UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q



(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT 1934. For the quarterly period ended June 30, 2001
                                         --------------
                                       or

[ ] TRANSITION  REPORT  PURSUANT TO  SECTION 13 OR 15(d) OF THE  SECURITIES  AND
EXCHANGE ACT OF 1934 For the transition period from              to            .
                                                     -----------    -----------
Commission File Number:  0-27036
                         -------

                            Ambanc Holding Co., Inc.
          -----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                  14-1783770
-------------------------------------     --------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

11 Division Street, Amsterdam, New York                          12010-4303
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code:       (518)842-7200
                                                    -----------------------

     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. [X] Yes [ ] No

     Indicate the number of shares  outstanding of each of the issuer's class of
common stock, as of the latest practicable date.


           Class                                Outstanding at August 10, 2001
-----------------------------                -----------------------------------
Common Stock, $.01 Par Value                               4,445,122

<PAGE>


AMBANC HOLDING CO., INC. AND SUBSIDIARIES
FORM 10-Q
June 30, 2001



                                      Table of Contents


Part I.   FINANCIAL INFORMATION

Item 1.        Consolidated Interim Financial Statements (unaudited):

               Consolidated Statements of Financial Condition at
               June 30, 2001 and December 31, 2000 ........................... 3

               Consolidated Statements of Income for the six months
               and three months ended June 30, 2001 and 2000 ................. 4

               Consolidated Statements of Cash Flows for the six
               months ended June 30, 2001 and 2000 ........................... 5

               Notes to Unaudited Interim Consolidated Financial Statements... 7

Item 2.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations.......................................8

Item 3.        Quantitative and Qualitative Disclosures About Market Risk.....27

Part II.   OTHER INFORMATION..................................................27

Item 4.    Submission of Matters to a Vote of Security Holders ...............27

Item 6.    Exhibits and Reports on Form 8-K...................................27

SIGNATURES....................................................................28
















                                       2

<PAGE>
Part I.   Financial Information
Item 1.  Financial Statements
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition  (unaudited)
(dollars in thousands, except per share amounts)          June 30,  December 31,
                                                            2001        2000
                                                          ---------    ---------
                                Assets

Cash and due from banks ...............................   $  17,848   $  15,306
Federal funds sold ....................................      11,400      11,600
Interest-bearing deposits .............................          79      51,591
                                                          ---------   ---------
     Cash and cash equivalents ........................      29,327      78,497
                                                          ---------   ---------
Securities available for sale, at fair value ..........     177,032     138,990
Federal Home Loan Bank of New York stock, at cost .....       8,870       8,870
Loans receivable ......................................     470,331     465,703
     Allowance for loan losses ........................      (5,697)     (5,745)
                                                          ---------   ---------
     Loans receivable, net ............................     464,634     459,958
                                                          ---------   ---------
Accrued interest receivable ...........................       4,047       4,103
Premises and equipment, net ...........................       5,292       5,288
Real estate owned and repossessed assets ..............         340         373
Goodwill, net .........................................       6,592       6,858
Bank-owned life insurance .............................      10,354         222
Other assets ..........................................       4,607       3,477
                                                          ---------   ---------
     Total assets .....................................   $ 711,095   $ 706,636
                                                          =========   =========
                 Liabilities and Shareholders' Equity
Liabilities:
   Deposits ...........................................   $ 493,043   $ 478,592
   Federal Home Loan Bank short-term borrowings .......         --        5,000
   Federal Home Loan Bank long-term advances ..........      68,284      66,435
   Securities sold under agreements to repurchase .....      62,500      72,500
   Advances from borrowers for taxes and insurance ....       3,960       3,402
   Accrued interest payable ...........................         978       1,108
   Accrued expenses and other liabilities .............       5,096       2,477
                                                          ---------   ---------
     Total liabilities ................................     633,861     629,514
                                                          ---------   ---------
Shareholders' equity:
   Preferred stock $.01 par value. Authorized 5,000,000
    shares; none outstanding at June 30, 2001 and
    December 31, 2000 .................................         --        --
   Common stock $.01 par value. Authorized 15,000,000
    shares; 5,432,245 outstanding at June 30, 2001
    and December 31, 2000 .............................          54          54
   Additional paid-in capital .........................      63,760      63,529
   Retained earnings,substantially restricted .........      30,760      29,994
   Treasury stock, at cost (924,965  shares at June 30,
      2001 and 829,279 shares at December 31, 2000) ...     (14,807)    (13,032)
   Unallocated common stock held by ESOP ..............      (1,695)     (1,909)
   Unearned RRP shares ................................         (65)       (126)
   Accumulated other comprehensive loss ...............        (773)     (1,388)
                                                          ---------   ---------
     Total shareholders' equity .......................      77,234      77,122
                                                          ---------   ---------
     Total liabilities and shareholders' equity .......   $ 711,095   $ 706,636
                                                          =========   =========
See accompanying notes to unaudited interim consolidated financial statements.
                                       3
<PAGE>

AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                Six months           Three months
                                                               ended June 30,        ended June 30,
                                                              2001        2000      2001        2000
                                                            --------    --------   --------    --------
Interest and dividend income:
<S>                                                         <C>         <C>        <C>         <C>
   Loans receivable .....................................   $ 17,387   $ 17,389    $  8,678   $  8,692
   Securities available for sale ........................      5,026      7,225       2,652      3,558
   Federal funds sold and interest-bearing deposits .....      1,350         72         450         39
   Federal Home Loan Bank stock .........................        311        294         148        147
                                                            --------   --------    --------   --------
     Total interest and dividend income .................     24,074     24,980      11,928     12,436
                                                            --------   --------    --------   --------
Interest expense:
   Deposits .............................................      9,845      8,834       4,943      4,470
   Borrowings ...........................................      4,358      5,184       2,124      2,520
                                                            --------   --------    --------   --------
     Total interest expense .............................     14,203     14,018       7,067      6,990
                                                            --------   --------    --------   --------
     Net interest income ................................      9,871     10,962       4,861      5,446
Provision for loan losses ...............................        240        240         120        120
                                                            --------   --------    --------   --------
     Net interest income after provision
       for loan losses ..................................      9,631     10,722       4,741      5,326
                                                            --------   --------    --------   --------
Non-interest income:
   Service charges on deposit accounts ..................        685        641         366        306
   Net gains (losses) on securities transactions ........         72        (46)         47        (46)
   Gain on curtailment of pension plan ..................      1,020         --          --         --
   Other ................................................        481        270         286        116
                                                            --------   --------    --------   --------
     Total non-interest income ..........................      2,258        865         699        376
                                                            --------   --------    --------   --------
Non-interest expenses:
   Salaries, wages and benefits .........................      4,043      4,125       2,045      2,023
   Occupancy and equipment ..............................      1,263      1,195         600        584
   Data processing ......................................        824        781         414        394
   Real estate owned and repossessed assets expenses, net         28         47          19         44
   Professional fees ....................................        397        239         282        149
   Amortization of goodwill .............................        266        266         133        133
   Other ................................................      1,502      1,660         782        808
                                                            --------   --------    --------   --------
     Total non-interest expenses ........................      8,323      8,313       4,275      4,135
                                                            --------   --------    --------   --------
Income  before taxes ....................................      3,566      3,274       1,165      1,567
Income tax expense ......................................      1,382      1,361         397        638
                                                            --------   --------    --------   --------
     Net income .........................................   $  2,184   $  1,913    $    768   $    929
                                                            ========   ========    ========   ========

Basic earnings per share ................................   $   0.50   $   0.41    $   0.18   $   0.20
Diluted earnings per share ..............................   $   0.49   $   0.41    $   0.17   $   0.20
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.

                                       4
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(dollars in thousands)                                       Six months
                                                            ended June 30,
                                                            2001       2000
                                                         --------     -------
Increase (decrease) in cash and cash equivalents:
 Cash flows from operating activities:
   Net income ........................................   $  2,184    $  1,913
   Adjustments to reconcile net income  to net
   cash provided by operating activities:
     Depreciation and amortization of premises
          and equipment ..............................        484         451
     Amortization of goodwill ........................        266         266
     Net amortization of premium on securities .......        154         141
     Increase in cash surrender value of
          bank-owned life insurance ..................       (132)         --
     Net (gains) losses on securities transactions ...        (72)         46
     Provision for loan losses .......................        240         240
     Provision for losses and writedowns on real
          estate owned and repossessed assets ........         --           3
     Net losses on sales of real estate owned
          and repossessed assets .....................          1          27
     ESOP compensation expense .......................        388         320
     RRP expense .....................................        191         242
     Gain on curtailment of pension plan .............      1,020          --
     (Increase) decrease in accrued interest
          receivable and other assets ................     (2,167)        126
     Increase (decrease) in accrued interest
          payable, accrued expenses and
          and other liabilities ......................      2,489      (2,954)
                                                         --------     --------
                Net cash provided by
                      operating activities ...........      5,046         821
                                                         --------     --------

 Cash flows from investing activities:
     Proceeds from sale of securities
          available for sale .........................     30,641       2,893
     Purchases of securities available for sale ......    (89,795)     (3,277)
     Proceeds from principal paydowns, maturities and
           calls of securities available for sale ....     22,056       8,153
     Purchase of Federal Home Loan Bank of New
           York stock ................................         --        (122)
     Net loans repaid by customers ...................      8,709       4,562
     Purchase of loans ...............................    (13,830)         --
     Purchase of bank-owned life insurance ...........    (10,000)         --
     Purchases of premises and equipment .............       (711)       (284)
     Proceeds from sales of real estate owned and
          repossessed assets .........................        237         174
                                                         --------     --------
               Net cash (used in) provided by
                      investing activities ...........    (52,693)     12,099
                                                         --------     --------

                                                                     (continued)
                                       5
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited) (continued)
(dollars in thousands)                                        Six months
                                                             ended June 30,
                                                            2001        2000
                                                         --------     --------
 Cash flows from financing activities:
    Net increase  in deposits ........................  $  14,451    $ 24,887
    Net decrease in FHLB short-term borrowings .......     (5,000)    (41,200)
    Proceeds from FHLB long-term advances ............      5,000      25,000
    Repayments of FHLB long-term advances ............     (3,151)     (1,527)
    Proceeds from repurchase agreements ..............         --      12,651
    Repayments of repurchase agreements ..............    (10,000)    (42,740)
    Increase in advances from borrowers
          for taxes and insurance ....................        558         744
    Purchases of treasury stock ......................     (2,337)     (1,142)
    Excercises of stock options ......................        362          --
    Dividends paid ...................................     (1,406)     (1,132)
                                                         --------     --------
          Net cash used in financing activities ......     (1,523)    (24,459)
                                                         --------     --------

Net decrease in cash and cash equivalents ............    (49,170)    (11,539)
Cash and cash equivalents at beginning of period .....     78,497      29,611
                                                         --------     --------
Cash and cash equivalents at end of period ...........   $ 29,327    $ 18,072
                                                         ========     ========

Supplemental disclosures of cash flow information -
cash paid during the period for:

Interest .............................................   $ 14,333    $ 14,120
                                                         ========     ========
Income taxes .........................................   $  1,365    $  1,380
                                                         ========     ========
Noncash investing and financing activities:
Net transfer of loans to real estate owned
     and repossessed assets ..........................   $    205    $    124
                                                         ========     ========
Adjustment of securities available for sale to
     fair value, net of tax ..........................   $    615    $    526
                                                         ========     ========
Net book value of premises and equipment
     transferred to assets held for sale .............   $    223          --
                                                         ========     ========
Issuance of RRP shares ...............................   $    130    $    171
                                                         ========     ========
Tax benefit related to vesting of RRP shares
     and exercises of stock options ..................   $    115    $      1
                                                         ========     ========

See accompanying notes to unaudited interim consolidated financial statements.


                                       6
<PAGE>
          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(1) In management's opinion, the financial information included herein, which is
unaudited,  reflects  all  adjustments,  consisting  solely of normal  recurring
adjustments,  necessary for a fair presentation of the financial  information as
of and for the three and six month  periods  ended  June 30,  2001 and 2000,  in
conformity with generally  accepted  accounting  principles.  These consolidated
financial  statements  should be read in  conjunction  with Ambanc  Holding Co.,
Inc.'s ("the  Company"  herein) 2000 Annual Report on Form 10-K.  The results of
operations for the 2001 interim  periods are not  necessarily  indicative of the
results of operations to be expected for the full fiscal year ended December 31,
2001, or any other interim periods.

(2)  Amounts in the prior  periods'  unaudited  interim  consolidated  financial
statements are  reclassified  whenever  necessary to conform to current period's
presentation.

(3)  Earnings per Share

     Basic  earnings  per share (EPS)  excludes  dilution and is  calculated  by
dividing net income  available to common  shareholders  by the weighted  average
number of shares outstanding during the period.  Unallocated ESOP shares are not
considered outstanding for purposes of computing EPS. Shares of restricted stock
(RRP  shares)  are  considered  outstanding  common  shares and  included in the
computation of basic EPS when they become fully vested. Diluted EPS reflects the
potential  dilution that could occur if  securities or other  contracts to issue
common stock (such as the Company's  stock options and unvested RRP shares) were
exercised  into common  stock or  resulted in the  issuance or vesting of common
stock using the treasury stock method.

     The  calculation  of basic EPS and  diluted EPS is as follows:

                                             Net          Weighted
                                           Income          Average     Per Share
                                       (in thousands)      Shares       Amount
For the six months ended June 30, 2001  ------------     ----------    ---------
Basic EPS
Net income                                   $2,184       4,330,111        $0.50
                                             ======                        =====
Effect of dilutive securities:
Stock options                                                97,752
Unvested RRP shares                                          13,603
                                                          ---------
Diluted EPS
Net income                                   $2,184       4,441,466        $0.49
                                             ======       =========        =====
For the six months ended June 30, 2000
Basic EPS
Net income                                   $1,913       4,648,316        $0.41
                                             ======                        =====
Effect of dilutive securities:
Stock options                                                15,800
Unvested RRP shares                                          15,003
                                                          ---------
Diluted EPS
Net income                                   $1,913       4,679,119        $0.41
                                             ======       =========        =====
                                       7
<PAGE>
For the quarter ended June 30, 2001
Basic EPS
Net income                                   $  768       4,309,903        $0.18
                                             ======                        =====
Effect of dilutive securities:
Stock options                                               109,783
Unvested RRP shares                                          11,039
                                                          ---------
Diluted EPS
Net income                                   $  768       4,430,725        $0.17
                                             ======       =========        =====
For the quarter ended June 30, 2000
Basic EPS
Net income                                   $  929       4,627,006        $0.20
                                             ======                        =====
Effect of dilutive securities:
Stock options                                                25,950
Unvested RRP shares                                          13,306
                                                          ---------
Diluted EPS
Net income                                   $  929       4,666,262        $0.20
                                             ======       =========        =====


(4)  Comprehensive Income

     Comprehensive  income  represents  the sum of net income and items of other
comprehensive  income or loss,  which are  reported  directly  in  shareholders'
equity,  net of tax,  such as the change in the net  unrealized  gain or loss on
securities  available for sale.  Accumulated other comprehensive income or loss,
which is included in shareholders' equity, represents the net unrealized gain or
loss on securities available for sale, net of tax.

     Comprehensive  income for the six-month  periods  ended June,  30, 2001 and
2000 was $2.8 million and $2.4 million,  respectively.  Comprehensive income for
the  three-month  periods  ended June 30,  2001 and 2000 was  $108,000  and $1.4
million, respectively.


(5)  Derivative Instruments and Hedging Activities

     In June 1998,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities," which establishes accounting and reporting standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities. The Company adopted Statement No. 133, as
amended,  on January 1, 2001.  As of January 1, 2001,  and during the six months
ended June 30,  2001,  the Company did not have any  derivative  instruments  or
derivative instruments embedded in other contracts.  Therefore,  the adoption of
Statement No. 133 did not have a material  impact on the Company's  consolidated
financial statements.

(6)      Business Combinations and Goodwill and Other Intangible Assets

     In July 2001, the FASB issued Statement No. 141,  "Business  Combinations,"
and Statement No. 142,  "Goodwill and Other  Intangible  Assets."  Statement 141
requires  that the  purchase  method  of  accounting  be used  for all  business
combinations  initiated  after June 30, 2001, as well as for all purchase method
business  combinations  completed  after  June  30,  2001.  Statement  141  also
specifies  criteria  intangible  assets  acquired in a purchase  method business
combination  must  meet to be  recognized  and  reported  apart  from  goodwill.
Statement 142 will require that goodwill and intangible  assets with  indefinite


                                       8
<PAGE>

useful lives no longer be amortized,  but instead tested for impairment at least
annually in accordance with the provisions of Statement 142.  Statement 142 will
also require that intangible assets with definite useful lives be amortized over
their respective  estimated useful lives to their estimated residual values, and
reviewed for  impairment in  accordance  with SFAS NO. 121,  Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

     The  Company  is  required  to  adopt  the   provisions  of  Statement  141
immediately,   and  Statement  142  effective  January  1,  2002.  Goodwill  and
intangible  assets acquired in business  combinations  completed  before July 1,
2001 will continue to be amortized prior to the adoption of Statement 142.

     Upon adoption of Statement 142, Statement 141 will require that the Company
evaluate its existing intangible assets and goodwill that were acquired in prior
purchase business combinations,  and to make any necessary  reclassifications in
order to conform with the new criteria in Statement  141 for  recognition  apart
from  goodwill.  Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible  assets acquired
in purchase business  combinations,  and make any necessary  amortization period
adjustments by the end of the first interim period after adoption.  In addition,
to the extent an intangible  asset is identified as having an indefinite  useful
life, the Company will be required to test the  intangible  asset for impairment
in  accordance  with the  provisions  of Statement  142 within the first interim
period.  Any  impairment  loss will be measured  as of the date of adoption  and
recognized  as a cumulative  effect of a change in  accounting  principle in the
first interim period.

     In  connection  with  the  transitional  goodwill  impairment   evaluation,
Statement 142 will require the Company to perform an assessment of whether there
is an indication that goodwill is impaired as of the date of adoption,  based on
criteria  specified in the Statement.  Any transitional  impairment loss will be
recognized as the cumulative  effect of a change in accounting  principal in the
Company's statement of earnings.

     As of the  date of  adoption,  the  Company  expects  to  have  unamortized
goodwill in the amount of $6.3 million,  which will be subject to the transition
provisions of Statements 141 and 142.  Amortization  expense related to goodwill
was $532 thousand and $266 thousand for the year ended December 31, 2000 and the
six months ended June 30, 2001,  respectively.  Because of the extensive  effort
needed to comply with adopting  Statements 141 and 142, it is not practicable to
reasonably  estimate the impact of adopting  these  Statements  on the Company's
consolidated financial statements at the date of this report,  including whether
any  transitional  impairment  losses will be required to be  recognized  as the
cumulative effect of a change in accounting principle.



ITEM 2.
                         MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General

     Ambanc Holding Co., Inc.  ("Ambanc" or the "Company") is a unitary  savings
and loan holding company.  Ambanc was formed as a Delaware Corporation to act as
the holding  company for the former  Amsterdam  Savings Bank,  FSB (now known as
Mohawk  Community  Bank)  upon  the  completion  of  Amsterdam   Savings  Bank's
conversion from the mutual to stock form on December 26, 1995.


                                       9
<PAGE>

     Mohawk  Community  Bank's (the Bank's)  results of operations are primarily
dependent  on its net  interest  income,  which is the  difference  between  the
interest  and  dividend  income  earned  on  its  assets,  primarily  loans  and
securities, and the interest expense on its liabilities,  primarily deposits and
borrowings.  Net  interest  income  may be  affected  significantly  by  general
economic  and  competitive  conditions  and  policies  of  regulatory  agencies,
particularly  those  with  respect  to market  interest  rates.  The  results of
operations  are also  significantly  influenced  by the  level  of  non-interest
expenses,  such as employee salaries and benefits,  non-interest income, such as
fees on  deposit-related  services,  the provision  for loan losses,  and income
taxes.


     The Bank has been,  and  intends to  continue  to be, a  community-oriented
financial  institution  offering a variety of financial  services.  Management's
strategy has been to try to achieve a high loan to asset ratio with  emphasis on
originating traditional one- to four-family residential mortgage and home equity
loans in its primary market area. The Company has also increased emphasis on the
origination of  commercial-type  loans,  including  entering into  participation
agreements  with other  financial  institutions.  In  addition,  the Company has
initiated the necessary steps to create a lending  production office in northern
New Jersey, primarily to create commercial real estate lending opportunities. At
June 30, 2001, the Company's loans  receivable,  net, to assets ratio was 65.3%,
as compared with 65.1% at December 31, 2000. The Company's  portfolio of one- to
four-family  residential mortgage and home equity loans was 78.7% of total loans
at June 30, 2001. Total  commercial-type loans were 16.9% of total loans at June
30, 2001, up from 11.8% at December 31, 2000.  Management  anticipates  that the
ratio of  commercial-type  loans to total  loans will  continue  to  increase in
future periods.


Forward-Looking Statements


     When used in this Form  10-Q,  in future  filings by the  Company  with the
Securities  and Exchange  Commission,  in the Company's  press releases or other
public  or  shareholder  communications,  and in oral  statements  made with the
approval of an authorized  executive officer,  the words or phrases "will likely
result",  "are expected to",  "will  continue",  "is  anticipated",  "estimate",
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements are subject to certain risks and  uncertainties  that
could cause actual  results to differ  materially  from  historical  results and
those presently anticipated or projected, including, but not limited to, changes
in economic  conditions  in the  Company's  market area,  changes in policies by
regulatory  agencies,  fluctuations in interest  rates,  demand for loans in the
Company's market area and competition. The Company wishes to caution readers not
to place undue reliance on any such forward-looking statements, which speak only
as of the date made.  The  Company  wishes to advise  readers  that the  factors
listed above could affect the Company's  financial  performance  and could cause
the Company's  actual results for future periods to differ  materially  from any
opinions or statements  expressed  with respect to future periods in any current
statements.

     The Company does not undertake - and specifically  disclaims any obligation
- to  publicly  release  the  result of any  revisions  which may be made to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.



                                       10
<PAGE>

Financial Condition

     Comparison  of Financial  Condition at June 30, 2001 and December 31, 2000.
Total assets  increased by $4.5 million to $711.1  million at June 30, 2001 from
$706.6  million at December 31, 2000,  primarily  due to increases in securities
available  for sale and  bank-owned  life  insurance of $38.0  million and $10.1
million,  respectively,  in addition to an increase in loans receivable,  net of
$4.7 million.  These  increases were partially  offset by a decrease in cash and
cash equivalents of $49.2 million.


     Cash and cash  equivalents  decreased by $49.2 million,  or 62.6%, to $29.3
million at June 30, 2001 from $78.5 million at December 31, 2000.  This decrease
was  primarily due to a decrease in  interest-bearing  deposits of $51.5 million
from $51.6  million at December 31, 2000 to $79  thousand at June 30, 2001.  The
vast  majority of these funds were  re-deployed  into  securities  available for
sale.


     Securities  available for sale increased $38.0 million, or 27.4%, to $177.0
million at June 30, 2001 from $139.0 million at December 31, 2000. This increase
was  primarily  due to the shift of funds from  interest-bearing  deposits  into
higher  yielding   securities   available  for  sale.  The  Company  anticipates
redeploying  the funds  invested in  securities  available  for sale and federal
funds sold into the loan portfolio as market conditions permit.


     Loans receivable,  net increased $4.7 million to $464.6 million at June 30,
2001,  from $460.0 million at December 31, 2000.  During the second half of 2000
and the first half of 2001, the Company  entered into commercial real estate and
commercial business loan participations with an unrelated financial  institution
in its market area.  Also,  as noted  previously,  the Company has initiated the
necessary  steps to create a lending  production  office in northern New Jersey,
primarily to create commercial real estate lending opportunities.  This strategy
is  consistent  with  management's  focus on the growth of the  commercial  loan
portfolio. During the first half of 2001, the Company purchased $13.8 million of
commercial real estate and commercial  business loan  participations.  Moreover,
commercial  real estate and commercial  loans  increased  $15.4 million and $5.2
million, respectively, during the first six months of 2001. Likewise, during the
first half of the year home  equity  loans  increased  $4.1  million.  Partially
offsetting  these increases were decreases in one-to-four  family mortgage loans
of $17.4 million and consumer loans of $352 thousand.


     Bank-owned  life  insurance  increased  $10.1  million due to the Company's
purchase of additional bank-owned life insurance at the end of the first quarter
of 2001,  as well as an increase in the cash  surrender  value of $132  thousand
during the second quarter.


     Other assets increased $1.1 million,  or 32.5%, to $4.6 million at June 30,
2001 due primarily to the gain on the curtailment of the Company's pension plan,
which increased  prepaid pension cost, as well as the deferred tax  consequences
related to the adjustment of securities available for sale to fair value.


                                       11
<PAGE>

     Deposits increased by $14.5 million, or 3.0%, to $493.0 million at June 30,
2001 from $478.6  million at December 31, 2000. The growth for the first half of
2001 was primarily in time  deposits,  which  increased $8.2 million from $248.9
million to $257.1 million;  savings accounts,  which increased $1.2 million from
$121.4 million to $122.6 million;  money market  accounts,  which increased $282
thousand from $23.4 million to $23.7 million;  and  non-interest-bearing  demand
deposits,  which  increased  $3.5 million from $38.6  million to $42.1  million.
These  increases  were  partially  offset by a decrease in NOW  accounts,  which
decreased $375 thousand from $46.3 million to $46.0 million.


     Short-term borrowings from the Federal Home Loan Bank ("FHLB") decreased by
$5.0 million, to $0 at June 30, 2001. This funding reduction was replaced with a
$5.0 million  long-term  advance from the FHLB during the first quarter of 2001.
Long-term  advances  from the FHLB  increased  $1.8  million,  or 2.8%, to $68.3
million at June 30, 2001 from $66.4  million at December  31,  2000.  Securities
repurchase  agreements  decreased  $10.0 million,  or 13.8%, to $62.5 million at
June 30, 2001 from $72.5  million at December  31,  2000,  due  primarily to the
maturity and  subsequent  repayment of the repurchase  agreements.  The shift to
longer-term  borrowings coupled with the repayment of the repurchase  agreements
is part of the  Company's  effort to improve its interest  rate risk position by
more closely matching the maturities of its assets and liabilities.


     Accrued expenses and other liabilities  increased $2.6 million,  or 105.7%,
to $5.1 million at June 30, 2001 from $2.5  million at December  31, 2000.  This
increase  was the result of a change in  processing  whereby  teller  drafts and
money orders are now drawn upon the Bank and ultimately  paid through the Bank's
Federal Reserve Bank correspondent  account and are included in accrued expenses
and other  liabilities.  Previously,  these items were drawn directly  against a
correspondent bank account.


     Shareholders' equity increased $112 thousand from $77.1 million at December
31, 2000 to $77.2 million at June 30, 2001,  primarily due to net income of $2.2
million and the decrease in net  unrealized  losses on securities  available for
sale,  net of tax, of $615  thousand,  partially  offset by the  treasury  stock
purchases  totaling  $2.3  million  and the  payment of cash  dividends  of $1.4
million  for  the  first  six  months  of  the  year.   Other  items   impacting
shareholders'  equity  during  the first  half of 2001 were the  release of ESOP
shares, the continued  amortization of unearned RRP shares, and the excercise of
stock options.



Consolidated Average Balances, Interest Rates & Yields

     The  following  table  presents for the periods  indicated the total dollar
amount of interest and dividend  income earned on average earning assets and the
resultant  yields,  as well as the  total  dollar  amount  of  interest  expense
incurred on average interest-bearing liabilities and the resultant rates. No tax
equivalent  adjustments  were  made.  All  average  balances  are daily  average
balances.  Non-accruing  loans  have been  included  in the table as loans  with
interest earned on a cash basis only. Securities available for sale are included
at amortized cost.


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                                      Three months ended June 30,
                                                              2001                                   2000
                                          ------------------------------------   -------------------------------------
                                                Average     Interest    Yield/        Average     Interest    Yield/
                                                Balance     Inc./Exp.    Rate         Balance     Inc./Exp.    Rate
<S>                                             <C>           <C>        <C>         <C>            <C>        <C>
Earning assets                                                        (Dollars in thousands)
  Loans receivable (1)                          $465,690      $8,678     7.47%       $469,311      $8,692     7.45%
  Securities available for sale (AFS)(2)         163,965       2,652     6.49%        216,673       3,558     6.60%
  Federal Home Loan Bank stock                     8,870         148     6.69%          8,838         147     6.69%
  Federal funds sold &
     interest-bearing deposits                    40,063         450     4.51%          2,472          39     6.35%
                                          --------------   ---------  --------   ------------   ---------  --------
      Total earning assets                       678,588      11,928     7.05%        697,294      12,436     7.17%
                                          --------------   ---------  --------   ------------   ---------  --------
Allowance for loan losses                         (5,735)                              (5,536)
Unrealized loss on AFS securities                   (494)                             (10,508)
Other assets                                      43,045                               33,932
                                          ---------------                         ------------
Total assets                                    $715,404                             $715,182
                                          ===============                         ============

Interest-bearing liabilities
  Savings deposits                               125,064         821     2.63%        129,788         887     2.75%
  NOW  deposits                                   47,348         160     1.36%         38,356         135     1.42%
  Certificates of deposit                        256,894       3,754     5.86%        233,128       3,187     5.50%
  Money market accounts                           23,144         208     3.60%         27,286         261     3.85%
  Borrowed funds                                 140,872       2,124     6.05%        168,030       2,520     6.03%
                                          --------------   ---------  --------   ------------   ---------  --------
      Total interest-bearing liabilities         593,322       7,067     4.78%        596,588       6,990     4.71%
                                          --------------   ---------  --------   ------------   ---------  --------
Demand deposits                                   38,155                               36,637
Other liabilities                                  6,999                                6,776
                                          ---------------                         ------------
Total liabilities                                638,476                              640,001
                                          ---------------                         ------------
Stockholders' equity                              76,928                               75,181
                                          ---------------                         ------------
Total average liabilities & equity              $715,404                             $715,182
                                          ===============                         ============

    Net interest income                                       $4,861                               $5,446

    Interest rate spread                                                 2.27%                                2.46%

    Net earning assets                           $85,266                             $100,706

    Net interest margin                                                  2.87%                                3.14%

    Average earning assets/Average
     interest-bearing liabilities                114.37%                              116.88%

(1)  Calculated net of deferred loan fees and costs, loan discounts and loans in process.
(2)  Securities available for sale exclude securities pending settlement.
</TABLE>

                                       13
<PAGE>

Consolidated Rate/Volume Analysis of Net Interest Income

     The following  table  presents the dollar amount of changes in interest and
dividend income and interest  expense for major components of earning assets and
interest-bearing  liabilities.  It distinguishes  between the changes related to
outstanding  balances and the changes due to changes in interest rates. For each
category of earning  assets and  interest-bearing  liabilities,  information  is
provided  on changes  attributable  to (i) changes in volume  (i.e.   changes in
volume  multiplied  by old rate) and (ii) changes in rate (i.e.  changes in rate
multiplied by old volume).  For purposes of this table,  changes attributable to
both  rate  and  volume,  which  cannot  be  segregated,   have  been  allocated
proportionately to the change due to volume and the change due to rate.

                                                  Three months ended June 30,
                                                           2001 vs. 2000
                                                -------------------------------
                                                       Increase
                                                      (Decrease)
                                                        Due to           Total
                                                ---------------------  Increase
                                                  Volume       Rate   (Decrease)
                                                ---------    --------  --------
Earning assets                                       (Dollars in thousands)
  Loans receivable ..........................    $   (51)     $   37     $  (14)
  Securities available for sale .............       (836)        (70)      (906)
  Federal Home Loan Bank stock ..............          1          --          1
  Federal funds sold and interest-bearing
     deposits ...............................        426         (15)       411
                                                ---------    --------  --------
      Total earning assets ..................       (460)        (48)      (508)
                                                ---------    --------  --------
Interest-bearing liabilities
  Savings deposits ..........................        (31)        (35)       (66)
  NOW  deposits .............................         31          (6)        25
  Certificates of deposit ...................        344         223        567
  Money market accounts .....................        (37)        (16)       (53)
  Borrowed funds ............................       (403)          7       (396)
                                                ---------    --------  --------
      Total interest-bearing liabilities ....        (96)        173         77
                                                ---------    --------  --------
    Net interest income .....................    $  (364)     $ (221)    $ (585)
                                                =========    ========  ========



                                       14
<PAGE>

Comparison  of  Operating  Results for the Three  Months Ended June 30, 2001 and
2000.


     Net Income.  Net income for the three  months  ended June 30, 2001 was $768
thousand  compared to $929  thousand  for the three  months ended June 30, 2000.
Diluted  earnings per share were $0.17 for the three months ended June 30, 2001,
as compared to $0.20 for the three months  ended June 30,  2000.  Net income for
the three months ended June 30, 2001 was adversely impacted by professional fees
in the amount of $157  thousand  incurred in the  connection  with the Company's
response to inquires  from,  and  preliminary  discussions  with,  third parties
regarding  possible business  combinations  with the Company.  These discussions
were  terminated in the second quarter  without  reaching any  agreements.  Also
impacting  net  income  during  the  quarter  ended  June 30,  2001  were  costs
associated with the change to a new computer  system  amounting to $57 thousand,
primarily  due to the  disposal  of  equipment.  Excluding  the  impact of these
non-recurring expenses, diluted earnings per share would have been $0.20 for the
three months ended June 30, 2001.


     Net Interest Income. Net interest income decreased $585 thousand, or 10.7%,
to $4.9  million for the three  months ended June 30, 2001 from $5.4 million for
the three months ended June 30,  2000.  The decrease in net interest  income was
primarily due to a decrease in the interest rate spread from 2.46% for the three
months  ended June 30, 2000 to 2.27% for the three months ended June 30, 2001, a
decrease  in the net  interest  margin  from 3.14% to 2.87%,  in  addition  to a
decrease  in  average  earning  assets of $18.7  million,  a portion of which is
attributable to the Company's treasury stock purchases.


     Earning assets consist of loans receivable,  securities available for sale,
federal  funds  sold,  interest-bearing  deposits,  and FHLB of New York  stock.
Interest-bearing liabilities consist of interest-bearing deposits, FHLB advances
and securities repurchase agreements.


     The interest  rate  spread,  which is the  difference  between the yield on
average  earning  assets and the cost of average  interest-bearing  liabilities,
decreased to 2.27% for the three months ended June 30, 2001,  from 2.46% for the
three months ended June 30,  2000.  The decrease in the interest  rate spread is
due to the  decrease  in the average  yield on earning  assets  coupled  with an
increase in the average cost of interest-bearing  liabilities during the period.
The average yield on earning  assets  decreased  from 7.17% for the three months
ended  June 30,  2000 to 7.05% for the three  months  ended  June 30,  2001.  In
addition,  the average cost of interest-bearing  liabilities  increased to 4.78%
for the three  months  ended June 30, 2001 from 4.71% for the  previous  period.
This  increase  was largely  impacted by an increase in the average rate paid on
certificates of deposit of 36 basis points, to 5.86%.


     The Company operates in an environment of intense  competition for deposits
and loans. The competition in today's  environment is not limited to other local
banks and thrifts,  but also includes a myriad of financial  services  providers
that are located both within and outside the Company's local market area. Due to
this  heightened  level of  competition  to attract  and retain  customers,  the
Company must continue to offer competitive interest rates on loans and deposits.
As a consequence of these competitive pressures, from time-to-time, the relative
spreads  between  interest  rates earned and interest  rates paid will  tighten,
exerting downward pressure on net interest income,  the interest rate spread and
the net interest  margin.  However,  management does not want to discourage,  by
offering   noncompetitive   interest   rates,   the  creation  of  new  customer
relationships  or  jeopardize  existing  relationships  thereby  curtailing  the


                                       15
<PAGE>

Company's  customer  base and the attendant  benefits to be derived.  Management
believes  that the  longer-term  benefits to be derived from this  position will
outweigh the shorter-term  costs associated with attracting,  cross-selling  and
retaining an expanding  customer  base.  The growing  customer base provides the
Company with the potential for future, profitable customer relationships,  which
should in turn increase the value of the franchise.


     Interest and Dividend  Income.  Interest and dividend  income  decreased by
$508  thousand,  or 4.1%,  to $11.9  million for the three months ended June 30,
2001 from $12.4  million for the three months ended June 30, 2000.  The decrease
was largely the result of the decrease in the average  balance of earning assets
from $697.3  million for the three months ended June 30, 2000 to $678.6  million
for the three  months  ended June 30,  2001.  In addition to the decrease in the
average  balance of earning  assets was a 12 basis point decrease in the average
yield on total  earning  assets.  The yield on the  average  balance  of earning
assets was 7.05% and 7.17% for the three  months  ended June 30,  2001 and 2000,
respectively.


     Interest and fees on loans  decreased  $14 thousand to $8.7 million for the
three months ended June 30, 2001.  This  decrease was  primarily the result of a
decrease in the average balance of net loans  receivable from $469.3 million for
the three  months  ended June 30, 2000 to $465.7  million  for the three  months
ended June 30, 2001,  offset almost entirely by an increase in the average yield
on net loans receivable of 2 basis points, to 7.47%.


     Interest and dividend  income on securities  available  for sale  decreased
$906  thousand,  or 25.5%,  to $2.7  million for the three months ended June 30,
2001 from $3.6 million for the previous  period.  This decrease is primarily the
result of a decrease in the average balance of securities  available for sale of
$52.7 million, or 24.3%.


     Interest  income  on  federal  funds  sold  and  interest-bearing  deposits
increased  $411  thousand to $450  thousand  for the three months ended June 30,
2001 from $39 thousand for the previous quarter,  primarily due to a increase in
the  average  balance of $37.6  million,  offset  somewhat  by a decrease in the
average yield from 6.35% to 4.51%.


     Interest  Expense.  Total interest  expense  increased by $77 thousand,  or
1.1%, to $7.1 million for the three months ended June 30, 2001 from $7.0 million
for the  three  months  ended  June 30,  2000.  Total  average  interest-bearing
liabilities decreased by $3.3 million to $593.3 million for the first quarter of
2001  compared  to $596.6  million  for the same  period of the  previous  year,
primarily due to the pay down of borrowed funds, partially offset by an increase
in average  interest-bearing  deposits.  The average  balance of borrowed  funds
decreased  $27.2  million,  or 16.2%,  from $168.0  million for the three months
ended June 30, 2000 to $140.9  million for the three months ended June 30, 2001.
This  decrease in borrowed  funds  reflects  management's  continued  efforts to
de-leverage  the  balance  sheet and improve the  Company's  interest  rate risk
position.  During the same  periods,  the average rate paid on  interest-bearing
liabilities increased by 7 basis points to 4.78% from 4.71%.



                                       16
<PAGE>

     Total  interest  expense for the three months ended June 30, 2001 increased
primarily due to an increase in the average  balance on  certificates of deposit
("CD") accounts to $256.9 million for the three months ended June 30, 2001, from
$233.1 million for the previous  period.  In addition,  the average rate paid on
these  deposit  accounts  increased  36 basis points to 5.86% during the period.
Based on current CD rates and the prospective  run-off in CDs, it is anticipated
that the average rate paid on these  deposits will trend  downward in subsequent
periods.  Likewise,  interest  expense  relative to NOW accounts  increased as a
result of increases in the average balance of $9.0 million,  or 23.4%, offset by
a decrease in the average rate paid on NOW accounts of 6 basis points.


     Provision for Loan Losses. The Company's provision for loan losses is based
upon management's analysis of the adequacy of the allowance for loan losses. The
allowance is increased by a charge to the provision for loan losses,  the amount
of which  depends  upon an analysis of the changing  risks  inherent in the loan
portfolio.  Management  determines the adequacy of the allowance for loan losses
based upon its analysis of risk  factors in the loan  portfolio.  This  analysis
includes evaluation of credit risk, historical loss experience, current economic
conditions,  estimated fair value of underlying collateral,  delinquencies,  and
other factors. The provision for loan losses for the three months ended June 30,
2001  and 2000  was  $120  thousand,  reflecting  the  relative  consistency  of
non-performing  loans  and  net  charge-offs,  as well  as the  increase  in the
percentage of  commercial-type  loans in the portfolio.  The Company's  ratio of
non-performing  loans to total  loans was  0.64% and 0.70% at June 30,  2001 and
December 31, 2000, respectively.


     Non-Interest  Income. Total non-interest income increased by $323 thousand,
or 85.9%,  to $699  thousand  for the three months ended June 30, 2001 from $376
thousand for the three months  ended June 30, 2000.  This  increase is primarily
due to the increase in the cash surrender  value of bank-owned life insurance of
$132 thousand for the three months ended June 30, 2001. During the quarter ended
June 30, 2000  approximately  $3.0 million in investments  of  mortgaged-related
securities were sold resulting in a net loss of $46 thousand.  However,  for the
three months ended June 30, 2001, the sale of securities  transactions  resulted
in a gain of $47 thousand.  Service  charges on deposit  accounts  increased $60
thousand to $366  thousand for the quarter ended June 30, 2001,  primarily  from
increased fees charged on deposit accounts.


     Non-Interest  Expenses.  Non-interest  expenses increased $140 thousand, or
3.4%, to $4.3 million for the three months ended June 30, 2001 from $4.1 million
for the three months  ended June 30, 2000 due  primarily  to  professional  fees
incurred  in  connection  with the  Company's  response to  inquires  from,  and
preliminary   discussions  with,  third  parties  regarding   possible  business
combinations with the Company.  Also impacting  non-interest expenses during the
second  quarter  of 2001  were the  costs  associated  with the  change to a new
computer system. These and other changes are discussed in more detail below.


     Salaries,  wages and benefits expense  increased by $22 thousand,  or 1.1%,
for the three months ended June 30, 2001. During the second quarter of 2001, the
Company  recognized  $33 thousand in expense  related to matching  contributions
under the Company's 401(k) plan. No matching  contributions were made during the
second  quarter of 2000.  In addition,  the expense  related to the ESOP for the
second quarter of 2001 was $35 thousand  higher than the  comparable  quarter in
2000 due to the  increased  stock  price in 2001  relative  to 2000.  Management
believes  that  salaries,  wages and benefits  expenses may  fluctuate in future
periods as costs  related to the  Company's  ESOP are dependent on the Company's
average stock price.  Offsetting  these  increases was the  recognition of a net
periodic  pension  credit of $64  thousand  in the second  quarter  of 2001,  as
compared  to a net  periodic  pension  expense  of  approximately  $34  thousand
recognized during the second quarter of 2000.


                                       17
<PAGE>

     Occupancy and equipment  increased $16 thousand,  or 2.7%, to $600 thousand
for the three months ended June 30, 2001,  from $584 thousand in 2000  primarily
due to costs  related to the change to a new  computer  system  amounting to $57
thousand  resulting from the disposal of equipment.  This increase was partially
offset by the impact of a branch office that closed in June 2001.


     Data processing increased $20 thousand,  or 5.1%, from $394 thousand in the
2000  period to $414  thousand  for the three  months  ended  June 30,  2001 due
primarily to the increase in volume of deposit and loan accounts serviced by the
Company.


     Real estate owned and repossessed  assets expense decreased $25 thousand to
$19 thousand  for the three  months ended June 30, 2001 due  primarily to larger
losses recognized on the sale of real estate owned and repossessed assets during
the 2000 period as compared to the 2001 period.


     Professional  fees increased $133 thousand,  or 89.3%, to $282 thousand for
the three  months  ended June 30, 2001,  from $149  thousand for the  comparable
period of the previous  year.  Professional  fees in the amount of $157 thousand
were incurred in the 2001 quarter in connection  with the Company's  response to
inquires  from,  and  preliminary  discussions  with,  third  parties  regarding
possible  business  combinations  with  the  Company.   These  discussions  were
terminated in the second quarter without reaching any agreements.


     Other  non-interest  expenses  decreased  $26  thousand,  or 3.2%,  to $782
thousand for the three months ended June 30, 2001 when  compared to the previous
period.  This  decrease  was  primarily  due to  expenses  associated  with  the
promotion and  advertising of time deposit and lending  products  offered during
the quarter  ended June 30, 2000. No such special  promotion was offered  during
the second quarter of 2001.



     Income Tax  Expense.  Income tax expense  decreased  by $241  thousand,  or
37.8%,  to $397  thousand  for the three  months  ended June 30,  2001 from $638
thousand for the three months  ended June 30, 2000.  The decrease was  primarily
the result of the  decrease  in income  before  taxes,  as well as  certain  tax
planning  strategies  implemented by the Company,  which decreased the effective
tax rate.


Consolidated Average Balances, Interest Rates & Yields

     The  following  table  presents for the periods  indicated the total dollar
amount of interest and dividend  income earned on average earning assets and the
resultant  yields,  as well as the  total  dollar  amount  of  interest  expense
incurred on average interest-bearing liabilities and the resultant rates. No tax
equivalent  adjustments  were  made.  All  average  balances  are daily  average
balances.  Non-accruing  loans  have been  included  in the table as loans  with
interest earned on a cash basis only. Securities available for sale are included
at amortized cost.


                                       18
<PAGE>
<TABLE>
<CAPTION>
                                                                        Six months ended June 30,
                                                              2001                                   2000
                                          ------------------------------------   -------------------------------------
                                                Average     Interest    Yield/        Average     Interest    Yield/
                                                Balance     Inc./Exp.    Rate         Balance     Inc./Exp.    Rate
<S>                                             <C>           <C>        <C>         <C>          <C>         <C>
Earning assets                                                        (Dollars in thousands)
  Loans receivable (1)                          $466,160     $17,387     7.52%       $470,173     $17,389     7.44%
  Securities available for sale (AFS)(2)         152,817       5,026     6.63%        218,775       7,225     6.64%
  Federal Home Loan Bank stock                     8,870         311     7.07%          8,793         294     6.72%
  Federal funds sold &
     interest-bearing deposits                    51,181       1,350     5.32%          2,648          72     5.47%
                                          --------------   ---------  --------   ------------   ---------  --------
      Total earning assets                       679,028      24,074     7.15%        700,389      24,980     7.17%
                                          --------------   ---------  --------   ------------   ---------  --------
Allowance for loan losses                         (5,756)                              (5,533)
Unrealized loss on AFS securities                 (1,053)                             (10,563)
Other assets                                      37,281                               34,902
                                          ---------------                         ------------
Total assets                                    $709,500                             $719,195
                                          ===============                         ============

Interest-bearing liabilities
  Savings deposits                               123,705       1,608     2.62%        129,156       1,762     2.74%
  NOW  deposits                                   46,959         381     1.64%         37,159         247     1.34%
  Certificates of deposit                        253,235       7,424     5.91%        232,525       6,290     5.44%
  Money market accounts                           23,019         432     3.78%         27,952         535     3.85%
  Borrowed funds                                 142,571       4,358     6.16%        174,987       5,184     5.96%
                                          --------------   ---------  --------   ------------   ---------  --------
      Total interest-bearing liabilities         589,489      14,203     4.86%        601,779      14,018     4.68%
                                          --------------   ---------  --------   ------------   ---------  --------
Demand deposits                                   37,037                               35,998
Other liabilities                                  5,983                                6,026
                                          ---------------                         ------------
Total liabilities                                632,509                              643,803
                                          ---------------                         ------------
Stockholders' equity                              76,991                               75,392
                                          ---------------                         ------------
Total average liabilities & equity              $709,500                             $719,195
                                          ===============                         ============

    Net interest income                                       $9,871                              $10,962

    Interest rate spread                                                 2.29%                                2.49%

    Net earning assets                          $ 89,539                             $ 98,610

    Net interest margin                                                  2.93%                                3.15%

    Average earning assets/Average
     interest-bearing liabilities                115.19%                              116.39%

(1)  Calculated net of deferred loan fees and costs, loan discounts and loans in process.
(2)  Securities available for sale exclude securities pending settlement.
</TABLE>

                                       19
<PAGE>

Consolidated Rate/Volume Analysis of Net Interest Income

     The following  table  presents the dollar amount of changes in interest and
dividend income and interest  expense for major components of earning assets and
interest-bearing  liabilities.  It distinguishes  between the changes related to
outstanding  balances and the changes due to changes in interest rates. For each
category of earning  assets and  interest-bearing  liabilities,  information  is
provided  on changes  attributable  to (i) changes in volume  (i.e.   changes in
volume  multiplied  by old rate) and (ii) changes in rate (i.e.  changes in rate
multiplied by old volume).  For purposes of this table,  changes attributable to
both  rate  and  volume,  which  cannot  be  segregated,   have  been  allocated
proportionately to the change due to volume and the change due to rate.

                                                     Six months ended June 30,
                                                           2001 vs. 2000
                                                -------------------------------
                                                       Increase
                                                      (Decrease)
                                                        Due to           Total
                                                ---------------------  Increase
                                                  Volume       Rate   (Decrease)
                                                ---------    --------  --------
Earning assets                                       (Dollars in thousands)
  Loans receivable ..........................    $  (169)     $  167    $    (2)
  Securities available for sale .............     (2,189)        (10)    (2,199)
  Federal Home Loan Bank stock ..............          3          14         17
  Federal funds sold and interest-bearing
     deposits ...............................      1,280          (2)     1,278
                                                ---------    --------  --------
      Total earning assets ..................     (1,075)        169       (906)
                                                ---------    --------  --------
Interest-bearing liabilities
  Savings deposits ..........................        (75)        (79)      (154)
  NOW  deposits .............................         72          62        134
  Certificates of deposit ...................        574         560      1,134
  Money market accounts .....................        (94)         (9)      (103)
  Borrowed funds ............................       (998)        172       (826)
                                                ---------    --------  --------
      Total interest-bearing liabilities ....       (521)        706        185
                                                ---------    --------  --------
    Net interest income .....................    $  (554)     $ (537)   $(1,091)
                                                =========    ========  ========



                                       20
<PAGE>

Comparison of Operating Results for the Six Months Ended June 30, 2001 and 2000.


     Net Income.  Net income  increased by $271 thousand,  or 14.2%, for the six
months  ended June 30, 2001 to $2.2 million from $1.9 million for the six months
ended June 30,  2000.  Net income  for the six  months  ended June 30,  2001 was
significantly  impacted by a $1.0 million ($634 thousand after-tax)  curtailment
gain  related to the  freezing  of benefit  accruals  and  participation  in the
Company's  defined benefit pension plan. This and other changes are discussed in
more detail below.


     Net Interest Income. Net interest income decreased $1.1 million,  or 10.0%,
from $11.0  million for the six months  ended June 30, 2000 to $9.9  million for
the six months  ended June 30, 2001.  The  decrease in net  interest  income was
primarily due to a decrease in the interest rate spread from 2.49% for the first
six months of 2000 to 2.29% for the first six months of 2001,  a decrease in the
net  interest  margin from 3.15% to 2.93%,  in addition to a decrease in average
earning  assets of $24.4  million,  a portion  of which is  attributable  to the
Company's treasury stock purchases.


     Interest and Dividend  Income.  Interest and dividend  income  decreased by
$906 thousand or 3.6%, from $25.0 million for the six months ended June 30, 2000
to $24.1  million  for the six months  ended June 30,  2001.  The  decrease  was
largely the result of the decrease in the average balance of earning assets from
$700.4  million for the six months ended June 30, 2000 to $679.0 million for the
six months ended June 30, 2001.


     Interest and fees on loans was $17.4  million for the six months ended June
30, 2001 and 2000.  The average yield on loans  receivable  increased from 7.44%
for the six months  ended June 30,  2000 to 7.52% for the six months  ended June
30, 2001,  offset almost  entirely by a decrease in the average balance of loans
receivable of $4.0 million.


     Interest and dividend  income on securities  available  for sale  decreased
$2.2 million,  or 30.4%,  to $5.0 million for the six months ended June 30, 2001
from $7.2 million for the previous period. This decrease is primarily the result
of a decrease in the average  balance of securities  available for sale of $66.0
million, or 30.1%.


     Interest  income  on  federal  funds  sold  and  interest-bearing  deposits
increased  $1.3  million to $1.4  million for the six months ended June 30, 2001
from $72  thousand for the previous  period  primarily  due to a increase in the
average balance of $48.5 million.


     Interest  Expense.  Total interest expense  increased by $185 thousand,  or
1.3%, to $14.2 million for the six months ended June 30, 2001 from $14.0 million
for  the  six  months  ended  June  30,  2000.  Total  average  interest-bearing
liabilities decreased by $12.3 million, or 2.0%, to $589.5 million for the first
half of 2001 compared to $601.8 million for the same period of the previous year
primarily due to the pay down of borrowed funds, partially offset by an increase
in average  interest-bearing  deposits.  The average  balance of borrowed  funds
decreased $32.4 million,  or 18.5%, from $175.0 million for the six months ended
June 30, 2000 to $142.6 million for the six months ended June 30, 2001. As noted
in  the  three  month  discussion,  the  decrease  in  borrowed  funds  reflects
management's  continued efforts to de-leverage the balance sheet and improve the
Company's interest rate risk position. During the same periods, the average rate
paid on interest-bearing  liabilities increased by 18 basis points to 4.86% from
4.68%.

                                       21
<PAGE>

     Total interest expense for the six months ended June 30, 2001 increased due
to an  increase  of 47 basis  points,  to  5.91%,  in the  average  rate paid on
certificates  of deposit  during the  period.  Based on current CD rates and the
prospective  run-off in CDs, it is  anticipated  that the  average  rate paid on
these  deposits will trend  downward in  subsequent  periods.  In addition,  the
average  balance on these deposit  accounts  increased to $253.2 million for the
six months ended June 30,  2001,  from $232.5  million for the previous  period.
Likewise,  interest  expense  relative to NOW accounts  increased as a result of
increases in the average  rate paid on NOW accounts  coupled with an increase in
the average  balance of $9.8  million,  or 26.4%.  The average  rate paid on NOW
accounts  increased  from 1.34% for the six months  ended June 30, 2000 to 1.64%
for the six months ended June 30, 2001.


     Provision for Loan Losses. The provision for loan losses for the six months
ended  June  30,  2001  and 2000 was  $240  thousand,  reflecting  the  relative
consistency of non-performing loans and net charge-offs, as well as the increase
in the percentage of commercial type loans in the portfolio. The Company's ratio
of non-performing  loans to total loans was 0.64% and 0.70% at June 30, 2001 and
December 31, 2000, respectively.


     Non-Interest  Income.  Total non-interest income increased by $1.4 million,
or 161.0%,  to $2.3  million  for the six months  ended June 30,  2001 from $865
thousand  for the six  months  ended June 30,  2000.  As  previously  mentioned,
significantly  impacting non-interest income during the first half of 2001 was a
$1.0 million  curtailment  gain related to the freezing of benefit  accruals and
participation  in the Company's  defined benefit pension plan. In addition,  the
Company  recognized $132 thousand of non-interest  income due to the increase in
the cash surrender  value of bank-owned  life insurance for the six months ended
June 30,  2001.  For the six  months  ended  June 30,  2000,  the  Company  sold
mortgage-related securities recognizing a net loss of $46 thousand. However, for
the six months ended June 30, 2001,  a $72 thousand net gain was  recognized  on
securities  transactions.  Service  charges on deposit  accounts  increased  $44
thousand to $685 thousand for the six months ended June 30, 2001  primarily from
increased fees charged on deposit accounts.


     Non-Interest Expenses.  Non-interest expenses had a nominal increase of $10
thousand to $8.3  million for the six months  ended June 30,  2001.  The various
changes are discussed in more detail below.


     Salaries,  wages and benefits  decreased by $82 thousand,  or 2.0%, for the
first six months of 2001 primarily due to a decrease in benefits associated with
the  curtailment of the Company's  pension plan,  which reduced the service cost
component of net periodic  pension  cost/credit.  During the first six months of
2001,  the Company  recognized a net periodic  pension  credit of $128  thousand
compared to a net periodic  pension  expense of $68 thousand for the same period
of the previous year. However,  during the first six months of 2001, the Company
recognized $70 thousand in expense related to matching  contributions  under the
Company's  401(k)  plan.  No matching  contributions  were made for the previous
year.  In addition,  the expense  related to the ESOP for the first half of 2001
was $69 thousand higher than the comparable  period in 2000 due to the increased
stock price in 2001 relative to 2000.  Management believes that salaries,  wages
and benefits  expenses may  fluctuate in future  periods as costs related to the
Company's ESOP are dependent on the Company's average stock price.


                                       22
<PAGE>

     Occupancy  and equipment  increased $68 thousand,  or 5.7%, to $1.3 million
for the six months  ended June 30,  2001 when  compared to the  previous  period
primarily due to costs related to the change to a new computer system  amounting
to $57 thousand  resulting from the disposal of equipment.  Also contributing to
the  increase  is the  acceleration  of lease  expense and the  amortization  of
leasehold improvements during the first quarter of 2001, on a branch office that
closed June 2001.


     Data processing increased $43 thousand,  or 5.5%, from $781 thousand in the
2000  period  to $824  thousand  for the six  months  ended  June  30,  2001 due
primarily to the increase in volume of deposit and loan accounts serviced by the
Company.


     Real estate owned and repossessed  assets expense decreased $19 thousand to
$28  thousand  for the six months  ended June 30, 2001 due  primarily  to larger
losses recognized on the sale of real estate owned and repossessed assets during
the 2000 period as compared to the 2001 period.


     Professional  fees increased $158 thousand,  or 66.1%, to $397 thousand for
the six months ended June 30, 2001 primarily due to  professional  fees incurred
in the amount of $157 thousand  during the second quarter in connection with the
Company's  response to inquires from, and preliminary  discussions  with,  third
parties regarding possible business combinations with the Company.


     Other  non-interest  expenses  decreased  $158  thousand,  or 9.5%, to $1.5
million  for the six months  ended June 30, 2001 when  compared to the  previous
period.  This  decrease  was  primarily  due to  expenses  associated  with  the
promotion and  advertising of time deposit and lending  products  offered during
the first half of 2000. No such  promotion was offered  during the first half of
2001. In addition, the Company reduced the costs associated with armored car and
courier  service by  implementing a change in both the carrier and in the number
of runs made.


     Income Tax Expense.  Income tax expense increased by $21 thousand, or 1.5%,
to $1.4  million  for the six  months  ended June 30,  2001.  The  increase  was
primarily the result of the increase in income before taxes, partially offset by
the impact of certain tax planning strategies  implemented by the Company, which
decreased the effective tax rate.



                                       23
<PAGE>

ASSET QUALITY

Non-Performing Assets

     The table  below sets forth the amounts and  categories  of  non-performing
assets at the dates indicated.

                                        June 30,  Dec.31,
                                         2001      2000
                                        ------    ------
                                         (In thousands)
Non-accruing loans:
   One-to four-family (1)............   $1,515    $1,471
   Commercial real estate ...........       --        44
   Consumer .........................      415       418
   Commercial business ..............      370       515
                                        ------    ------
     Total ..........................    2,300     2,448
                                        ------    ------
Accruing loans delinquent
   more than 90 days:
   One-to four-family (1)............      183       247
   Consumer .........................       --        10
                                        ------    ------
     Total ..........................      183       257
                                        ------    ------
Troubled debt restructured loans:
   One-to four-family (1)............       82        82
   Commercial real estate ...........      448       458
   Commercial business ..............       --         1
                                        ------    ------
     Total ..........................      530       541
                                        ------    ------
Total non-performing loans ..........    3,013     3,246
                                        ------    ------
Foreclosed assets:
   One-to four-family (1)............      245       232
   Commercial real estate ...........       --       112
   Consumer .........................       95        29
                                        ------    ------
     Total ..........................      340       373
                                        ------    ------
Total non-performing assets .........   $3,353    $3,619
                                        ======    ======
Non-performing loans as a percentage
of total loans ......................     0.64%     0.70%

Non-performing assets as a percentage
of total assets .....................     0.47%     0.51%

(1)  Includes home equity loans.


                                       24
<PAGE>

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 the Bank's loan
portfolio and changes in the nature and volume of its loan  activity,  including
those  loans  that  are  being  specifically   monitored  by  management.   Such
evaluation,  which includes a review of loans for which full  collectibility may
not be reasonably assured,  considers,  among other matters,  the estimated fair
value of the  underlying  collateral  for collateral  dependent  loans,  the net
present  value of  estimated  future  cash  flows if the loan is not  collateral
dependent,  economic  conditions,  historical  loan loss  experience,  and other
factors  that  warrant  recognition  in  providing  for an  adequate  loan  loss
allowance. The following table sets forth an analysis of the Company's allowance
for loan losses.
                                           For the six months
                                             ended June 30,
                                           2001         2000
                                          -------     -------
                                             (In thousands)

Balance at beginning of period ........   $ 5,745     $ 5,509

Charge-offs:
     One- to four-family (1) ..........       (25)         (1)
     Consumer .........................      (127)       (186)
     Commercial business ..............      (169)         (6)
                                          -------     -------
        Total charge-offs .............      (321)       (193)
                                          -------     -------

Recoveries:
     One- to four-family (1) ..........         2           1
     Consumer .........................        10          11
     Commercial business ..............        21           6
                                          -------     -------
        Total Recoveries ..............        33          18
                                          -------     -------

Net charge-offs .......................      (288)       (175)
Provisions charged to operations ......       240         240
                                          -------     -------
Balance at end of period ..............   $ 5,697     $ 5,574
                                          =======     =======

Ratio of allowance for loan
losses to total loans (period end) ....      1.21%       1.20%

Ratio of allowance for loan losses
to non-performing loans (at period end)    189.08%     201.37%

Ratio of net charge-offs during the
period to average loans outstanding
during period (annualized) ............      0.12%       0.07%

(1) Includes home equity loans.

                                       25
<PAGE>

Liquidity and Capital Resources


     The Bank is required by OTS regulations to maintain sufficient liquidity to
ensure its safe and sound operation.  The Company's sources of liquidity include
cash  flows  from  operations,   principal  and  interest   payments  on  loans,
mortgage-backed  securities and collateralized mortgage obligations,  maturities
of  securities,  deposit  inflows,  borrowings  from  the  FHLB of New  York and
proceeds from the sale of securities sold under agreements to repurchase.


     While maturities and scheduled amortization of loans and securities are, in
general, a predictable  source of funds,  deposit flows and prepayments on loans
and  securities  are greatly  influenced  by general  interest  rates,  economic
conditions and  competition.  In addition,  the Company  invests excess funds in
overnight deposits which provide liquidity to meet lending requirements.


     In addition to deposit  growth,  the Company borrows funds from the FHLB of
New York or may utilize  other types of borrowed  funds to  supplement  its cash
flows. At June 30, 2001 and December 31, 2000, the Company had $68.3 million and
$71.4 million,  respectively,  in outstanding borrowings from the FHLB and $62.5
million and $72.5 million,  respectively,  in securities repurchase  agreements,
the vast majority of which are also with the FHLB.


     As of June 30, 2001 and December 31, 2000,  the Company had $177.0  million
and $139.0  million,  respectively,  of  securities  classified as available for
sale. The liquidity of the securities  available for sale portfolio provides the
Company  with  additional  potential  cash flows to meet loan growth and deposit
flows.


     Liquidity  may  be  adversely  affected  by  unexpected  deposit  outflows,
excessive interest rates paid by competitors,  adverse publicity relating to the
savings and loan industry,  and similar matters.  Management  monitors projected
liquidity  needs  and  determines  the  level  desirable,  based  in part on the
Company's commitment to make loans and management's  assessment of the Company's
ability to generate funds.


     The Bank is subject to federal  regulations  that  impose  certain  minimum
capital requirements.  At June 30, 2001, the Bank's capital exceeded each of the
regulatory  capital  requirements of the OTS. The Bank is "well  capitalized" at
June 30, 2001 according to regulatory  definition.  At June 30, 2001, the Bank's
tangible  and core  capital  levels  were  both  $62.1  million  (8.79% of total
adjusted  assets)  and its total  risk-based  capital  level  was $66.8  million
(17.85% of total  risk-weighted  assets).  The minimum  regulatory capital ratio
requirements of the Bank are 1.5% for tangible  capital,  4.0% for core capital,
and 8.0% for total risk-based capital.


     During the first six months of 2001, the Company repurchased 130,033 shares
of its common stock in open-market transactions at a total cost of $2.3 million.

                                       26
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About market Risk

     There have been no material  changes in the  Company's  interest  rate risk
position  since December 31, 2000.  Other types of market risk,  such as foreign
exchange rate risk and  commodity  price risk, do not arise in the normal course
of the Company's business activities.



Part II - Other Information

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

     Ambanc Holding Co., Inc.'s Annual Meeting of  Shareholders  was convened on
June 1, 2001.

     Proxies for the meeting were solicited pursuant to Regulation 14A under the
Securities  Exchange  Act of 1934,  as  amended.  There was no  solicitation  in
opposition to management's  nominees as listed in the proxy  statement,  and all
such nominees were elected.

     With respect to  management's  nominees,  voting was as follows:  Daniel J.
Greco, For - 3,689,048,  Withheld - 606,444,  John M. Lisicki,  For - 3,633,122,
Withheld - 662,370,  Charles S. Pedersen,  For - 3,688,511,  Withheld - 606,981,
John A. Tesiero, Jr., For - 3,688,719, Withheld - 606,773.

     Proxies were also solicited at the annual meeting for the  ratification  of
the Ambanc Holding Co., Inc. 2001 Stock Option Plan. The plan was adopted,  with
2,227,309  shares voting For,  927,435 shares voting Against,  and 31,581 shares
Abstaining.

     Proxies were also solicited at the annual meeting for the  ratification  of
the appointment of KPMG LLP as independent auditors of the Company. The proposal
was adopted, with 4,251,120 shares voting For, 33,250 shares voting Against, and
11,122 shares Abstaining.



Item 6.  Exhibits and Reports on Form 8-K

      (a)   Exhibits as required by Item 601 of Regulation S-K.

                        None

      (b)   Reports on Form 8-K

                        During the quarter under report, a Form 8-K was filed on
                   May 16, 2001 and on May 30, 2001.


                                       27
<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.

AMBANC HOLDING CO., INC.



/s/ John M. Lisicki

John M. Lisicki
President and Chief Executive Officer
(Principal Executive Officer)
Date:  August 13, 2001



/s/ James J. Alescio

James J. Alescio
Executive Vice President & CFO
(Principal Financial and Accounting Officer)
Date:  August 13, 2001























                                       28