SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q
(Mark One)

[_]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended           March 31, 1998
                               -------------------------------------

                                       OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

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

                         Commission file number 0-27010
                                                -------

                           LITTLE FALLS BANCORP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           New Jersey                                   22-3402073
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. employer identification no.)
incorporation or organization)

86 Main Street, Little Falls, New Jersey                   07424
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code    (201) 256-6100

                                       N/A
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report.

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date May 9, 1997.

          Class                                             Outstanding
---------------------------                               ----------------
$.10 par value common stock                               2,477,525 shares


<PAGE>



                           LITTLE FALLS BANCORP, INC.
                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1998

                                      INDEX

                                                                      Page
                                                                     Number
                                                                     ------

PART I - CONSOLIDATED FINANCIAL INFORMATION OF LITTLE FALLS
             BANCORP, INC.

Item 1.  Financial Statements and Notes Thereto...........................1
Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.....................6

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings...............................................13
Item 2.  Changes in Securities...........................................13
Item 3.  Defaults upon Senior Securities.................................13
Item 4.  Submission of Matters to a Vote of Security Holders.............13
Item 5.  Other Materially Important Events...............................13
Item 6.           Exhibits and Reports on Form 8-K.......................13

SIGNATURES


<PAGE>



                           LITTLE FALLS BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                     March 31,             December 31,
                                                                                       1998                    1997
                                                                                  -------------            -------------
<S>                                                                               <C>                     <C>         
ASSETS
Cash and due from banks................................................           $  3,600,345            $  2,737,709
Interest-bearing deposits in other banks...............................                390,149                 550,522
Federal funds sold.....................................................             19,500,000               3,500,000
                                                                                   -----------             -----------
     Total cash and cash equivalents...................................             23,490,494               6,788,231
Investment securities held-to-maturity net
  (estimated fair values $58,920,000
  and $58,129,000).....................................................             58,679,591              57,987,644
Investment securities available for sale...............................             15,212,910                      --
Mortgage-backed securities available for
  sale.................................................................             11,954,422              13,929,048
Mortgage-backed securities held to maturity, net
  (estimated fair values $84,527,000
  and $91,246,000).....................................................             84,271,082              90,957,446
Loans receivable.......................................................            148,446,662             147,033,259
Premises and equipment.................................................              2,618,071               2,617,175
Investment in real estate..............................................                424,752                 427,317
Foreclosed real estate.................................................                585,352                 604,219
Interest receivable....................................................              2,617,275               2,079,091
Federal Home Loan Bank of New York stock, at cost......................              3,767,600               2,517,600
Excess of cost over assets acquired....................................              2,766,033               2,856,230
Other assets...........................................................                609,136                 725,234
                                                                                   -----------             -----------
      TOTAL ASSETS.....................................................           $355,443,380            $328,522,494
                                                                                   ===========             ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits.............................................................           $233,847,551            $230,132,675
  Borrowed money.......................................................             83,877,000              58,719,500
  Accounts payable and other liabilities...............................              1,466,282               1,375,658
                                                                                  ------------             -----------
      Total liabilities................................................            319,190,833             290,227,833
                                                                                   -----------             -----------
Stockholders' Equity:
  Preferred stock; 5,000,000 authorized shares;
    none outstanding...................................................                     --                      --

  Common stock, par value $.10; 10,000,000
     authorized shares; shares issued 3,041,750;
     shares outstanding 2,477,525 and 2,607,921........................                304,175                 304,175
  Additional paid-in-capital...........................................             29,105,270              29,067,633
  Retained earnings - substantially restricted.........................             18,603,670              18,275,517
  Common Stock acquired by ESOP shares.................................             (2,065,875)             (2,106,432)
  Unearned restricted MSBP stock, at cost..............................             (1,253,384)             (1,329,167)
  Treasury stock, at cost; 564,225 and 433,829 shares..................             (8,191,308)             (5,632,286)
  Unrealized loss on securities available
    for sale...........................................................                (36,284)                (71,062)

  Minimum pension liability net of deferred taxes......................               (213,717)               (213,717)
                                                                                   -----------            ------------
      Total stockholders' equity.......................................             36,252,547              38,294,661
                                                                                   -----------             -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......................           $355,443,380            $328,522,494
                                                                                   ===========             ===========
</TABLE>

---------------------
*    The consolidated balance sheet at December 31, 1997 has been taken from the
     audited balance sheet at that date.

See notes to unaudited consolidated financial statements.

                                        1

<PAGE>



                           LITTLE FALLS BANCORP, INC.
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                              For the Three Months
                                                                                                 Ended March 31,
                                                                                       ----------------------------------
                                                                                          1998                   1997
                                                                                       ------------           -----------
<S>                                                                                     <C>                   <C>       
Interest income:
  Loans receivable........................................................              $2,789,542            $2,205,524
  Mortgage backed securities..............................................               1,619,400             1,814,168
  Investment securities and other interest earning assets.................               1,198,830               961,423
                                                                                         ---------              --------
      Total interest income...............................................               5,607,772             4,981,115
Interest expense:
  Deposits................................................................               2,599,740             2,521,787
  Borrowings..............................................................                 918,442               473,696
                                                                                         ---------             ---------
Total interest expense....................................................               3,518,182             2,995,483
                                                                                         ---------             ---------
Net interest income before provision for loan losses......................               2,089,590             1,985,632
Provision for loan losses.................................................                  60,000                60,000
                                                                                         ---------             ---------
     Net interest income after provision for loan losses..................               2,029,590             1,925,632
                                                                                         ---------             ---------
Non-interest income:
Total non-interest income.................................................                  62,519                60,883
                                                                                         ---------             ---------
Non-interest expense:
  Compensation and employee benefits......................................                 724,221               636,569
  Occupancy, net..........................................................                  94,541                76,590
  Equipment...............................................................                 101,260               115,017
  Deposit insurance premiums..............................................                  30,057                30,973
  Loss on foreclosed real estate..........................................                   6,876                 9,892
  Amortization of deposit premium.........................................                  90,197                90,197
  Miscellaneous expense...................................................                 339,708               311,924
                                                                                         ---------             ---------
     Total non-interest expense...........................................               1,386,860             1,271,162
                                                                                         ---------             ---------
     Income before provision for income taxes.............................                 705,249               715,353
Provision for income taxes................................................                 246,700               270,000
                                                                                         ---------             ---------
      Net income..........................................................                 458,549               445,353
Other comprehensive income - unrealized holding gains on securities
  available for sale, net of income taxes of $19,547 in 1998..............                  34,778                --
                                                                                        ----------            ------
                                                                                       $   493,327           $   445,353
                                                                                        ==========            ==========
Weighted average number of common shares outstanding:
                           basic                                                         2,259,761             2,508,014
                                                                                        ==========            ==========
                           diluted                                                       2,378,608             2,557,243
                                                                                        ==========            ==========
  Earnings per share:
                           basic                                                           $  0.20               $  0.18
                                                                                            ======                ======
                           diluted                                                         $  0.19               $  0.17
                                                                                            ======                ======

</TABLE>

See notes to unaudited consolidated financial statements.



                                        2

<PAGE>
                           LITTLE FALLS BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                             For the Three Months
                                                                                                 Ended March 31,
                                                                                   -----------------------------------------
                                                                                          1998                     1997
                                                                                   ---------------           ---------------
<S>                                                                                  <C>                      <C>        
Cash flows from operating activities:
  Net income..............................................................              $458,549                 $445,353
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation..........................................................                32,004                   34,299
    Provision for loan losses.............................................                60,000                   60,000
    Amortization of intangibles...........................................                90,197                   90,197
    Amortization of deferred fees, premiums and discounts, net............                54,867                   24,337
    Amortization of unearned ESOP shares..................................                78,194                   54,589
    Amortization of MSBP cost.............................................                75,783                   43,800
    Loss (gain) on sale of foreclosed real estate.........................                    --                    8,169
    Decrease in other assets..............................................                96,551                  207,882
    Increase in interest receivable, net..................................              (538,184)                (563,745)
    Increase (decrease) in interest payable...............................               126,718                  (47,381)
    Increase (decrease) in accounts payable and other liabilities.........               (72,175)                 231,973
                                                                                        --------                  -------
      Net cash provided by operating activities...........................               462,504                  589,473
                                                                                         -------                  -------
Cash flows from investing activities:
    Principal collections on mortgage-backed securities available for sale             1,982,192                       --
    Principal collections on mortgage-backed securities held to maturity..             6,668,594                5,458,872
    Net increase in loans receivable......................................            (1,448,269)              (5,095,002)
    Purchase of investments held to maturity..............................            (7,694,185)                      --
    Purchases of premises and equipment...................................               (30,335)                 (15,371)
    Proceeds from sale of foreclosed real estate..........................                    --                   74,631
    Purchases of Federal Home Loan Bank of New York stock.................            (1,250,000)                (146,300)
                                                                                       ---------                 --------
      Net cash provided by (used in) investing activities.................            (9,979,280)                 276,830
                                                                                       ---------                 --------
 Cash flows from financing activities:
   Net increase (decrease) in deposits....................................             3,750,957                (793,578)
   Treasury stock acquired................................................            (2,559,022)                     --
   Increase in borrowed money.............................................            25,157,500                      --
   Cash dividends paid....................................................              (130,396)                (68,630)
                                                                                       ---------              ----------
     Net cash used in financing activities................................            26,219,039                (862,208)
                                                                                      ----------              ----------
     Increase in cash and cash equivalents................................            16,102,263                    4,095
Cash and cash equivalents:
  Beginning of period.....................................................             6,788,231               10,373,964
                                                                                       ---------               ----------
  End of period...........................................................           $23,490,494              $10,378,059
                                                                                      ==========               ==========
Supplemental disclosures:
Cash paid during the year for:
  Interest................................................................           $ 3,391,464             $  3,040,164
                                                                                     ===========             ============
  Income Taxes............................................................                    --                       --
                                                                                     ===========             ============
Unrealized gain on securities available for sale, net of
  income taxes........................................................               $    34,778             $         --
                                                                                     ===========             ============
Repurchase of stock for MSBP - trade date March 26, 1997,
  settlement date April 1, 1997...........................................           $        --             $  1,688,171
                                                                                     ===========             ============
Dividend declared.........................................................           $        --             $     82,355
                                                                                     ===========             ============

</TABLE>

                   See notes to unaudited consolidated financial statements.

                                        3

<PAGE>



                           LITTLE FALLS BANCORP, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - PRINCIPLES OF CONSOLIDATION

         The  consolidated  financial  statements  as of and for the three month
         periods  ended March 31, 1998 and 1997  include the  accounts of Little
         Falls Bancorp,  Inc. (the "Company") and its  subsidiary,  Little Falls
         Bank (the  "Bank").  The  Company's  business is conducted  principally
         through  the  Bank.   All   significant   intercompany   accounts   and
         transactions have been eliminated in consolidation.

NOTE 2 - BASIS OF PRESENTATION

         The  accompanying  consolidated  financial  statements were prepared in
         accordance  with  instructions  for Form  10-Q and,  therefore,  do not
         include  all  information  necessary  for a  complete  presentation  of
         consolidated financial condition, results of operations, and cash flows
         in conformity with generally accepted accounting  principles.  However,
         all adjustments, consisting of normal recurring accruals, which, in the
         opinion of  management,  are necessary for a fair  presentation  of the
         consolidated  financial  statements have been included.  The results of
         operations  for the  periods  ended  March  31,  1998  and 1997 are not
         necessarily  indicative  of the results  which may be expected  for the
         entire fiscal year or any other period.

         These  statements  should be read in conjunction  with the consolidated
         financial  statements  and  related  notes  which are  incorporated  by
         reference  in the  Company's  Annual  Report  on Form 10-K for the year
         ended December 31, 1997.

NOTE 3 - EARNINGS PER SHARE

         During the quarter ended March 31, 1998, the Company adopted  Statement
         of Financial Accounting Standards  ("Statement") No. 128, "Earnings Per
         Share" and has restated  previously  reported per share amounts.  Under
         the new  standard,  basic  earnings  per share is  computed by dividing
         income  applicable to common shares by the weighted  average  number of
         common shares  outstanding  for the period  (excluding  any  dilution).
         Diluted  earnings  per  share  includes  the  effect  of  all  dilutive
         potential  common  shares  outstanding  during the  period.  Sources of
         potential common shares include  unearned shares and outstanding  stock
         options.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

          Accounting  for  Transfers  and  Servicing  of  Financial  Assets  and
          Extinguishments  of Liabilities.  The Financial  Accounting  Standards
          Board  ("FASB")  issued  Statement  of Financial  Accounting  Standard
          ("SFAS") No. 125,  Accounting for Transfers and Servicing of Financial
          Assets and  Extinguishments of Liabilities (SFAS No. 125) and SFAS No.
          127,  Deferral of the  Effective  Date of Certain  Provisions  of FASB
          Statement  No.  125  (SFAS  No.  127)  in  June  and  December   1996,
          respectively. SFAS No. 125 provides accounting and reporting standards
          for transfers and servicing of financial assets and extinguishments of
          liabilities.  It requires  entities to recognize  servicing assets and
          liabilities for all contracts to service financial assets,  unless the
          assets are  securitized  and all servicing is retained.  The servicing
          assets will be measured initially at fair value, and will be amortized
          over the estimated useful lives of the servicing  assets. In addition,
          the  impairment  of  servicing  assets  will be  recognized  through a
          valuation  allowance.  SFAS No. 125 also  addresses the accounting and
          reporting standards for securities lending,

                                        4

<PAGE>



          dollar-rolls,  repurchase  agreements  and similar  transactions.  The
          Company  has  prospectively  adopted  SFAS No. 125 on January 1, 1997.
          However,  in  accordance  with  SFAS No.  127,  the  Company  deferred
          adoption  of  the  standard  as  it  relates  to  securities  lending,
          dollar-rolls,  repurchase  agreements and similar  transactions  until
          January 1, 1998.  The adoption of SFAS No. 125 did not have a material
          impact on its consolidated financial statements.

               Comprehensive  Income.  Effective January 1,  1998,  the  Company
          adopted Statement No. 130, "Reporting Comprehensive Income." Statement
          No. 130 requires the reporting of comprehensive  income in addition to
          net income from  operations.  Comprehensive  income is more  inclusive
          financial  reporting  methodology that includes  disclosure of certain
          financial information that historically has not been recognized in the
          calculation  of net income.  As required,  the provisions of Statement
          No.  130  have  been  retroactively  applied  to  previously  reported
          periods.  The  application  of Statement  No. 130 had no effect on the
          Company's consolidated financial condition or operations.

                                        5

<PAGE>



                           LITTLE FALLS BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

         The Company is a New Jersey corporation organized in August 1995 at the
direction  of the Board of  Directors  of the Bank to acquire all of the capital
stock of the Bank issued in the Conversion. The Company is a unitary savings and
loan holding company which, under existing laws,  generally is not restricted in
the types of business  activities in which it may engage  provided that the Bank
retains a specified amount of its assets in housing-related investments.

         The Bank is a federally  chartered stock savings bank  headquartered in
Little  Falls,  New Jersey.  The Bank was founded in 1887 and its  deposits  are
federally  insured by the Savings  Association  Insurance  Fund ("SAIF") and the
Bank is a member of the Federal Home Loan Bank  ("FHLB")  System.  The Bank is a
community oriented, full service retail savings institution offering traditional
mortgage  loan  products.  It is the  Bank's  intent to  remain  an  independent
community savings bank serving the local banking needs of its community.

         The Bank attracts deposits from the general public and has historically
used such deposits  primarily to originate  loans secured by first  mortgages on
owner-occupied one- to four-family residences in its market area and to purchase
mortgage-backed  securities.  The Bank  also  originates  a  limited  number  of
commercial real estate,  residential  construction,  and consumer  loans,  which
mainly consist of home equity lines of credit.

         The  largest  components  of the Bank's  net  income  are net  interest
income,  which is the difference  between interest income and interest  expense,
and noninterest  income derived  primarily from fees.  Consequently,  the Bank's
earnings are dependent on its ability to originate  loans,  net interest income,
and  the  relative  amounts  of  interest-earning  assets  and  interest-bearing
liabilities.  The Bank's net income is also  affected by its  provision for loan
losses  and  foreclosed  real  estate  as well  as the  amount  of  non-interest
expenses,  such as  compensation  and benefit  expense,  occupancy and equipment
expense and deposit insurance  premium  expenses.  Earnings of the Bank also are
affected   significantly  by  general   economic  and  competitive   conditions,
particularly  changes in market interest rates,  government policies and actions
of regulatory authorities.

Comparison of Financial Condition

         Total assets  increased $26.9 million at March 31, 1998, as compared to
December 31, 1997.  This increase was  primarily due to a $25.0 million  Federal
Home Loan Bank ("FHLB")  advance taken by the Bank in March 1998.  Federal Funds
sold  increased  by $16.0  million  as a result of the  previously  noted  $25.0
borrowing.  It is not the Bank's  intention to keep a large portion of the funds
in federal funds sold.  Net loans  increased by $1.4 million due in most part to
mortgage  originations  of $3.9  million  offset  somewhat  by loan  repayments.
Mortgage-backed  securities  (including  those  available for sale) decreased by
$8.7  million due to  repayments  and no new  purchases.  Investment  securities
(including those available for sale) increased by $15.9 million as the Bank used
a portion of the $25.0 million borrowings to fund these purchases.

         Total  deposits  remained  relatively  stable,  increasing,   excluding
interest credited, by $1.1 million.


                                        6

<PAGE>



         Total stockholders' equity decreased by $2.0 million,  primarily due to
the  purchase  of  130,396  shares of stock at an average  price of $19,625  per
share.  Equity was also reduced  $130,000 due to a dividend paid on February 12,
1998. These were offset somewhat by earnings for the quarter.

Non-performing Assets

         The following  table sets forth  information  regarding  non-performing
loans and real estate owned.

<TABLE>
<CAPTION>
                                              At                       At                       At
                                           March 31,               December 31,              March 31,
                                           ---------               ------------              ---------
                                             1998                     1997                     1997
                                             ----                     ----                     ----
                                                                 (In thousands)
<S>                                        <C>                       <C>                      <C>    
Total non-performing loans........           $ 955                   $ 1,284                  $ 1,967
Real estate owned.................             585                       604                      774
                                            ------                    ------                    -----
Total non-performing assets.......         $ 1,540                   $ 1,888                  $ 2,741
                                            ======                    ======                    =====
Total non-performing loans to
  net loans.......................            0.64%                     0.87%                    1.61%
                                            ======                    ======                    =====
Total non-performing loans to
  total assets....................            0.27%                     0.39%                     .65%
                                            ======                    ======                    =====
Total non-performing assets to
  total assets....................           0.43%                     0.57%                     .90%
                                            ======                    ======                    =====

</TABLE>

Comparison of Earnings for the Three Months Ended March 31, 1998 and 1997

         Net  Income.  Net  income for the three  months  ended  March 31,  1998
increased  $13,000 to $459,000  over the same period of 1997.  This increase was
due primarily to an increase of $104,000 in net interest income, offset somewhat
by increases in compensation and employee benefits and occupancy expense.

         Total Interest Income.  Interest income increased by $627,000 or 12.58%
to $5.6  million  for the three  months  ended March 31, 1998 as compared to the
three  months  ended March 31,  1997.  This  increase was due in most part to an
increase of $30.9 million in the average balance of interest earning assets.  In
addition,  the average  rate earned on interest  earning  assets  increased by 9
basis points to 6.95% from 6.86%. This increase was due in part to the change in
the composition of average interest  earning assets.  For the three months ended
March 31, 1998, the average balance of loans made up 45.9% of all the average of
interest  earning  assets,  up from 40.9% for the three  months  ended March 31,
1997.  The average  balance of investment  securities  (including  available for
sale) increased to 19.6% from 17.7%. Conversely, mortgage-backed securities made
up 31.5% of the average  interest earning assets for the quarter ended March 31,
1998,  down from 37.8% for the first  quarter of 1997.  The  average  balance of
federal funds sold and interest  bearing  deposits in banks increased to 3.4% of
all interest earning assets for the quarter ended March 31, 1998, from 2.95% for
the quarter ended March 31, 1997. In general,  mortgage-backed securities have a
lower yield than loans because they are guaranteed as to principal and interest.
Federal  funds and  interest  bearing  deposits in banks have a lower yield than
investment securities, generally, due to their relatively short terms.

         Total  Interest  Expense.  Interest  expense  increased  by $523,000 or
17.45% for the  quarter  ended  March 31, 1998 as compared to the same period of
1997.  This increase was primarily due to the increase in the average balance of
interest  bearing  liabilities  of $33.7  million and an increase in the average
cost

                                        7

<PAGE>



of funds of 19 basis  points to 4.84% for the  quarter  ended  March 31, 1998 as
compared to the quarter ended March 31, 1997. The $33.7 million  increase in the
average balance of interest  bearing  liabilities was due to the average balance
of borrowed money  increasing by $29.9 million.  At March 31, 1998, the Bank had
$75.4 million of borrowings with the FHLB. They consist of the following:

          (a)  $9.0 million  repurchase  agreement with rate of 5.82%,  maturing
               December 1999 with a one time call feature at December 20, 1998.

          (b)  Two  repurchase  agreements of  approximately  $8.2 million each.
               Both mature in November 1998, at rates of 5.62% and 5.61%.

          (c)  $10.0 million repurchase agreement with a rate of 5.61%, maturing
               April 30,  1998.  (This  repurchase  agreement  was  subsequently
               rolled over at a rate of 5.62% and will mature June 1, 1998).

          (d)  $15.0  million  advance with a rate of 5.80%,  maturing in August
               1998.

          (e)  $25.0 million  advance at a rate of 5.35%,  with a final maturity
               of March 2011,  but it is callable by the Federal  Home Loan Bank
               after March 2001.

         In addition,  the Bank has an $8.5 million repurchase agreement with an
independent third party, which matures in August, 1998 and has a rate of 5.62%.

         Net Interest Income.  Net interest income increased $104,000  or  5.2%,
due to the reasons discussed in the two previous sections.

         Provisions  for Loan Losses.  A provision for loan losses is charged to
operations based on management's  evaluation of the potential losses that may be
incurred in the Bank's loan portfolio. Such evaluation,  which includes a review
of certain loans of which full  collectibility of interest and principal may not
be reasonably assured, considers the Bank's past loan loss experience, known and
inherent  risks  in the  portfolio,  adverse  situations  that  may  affect  the
borrower's  ability to repay,  estimated value of any underlying  collateral and
current  economic  conditions.  The provision for loan losses was $60,000 in the
quarters ended March 31, 1998 and 1997.

         As a result of the declines in regional  real estate  market values and
the significant  losses  experienced by many financial  institutions,  there has
been a  greater  level  of  scrutiny  by  regulatory  authorities  of  the  loan
portfolios of financial  institutions  undertaken as part of the  examination of
the institution by the FDIC, OTS or other federal or state  regulators.  Results
of recent  examinations  indicate  that these  regulators  may be applying  more
conservative  criteria  in  evaluating  real  estate  market  values,  requiring
significantly  increased  provisions for potential  loan losses.  While the Bank
believes it has established an adequate allowance for loan losses,  there can be
no assurance that regulators,  in reviewing the Bank's loan portfolio,  will not
request  the Bank to  significantly  increase  its  allowance  for loan  losses,
thereby negatively affecting the Bank's financial condition and earnings or that
the Bank may not have to  increase  its  level  of loan  loss  allowance  in the
future.

         Management  will continue to review its loan portfolio to determine the
extent,  if any,  to which  further  additional  loss  provisions  may be deemed
necessary.  There can be no  assurance  that the  allowance  for losses  will be
adequate  to cover  losses  which may in fact be realized in the future and that
additional provisions for losses will not be required.


                                        8

<PAGE>



         An analysis of the allowance for loan losses follows:

                                                    Three Months
                                                    Ended March 31,
                                                 ---------------------
                                                  1998            1997
                                                  ----            ----
                                                  (In thousands)
Balance - beginning                              $1,168          $1,090
Provisions charged to operations.........            60             60
Loans charged off, net of recoveries.....          (19)           (142)
                                                 -----            ----
Balance-ending...........................        $1,209          $1,008
                                                  =====           =====


         Impaired loans and related  amounts  recorded in the allowance for loan
losses at March 31, 1998 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
                                                  At                   At                   At
                                              March 31,           December 31,           March 31,
                                                 1998                 1997                 1997
                                                ------               ------               -----
<S>                                             <C>                   <C>                 <C>   
         With recorded allowances..........     $  741                $  744              $1,612

         Without recorded allowances.......         --                    --                 --
                                                 -----                 -----               ----
      Total impaired loans.................        741                   744               1,612
      Related allowance for loan losses....        111                   111                 245
                                                 -----                 -----               -----
      Net impaired loans...................     $  630                $  633              $1,367
                                                 =====                 =====               =====
</TABLE>


         Non-interest  Income.  Non-interest  income increased by $2,000 for the
three  months  ended March 31, 1998 as compared to the three  months ended March
31, 1997.

         Non-interest  Expense.  Non-interest  expense  increased by $116,000 or
9.1%,  for the three  months ended March 31, 1998 as compared to the same period
last year.  The increase was  primarily  due to  increases in  compensation  and
employee  benefits,  occupancy  and  miscellaneous  expense.   Compensation  and
employee  benefits  increased  by $89,000 due in most part to an increase in the
expense  related to the Company's  Employee Stock  Ownership Plan resulting from
the increase in the stock price of Little Falls  Bancorp,  Inc.,  an increase in
employee health insurance fees, an increase in the expense related to Management
Stock Bonus Plan and normal annual merit increases.  Occupancy expense increased
$18,000  due in most part to the  payment  of  $34,000  in back rent to settle a
disputed rental increase. Miscellaneous expense increased $28,000, primarily due
to the expense for the directors  stock bonus plans.  For the three months ended
March 31, 1998 and 1997,  the expense  for the  directors  stock bonus plans was
$43,000 and $19,000, respectively.

         Income Tax  Expense.  Income tax  expense  decreased  from  $270,000 to
$247,000,  due to the Bank increasing  investments in assets that are taxed at a
reduced Federal tax rate.


                                        9

<PAGE>



Liquidity and Capital Resources

         On March 31, 1998, the Bank was in compliance with its three regulatory
capital requirements as follows:


                                              Amount               Percent
                                              ------               -------
                                       (Dollars in thousands)

Tangible capital....................          $27,081                 7.67%
Tangible capital requirement........            5,296                 1.50%
                                              -------               ------
Excess over requirement.............          $21,785                 6.17%
                                               ======               ======

Core capital........................          $27,081                 7.67%
Core capital requirement............           10,592                 3.00%
                                               ------               ------
Excess over requirement.............          $16,489                 4.67%
                                               ======               ======

Risk based capital..................          $22,884                16.77%
Risk based capital requirement......           10,916                 8.00%
                                               ------              -------
Excess over requirement.............          $11,968                 8.77%
                                               ======              =======


         Management  believes  that  under  current  regulations,  the Bank will
continue to meet its minimum capital  requirements  in the  foreseeable  future.
Events  beyond the control of the Bank,  such as increased  interest  rates or a
downturn  in the  economy in areas in which the Bank  operates  could  adversely
affect  future  earnings  and as a result,  the  ability of the Bank to meet its
future minimum capital requirements.

         The Bank's  liquidity  is a measure of its ability to fund  loans,  pay
withdrawals of deposits, and other cash outflows in an efficient, cost effective
manner.  The  Bank's  primary  sources  of  funds  are  deposits  and  scheduled
amortization and prepayment of loan and  mortgage-backed  principal.  During the
past several years, the Bank has used such funds primarily to fund maturing time
deposits,  pay savings  withdrawals,  fund  lending  commitments,  purchase  new
investments,  and increase  liquidity.  The Bank is  currently  able to fund its
operations  internally.  Additionally,  sources of funds  include the ability to
utilize  Federal  Home Loan Bank of New York  advances and the ability to borrow
against  mortgage-backed  and investment  securities.  As of March 31, 1998, the
Bank had $83.9 million of borrowed funds.  Loan payments,  maturing  investments
and  mortgage-backed  security  prepayments  are greatly  influenced  by general
interest rates, economic conditions and competition.

         The Bank  anticipates  that it will have sufficient  funds available to
meet its  current  commitments.  As of March  31,  1998,  the Bank had  mortgage
commitments to fund loans of $4.6 million.  Also, at March 31, 1998,  there were
commitments  on unused  lines of credit  relating to home  equity  loans of $4.2
million.  Certificates  of  deposit  scheduled  to mature in one year or less at
March 31, 1998 totaled $122.0 million.  Based on historical deposit  withdrawals
and outflows,  and on internal monthly deposit reports  monitored by management,
management  believes that a majority of such deposits will remain with the Bank.
As a result,  no adverse  liquidity effects are expected.  Note,  however,  that
purchases of common  stock of the Company  pursuant to the  repurchase  plan and
MSBP will require additional  liquidity.  Management is currently evaluating its
options on these matters.

         The Bank is required  under  federal  regulations  to maintain  certain
specified  levels of "liquid  investments,"  which include certain United States
government  obligations  and other  approved  investments.  Current  regulations
require  the Bank to  maintain  liquid  assets  of not  less  than 4% of its net
withdrawable  accounts plus short term  borrowings.  Those levels may be changed
from time to time by the regulators to reflect current economic conditions.  The
Bank has maintained liquidity in excess of regulatory requirements.

                                       10

<PAGE>




Risk Management

         In an effort  to reduce  interest  rate  risk and  protect  it from the
negative effect of rapid increases and decreases in interest rates, the Bank has
instituted certain asset and liability management measures including emphasizing
the origination of three, five and ten year  adjustable-rate  mortgage loans and
investing excess funds in short- and medium-term  mortgage-backed and investment
securities.  The Bank retains an asset/liability  consultant,  FinPro,  Inc., to
assist it in  analyzing  its asset  liability  position.  With the  consultant's
assistance,  the Bank undertakes a quarterly  extensive study of various trends,
conducts   separate   deposit   and  asset   analyses   and   prepares   various
asset/liability  tables including  contractual  interest rate gap, interest rate
gap with prepayment  assumptions,  margin/spread  and duration tables.  Interest
rate gap analysis  measures the difference  between amounts of  interest-earning
assets and interest-bearing  liabilities which either reprice or mature within a
given period of times and their sensitivity to changing interest rates.

         The Bank, like many other thrift  institutions,  is exposed to interest
rate risk as a result of the  difference  in the  maturity  of  interest-bearing
liabilities  and  interest-earning  assets and the volatility of interest rates.
Most deposit  accounts react more quickly to market interest rate movements than
do the existing mortgage loans because of the deposit accounts' shorter terms to
maturity;  sharp decreases in interest rates would typically increase the Bank's
earnings.  Conversely,  this same mismatch will generally  adversely  affect the
Bank's  earnings  during  periods of increasing  interest  rates.  The extent of
movement of interest rates is an uncertainty  that could have a negative  impact
on the earnings of the Bank.

         Volatility  in  interest  rates can also  result in  disintermediation,
which is the flow of funds away from savings institutions (such as the Bank) and
into other  investments,  such as U.S.  Government and corporate  securities and
other investment vehicles.  Because of the absence of federal insurance premiums
and reserve  requirements,  such investments may pay higher rates of return than
investment vehicles offered by savings institutions.

Year 2000

A great deal of information has been disseminated about the global computer year
2000. Many computer  programs that can only  distinguish the final two digits of
the year entered (a common  programming  practice in earlier years) are expected
to read entries for the year 2000 as the year 1900 and compute payment, interest
or  delinquency  based on the wrong date or are expected to be unable to compute
payment,  interest  or  delinquency.  Rapid  and  accurate  data  processing  is
essential to the operation of the Company.  Data processing is also essential to
most other financial institutions and many other companies.  All of the material
data  processing  of the  Company  that  could be  affected  by this  problem is
provided by a third party service bureau.  The service bureau of the Company has
advised the Company that it expects to be year 2000 complaint  prior to December
31, 1999.  However,  if the service  bureau is unable to resolve this  potential
problem in time, the Company would likely experience significant data processing
delays,  mistakes or failures.  These delays,  mistakes or failures could have a
significant  adverse impact on the financial  condition and results of operation
of the Company.

Furthermore,  the Company is requiring its computer systems and software vendors
to represent  that the products  provided are or will be Year 2000 compliant and
has  planned a program of  testing  for  compliance.  The  Company is  obtaining
representations  from its  primary  third  party  vendors  that  they  will have
resolved any Year 2000 problems and anticipates  that its vendors also will have
resolved any Year 2000 problems.  There can be no assurances,  however, that the
Company's plan or the performance by the Company's  vendors will be effective to
remedy all potential problems. To the extent the Company's systems are not fully
Year  2000  compliant,   there  can  be  no  assurance  that  potential  systems
interruptions  or the  cost  necessary  to  update  software  would  not  have a
materially  adverse  effect  on the  Company's  business,  financial  condition,
results of operations, cash flows, and business prospects.

                                       11

<PAGE>



Further,  any Year 2000  failure on the part of the  Company's  customers  could
result in additional  expense or loss to the Company.  The Company expects to be
in year 2000 compliance by the end of 1998.

Impact of Inflation and Changing Prices

         The consolidated financial statements of the Company and notes thereto,
presented  elsewhere  herein,  have been prepared in accordance with GAAP, which
require the measurement of financial  position and operating results in terms of
historical  dollars without  considering  the change in the relative  purchasing
power of money over time due to inflation.  The impact of inflation is reflected
in the  increased  cost of the  Company's  operations.  Unlike  most  industrial
companies,  nearly all the assets and  liabilities of the Company are financial.
As a result,  interest rates have a greater impact on the Company's  performance
than do the  effects  of  general  levels of  inflation.  Interest  rates do not
necessarily  move in the same  direction  or to the same extent as the prices of
goods and services.

Additional Key Operating Ratios
                                                        For the
                                                   Three Months Ended
                                                        March 31,
                                                1998(1)             1997(1)
                                                -------             -------
Diluted earnings per common share (2).....      $ 0.19              $ 0.17
Return on average assets..................        0.55%               0.59%
Return on average equity..................        4.81%               4.44%
Interest rate spread......................        2.11%               2.21%
Net interest margin.......................        2.59%               2.73%
Noninterest expense to average assets.....        1.66%               1.69%
Net charge-offs to average outstanding
  loans...................................        0.05%               0.47%


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

Tangible book value per share........         $13.52            $13.59

----------------
(1)      The ratios for the three month period are annualized.
(2)      The average number of shares and share equivalents  outstanding  during
         the three  months  ended  March  31,  1998 and 1997 was  2,378,608  and
         2,557,243, respectively.

                                       12

<PAGE>
                    LITTLE FALLS BANCORP, INC. AND SUBSIDIARY

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS
          Neither the  Company nor the Bank was engaged in any legal  proceeding
          of a material nature at March 31, 1998. From time to time, the Company
          is a party to routine  legal  proceedings  in the  ordinary  course of
          business, such as claims to enforce liens, condemnation proceedings on
          properties  in which the  Company  holds  security  interests,  claims
          involving the making and servicing of real property  loans,  and other
          issues incident to the business of the Company. There were no lawsuits
          pending or known to be  contemplated  against the Company at March 31,
          1998 that would have a material  effect on the operations or income of
          the Company or the Bank, taken as a whole.

ITEM 2.  CHANGES IN SECURITIES
           Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
           Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
           Not applicable.

ITEM 5.  OTHER MATERIALLY IMPORTANT EVENTS
           Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          3.1  Articles of Incorporation of Little Falls Bancorp, Inc.*
          3.2  Bylaws of Little Falls Bancorp, Inc.*
          4.0  Form of Stock Certificate of Little Falls Bancorp, Inc.*
         10.1  Employment Agreement between the Bank and John P. Pullara**
         10.2  Employment Agreement between the Bank and Leonard G. Romaine**
         10.4  Form of Employment Agreement with Eight Employees of the Bank***
         10.6  1996 Management Stock Bonus Plan***
         10.7  1996 Stock Option Plan***
         11.0  Earnings Per Share Calculation
         27.0  Financial Data Schedule****

               (b)     Reports on Form 8-K.

               None.

------------------
*    Incorporated  herein by reference  into this  document from the Exhibits to
     Form S-1, Registration  Statement,  initially filed with the Securities and
     Exchange Commission on September 25, 1995 (Registration No. 33-97316).
**   Incorporated   by  reference  into  this  document  from  the  Exhibits  to
     Registrant's  Annual  Report on Form 10-K for the Year Ended  December  31,
     1995 (File No. 0-27010).
***  Incorporated   by  reference  into  this  document  from  the  Exhibits  to
     Registrant's  Annual  Report on Form 10-K for the year ended  December  31,
     1996 (File No. 0-27010).
**** In electronic filing only.


                                       13

<PAGE>



                    LITTLE FALLS BANCORP, INC. AND SUBSIDIARY

                                   SIGNATURES


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


                            LITTLE FALLS BANCORP, INC.




Date: May 15, 1998          By:      /s/Leonard G. Romaine
                                     -------------------------------------------
                                     Leonard G. Romaine
                                     President and Chief Executive Officer
                                     (Principal Executive Officer)



Date: May 15, 1998          By:      /s/Richard Capone
                                     -------------------------------------------
                                     Richard Capone
                                     Senior Vice President and
                                     Chief Financial Officer
                                     (Principal Officer)