SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-KSB

                   Annual Report Pursuant to Section 13 of the
                   Securities Exchange Act of 1934, as amended

                   For the fiscal year ended December 31, 2000

                          Commission File No.: 0-26681


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

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


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


       Registrant's telephone number, including area code: (973) 564-9000
        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

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

        Indicate by check mark whether the  registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes[ X ]  No [  ].

        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of 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,
2000 were $18,588,000.

        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 15, 2001,
as quoted on the Nasdaq SmallCap Market,  was approximately  $8,320,000.  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 15, 2001
was: 1,920,845.

                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the 2000 Annual Report to  Stockholders  and the  definitive
Proxy Statement for the 2001 Annual Meeting of Stockholders  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

<TABLE>
<CAPTION>

PART I                                                                               PAGE
                                                                                     ----

<S>                  <C>                                                               <C>
         Item 1.     Description of Business........................................     1

         Additional Item.  Executive Officers of the Registrant.....................    32

         Item 2.     Properties.....................................................    33

         Item 3.     Legal Proceedings..............................................    34

         Item 4.     Submission of Matters to a Vote of Security Holders............    34


PART II

         Item 5.     Market for Common Equity and Related Stockholders
                     Matters........................................................    34

         Item 6.     Management's Discussion and Analysis of Financial
                     Condition and Results of Operations............................    34

         Item 7.     Financial Statements...........................................    34

         Item 8.     Changes in and Disagreements With Accountants
                     on Accounting and Financial Disclosure.........................    34

PART III

         Item 9.     Directors, Executive Officers Promoters and Control Persons;
                     Compliance with Section 16(a) of the Exchange Act..............    35

         Item 10.    Executive Compensation.........................................    35

         Item 11.    Security Ownership of Certain Beneficial Owners
                     and Management.................................................    35

         Item 12.    Certain Relationships and Related Transactions.................    35

         Item 13.    Exhibits, Financial Statement Schedules and Reports
                     on Form 8-K....................................................    35

SIGNATURES

</TABLE>

<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  ("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, 2000, the Company had total
assets  of  $244.5   million,   total  deposits  of  $189.3  million  and  total
stockholders' equity of $24.4 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.


                                        1

<PAGE>

         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.

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,
                                  -------------------------------------------------------------------------------------------------
                                       2000               1999                 1998                  1997                 1996
                                  -----------------   -----------------    ----------------    -----------------    ---------------
                                           Percent             Percent             Percent              Percent             Percent
                                  Amount   of Total   Amount   of Total    Amount  of Total    Amount   of Total    Amount  of Total
                                  ------   --------   ------   --------    ------  --------    ------   --------    ------  --------
                                                                     (Dollars in thousands)
<S>                                <C>       <C>     <C>          <C>     <C>        <C>     <C>          <C>     <C>         <C>
Mortgage Loans:
  Residential:
    One- to four-family.........   $98,267   57.01%  $100,110     64.09%  $ 78,110   67.40%  $  84,006    74.93%  $  87,506   85.03%
    Multi-family................     2,960    1.72      2,501      1.60      2,903    2.51       2,726     2.43       2,510    2.44
    Second mortgage.............     7,718    4.48      6,576      4.21      4,831    4.17       3,798     3.39       3,164    3.07
    Home equity lines...........     3,958    2.30      3,028      1.94      2,168    1.87       1,275     1.14       1,865    1.81
  Commercial real estate........    15,205    8.82      6,968      4.46      3,689    3.18       3,811     3.40         991    0.96
  Construction and development..    44,000   25.53     36,901     23.62     23,898   20.62      16,408    14.63       6,757    6,57
                                   -------  ------   --------    ------   --------  ------   ---------   ------   ---------  ------
      Total mortgage loans......   172,108   99.86    156,084     99.92    115,599   99.75     112,024    99.92     102,793   99.88
                                   -------  ------   --------    ------   --------  ------   ---------   ------   ---------  ------
Consumer Loans:
    Passbook or account.........       198    0.11        127      0.08        286    0.25          91     0.08         124    0.12
      Cash reserve..............         2      --         --        --         --      --          --       --          --      --
      Automobile................        44    0.03         --        --         --      --          --       --          --      --
                                   -------  ------   --------    ------   --------  ------   ---------   ------   ---------  ------
      Total consumer loans......       244    0.14        127      0.08        286    0.25          91     0.08         124    0.12
                                   -------  ------   --------    ------   --------  ------   ---------   ------   ---------  ------
  Total loans receivable........   172,352  100.00%   156,211    100.00%   115,885  100.00%    112,115   100.00%    102,917  100.00%
                                            ======               ======             ======               ======              ======
  Less:
    Allowance for loan losses...     1,194              1,135                1,022                 913                  844
    Loans in process............    18,129             19,760               13,143               7,823                4,599
    Deferred loan fees..........       742                794                  826               1,167                1,216
                                  --------           --------             --------            --------            ---------
  Loans receivable, net.........  $152,287           $134,522             $100,894            $102,212            $  96,258
                                  ========           ========             ========            ========            =========

</TABLE>


                                        3

<PAGE>



         Loan  Maturity.  The following  table shows the  remaining  contractual
maturity of the Bank's loans at December  31,  2000.  The table does not include
the effect of future principal prepayments.
<TABLE>
<CAPTION>


                                                                               At December 31, 2000
                                             ---------------------------------------------------------------------------------------
                                               One- to                                                 Construction
                                               Four-       Multi-    Second       Equity   Commercial     and                 Total
                                               Family      Family    Mortgages    Lines    Real Estate Development Consumer   Loans
                                               ------      ------    ---------    -----    ----------- ----------- -------    -----
                                                                               (In thousands)
<S>                                          <C>         <C>        <C>        <C>         <C>         <C>        <C>       <C>
Amounts due:
    One year or less........................   $   120    $    --   $     33   $      21      $    --   $37,304    $  199   $ 37,677
                                               -------    -------   ---------   ---------   ---------   -------    ------   --------

    After one year:
       More than one year to three years....     1,214         --        559         156           --     6,696        23      8,648
       More than three years to five years..       896         --        582          72           --        --        22      1,572
       More than five years to 10 years.....    11,658        216      3,190          64        5,306        --        --     20,434
       More than 10 years to 20 years.......    18,981        451      3,354          --        2,615        --        --     25,401
       More than 20 years...................    65,398      2,293        --        3,645        7,284        --        --     78,620
                                                ------      -----  ---------     -------      -------   -------     ------  --------

    Total due after one year................    98,147      2,960      7,685       3,937       15,205     6,696        45    134,675
                                              --------   --------   --------     -------      -------   -------     -----   --------

    Total due...............................   $98,267    $ 2,960    $ 7,718     $ 3,958      $15,205   $44,000    $  244    172,352
                                               =======    =======    =======     =======      =======   =======    ======
          Less:
              Loans in process..............                                                                                  18,129
              Deferred loan fees............                                                                                     742
              Allowance for loan losses.....                                                                                   1,194
                                                                                                                            --------

       Loans receivable, net................                                                                                $152,287
                                                                                                                            ========

</TABLE>

                                        4

<PAGE>

         The following  table sets forth at December 31, 2000, the dollar amount
of all loans  contractually  due after December 31, 2001, and whether such loans
have fixed or adjustable interest rates.

<TABLE>
<CAPTION>

                                                 Due after December 31, 2001
                                            ------------------------------------
                                             Fixed       Adjustable        Total
                                             -----       ----------        -----
                                                       (In thousands)
<S>                                         <C>           <C>           <C>
Mortgage loans:
   One- to four-family ...............      $ 84,087      $ 14,060      $ 98,147
   Multi-family ......................         1,356         1,604         2,960
   Second mortgages ..................         7,685            --         7,685
   Equity lines ......................            --         3,937         3,937
   Commercial real estate ............         3,885        11,320        15,205
   Construction and development ......            --         6,696         6,696
                                            --------      --------      --------
     Total mortgage loans ............        97,013        37,617       134,630
Consumer loans .......................            45            --            45
                                            --------      --------      --------
       Total loans ...................      $ 97,058      $ 37,617      $134,675
                                            ========      ========      ========

</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.  Although  the Bank is not an  approved  FNMA or FHLMC  lender,  the
Bank's  internal  underwriting  policies,  guidelines and procedures are modeled
after those of FNMA and FHLMC.  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, 2000,  the Bank  purchased  or acquired new  participations  in the
amount  of $6.6  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,
                                              ----------------------------------
                                               2000          1999         1998
                                              --------     --------     --------
                                                         (In thousands)
<S>                                           <C>          <C>          <C>
Beginning balance .......................     $156,211     $115,885     $112,115
   Loans originated(1):
    Mortgage loans:
       One- to four-family ..............        8,951       32,332       10,647
       Multi-family .....................        3,269          373          216
       Second mortgages .................        2,387        2,834        2,207
       Equity lines .....................        3,794        2,835        3,300
       Commercial real estate ...........        9,199        4,093          625
       Construction and development .....       26,101       19,328       15,078
                                              --------     --------     --------
           Total mortgage loans .........       53,701       61,795       32,073
    Consumer loans ......................           82           78          360
                                              --------     --------     --------
    Total loans originated ..............       53,783       61,873       32,433
                                              --------     --------     --------
           Total ........................      209,994      177,758      144,548

Less:
    Principal repayments and other, net .       37,588       21,514       28,535
    Transfer of mortgage loans to REO ...           54           33          128
                                              --------     --------     --------
Ending balance ..........................     $172,352     $156,211     $115,885
                                              ========     ========     ========
</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,  $109.9  million,  or 63.7%,  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 10 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.


                                        6

<PAGE>

         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 appraised
value or selling  price if private  mortgage  insurance  is  obtained,  with the
exception of certain loans  secured by  condominium  units (which  require a 65%
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%;  however,  with  respect  to loans  secured  by
condominium  units, the Bank will allow a combined LTV ratio of only 65%. 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

                                        7

<PAGE>
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  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, 2000 was $3.7
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 or the U.S.  Treasury  Bill.  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, 2000 was a $3.0  million  loan on an
office building located in Brick, 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 development loan at December 31,
2000 was a performing loan with a gross loan amount and carrying balance of $3.6
million secured by an 18 unit residential  development  tract located in Chester
Township, Morris County, 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

                                        8

<PAGE>
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.

         Consumer  Lending.  Consumer  loans at December  31, 2000  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 real estate owned.

         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

                                        9

<PAGE>



insured  institution to sufficient risk to warrant  classification in one of the
aforementioned  categories but possess  weaknesses are required to be designated
"Special Mention."

         When an insured institution  classifies one or more assets, or portions
thereof,  as  Substandard  or  Doubtful,  it is required to  establish a general
valuation  allowance for loan losses in an amount deemed  prudent by management.
General  valuation   allowances   represent  loss  allowances  which  have  been
established to recognize the inherent risk associated  with lending  activities,
but which,  unlike  specific  allowances,  have not been allocated to particular
problem assets.  When an insured  institution  classifies one or more assets, or
portions  thereof,  as "Loss," it is  required  either to  establish  a specific
allowance  for losses equal to 100% of the amount of the asset so  classified or
to charge off such amount.

         A savings  institution's  determination as to the classification of its
assets and the amount of its  valuation  allowances  is subject to review by the
OTS which can order the  establishment  of  additional  general or specific loss
allowances. The OTS, in conjunction with the other federal banking agencies, has
adopted an  interagency  policy  statement on the  allowance  for loan and lease
losses.  The policy statement  provides  guidance for financial  institutions on
both the  responsibilities of management for the assessment and establishment of
adequate  allowances  and  guidance  for  banking  agency  examiners  to  use in
determining the adequacy of general valuation guidelines.  Generally, the policy
statement  recommends that  institutions  have effective systems and controls to
identify,  monitor and address  asset  quality  problems;  that  management  has
analyzed all significant factors that affect the collectibility of the portfolio
in a reasonable manner; and that management has established acceptable allowance
evaluation processes that meet the objectives set forth in the policy statement.
Although management  believes that, based on information  currently available to
it at this time,  its allowance  for loan losses is adequate,  actual losses are
dependent  upon future  events and, as such,  further  additions to the level of
allowances for loan losses may become necessary.

         The 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,  2000,  the Bank had  $356,000 of assets  designated  as
Substandard, and no assets designated as Doubtful or Loss. At December 31, 2000,
the largest loan  designated as Substandard  had a carrying  balance of $216,000
and was secured by a one-to-four-family property.

                                       10

<PAGE>



         At December 31, 2000, 1999 and 1998,  delinquencies  in the Bank's loan
portfolio were as follows:

<TABLE>
<CAPTION>

                                               At December 31, 2000                       At December 31, 1999
                                   ------------------------------------------  ----------------------------------------
                                        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..........          3       $150         3      $309         2      $138         8       $676
   Construction and development.         --         --         1       247        --        --        --         --
                                        ---       -----      ---      ----       ---      ----       ---       ----

     Total loans................          3       $150         4      $556         2      $138         8       $676
                                        ===       ====       ===      ====       ===      ====       ===       ====
Delinquent loans to total
    loans.......................                  0.09%               0.32%               0.09%                0.43%
                                                  ====                ====                ====                 ====
<CAPTION>
                                               At December 31, 1998
                                   -------------------------------------------
                                         60-89 Days          90 Days or More
                                    --------------------   --------------------
                                    Number     Principal   Number    Principal
                                    of Loans   Balance     of Loans   Balance
                                    --------   -------     --------   -------
 <S>                                      <C>      <C>         <C>      <C>
Loans:
   One- to four-family..........          3       $199         9       $930
   Construction and development.         --        --         --         --
                                        ---       ----       ---       ----
     Total loans................          3       $199         9       $930
                                        ===       ====       ===       ====
Delinquent loans to total
    loans.......................                  0.17%                0.80%
                                                  ====                 ====

</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, 2000.  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,  2000,  1999 and 1998,  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 $7,000, $51,000 and $54,000, respectively.

<TABLE>
<CAPTION>
                                                                   At December 31,
                                            --------------------------------------------------------------
                                             2000          1999          1998          1997          1996
                                             ----          ----          ----          ----          ----
                                                                    (Dollars in thousands)
<S>                                          <C>          <C>         <C>             <C>          <C>
Non-accrual loans:
  Mortgage loans:
    One- to four-family .............        $   309      $   676      $     930      $   891      $1,169
    Construction and development ....             --           --             --           --         159
    Other loans .....................             --           --             --           --          --
                                             -------      -------      ---------      -------      ------
      Total mortgage loans ..........            309          676            930          891       1,328
    Real estate owned, net(1) .......             --           50            131           69         145
                                             -------      -------      ---------      -------      ------
    Total non-performing assets .....        $   309      $   726      $   1,061      $   960      $1,473
                                             =======      =======      =========      =======      ======
Allowance for loan losses as a
  percent of total loans ............           0.69%        0.73%          0.88%        0.81%       0.82%
Allowance for loan losses as a
  percent of non-performing loans(2).         386.41%      167.90%        109.89%      102.47%      63.55%
Non-performing loans as a
  percent of total loans(2) .........           0.18%        0.43%          0.80%        0.79%       1.29%
Non-performing assets as
  a percent of total assets(3).......           0.12%        0.31%          0.53%        0.53%       0.92%
</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,  2000,  1999 and  1998,  total  impaired  loans  were
$506,000,  $460,000 and $782,000,  respectively,  and the related  allowance for
loan losses amounted to $26,000, $41,000 and $54,000, 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 2000,
1999 and 1998,  the  average  recorded  value of  impaired  loans was  $516,000,
$465,000  and  $596,000,  respectively.  For these  loans  $60,000,  $28,000 and
$42,000 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, 2000, and 1999, the Bank's allowance for loan
losses was 0.69% and 0.73%,  respectively,  of total loans receivable.  The Bank
had non-accrual

                                       12

<PAGE>
loans of $309,000 at December  31, 2000.  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,
                                    -----------------------------------------------------
                                     2000        1999       1998        1997        1996
                                    ------      ------     ------      ------      ------
                                                       (In thousands)
<S>                                 <C>         <C>        <C>         <C>         <C>
Balance at beginning of period      $1,135      $1,022     $  913      $  844      $  846
Provision for loan losses .....         91         113        114         168         107
Charge-offs:
  Mortgage loans:
   One -to-four-family ........         32          --          5         125         114
   Other loans ................         --          --         --          --          --
                                    ------      ------     ------      ------      ------
   Total charge-offs ..........         32          --          5         125         114
Recoveries ....................         --          --         --          26           5
                                    ------      ------     ------      ------      ------
Balance at end of period ......     $1,194      $1,135     $1,022      $  913      $  844
                                    ======      ======     ======      ======      ======
Ratio of net charge-offs during
  the period to average loans
  outstanding during the
  period ......................       0.01%         --       0.01%       0.13%       0.12%

</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,
                          ----------------------------------------------------------------------------------------------------------
                                        2000                                 1999                                1998
                          ---------------------------------    ----------------------------------  ---------------------------------
                                                   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) .     $  403         33.75%      65.51%     $  602        53.04%      71.84%     $  553       54.11%    75.95%
    Commercial real
       estate .......        235         19.68        8.82          93         8.19        4.46         108       10.57      3.18
    Construction and
       Development ..        556         46.57       25.53         440        38.77       23.62         361       35.32     20.62
                          ------        ------      ------      ------       ------      ------      ------      ------    ------
         Total ......      1,194        100.00%      99.86%      1,135       100.00       99.92       1,022      100.00     99.75
Consumer ............         --            --        0.14          --          --         0.08          --          --      0.25
                          ------        ------      ------      ------       ------      ------      ------      ------    ------
    Total allowance
      for loan losses     $1,194        100.00%     100.00%     $1,135       100.00%     100.00%     $1,022      100.00%   100.00%
                          ======        ======      ======      ======       ======      ======      ======      ======    ======

<CAPTION>
                                              At December 31,
                           --------------------------------------------------------------
                                     1997                         1996
                           -----------------------------  -------------------------------
                                                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
                           ------  ---------     -----     ------  ---------      -----

<S>                         <C>       <C>        <C>       <C>       <C>          <C>
Mortgages:
    Residential (1)...       $421      46.11%     81.89%    $656      77.73%       92.35%
    Commercial real
       estate.........        153      16.76       3.40       59       6.99         0.96
    Construction and
       Development ...        339      37.13      14.63      129      15.28         6.57
                            ----      ------     ------     ----     ------       ------
         Total........        913     100.00      99.92      844     100.00        99.88

Consumer..............         --         --       0.08       --         --         0.12
                             ----     ------     ------     ----     ------       ------
    Total allowance
      for loan losses.       $913     100.00%    100.00%    $844     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, 2000,  the Bank had no real estate
owned.  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, 2000 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,
                                               --------------------------------------------------------------------
                                                       2000                    1999                    1998
                                               --------------------   --------------------     -------------------
                                               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      $ 6,000    $  5,995
    Other.................................          948         910         947        927          946         945
Federal Home Loan Bank stock(2)...........        2,350       2,350       2,100      2,100        1,446       1,446
Available for sale(3):
   Equity securities......................        6,378       6,327       5,988      5,906        5,678       5,642
                                                -------     -------     ------     -------      -------     -------
     Total investment securities..........      $15,676     $15,532     $15,035    $14,702      $14,070     $14,028
                                                =======     =======     =======    =======      =======     =======
</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,
                              ----------------------------------------------------------------------------------------------
                                          2000                               1999                           1998
                              ----------------------------   -------------------------------  ------------------------------
                                         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.....................   $12,088      19.94%   $12,136     $14,272      19.99%   $14,022    $10,427     18.71%   $10,597
  FNMA.....................    15,042      24.82     15,002      20,034      28.06     19,646     29,874     53.61     30,013
  FHLMC....................    33,090      54.59     33,102      36,686      51.38     36,477     14,894     26.72     14,960
  SBA......................       394       0.65        391         407       0.57        402        533      0.96        531
                              -------     ------    -------     -------     ------    -------    -------    ------    -------

    Total mortgage-backed
      securities...........   $60,614     100.00%   $60,631     $71,399     100.00%   $70,547    $55,728    100.00%   $56,101
                              =======     ======    =======     =======     ======    =======    =======    ======    =======


By Coupon Type:
  Adjustable-rate..........   $53,451      88.18%   $53,514     $62,371      87.36%   $62,004    $48,481     87.00%   $48,804
  Fixed-rate...............     7,163      11.82      7,117       9,028      12.64      8,543      7,247     13.00      7,297
                              -------     ------    -------     -------     ------    -------    -------    ------    -------

    Total mortgage-backed
      securities...........   $60,614     100.00%   $60,631     $71,399     100.00%   $70,547    $55,728    100.00%   $56,101
                              =======     ======    =======     =======     ======    =======    =======    ======    =======

</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,
                                                    ------------------------------------
                                                      2000           1999         1998
                                                    --------      --------      --------
                                                            (Dollars in thousands)
<S>                                                 <C>           <C>           <C>
Beginning balance .............................     $ 71,399      $ 55,728      $ 50,856
    Purchases .................................         --          37,149        31,676
    Principal repayments ......................      (10,743)      (21,368)      (26,666)
    Net amortization and accretion of discounts
       (premiums) .............................          (42)         (110)         (138)
                                                    --------      --------      --------
Ending balance ................................     $ 60,614      $ 71,399      $ 55,728
                                                    ========      ========      ========

</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, 2000. 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, 2000
                                             ---------------------------------------------------------------------
                                                                         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.......   $ --            -- %    $1,000        6.00%    $5,000        6.32%
  Other....................................     --            --          --          --         --          --
                                               ----                   ------                  ------
       Total...............................   $ --            --      $1,000        6.00     $5,000        6.32
                                              =====                   ======                 ======
Mortgage-backed securities held to maturity:
  Adjustable-rate:
    GNMA...................................   $  --           --      $   --          --     $   --          --
    FHLMC..................................      --           --          --          --         --          --
    FNMA...................................      --           --          --          --         --          --
    SBA....................................      --           --          --          --         --          --
                                               ----                   ------                 ------
       Total...............................      --           --          --          --         --          --
                                               ----                   ------                 ------
  Fixed-rate:
    GNMA...................................       5         9.50          --          --         --          --
    FHLMC..................................      --           --          --          --         --          --
    FNMA...................................      --           --          --          --         --          --
                                               ----                   ------                 ------
       Total...............................       5         9.50          --          --         --          --
                                               ----                   ------                 ------
Total mortgage-backed securities held to
  maturity.................................   $   5        9.50%      $   --          --     $   --          --
                                              =====                   ======                 ======
<CAPTION>
                                                          At December 31, 2000
                                              -------------------------------------------
                                              More than Ten Years            Total
                                              -----------------------  -------------------
                                                             Weighted             Weighted
                                               Carrying      Average   Carrying    Average
                                                Value         Yield     Value       Yield
                                               --------      -------   --------    -------
<S>                                           <C>             <C>      <C>             <C>
Investment securities held to maturity:
  U.S. Government agency obligations.......   $      --          --%   $  6,000        6.26%
  Other....................................         948        7.66         948        7.66
                                              ---------                 -------
       Total...............................   $     948        7.66    $  6,948        6.45
                                              =========                ========
Mortgage-backed securities held to maturity:
  Adjustable-rate:
    GNMA...................................   $   8,647        6.62    $  8,647        6.62
    FHLMC..................................      33,061        7.65      33,061        7.65
    FNMA...................................      11,349        7.44      11,349        7.44
    SBA....................................         394        7.50         394        7.50
                                              ---------                  ------
       Total...............................      53,451        7.44      53,451        7.44
                                              ---------                --------
  Fixed-rate:
    GNMA...................................       3,436        6.85       3,441        6.85
    FHLMC..................................          29       10.00          29       10.00
    FNMA...................................       3,693        6.23       3,693        6.23
                                              ---------                 -------
       Total...............................       7,158        6.54       7,163        6.54
                                              ---------                 -------
Total mortgage-backed securities held to
  maturity.................................   $  60,609        7.33%    $60,614        7.33%
                                              =========                 =======

</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, 2000, average
core deposits represented 31.8% 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, 2000,  certificates of deposit  comprised  70.00% 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,
                            --------------------------------------------------------------------------------------------------
                                        2000                             1999                            1998
                            -----------------------------   ------------------------------  ----------------------------------
                                       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...........  $  25,654     14.49%     3.22%  $  20,509      12.04%      3.15%  $ 13,372      8.30%       2.47%
Money market savings......      2,766      1.56      2.94       3,029       1.78       2.71      3,352      2.08        2.76
Regular savings...........     27,956     15.78      2.34      26,432      15.52       2.29     25,942     16.11        2.43
Certificates of deposit...    120,749     68.17      5.56     120,312      70.66       5.10    118,406     73.51        5.51
                              -------     -----             ---------    -------              --------     -----
         Total............   $177,125    100.00%     4.58%  $ 170,282     100.00%      4.39%  $161,072    100.00%       4.66%
                             ========    =======            =========     ======              ========    ======

<CAPTION>

                                                                     At December 31,
                             --------------------------------------------------------------------------------------------------
                                        2000                             1999                                1998
                            -------------------------------  ---------------------------------   ------------------------------
                                       Percent                          Percent                             Percent
                                       of Total                         of Total                            of Total
                                       Balance    Weighted              Balance       Weighted              Balance    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.......   $120,011     90.56%     5.99   $  97,446      84.78%      4.97%   $ 99,669     79.96%       5.31%
One to three years........     11,374      8.58      5.76      15,236      13.25       5.45      22,161     17.78        5.49
Three years and over......      1,141      0.86      5.62       2,265       1.97       5.44       2,812      2.26        5.71
                            ---------    ------             ---------     ------               -------     -------
     Total certificate
       accounts...........   $132,526    100.00%     5.97%  $ 114,947     100.00%      5.04%   $124,642    100.00%       5.35%
                             ========    =======            =========     ======               ========    ======
</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,
                                               --------------------------------------
                                                2000           1999            1998
                                               ---------     ---------     ----------
                                                           (In thousands)
<S>                                            <C>           <C>            <C>
Beginning balance ........................     $ 169,008     $ 174,808      $ 153,227
                                               ---------     ---------      ---------
   Net (withdrawals) deposits ............        12,204        (7,603)        14,494
   Sale of deposits ......................            --        (5,668)            --
   Interest credited to accounts .........         8,121         7,471          7,087
                                               ---------     ---------      ---------
   Increase (decrease) in deposit accounts        20,325        (5,800)        21,581
                                               ---------     ---------      ---------
Ending balance ...........................     $ 189,333     $ 169,008      $ 174,808
                                               =========     =========      =========

</TABLE>

                                       20

<PAGE>

         The  following  table  presents  by various  categories,  the amount of
certificate  accounts  outstanding at December 31, 2000, 1999, and 1998, and the
time to maturity of the certificate accounts outstanding at December 31, 2000.

<TABLE>
<CAPTION>



                                       Period to Maturity from December 31, 2000                        At December 31,
                            ---------------------------------------------------------------    --------------------------------
                            Due Within     One to       Two to       Three to     Four to
                            One Year     Two years    Three years    Four years  Five years    2000          1999         1998
                            --------     ---------    -----------    ----------  ----------    ----          ----         ----
                                                                        (In thousands)
<S>                          <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
Certificate accounts:
Less than 4.00% .........    $     --     $     --     $     --    $     --      $     --     $     --     $     --     $     --
4.01 to 5.00% ...........      23,518          129          105          440           --       24,192       71,589       22,814
5.01 to 6.00% ...........      20,905        5,003        1,503          155          113       27,678       41,574       99,558
6.01 to 7.00% ...........      74,255        3,761          874          433           --       79,323        1,284        1,584
Over 7.00% ..............          --           --           --           --           --           --           --           --
                             --------     --------     --------     --------     --------     --------     --------     --------
                             $118,678     $  8,893     $  2,482     $  1,028     $    113      131,194      114,447      123,956
                             ========     ========     ========     ========     ========      =======      =======      =======
Accrued interest payable.                                                                        1,332          500          686
                                                                                              --------     --------     --------
   Total.................                                                                     $132,526     $114,947     $124,642
                                                                                              ========     ========     ========
</TABLE>

                                       21

<PAGE>



         At  December  31,  2000,  the Bank had  outstanding  $19.7  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.....................     $  6,993            5.87%
Over three to six months.................        7,261            6.38
Over six through 12 months...............        3,021            5.61
Over 12 months...........................        2,433            5.82
                                               -------
                                               $19,708            6.01%
                                               =======

Borrowings

         Although the Bank has not significantly utilized 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, 2000,  the Bank had
$29 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,
                                                    --------------------------------------
                                                        2000         1999         1998
                                                       -------      -------      -------
                                                            (Dollars in thousands)
<S>                                                    <C>          <C>          <C>
FHLB borrowings:
  Average balance outstanding ....................     $37,154      $15,038      $ 1,923
  Maximum amount outstanding at any
    month-end during the period ..................      39,900       42,000        5,000
  Balance outstanding at end of period ...........      29,000       42,000           --
  Weighted average interest rate
    during the period ............................       6.44%        5.47%        6.25%
  Weighted average interest rate
    at end of period .............................       6.33%        5.93%          --
ESOP loan:
  Average balance outstanding ....................     $   --      $   230      $   557
  Maximum amount outstanding at any month-end
    during the period ............................         --          455          630
  Balance outstanding at end of period ...........         --           --          455
  Weighted average interest rate
    during the period ............................         --         8.25%        8.97%
  Weighted average interest rate
    at end of period .............................         --           --         8.25%


</TABLE>


                                       22

<PAGE>
Personnel

         As of December 31, 2000, the Company had 50 full-time  employees and 17
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 institutions are
governed by the Home Owners Loan Act (the "HOLA") and, in certain respects,  the
Federal Deposit Insurance Act (the "FDI Act") and the regulations  issued by the
agencies to implement these statutes.  These laws and regulations  delineate the
nature and extent of the activities in which federal associations may engage. In
particular,  many types of lending  authority  for federal  associations,  e.g.,
commercial,  non-residential real property loans and consumer loans, are limited
to a specified percentage of the institution's capital or assets.

         Loans-to-One  Borrower.   Under  the  HOLA,  savings  institutions  are
generally  subject  to  the  national  bank  limit  on  loans-to-one   borrower.
Generally,  this limit is 15% of the Bank's unimpaired capital and surplus, plus
an additional 10% of unimpaired capital and surplus,  if such loan is secured by
readily-marketable  collateral,  which is defined to include  certain  financial
instruments and bullion.  At December 31, 2000, the Bank's  regulatory  limit on
loans-to-one borrower was $3.7 million. At December 31, 2000, the Bank's largest
aggregate  disbursed  amount of  loans-to-one  borrower was $3.6  million,  on a
construction loan.


                                       23

<PAGE>



         QTL Test. The HOLA requires  savings  institutions  to meet a qualified
thrift  lender  ("QTL")  test.  Under the QTL test,  a  savings  association  is
required to qualify as a "domestic  building and loan  association" as that term
is  defined  in 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  and related  securities) in at least nine months out of each 12
month period. A savings  association that fails the QTL test must either convert
to a bank  charter or operate  under  certain  restrictions.  As of December 31,
2000,  the Bank  maintained  91.3% of its portfolio  assets in qualified  thrift
investments and, therefore, met the QTL test.

         Limitation on Capital Distributions. OTS regulations impose limitations
upon  all  capital  distributions  by  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 OTS' 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,   compliance  with  capital   requirements  and
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, as the case with the Bank,  it is a  subsidiary  of a
savings and loan 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.

         Liquidity.  During  2000,  the Bank was required to maintain an average
daily balance of specified  liquid assets equal to a monthly average of not less
than a  specified  percentage  (currently  4%) of its net  withdrawable  deposit
accounts plus short-term borrowings.  Monetary penalties could have been imposed
for failure to meet these liquidity requirements.  The Bank's liquidity ratio at
December 31, 2000 was 22.7%,  which  exceeded the applicable  requirements.  The
Bank has never  been  subject  to  monetary  penalties  for  failure to meet its
liquidity   requirements.   Recent  legislation  has  eliminated  the  liquidity
requirement.

         Assessments.  Savings  institutions  are required by  regulation to pay
assessments to the OTS to fund the agency's operations.  The general assessment,
paid on a  semi-annual  basis,  is based upon the  savings  institution's  total
assets,  including consolidated  subsidiaries,  as reported in the Bank's latest
quarterly Thrift Financial Report. The assessments paid by the Bank for the year
ended December 31, 2000 totaled $57,000.

         Branching.   OTS  regulations   permit  federally   chartered   savings
associations to branch nationwide under certain conditions.  Generally,  federal
savings  associations  may  establish  interstate  networks  and  geographically
diversify  their  loan  portfolios  and  lines of  business.  The OTS  authority
preempts  any state law  purporting  to regulate  branching  by federal  savings
associations.

         Transactions  with Related  Parties.  The Bank's authority to engage in
transactions  with  related  parties or  "affiliates"  (i.e.,  any company  that
controls or is under common control with an  institution,  including the Company
and any non-savings institution  subsidiaries that the Company may establish) is
limited by Sections 23A and 23B of the Federal Reserve Act ("FRA").  Section 23A
restricts the

                                       24

<PAGE>



aggregate amount of covered transactions with any individual affiliate to 10% of
the capital and surplus of the savings institution and also limits the aggregate
amount of transactions  with all affiliates to 20% of the savings  institution's
capital and surplus.  Certain  transactions  with  affiliates are required to be
secured by  collateral  in an amount and of a type  described in Section 23A and
the purchase of low quality  assets from  affiliates  is  generally  prohibited.
Section 23B  generally  requires  that  certain  transactions  with  affiliates,
including loans and asset purchases,  must be on terms and under  circumstances,
including  credit  standards,  that  are  substantially  the same or at least as
favorable to the  institution  as those  prevailing  at the time for  comparable
transactions  with  non-affiliated  companies.  A  savings  association  also is
prohibited  from  extending  credit to any affiliate  engaged in activities  not
permitted for a bank holding  company and may not purchase the  securities of an
affiliate (other than a subsidiary).

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

         Enforcement.  Under  the  FDI  Act,  the OTS  has  primary  enforcement
responsibility  over savings  institutions and has the authority to bring action
against 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  or  directors,  receivership,
conservatorship  or termination of deposit  insurance.  Civil  penalties cover a
wide range of violations  and can amount to $25,000 per day, or $1.0 million per
day in especially egregious cases. Under the FDI Act, the FDIC has the authority
to recommend to the  Director of the OTS that  enforcement  action 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 and state law also  establishes  criminal  penalties for
certain violations.

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

         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  those  institutions  with  the  highest
examination ratio, 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  financial  institution  rating  system),  and,
together with the risk-based  capital  standard  itself,  a 4% Tier 1 risk-based
capital  standard.  The OTS  regulations  also  require  that,  in  meeting  the
tangible, leverage and risk-based capital

                                       25

<PAGE>



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 and the  allowance for loan and lease losses
limited to a maximum of 1.25% of risk-weighted  assets.  Overall,  the amount of
supplementary  capital  included as part of total capital  cannot exceed 100% of
core capital.

         The  capital   regulations  also  incorporate  an  interest  rate  risk
component.  Savings institutions with "above normal" interest rate risk exposure
are subject to a deduction from total capital for purposes of calculating  their
risk-based  capital  requirements.  For the present  time,  the OTS has deferred
implementation  of the interest rate risk  deduction.  At December 31, 2000, the
Bank met each of its capital requirements.

         The following  table presents the Bank's  capital  position at December
31, 2000.

<TABLE>
<CAPTION>

                                                                                           Capital
                                                                                    ---------------------
                              Actual           Required           Excess            Actual       Required
                              Capital          Capital            Amount            Percent       Percent
                              -------          -------            ------            -------       -------
                                                         (Dollars in thousands)
<S>                           <C>             <C>                <C>                  <C>           <C>
Tangible............          $23,996         $ 3,668            $ 20,328             9.81%         1.50%
Core (Leverage).....           23,996           9,781              14,215             9.81          4.00
Risk-based..........           25,164          10,935              14,229            18.41          8.00
</TABLE>

         Prompt Corrective  Regulatory  Action.  Under the OTS prompt corrective
action  regulations,  the OTS is required to take  certain  supervisory  actions
against  undercapitalized  institutions,  the severity of which depends upon the
institution's  degree of capitalization.  Generally,  a savings institution that
has a total  risk-based  capital of less than 8% or a leverage ratio or a Tier 1
capital  ratio  that is less than 4% is  considered  to be  undercapitalized.  A
savings  institution that has a total risk-based  capital less than 6%, a Tier 1
risk-based  capital ratio of less than 3% or a leverage  ratio that is less than
3%  is  considered  to  be  "significantly   undercapitalized"   and  a  savings
institution that has a tangible capital to assets ratio equal to or less than 2%
is deemed to be "critically  undercapitalized."  Subject to a narrow  exception,
the banking  regulator is required to appoint a receiver or  conservator  for an
institution  that is critically  undercapitalized.  The regulation also provides
that a capital restoration plan must be filed with the OTS within 45 days of the
date  an   association   receives   notice   that   it  is   "undercapitalized,"
"significantly  undercapitalized" or "critically  undercapitalized."  Compliance
with the plan must be guaranteed by any

                                       26

<PAGE>

parent holding company. In addition,  numerous mandatory supervisory actions may
become  immediately  applicable to the institution  depending upon its category,
including, but not limited to, increased monitoring by regulators,  restrictions
on growth, and capital distributions and limitations on 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  SAIF  member   institutions  are  determined
semiannually  by the FDIC and  currently  range from zero  basis  points for the
healthiest institutions to 27 basis points for the riskiest.

         In addition to the assessment for deposit  insurance,  institutions are
required  to make  payments on bonds  issued in the late 1980s by the  Financing
Corporation  ("FICO") to recapitalize the predecessor to the SAIF.  During 2000,
FICO  payments for both SAIF  members and Bank  Insurance  Fund ("BIF")  members
approximated  2.07  basis  points.  The year  2000 was the  first  year of equal
sharing of FICO payments between BIF and SAIF member institutions.

         The  Bank's  assessment  rate for fiscal  2000 was 2.07  basis  points.
Payments  toward the FICO bonds  amounted to $35,000.  The FDIC has authority to
increase  insurance  assessments.  A  significant  increase  in  SAIF  insurance
premiums  would  likely have an adverse  effect on the  operating  expenses  and
results of  operations of the Bank.  Management  cannot  predict what  insurance
assessment rates will be in the future.

         Insurance of deposits may be terminated by the FDIC upon a finding that
the institution has engaged in unsafe or unsound  practices,  is in an unsafe or
unsound  condition to continue  operations or has violated any  applicable  law,
regulation,  rule,  order or  condition  imposed  by the  FDIC or the  OTS.  The
management  of the Bank does not know of any  practice,  condition  or violation
that might lead to termination of deposit insurance.

         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 FHLB 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 of New York,  is  required  to
acquire and hold shares of capital stock in the FHLB in an amount at least equal
to 1% of the aggregate principal amount of its unpaid residential mortgage loans
and similar

                                       27

<PAGE>



obligations at the beginning of each year, or 1/20 of its advances  (borrowings)
from the  FHLB,  whichever  is  greater.  The Bank was in  compliance  with this
requirement  with an  investment  in FHLB  stock at  December  31,  2000 of $2.4
million.  FHLB  borrowings  must be secured by specified types of collateral and
all long-term borrowings may only be obtained for the purpose of providing funds
for residential housing finance.

         The FHLBs are required to provide funds for the resolution of insolvent
thrifts  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. For the years ended December 31, 2000, 1999 and 1998,
dividends from the FHLB to the Bank amounted to approximately $152,000, $108,000
and $105,000,  respectively.  If dividends were reduced, the Bank's net interest
income would likely also be reduced. Further, there can be no assurance that the
impact  of  recent or future  legislation  on the  FHLBs  will not also  cause a
decrease in the value of FHLB stock held by the Bank, if any.

Federal Reserve System

         The Federal Reserve Board regulations  require savings  institutions to
maintain  non-interest-earning  reserves against their transaction accounts. The
Federal Reserve Board regulations  generally require that reserves be maintained
against  aggregate  transaction  accounts as follows:  for accounts  aggregating
$42.8 million or less (subject to adjustment by the Federal  Reserve  Board) the
reserve  requirement  is 3%; and for accounts  greater than $42.8  million,  the
reserve  requirement  is $1.3  million plus 10%  (subject to  adjustment  by the
Federal  Reserve  Board  between  8% and  14%)  against  that  portion  of total
transaction  accounts  in excess of $42.8  million.  The first  $5.5  million of
otherwise  reservable  balances  (subject to adjustment  by the Federal  Reserve
Board) are exempted  from the reserve  requirements.  The Bank is in  compliance
with the foregoing requirements. Because required reserves must be maintained in
the form of either  vault  cash,  a  non-interest-bearing  account  at a Federal
Reserve Bank or a pass-through  account as defined by the Federal Reserve Board,
the effect of this reserve requirement is to reduce the Bank's  interest-earning
assets.  FHLB  System  members  are also  authorized  to borrow from the Federal
Reserve  "discount  window,"  but  Federal  Reserve  Board  regulations  require
institutions to exhaust all FHLB sources before borrowing from a Federal Reserve
Bank.

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

                                       28

<PAGE>



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.

         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.



                                       29

<PAGE>
                           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 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,

                                       30

<PAGE>



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,
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).


                                       31

<PAGE>
Additional Item.  Executive Officers of the Registrant
----------------  ------------------------------------

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

<TABLE>
<CAPTION>

                             Age at
             Name           12/31/00                                 Position
------------------------   ----------        ---------------------------------------------------------
<S>                            <C>           <C>
Lee Wagstaff............       60            Vice President, Chief Financial Officer and Treasurer of
                                                the Company and the Bank
Valerie Kaminski........       62            Vice President and Secretary of the Company and the
                                                Bank
Kevin Aylward(1)........       46            Vice President of the Company and Vice President and
                                                Mortgage Lending Officer of the Bank
Patrick Paolella........       57            Vice President of the Company and Vice President
                                                and Human Resource Officer of the Bank
</TABLE>

---------------
1    Mr.  Aylward  resigned  his  position  with the  Company and the Bank as of
     January 6, 2001.


         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.

         Kevin Aylward joined the Bank in 1990 and was the Bank's Vice President
and  Mortgage  Lending  Officer.  Mr.  Aylward  served as Vice  President of the
Company since 1999.  Mr.  Aylward was the Bank's CRA Officer and a member of the
Bank's Asset/Liability  Committee.  Prior to joining the Bank, Mr. Aylward was a
lending officer for Nassau Savings and Loan Association, Princeton, New Jersey.

         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 prior served as President of a financial
savings institution.

                                       32

<PAGE>



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

         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.  Management  believes that the Bank's facilities are
adequate to meet the present and immediately  foreseeable  needs of the Bank and
the Company.
<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, 2000
            --------                 -----            --------        ----------     -----------------
<S>                                  <C>                 <C>               <C>             <C>
Administrative/Corporate/
Branch Office:

130 Mountain Avenue                  Owned               1990                 --           $1,966
Springfield, NJ  07081

Branch Offices:

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

520 Main Street                      Owned               1979                 --              331
Spotswood, NJ  08884

827 Fischer Boulevard                Owned               1980                 --              864
Toms River, NJ  08753

Route 9 and                          Leased              1999             07/31/11             51
Oceangate Drive
Bayville, NJ  08721

270 Ryders Lane                      Leased              1999             05/31/11             21
Milltown, NJ  08850
</TABLE>

         The Bank  plans to open a branch  office  in Old  Bridge,  New  Jersey,
during the fourth quarter of 2001.

                                       33

<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 2000  Annual  Report to
Stockholders  on page 46 is  incorporated  herein by reference.  At December 31,
2000,  1,925,845 shares of the Company's  outstanding  common stock were held of
record by  approximately  284 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 of Financial Condition and Results
--------------------------------------------------------------------------------
        of Operations
        -------------

         The above-captioned  information appears under "Management's Discussion
and Analysis of Financial  Condition and Results of Operations" in the Company's
2000  Annual  Report to  Stockholders  on pages 1 through 6 and is  incorporated
herein by reference.

Item 7.  Consolidated 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
2000 Annual Report to  Stockholders  on pages 7 through 44 and are  incorporated
herein by reference.

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

         None.



                                       34

<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 2001 Annual Meeting of Stockholders, at pages 4 through 5 and 8.

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 2001 Annual Meeting of Stockholders at pages 6 through 8.

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 2001 Annual Meeting of Stockholders, at pages 3 and 4.

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
2001 Annual Meeting of Stockholders, at page 8.

Item 13.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------------------------------------------------------------------------

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

          Exhibit
          Number           Description
          ----------------------------------------------------------------------
           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 Thomas Bentkowski*
          10.2         Employment  Agreement  by and  between  Pulaski  Bancorp,
                       M.H.C., Pulaski Savings Bank and Lee Wagstaff*
          10.3         Change  in  Control  Agreement  by  and  between  Pulaski
                       Bancorp,   M.H.C.,   Pulaski  Savings  Bank  and  Valerie
                       Kaminski*
          10.4         Amended  and  Restated   Pulaski   Bancorp,   Inc.   1997
                       Stock-Based Incentive Plan*
          10.5         Pulaski  Savings Bank Employee Stock Ownership Plan Trust
                       Agreement*
          10.6         Employment  Agreement  by and  between  Pulaski  Bancorp,
                       Inc., Pulaski Savings Bank and John T. Robertson
          11.0         Computation of Earnings Per Share
          13.0         Portions of the 2000 Annual Report to Stockholders
          21.0         Subsidiary   information   is   incorporated   herein  by
                       reference to "Part I - Business - Subsidiary Activities"

                                       35

<PAGE>

               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.


(b)      Reports on Form 8-K.

         None.


                                       36

<PAGE>



                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date:  March 15, 2001                       PULASKI SAVINGS BANK


                                            /s/ Thomas Bentkowski
                                            ---------------------
                                            Thomas Bentkowski
                                            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.

Signature                             Title                             Date

 /s/Thomas Bentkowski        President, Chief Executive           March 15, 2001
---------------------        Officer and Director
Thomas Bentkowski            (principal executive officer)


/s/John T. Robertson         Executive Vice President,            March 15, 2001
--------------------         Chief Operating Officer and
John T. Robertson            Director


/s/Edward J. Mizerski        Chairman of the Board and            March 15, 2001
---------------------        Director
Edward J. Mizerski


/s/Peter C. Pietrucha        Vice Chairman of the Board           March 15, 2001
---------------------        and Director
Peter C. Pietrucha


/s/Eugene J. Bogucki, M.D.   Director                             March 15, 2001
-------------------------
Eugene J. Bogucki, M.D.


/s/Anthony C. Majeski        Director                             March 15, 2001
---------------------
Anthony C. Majeski


Walter F. Rusak              Director                             March 15, 2001
---------------
Walter F. Rusak


/s/Lee Wagstaff              Vice President, Chief Financial      March 15, 2001
---------------              Officer and Treasurer
Lee Wagstaff                 (principal financial and
                             accounting officer)

                                       37