirely of a mutual fund that invests in adjustable rate
mortgage-backed securities.

         The Company's adjustable-rate mortgage-backed securities generally have
1% to 2% maximum annual interest rate adjustments and lifetime maximum interest
rate adjustments of 5% to 6%. Investments in mortgage-backed securities involve
a risk that actual prepayments which differ from estimated prepayments over the
life of the security, 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. In addition, the market value of such
securities may be adversely affected by changes in interest rates.

         In an effort to increase assets and enhance earnings, and to supplement
loan demand in future periods, the Company anticipates increasing its investment
and mortgage-backed securities portfolio. The Company may utilize borrowings to
fund the purchase of such securities.



                                       15

<PAGE>



         The following table sets forth certain information regarding the
amortized cost and market value of the Company's investment securities at the
dates indicated.

<TABLE>
<CAPTION>

                                                                        At December 31,
                                            -----------------------------------------------------------------------
                                                     2001                    2000                    1999
                                            ----------------------- ----------------------  -----------------------
                                             Amortized     Market    Amortized    Market     Amortized     Market
                                               Cost        Value       Cost       Value        Cost        Value
                                            -----------  ---------- ----------- ----------  -----------  ----------
                                                                        (In thousands)
<S>                                              <C>         <C>        <C>        <C>          <C>         <C>
Investment securities:
Held to maturity(1):
   U.S. Government and
     agency obligations...................       $   --      $   --     $ 6,000    $ 5,945     $  6,000      $5,769
    Other.................................          948         900         948        910          947         927
Federal Home Loan Bank stock(2)...........        1,489       1,489       2,350      2,350        2,100       2,100
Available for sale(3):
   Equity securities......................        6,716       6,704       6,378      6,327        5,988       5,906
                                                -------     -------   ---------    -------    ---------   ---------
     Total investment securities..........       $9,153      $9,093     $15,676    $15,532      $15,035     $14,702
                                                 ======      ======     =======    =======      =======     =======
</TABLE>

--------------
(1)   Held to maturity securities are carried at amortized cost.
(2)   Investment in FHLB-NY stock is required by regulations. As the security is
      not readily marketable, its cost approximates fair value.
(3)   Available for sale securities are carried at fair value.


         The following table sets forth certain information regarding the
carrying values and fair values of the Company's mortgage-backed securities, all
of which are held to maturity, at the dates indicated.

<TABLE>
<CAPTION>

                                                               At December 31,
                            --------------------------------------------------------------------------------------
                                        2001                         2000                         1999
                            ---------------------------- ---------------------------- ----------------------------
                                       Percent                      Percent                      Percent
                                         of                           of                           of
                            Carrying   Carrying   Fair   Carrying   Carrying   Fair   Carrying   Carrying   Fair
                             Value      Value     Value   Value      Value     Value   Value      Value     Value
                            --------- ---------- ------- --------- ---------- ------- --------- ---------- -------
                                                            (Dollars in thousands)
<S>                           <C>        <C>     <C>       <C>        <C>     <C>        <C>       <C>     <C>
By Issuer:
  GNMA.....................   $12,745    21.69%  $12,895   $12,088    19.94%  $12,136    $14,272   19.99%  $14,022
  FNMA.....................    14,829    25.24    14,872    15,042    24.82    15,002     20,034   28.06    19,646
  FHLMC....................    30,967    52.70    31,035    33,090    54.59    33,102     36,686   51.38    36,477
  SBA......................       219     0.37       216       394     0.65       391        407    0.57       402
                              -------   ------   -------   -------   ------   -------    -------  ------   -------
    Total mortgage-backed
      securities...........   $58,760   100.00%  $59,018   $60,614   100.00%  $60,631    $71,399  100.00%  $70,547
                              =======   ======   =======   =======   ======   =======    =======  ======   =======

By Coupon Type:
  Adjustable-rate..........   $48,541    82.61%  $48,785   $53,451    88.18%  $53,514    $62,371   87.36%  $62,004
  Fixed-rate...............    10,219    17.39    10,233     7,163    11.82     7,117      9,028   12.64     8,543
                              -------   ------   -------   -------   ------   -------    -------  ------   -------
    Total mortgage-backed
     securities...........    $58,760   100.00%  $59,018   $60,614   100.00%  $60,631    $71,399  100.00%  $70,547
                              =======   ======   =======   =======   ======   =======    =======  ======   =======
</TABLE>


                                       16

<PAGE>



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

<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
                                                                  2001               2000                1999
                                                              -------------     ---------------    -----------------
                                                                                 (In thousands)
<S>                                                                 <C>                <C>                  <C>
Beginning balance .......................................           $60,614            $71,399              $55,728
    Purchases............................................            14,154                 --               37,149
    Principal repayments.................................           (15,972)           (10,743)             (21,368)
    Net amortization and accretion of discounts
       (premiums)........................................               (36)               (42)                (110)
                                                                 -----------        -----------          ----------
Ending balance...........................................           $58,760            $60,614              $71,399
                                                                    =======            =======              =======

</TABLE>


                                       17

<PAGE>



         The table below sets forth certain information regarding the carrying
values, weighted average yields and contractual maturities of the Bank's
investment securities held to maturity and mortgage-backed securities held to
maturity as of December 31, 2001. The Bank's investment securities available for
sale consist solely of equity securities and, as they have no contractual
maturities, are not included in this table.

<TABLE>
<CAPTION>
                                                                    At December 31, 2001
                                            ---------------------------------------------------------------------
                                                                        More than One         More than Five
                                               One Year or Less       Year to Five Years    Years to Ten Years
                                            ---------------------    -------------------    ---------------------
                                                         Weighted               Weighted               Weighted
                                             Carrying    Average      Carrying   Average     Carrying   Average
                                               Value      Yield       Value      Yield       Value      Yield
                                             ---------  ----------   --------  ----------  ---------  ----------
                                                                     (Dollars in thousands)
<S>                                               <C>         <C>        <C>          <C>       <C>         <C>
Investment securities held to maturity:
  U.S. Government agency obligations.......       $ --          --%      $ --          --%      $ --          --%
  Other....................................         --          --         --          --         --          --
                                                  ----                   ----                   ----
       Total...............................         --          --         --          --         --          --
                                                  ====                   ====                   ====
Mortgage-backed securities held to maturity:
  Adjustable-rate:
    GNMA...................................       $ --          --%      $ --          --%      $ --          --%
    FHLMC..................................         --          --         --          --         --          --
    FNMA...................................         --          --         --          --         --          --
    SBA....................................         --          --         --          --         --          --
                                                  ----                   ----                   ----
       Total...............................         --          --         --          --         --          --
                                                  ----                   ----                   ----        ----
  Fixed-rate:
    GNMA...................................         --          --         --          --         --          --
    FHLMC..................................         --          --         --          --         --          --
    FNMA...................................         --          --         --          --     $1,923        5.94
                                                  ----                   ----                 ------
       Total...............................         --          --         --          --     $1,923        5.94
                                                  ----                   ----                 ------
Total mortgage-backed securities held to

  maturity.................................       $ --          --%      $ --          --%    $1,923        5.94%
                                                  ====                   ====                 ======
<CAPTION>

                                                            At December 31, 2001
                                            -----------------------------------------------
                                                More than Ten Years          Total
                                            ------------------------ ----------------------
                                                          Weighted                Weighted
                                                Carrying    Average    Carrying    Average
                                                Value      Yield       Value       Yield
                                              ---------  ----------  ----------  ----------
                                                           (Dollars in thousands)
<S>                                             <C>           <C>       <C>           <C>
Investment securities held to maturity:
  U.S. Government agency obligations.......     $    --         -- %    $    --          -- %
  Other....................................         948       2.88          948        2.88
                                                -------        ----     -------        ----
       Total...............................         948       2.88%     $   948        2.88%
                                                =======                 =======
Mortgage-backed securities held to maturity:
  Adjustable-rate:
    GNMA...................................     $10,151        5.48%    $10,151        5.48%
    FHLMC..................................      30,946        3.88      30,946        3.88
    FNMA...................................       7,212        6.17       7,212        6.17
    SBA....................................         219        4.01         219        4.01
                                                -------        ----     -------        ----
       Total...............................      48,528        4.56      48,528        4.56
                                                -------        ----     -------        ----
  Fixed-rate:
    GNMA...................................       2,594        6.82       2,594        6.82
    FHLMC..................................          21       10.00          21       10.00
    FNMA...................................       5,694        6.38       7,617        6.27
                                                -------        ----     -------        ----
       Total...............................       8,309        6.53      10,232        6.42
                                                -------        ----     -------        ----
Total mortgage-backed securities held to
  maturity.................................     $56,837        4.85%    $58,760        4.88%
                                                =======                 =======


</TABLE>

                                       18

<PAGE>



Source of Funds

         General. Deposits, loan repayments and prepayments and cash flows
generated from operations are the primary sources of the Company's funds for use
in lending, investing and for other general purposes. The Company also utilizes
borrowings for lending and investing activities.

         Deposits. The Bank has long focused on its deposit base as its primary
source of funds and a means of growth. In this regard, management previously
employed a strategy of pricing its deposit products among the highest in the
Bank's market area in order to attract and retain deposits. In more recent
periods, the Bank has reduced its rates paid on deposits to a level that is more
competitive in the market area, and has strived to maintain its deposits by
other means. The Bank offers a variety of deposit accounts with a range of
interest rates and terms. The Bank's deposits consist of money market, savings,
checking and certificate accounts. For the year ended December 31, 2001, average
core deposits represented 33.1% 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 Bank's deposits are
obtained predominantly from the areas in which its branch offices are located.
The Bank 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 Bank's ability to attract and retain deposits. In an
effort to build its deposit base, the Bank has increased the types of deposit
products offered, such as offering new transaction accounts, as well as
expanding the terms of deposit products offered, such as certificate of deposit
accounts, which the Bank now offers with terms ranging from three months to five
years. At December 31, 2001, certificates of deposit comprised 64.73% of the
Bank's deposit base. Due to the predominance of certificate accounts within the
deposit base, the Bank's liquidity could be reduced if a significant amount of
maturing certificates of deposit are not renewed in any given period. Management
believes that, based upon its experience and the Bank's deposit flow history, a
significant portion of such deposits will remain with the Bank. The Bank
generally does not solicit deposits from outside its market area. While the Bank
does not actively solicit certificate accounts in excess of $100,000 or use
brokers to obtain deposits, it may do so from time to time, depending upon
market conditions.



                                       19

<PAGE>



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


<TABLE>
<CAPTION>
                                                               Years Ended December 31,
                            ----------------------------------------------------------------------------------------------
                                         2001                            2000                            1999
                            ------------------------------- ------------------------------- ------------------------------
                                       Percent                          Percent                        Percent
                                       of Total   Weighted              of Total   Weighted            of Total   Weighted
                             Average   Average    Average    Average    Average    Average   Average   Average    Average
                             Balance   Deposits     Rate     Balance    Deposits     Rate    Balance   Deposits     Rate
                            --------- ---------- ---------- ---------- ---------- --------- --------- ---------  ---------
                                                                (Dollars in thousands)
<S>                          <C>           <C>         <C>   <C>            <C>       <C>    <C>          <C>         <C>
Demand deposits............  $ 36,586      18.73%      2.03%  $ 25,654      14.49%    3.22%   $ 20,509    12.04%      3.15%
Money market savings.......     2,200       1.13       1.49      2,766       1.56     2.94       3,029     1.78       2.71
Regular savings............    25,890      13.26       2.32     27,956      15.78     2.34      26,432    15.52       2.29
Certificates of deposit....   130,619      66.88       5.04    120,749      68.17     5.56     120,312    70.66       5.10
                             --------     -----               --------     ------             --------   ------
         Total.............  $195,295     100.00%      4.07%  $177,125     100.00%    4.58%   $170,282   100.00%      4.39%
                             ========     ======              ========     ======             ========   ======
<CAPTION>


                                                                   At December 31,
                            ----------------------------------------------------------------------------------------------
                                         2001                            2000                            1999
                            ------------------------------- ------------------------------- ------------------------------
                                       Percent                          Percent                        Percent
                                       of Total                         of Total                       of Total
                                       Certificate  Weighted           Certificate  Weighted           Certificate   Weighted
                                           of       Average                of       Average                 of       Average
                             Balance    Deposits     Rate     Balance   Deposits     Rate     Balance    Deposits      Rate
                             -------    --------     ----     -------   --------     ----     -------    --------      ----
                                                                   (Dollars in thousands)
<S>                          <C>           <C>         <C>    <C>           <C>        <C>    <C>           <C>         <C>
Certificate accounts(1):
Due within one year........  $110,336      85.90%      3.86%  $120,011      90.56%     5.99   $  97,446     84.78%      4.97%
One to three years.........    16,115      12.55       4.52     11,374       8.58      5.76      15,236     13.25       5.45
Three years and over.......     1,998       1.55       4.94      1,141       0.86      5.62       2,265      1.97       5.44
                             --------     ------              --------     ------              --------    ------
     Total certificate
       accounts............  $128,449     100.00%      3.96%  $132,526     100.00%     5.97%   $114,947    100.00%      5.04%
                             ========     ======              ========     =======             ========    ======
</TABLE>

----------------------------------------

 (1) Based on remaining maturity of certificates calculated as of the end of
     the period.


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

<TABLE>
<CAPTION>

                                                                                    Years Ended December 31,
                                                                      -----------------------------------------------------
                                                                           2001                2000               1999
                                                                      --------------      --------------     --------------
                                                                                         (In thousands)

<S>                                                                         <C>                 <C>                <C>
Beginning balance..................................................         $189,333            $169,008           $174,808
                                                                            --------            --------           --------
   Net deposits (withdrawals)......................................            1,164              12,204             (7,603)
   Sale of deposits................................................               --                  --             (5,668)
   Interest credited to accounts...................................            7,946               8,121              7,471
                                                                         -----------          ----------        -----------
   Increase (decrease) in deposit accounts.........................            9,110              20,325             (5,800)
                                                                         -----------          ----------         ----------
Ending balance.....................................................         $198,443            $189,333           $169,008
                                                                            ========            ========          =========

</TABLE>





                                       20

<PAGE>



         The following table presents by various categories, the amount of
certificate accounts outstanding at December 31, 2001, 2000, and 1999, and the
time to maturity of the certificate accounts outstanding at December 31, 2001.


<TABLE>
<CAPTION>


                                                   Period to Maturity from December 31, 2001
                                --------------------------------------------------------------------------------
                                 Due Within        One to           Two to           Three to         Four to
                                  One Year       Two years        Three years       Four years       Five years
                                ------------    ------------    ---------------    -------------    ------------
                                                                                        (In thousands)
<S>                                 <C>             <C>                 <C>                <C>          <C>
Certificate accounts:
Less than 4.00%.............        $ 59,510         $ 3,946             $  586            $  34          $   49
4.01 to 5.00%...............          33,753           5,195              1,910              164             982
5.01 to 6.00%...............          13,301           2,988                163              287             409
6.01 to 7.00%...............           3,772             871                456               72              --
Over 7.00%..................              --              --                 --               --              --
                                    --------         -------             ------            -----          ------
                                    $110,336         $13,000             $3,115             $557          $1,440
                                    ========         =======             ======             ====          ======
Accrued interest payable....

   Total....................

<CAPTION>


                                                 At December 31,
                                   -------------------------------------------

                                       2001           2000            1999
                                   ------------    -----------    ------------
<S>                                  <C>           <C>            <C>
Certificate accounts:
Less than 4.00%.............         $64,125       $     --        $     --
4.01 to 5.00%...............          42,004         24,192          71,589
5.01 to 6.00%...............          17,148         27,678          41,574
6.01 to 7.00%...............           5,171         79,324           1,284
Over 7.00%..................              --             --              --
                                    --------    -----------    -------------
                                     128,448        131,194         114,447

Accrued interest payable....               1          1,332             500
                                    --------       --------        --------
   Total....................        $128,449       $132,526        $114,947
                                    ========       ========        ========



</TABLE>



                                       21

<PAGE>



         At December 31, 2001, the Bank had outstanding $21.5 million in
certificate accounts in amounts of $100,000 or more maturing as follows:


                                                             Weighted
                                                             Average
             Maturity Period                  Amount           Rate
-----------------------------------------    ---------      ----------
                                               (Dollars in thousands)
Three months or less.....................      $ 8,183            3.79%
Over three to six months.................        4,283            4.08
Over six through 12 months...............        6,417            4.28
Over 12 months...........................        2,597            4.52
                                             ---------
                                               $21,480            4.08%
                                               =======

Borrowings

         Although the Bank has not significantly utilized the Federal Home Loan
Bank ("FHLB") borrowings in the past, it has done so as needed to fund its
operations and meet liquidity needs. These FHLB advances are collateralized
primarily by certain of the Bank's mortgage loans and mortgage-backed securities
and secondarily by the Bank's investment in capital stock of the FHLB. 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 OTS and the FHLB. At
December 31, 2001, the Bank had $11.0 million in outstanding advances from the
FHLB-NY.

         The Bank increased its borrowings in order to use the funds to increase
its asset base and enhance earnings through the purchase of investment and
mortgage-backed securities. By so doing, the Bank seeks to realize increased
earnings equal to the spread between the cost of the borrowed funds and the
yield on the investment and mortgage-backed securities.

         The following table sets forth certain information regarding the
Company's borrowed funds for the dates indicated:

<TABLE>
<CAPTION>

                                                                       At or For the Years Ended December 31,
                                                                  -------------------------------------------------
                                                                       2001             2000             1999
                                                                  --------------   --------------   ---------------
                                                                               (Dollars in thousands)
<S>                                                                      <C>              <C>               <C>
FHLB borrowings:
  Average balance outstanding.................................           $16,093          $37,154           $15,038
  Maximum amount outstanding at any
    month-end during the period...............................            27,000           39,900            42,000
  Balance outstanding at end of period........................            11,000           29,000            42,000
  Weighted average interest rate during the period............              4.81%            6.44%             5.47%
  Weighted average interest rate at end of period.............              3.80%            6.33%             5.93%
ESOP loan:
  Average balance outstanding.................................         $      --        $      --         $     230
  Maximum amount outstanding at any month-end
    during the period.........................................                --               --               455
  Balance outstanding at end of period........................                --               --                --
  Weighted average interest rate during the period............                --               --              8.25%
  Weighted average interest rate at end of period.............                --               --                --


</TABLE>


                                       22

<PAGE>



Personnel

         As of December 31, 2001, the Company had 51 full-time employees and 14
part-time employees. The employees are not represented by a collective
bargaining unit, and the Company considers its relationship with its employees
to be good.

Subsidiary Activities

         The Company's sole subsidiary is the Bank. The Bank has no
subsidiaries.

                           REGULATION AND SUPERVISION

General

         The Bank is subject to extensive regulation, examination and
supervision by the OTS, as its chartering agency, and the FDIC, as the deposit
insurer. The Bank is a member of the FHLB System. The Bank's 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 financial institutions. There are periodic
examinations by the OTS and the FDIC to test the Bank's 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 policies, whether by the OTS, the FDIC or the Congress, could
have a material adverse impact on the Company, the MHC and the Bank and their
operations. The MHC, as a federal mutual holding company and the Company, as a
federal corporation, will also be required to file certain reports with, and
otherwise comply with the rules and regulations of the OTS.

         The following summary of the regulation and supervision of savings
associations and their holding companies does not purport to be a complete
description of the applicable statutes and regulations and is qualified in its
entirety by reference to such statutes and regulations.

Federal Savings Institution Regulation

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

         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
December 31, 2001, the Bank's limit on loans to one borrower was $3.8 million,
and the Bank's largest aggregate outstanding balance of loans to one borrower
was $3.0 million.


                                       23

<PAGE>



         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 December 31, 2001, the Bank maintained 87.3% 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. Under the regulations, 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 if, like the Bank, it is a subsidiary of a holding company. 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.

         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 December 31, 2001 totaled $61,000.

         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

                                       24

<PAGE>



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
Federal Deposit Insurance Corporation 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.

         Capital Requirements. The OTS capital regulations require savings
institutions to meet three minimum capital standards: a 1.5% tangible capital
ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on
the CAMELS examination rating system) and an 8% risk-based capital ratio. 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 CAMELS 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 market 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

                                       25

<PAGE>



implementation of the interest rate risk capital charge. At December 31, 2001,
the Bank met each of its capital requirements.

         The following table presents the Bank's capital position at December
31, 2001.

<TABLE>
<CAPTION>


                                                                 Excess                     Capital
                                                                                --------------------------------
                            Actual            Required        (Deficiency)          Actual          Required
                            Capital           Capital            Amount            Percent           Percent
                       -----------------   --------------   ----------------    --------------   ---------------
                                                        (Dollars in thousands)

<S>                              <C>               <C>               <C>                 <C>                <C>
Tangible...............          $24,801           $3,554            $21,247             10.47%             1.50%
Core (Leverage)........           24,801            9,476             15,325             10.47              4.00%
Risk-based.............           26,035            9,806             16,229             21.24              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. The Bank is a member of 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 Savings Association Insurance Fund member
institutions are determined semi- annually by the FDIC and currently range from
zero basis points for the healthiest institutions to 27 basis points for the
riskiest.

         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

                                       26

<PAGE>



operations of the Bank. Management cannot predict what insurance assessment
rates will be in the future.

         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 2001,
FICO payments for Savings Association Insurance Fund members approximated 1.9
basis points.

         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.

         Community Reinvestment Act. Under the Community Reinvestment Act, as
amended ("CRA"), as implemented by OTS regulations, a savings association has a
continuing and affirmative obligation consistent with its safe and sound
operation to help meet the credit needs of its entire community, including low
and moderate income neighborhoods. The CRA does not establish specific lending
requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The CRA requires the OTS, in connection with its examination of a savings
institution, to assess the institution's record of meeting the credit needs of
its community and to take such record into account in its evaluation of certain
applications by such institution. The Bank's latest CRA rating received from the
OTS was "Satisfactory."

Federal Home Loan Bank System

         The Bank is a member of the Federal Home Loan Bank System, which
consists of 12 regional FHLBs. The FHLB provides a central credit facility
primarily for member institutions. The Bank, as a member of the FHLB, is
required to acquire and hold shares of capital stock in that FHLB in an amount
at least equal to 1.0% of the aggregate principal amount of its unpaid
residential mortgage loans and similar obligations at the beginning of each
year, or 1/20 of its advances (borrowings) from the FHLB, whichever is greater.

         The FHLBs are required to provide funds for the resolution of insolvent
thrifts in the late 1980s and to contribute funds for affordable housing
programs. These requirements could reduce the amount of dividends that the FHLBs
pay to their members and could also result in the FHLBs imposing a higher rate
of interest on advances to their members. If dividends were reduced, or interest
on future FHLB advances increased, the Bank's net interest income would likely
also be reduced. Recent legislation has changed the structure of the FHLBs
funding obligations for insolvent thrifts, revised the capital structure of the
FHLBs and implemented entirely voluntary membership for FHLBs. Management cannot
predict the effect that these changes may have with respect to its FHLB
membership.

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 provide
that reserves be maintained against aggregate transaction accounts as follows: a
3% reserve ratio is assessed on net transaction accounts up to and including
$41.3 million; a

                                       27

<PAGE>



10% reserve ratio is applied above $41.3 million. The first $5.7 million of
otherwise reservable balances (subject to adjustments by the Federal Reserve
Board) are exempted from the reserve requirements. The amounts are adjusted
annually. The Bank complies with the foregoing requirements.

Holding Company Regulation

         General. The Company is a federal savings and loan holding company
within the meaning of the HOLA. As such, the Company is registered with the OTS
and is subject to OTS regulations, examinations, supervision and reporting
requirements. In addition, the OTS has enforcement authority over the Company
and its non-savings institution subsidiaries. Among other things, this authority
permits the OTS to restrict or prohibit activities that are determined to be a
serious risk to the subsidiary savings institution. The Bank must notify the OTS
30 days before declaring any dividend to the Company.

         Restrictions Applicable to Mutual Holding Companies. Pursuant to
Section 10(o) of the HOLA and the Regulations, a mutual holding company, such as
the MHC, may engage in the following activities: (i) investing in the stock of a
savings association; (ii) acquiring a mutual association through the merger of
such association into a savings association subsidiary of such holding company
or an interim savings association subsidiary of such holding company; (iii)
merging with or acquiring another holding company, one of whose subsidiaries is
a savings association and (iv) any activity approved by the Federal Reserve
Board for a bank holding company or financial holding company. Recent
legislation, which authorized MHCs to engage in activities permitted financial
holding companies, expanded the authorized activities. Financial holding
companies may engage in a broad array of financial service activities including
insurance and securities.

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

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

         If the savings institution subsidiary of a savings and loan holding
company fails to meet the QTL test set forth in Section 10(m) of the HOLA and
the regulations of the OTS, the holding company must register with the Federal
Reserve Board as a Bank Holding Company within one year of the savings
institution's failure to so qualify.


                                       28

<PAGE>



         Stock Holding Company Subsidiary Regulation. The OTS has adopted
regulations governing the two-tier mutual holding company form of organization
and mid-tier stock holding companies that are controlled by mutual holding
companies. Under these rules, the stock holding company subsidiary holds all the
shares of the mutual holding company's savings association subsidiary and issues
the majority of its own shares to the mutual holding company parent. In
addition, the stock holding company subsidiary is permitted to engage in
activities that are permitted for its mutual holding company parent and to have
the same indemnification and employment contract restrictions imposed that are
on the mutual holding company parent. Finally, OTS regulations maintain that the
stock holding company subsidiary must be federally chartered for supervisory
reasons.

                           FEDERAL AND STATE TAXATION


Federal Taxation

         General. The Bank, the Company and the MHC will report their income on
a calendar year basis using the accrual method of accounting and will be 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, the Company and the MHC.

         Bad Debt Reserve. Historically, savings institutions such as the Bank
which met certain definitional tests primarily related to their assets and the
nature of their business ("qualifying thrifts") were permitted to establish a
reserve for bad debts and to make annual additions thereto, which may have been
deducted in arriving at their taxable income. The Bank's deductions with respect
to "qualifying real property loans," which are generally loans secured by
certain interest in real property, were computed using an amount based on the
Bank's actual loss experience, or a percentage equal to 8% of the Bank's taxable
income, computed with certain modifications and reduced by the amount of any
permitted addition to the non-qualifying loan loss reserve. Due to the Bank's
loss experience, the Bank generally recognized a bad debt deduction equal to 8%
of taxable income.

         In August 1996, the provisions repealing the above thrift bad debt
rules were passed by Congress as part of "The Small Business Job Protection Act
of 1996." The new rules eliminate the 8% of taxable income method for deducting
additions to the tax bad debt reserves for all thrifts for tax years beginning
after December 31, 1995. These rules also require that all thrift institutions
recapture all or a portion of their bad debt reserves added since the base year
(last taxable year beginning before January 1, 1988). The Bank has previously
recorded a deferred tax liability equal to the bad debt recapture and as such,
the new rules will have no effect on net income or federal income tax expense.
For taxable years beginning after December 31, 1995, the Bank's bad debt
deduction will be equal to net charge-offs. The new rules allow an institution
to suspend the bad debt reserve recapture for the 1996 and 1997 tax years if the
institution's lending activity for those years is equal to or greater than the
institution's average mortgage lending activity for the six taxable years
preceding 1996. For this purpose, only home purchase and home improvement loans
are included and the institution can elect to have the tax years with the
highest and lowest lending activity removed from the average calculation. If an
institution is permitted to postpone the reserve recapture, it must begin its
six year recapture no later than the 1998 tax year. The unrecaptured base year
reserves will not be subject to recapture as long as the institution continues
to carry on the business of banking. In addition, the balance of the pre-1988
bad debt reserves continue to

                                       29

<PAGE>



be subject to a provision of present law referred to below that require
recapture in the case of certain excess distributions to shareholders.

         Distributions. To the extent that the Bank makes "non-dividend
distributions" to the Company that are considered as made (i) from the reserve
for losses on qualifying real property loans, to the extent the reserve for such
losses exceeds the amount that would have been allowed under the experience
method, or (ii) from the supplemental reserve for losses on loans ("Excess
Distributions"), then an amount based on the amount distributed will be included
in the Bank's taxable income. Non-dividend distributions include distributions
in excess of the Bank's current and accumulated earnings and profits,
distributions in redemption of stock, and distributions in partial or complete
liquidation. However, dividends paid out of the Bank's current or accumulated
earnings and profits, as calculated for federal income tax purposes, will not be
considered to result in a distribution from the Bank's bad debt reserve. Thus,
any dividends to the Company that would reduce amounts appropriated to the
Bank's bad debt reserve and deducted for federal income tax purposes would
create a tax liability for the Bank. The amount of additional taxable income
created from an Excess Distribution is an amount that, when reduced by the tax
attributable to the income, is equal to the amount of the distribution.

         Corporate Alternative Minimum Tax. The Internal Revenue Code of 1986,
as amended (the "Code") imposes a tax on alternative minimum taxable income
("AMTI") at a rate of 20%. The excess of the bad debt reserve deduction using
the percentage of taxable income method over the deduction that would have been
allowable under the experience method is treated as a preference item for
purposes of computing the AMTI. Only 90% of AMTI can be offset by net operating
loss carryovers. AMTI is increased by an amount equal to 75% of the amount by
which the Bank's adjusted current earnings exceeds its AMTI (determined without
regard to this preference and prior to reduction for net operating losses).

         Dividends Received Deduction and Other Matters. The Company may exclude
from its income 100% of dividends received from the Bank. The MHC may exclude
from its income 80% of dividends received from the Company as long as it
maintains ownership in the Company of at least 20%. In addition, the MHC waived
dividends from both the Company and the Bank during the year ended December 31,
2001 and 2000.

     Audits. The Bank was last audited by the IRS in 1994. The Bank was not
audited by the New Jersey Department of Revenue ("DOR") in the past five years.

State and Local Taxation

         State of New Jersey. The Bank, the Company and the MHC file New Jersey
income tax returns. For New Jersey income tax purposes, savings institutions are
presently taxed at a rate equal to 3% of taxable income. For this purpose,
"taxable income" generally means federal taxable income, subject to certain
adjustments (including addition of interest income on state and municipal
obligations). For New Jersey tax purposes, regular corporations are presently
taxed at a rate equal to 9% of taxable income (7.5% is the rate if taxable
income is less than $100,000).

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.


                                       30

<PAGE>
<TABLE>
<CAPTION>




                                          Age at
             Name                        12/31/01                                 Position
-------------------------------         ----------        ---------------------------------------------------------

<S>                                         <C>           <C>
Lee Wagstaff...................             61            Vice President, Chief Financial Officer and Treasurer of
                                                             the Company and the Bank
Valerie Kaminski...............             63            Vice President and Secretary of the Company and the
                                                             Bank
Richard Wagner.................             61            Vice President of the Company and Vice President and
                                                             Mortgage Lending Officer of the Bank
Patrick Paolella...............             58            Vice President of the Company and Vice President
                                                             and Human Resource Officer of the Bank
</TABLE>

     Lee Wagstaff, a certified public accountant, has been Vice President,
Treasurer and Chief Financial Officer of the Company and the Bank since 1999 and
1984, respectively. Mr. Wagstaff is a member of the Bank's Asset/Liability
Committee. Prior to joining the Bank, Mr. Wagstaff was a senior staff accountant
for Stephen P. Radics & Co., in Haledon, New Jersey.

     Valerie Kaminski has been Vice President and Secretary of the Company and
the Bank since 1999 and 1984, respectively. Ms. Kaminski has been employed by
the Bank since 1956. From 1956 to 1984, Ms. Kaminski held various positions with
the Bank.

     Richard Wagner has been Vice President of the Company and the Bank since
April 2001. Mr. Wagner most recently was a Loan Acquisition Analyst with GE
Capital Mortgage Services, Inc. Prior to that, he has spent over 20 years as a
loan officer in the lending industry. Mr. Wagner also was on the accounting
staff of Stephen P. Radics Co., Haledon, New Jersey. He serves on the Bank's
Credit Committee.

     Patrick Paolella has been Vice President of the Company since July 1999 and
Vice President and Human Resource Officer of the Bank since 1997. Prior to
becoming Vice President and Human Resource Officer, Mr. Paolella served as a
Consultant to the Banking Industry and served as President of a financial
savings institution.

                                       31

<PAGE>



Item 2.  Description of Property
--------------------------------

         The Bank currently conducts its business through an administrative and
full service branch office located in Springfield, New Jersey and five other
full service branch offices located in Bayville, Irvington, Milltown, Spotswood
and Toms River, New Jersey. The Bank also maintains a loan origination and
service center.
<TABLE>
<CAPTION>


                                                      Original                                    Net Book Value
                                                        Year                                      of Property or
                                     Leased            Leased                Date of                Leasehold
                                       or                or                   Lease              Improvements at
            Location                 Owned            Acquired             Expiration           December 31, 2001
--------------------------------  ------------    -----------------   ---------------------    --------------------
                                                    (In thousands)
<S>                                 <C>                        <C>           <C>                         <C>
Administrative/Corporate/
Branch Office:

130 Mountain Avenue                  Owned                     1990            --                        $1,892
Springfield, NJ  07081

Branch Offices:

860 18th Avenue                      Owned                     1951            --                            65
Irvington, NJ  07111

520 Main Street                      Owned                     1979            --                           314
Spotswood, NJ  08884

827 Fischer Boulevard                Owned                     1980            --                           837
Toms River, NJ  08753

Route 9 and                          Leased                    1999         07/31/11                         45
Oceangate Drive
Bayville, NJ  08721

270 Ryders Lane                      Leased                    1999         05/31/11                         18
Milltown, NJ  08850

Loan Origination and Service
Center:

140 Mountain Avenue                  Leased                    2001         04/30/06                          5
Springfield, NJ  07081
</TABLE>


         The Bank plans to open a branch office in Old Bridge, New Jersey,
during the second quarter of 2002. The total amount spent and capitalized
totalled $407,000 at December 31, 2001.

                                       32

<PAGE>



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

         The Bank 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 or the Bank's financial condition or results of
operations.

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

         None.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

         The information contained under the section captioned "Market For
Common Stock and Related Stockholder Matters" in the 2001 Annual Report to
Stockholders is incorporated herein by reference. At December 31, 2001,
1,920,845 shares of the Company's outstanding common stock were held of record
by approximately 245 persons or entities, not including the number of persons or
entities holding stock in nominee or stock name through various brokers or
banks.

Item 6.  Management's Discussion and Analysis or Plan of Operation
------------------------------------------------------------------

         The above-captioned information appears under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Company's
2001 Annual Report to Stockholders and is incorporated herein by reference.

Item 7.  Financial Statements
-----------------------------

         The Company's consolidated financial statements listed in Item 13
herein, together with the report thereon by Radics & Co., LLC, are found in the
2001 Annual Report to Stockholders and are incorporated herein by reference.

Item 8. Changes in and Disagreements with Accountants on Accounting and
     Financial Disclosure
-----------------------------------------------------------------------

         None.



                                       33

<PAGE>



                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
--------------------------------------------------------------------------------
     with Section 16(a) of the Exchange Act
--------------------------------------------------------------------------------

     The information relating to Directors and Executive Officers of the Company
is incorporated herein by reference to the Company's Proxy Statement for the
2002 Annual Meeting of Stockholders, sections "Additional Information Regarding
Annual Meeting - Election of Directors and Section 16(a) Beneficial Ownership
Reporting Compliance."

Item 10. Executive Compensation
-------------------------------

     The information relating to directors' compensation and executives'
compensation is incorporated herein by reference to the Company's Proxy
Statement for the 2002 Annual Meeting of Stockholders, sections "Additional
Information Regarding Annual Meeting - Directors' Compensation and Executive
Compensation."

Item 11.  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 Company's Proxy
Statement for the 2002 Annual Meeting of Stockholders, section "Additional
Information Regarding Annual Meeting - Stock Ownership."

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

     The information relating to certain relationships and related transactions
is incorporated herein by reference to the Company's Proxy Statement for the
2002 Annual Meeting of Stockholders, section "Additional Information Regarding
Annual Meeting - Transactions With Certain Related Persons."

Item 13.  Exhibits and Reports on Form 8-K
------------------------------------------

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

      Exhibit
      Number      Description
--------------------------------------------------------------------------------
     (a)  (1) The following are filed as a part of this report by means of
             incorporation to the Company's 2001 Annual Report to Stockholders:

                    o    Report of Independent Auditors

                    o    Consolidated Statements of Financial Condition as of
                         December 31, 2001 and December 31, 2000

                    o    Consolidated Statements of Comprehensive Income for the
                         Years Ended December 31, 2001 and December 31, 2000

                    o    Consolidated Statements of Changes in Stockholders'
                         Equity for the Years Ended December 31, 2001 and
                         December 31, 2000


                                       34

<PAGE>



                    o    Consolidated Statements of Cash Flows for the Years
                         Ended December 31, 2001 and December 31, 2000

                    o    Notes to Consolidated Financial Statements

               (2)  All financial statement 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.

               (3)  Exhibits

                    2.0  Agreement and Plan of Merger By and Between Kearny
                         Federal Savings Bank and Kearny Financial Corp. and
                         Kearny MHC and Pulaski Savings Bank and Pulaski
                         Bancorp, Inc. and Pulaski Bancorp, M.H.C., dated as of
                         January 10, 2002.***

                    3.1  Charter of Pulaski Bancorp, Inc.*

                    3.2  Amended Bylaws of Pulaski Bancorp, Inc.**

                    4.0  Form of Common Stock Certificate*

                    10.1 Employment Agreement by and between Pulaski Bancorp,
                         M.H.C., Pulaski Savings Bank and Lee Wagstaff*

                    10.2 Change in Control Agreement by and between Pulaski
                         Bancorp, M.H.C., Pulaski Savings Bank and Valerie
                         Kaminski*

                    10.3 Amended and Restated Pulaski Bancorp, Inc. 1997
                         Stock-Based Incentive Plan*

                    10.4 Pulaski Savings Bank Employee Stock Ownership Plan
                         Trust Agreement*

                    10.5 Employment Agreement by and between Pulaski Bancorp,
                         Inc., Pulaski Savings Bank and John T. Robertson**

                    10.6 Change in Control Agreement by and between Pulaski
                         Savings Bank, Pulaski Bancorp, Inc. and Patrick
                         Paolella

                    11.0 Computation of Earnings Per Share

                    13.0 Portions of the 2001 Annual Report to Stockholders

                    21.0 Subsidiary information is incorporated herein by
                         reference to "Part I - Business - Subsidiary
                         Activities"

                    23.0 Consent of Radics & Co., LLC


                    --------------------------
                    *    Incorporated herein by reference into this document
                         from the Exhibits to the Current Report on Form 8-K,
                         filed July 12, 1999.

                    **   Incorporated herein by reference into this document
                         from the Exhibits to the Annual Report on Form 10-KSB,
                         filed March 30, 2001.

                    ***  Incorporated herein by reference into this document
                         from the Exhibits to the Current Report on Form 8-K,
                         filed January 14, 2002.

(b)  Reports on Form 8-K.

         None.


                                       35

<PAGE>





                                   SIGNATURES

        In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: February 28, 2002   PULASKI BANCORP, INC.

                          /s/ John T. Robertson
                          -------------------------------------------------
                          John T. Robertson
                          President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.
<TABLE>
<CAPTION>

Signature                                          Title                                     Date

<S>                                                <C>                                      <C>
/s/ John T. Robertson                              President, Chief Executive                February 28, 2002
--------------------------------------
John T. Robertson                                  Officer and Director
                                                  (principal executive officer)

/s/ Edward J. Mizerski                             Chairman of the Board                     February 28, 2002
------------------------------------
Edward J. Mizerski

/s/ Peter C. Pietrucha                             Vice Chairman of the Board                February 28, 2002
------------------------------------
Peter C. Pietrucha

/s/ Eugene J. Bogucki, M.D.                        Director                                  February 28, 2002
------------------------------------
Eugene J. Bogucki, M.D.

/s/ Anthony C. Majeski                             Director                                  February 28, 2002
--------------------------------------
Anthony C. Majeski

/s/ Walter F. Rusak                                Director                                  February 28, 2002
----------------------------------------
Walter F. Rusak

/s/ Thomas Bentkowski                              Director                                  February 28, 2002
------------------------------------
Thomas Bentkowski

/s/ Lee Wagstaff                                   Vice President, Chief Financial           February 28, 2002
------------------------------------
Lee Wagstaff                                       Officer and Treasurer
                                                   (principal financial and
                                                   accounting officer)


</TABLE>




                                       36