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 OF 1934

For the quarterly period ended          March 31, 1997
                               -------------------------------------

                                       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 incorporation          (I.R.S. employer 
      or organization)                              employer identification no.)

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                              2,745,180 shares


<PAGE>



                           LITTLE FALLS BANCORP, INC.
                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1997

                                      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............................................  12
Item 2.     Changes in Securities........................................  12
Item 3.     Defaults upon Senior Securities..............................  12
Item 4.     Submission of Matters to a Vote of Security Holders..........  12
Item 5.     Other Materially Important Events............................  12
Item 6.     Exhibits and Reports on Form 8-K.............................  12

SIGNATURES


<PAGE>



                           LITTLE FALLS BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (Unaudited)

                                                      March 31,     December 31,
                                                        1997            1996
                                                    -----------      -----------
ASSETS
Cash and due from banks..........................    $3,867,328       $1,746,743
Interest-bearing deposits in other banks.........     3,210,731        3,627,221
Federal funds sold...............................     3,300,000        5,000,000
                                                    -----------      -----------
     Total cash and cash equivalents.............    10,378,059       10,373,964
Investment securities held-to-maturity net
  (estimated fair values $50,893,000
  and $51,204,000)...............................    51,364,068       51,370,297
Mortgage-backed securities held to maturity, net
  (estimated fair values $106,704,000
  and $112,426,000)..............................   106,993,527      112,473,144
Loans receivable, net............................   122,153,423      117,115,784
Premises and equipment, net......................     2,644,894        2,659,239
Investment in real estate, net...................       678,471          683,054
Foreclosed real estate, net......................       774,357          857,157
Interest receivable, net.........................     2,299,036        1,735,291
Federal Home Loan Bank of New York stock, at cost     2,222,000        2,075,700
Excess of cost over assets acquired..............     3,126,820        3,217,017
Other assets.....................................       749,209          957,091
                                                    -----------      -----------
      TOTAL ASSETS...............................  $303,383,864     $303,517,738
                                                    ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits.......................................  $227,548,995     $228,311,543
  Securities sold under agreements
    to repurchase................................    33,623,500       33,623,500
  Accounts payable and other liabilities.........     2,970,583        1,134,397
                                                   ------------      -----------
      Total liabilities.........................    264,143,078      263,069,440
                                                   ------------      -----------
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 2,745,180................       304,175          304,175
  Additional paid-in-capital.....................    28,988,832       28,974,799
  Retained earnings..............................    17,096,424       16,802,056
  Unearned ESOP shares...........................   (2,230,617)      (2,271,173)
  Minimum earned restricted MSBP stock at cost...   (1,556,469)               --
  Minimum pension liability net of deferred taxes      (84,555)         (84,555)
  Treasury stock, at cost; 296,570 shares........   (3,277,004)      (3,277,004)
                                                   -----------      -----------
      Total stockholders' equity.................    39,240,786       40,448,298
                                                    -----------      -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.  $303,383,864     $303,517,738
                                                    ===========      ===========

---------------------
*     The  consolidated  balance  sheet at December 31, 1996 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
                                   (Unaudited)




                                                         For the Three Months
                                                            Ended March 31,
                                                       -------------------------
                                                          1997           1996
                                                       ----------     ----------
Interest income:
  Loans receivable ...............................     $2,205,524     $1,904,823
  Mortgage backed securities .....................      1,814,168      2,084,510
  Investment securities and other interest
    earning assets ...............................        961,423        721,462
                                                       ----------     ----------
      Total interest income ......................      4,981,115      4,710,795
Interest expense:
  Deposits .......................................      2,521,787      2,912,296
  Borrowings .....................................        473,696             --
                                                       ----------     ----------
Total interest expense ...........................      2,995,483      2,912,296
                                                       ----------     ----------
Net interest income before provision for
  loan losses ....................................      1,985,632      1,798,499
Provision for loan losses ........................         60,000         30,000
                                                       ----------     ----------
     Net interest income after provision for
       loan losses ...............................      1,925,632      1,768,499
                                                       ----------     ----------
Non-interest income:
Total non-interest income ........................         68,903         66,798
                                                       ----------     ----------
Non-interest expense:
  Compensation and employee benefits .............        635,600        614,764
  Occupancy, net .................................         77,990        115,241
  Equipment ......................................        113,221        111,860
  Deposit insurance premiums .....................         30,973        109,205
  Amortization of deposit premium ................         90,197         90,197
  Miscellaneous expense ..........................        331,201        310,301
                                                       ----------     ----------
     Total non-interest expense ..................      1,279,182      1,351,568
     Income before provision for
      income taxes ...............................        715,353        483,729
Provision for income taxes .......................        270,000        171,351
                                                       ----------     ----------
      Net income .................................     $  445,353     $  312,378
                                                       ==========     ==========

Weighted average number of common
  shares outstanding .............................      2,568,791      2,800,438
                                                       ==========     ==========
Earnings per share ...............................     $     0.17     $     0.11
                                                       ==========     ==========


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,
                                                                                  -----------------
                                                                                1997             1996
                                                                              -------          --------

Cash flows from operating activities:
<S>                                                                        <C>             <C>         
  Net income ...........................................................   $    445,353    $    312,378
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation .......................................................         34,299          36,915
    Provision for loan losses ..........................................         60,000          30,000
    Amortization of intangibles ........................................         90,197          90,197
    Amortization of deferred fees, premiums and discounts, net..........         24,337.         25,932
    Amortization of unearned ESOP shares ...............................         54,589          40,557
    Loss (gain) on sale of foreclosed real estate ......................          8,169         (35,316)
    Decrease (increase) in other assets ................................        207,882        (229,489)
    Increase in interest receivable, net ...............................       (563,745)       (113,682)
    Increase (decrease) in interest payable ............................        (47,381)        102,203
    Increase in accounts payable and other liabilities .................        275,773          80,250
                                                                           ------------    ------------
      Net cash provided by operating activities ........................        589,473         339,945
                                                                           ------------    ------------
Cash flows from investing activities:
    Purchase of mortgage-backed securities held to maturity ............             --     (10,190,780)
    Principal collections on mortgage-backed securities 5,458,872aturity      6,047,630
    Net increase in loans receivable ...................................     (5,095,002)     (2,222,607)
    Purchase of investments held to maturity ...........................             --      (5,000,000)
    Purchases of premises and equipment ................................        (15,371)        (38,594)
    Proceeds from sale of foreclosed real estate .......................         74,631         127,363
    Purchases of Federal Home Loan Bank of New York stock...............       (146,300)             --
                                                                           ------------    ------------
      Net cash provided by (used in) investing activities ..............        276,830     (11,276,988)
                                                                           ------------    ------------
 Cash flows from financing activities:
   Net decrease in deposits ............................................       (793,578)     (4,540,610)
   Decrease in advances from borrowers .................................             --          18,588
   Refund of oversubscribed stock subscription .........................             --     (19,706,653)
   Costs of issuance of common stock ...................................             --        (717,311)
   Cash dividends paid .................................................        (68,630)             --
                                                                           ------------    ------------
     Net cash used in financing activities .............................       (862,208)    (24,945,986)
                                                                           ------------    ------------
     Increase in cash and cash equivalents .............................          4,095      35,883,029
Cash and cash equivalents:
  Beginning of period ..................................................     10,373,964      53,419,088
                                                                           ------------    ------------
  End of period ........................................................   $ 10,378,059    $ 17,536,059
                                                                           ============    ============
Supplemental disclosures:
Cash paid during the year for:
  Interest .............................................................   $  3,040,164    $  2,810,094
                                                                           ============    ============
  Income taxes .........................................................   $               $        
                                                                           ============    ============
Loans receivable transferred to foreclosed real estat$ .................             --    $    308,728
                                                                           ============    ============
Issuance of common stock:
  Deposits used for stock purchase .....................................   $         --    $  2,859,458
  Stock subscriptions used for stock purchase ..........................             --      25,124,642
  Deferred costs .......................................................             --        (422,630)
                                                                           ------------    ------------
                                                                           $         --    $ 27,561,470
                                                                           ============    ============
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, 1997 and 1996 include the accounts of Little Falls
      Bancorp,  Inc. (the "Company") and its subsidiary,  Little Falls Bank (the
      "Bank") which, as discussed in Note 3, became the wholly owned  subsidiary
      of the Company on January 5, 1996.  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, 1997 and 1996 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, 1996.

NOTE 3 - CONVERSION FROM MUTUAL SAVINGS BANK TO STOCK SAVINGS BANK AND
          FORMATION OF SAVINGS AND LOAN HOLDING COMPANY

      On January 5, 1996, the Bank  consummated  its conversion from a federally
      chartered  mutual  savings bank to a stock savings bank pursuant to a Plan
      of Conversion  (the  "Conversion")  via the issuance of common  stock.  In
      connection  with the  Conversion,  the Company  sold  3,041,750  shares of
      common  stock  which,  after  giving  effect to offering  expenses of $1.1
      million and 243,340 shares issued to the Bank's  Employee Stock  Ownership
      Plan ("ESOP"),  resulted in net proceeds of $26.8 million. Pursuant to the
      Conversion,  the Bank transferred all of its outstanding shares to a newly
      organized holding company, Little Falls Bancorp, Inc., in exchange for 50%
      of the net proceeds.

      Upon consummation of the Conversion, the preexisting liquidation rights of
      the depositors of the Bank were unchanged.  Specifically, such rights were
      retained  and will be  accounted  for by the Bank for the  benefit of such
      depositors  in  proportion  to  their  liquidation  interests  as  of  the
      eligibility  and  supplemental  eligibility  record  dates as  required by
      Office of Thrift Supervision ("OTS") regulations.


                                        4

<PAGE>



NOTE 4 - MANAGEMENT STOCK BONUS PLAN ("MSBP")

      On July 9, 1996, the Bank established a MSBP to provide both key employees
      and  outside  directors  with a  proprietary  interest in the Company in a
      manner  designed to encourage  such  persons to remain with the Bank.  The
      Bank, effective March 26, 1997, committed to contribute  $1,688,171 to the
      MSBP to purchase 121,670 shares of common stock of the Company in the open
      market.  The common stock purchase  transaction  was effected on March 26,
      1997 and funded on April 1, 1997.

NOTE 5 - EARNINGS PER SHARE

      Earnings per share for the three month  periods  herein are  calculated by
      dividing net earnings for the periods,  by the weighted  average number of
      shares  outstanding  during these same periods (as if the  Conversion  had
      taken place on January 1, 1996) of 2,568,791 and 2,804,494  shares for the
      1997 and 1996 periods, respectively. The weighted average number of common
      shares outstanding is adjusted for the unallocated  portion of shares held
      by the ESOP and for common stock  equivalents.  The Company's common stock
      equivalents  are based on the exercise of  outstanding  stock options that
      are determined to have a dilutive effect.

NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS

          Accounting  for  Transfers  and  Servicing  of  Financial  Assets  and
      Extinguishments of Liabilities.  The FASB issued 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,  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  will  defer  adoption  of  the  standard  as it  relates  to
      securities  lending,  dollar-rolls,   repurchase  agreements  and  similar
      transactions  until  January  1,  1998.  The  Company  does not expect the
      adoption  of SFAS No.  125 to have a material  impact on its  consolidated
      financial statements.

          Earnings  per Share.  On March 3, 1997,  the FASB issued SFAS No. 128,
      Earnings  per Share  (SFAS  No.  128)  which is  effective  for  financial
      statements issued for periods ending after December 15, 1997. SFAS No. 128
      replaces  APB  Opinion  15,   Earnings  per  Share,   and  simplifies  the
      computation of earnings per share (EPS) by replacing the  presentation  of
      primary EPS with a presentation  of basic EPS. In addition,  the Statement
      requires  dual  presentation  of basic and diluted  EPS by  entities  with
      complex capital structures. Basic EPS includes no dilution and is computed
      by   dividing   income   available   to   common   stockholders   by   the
      weighted-average  number  of common  shares  outstanding  for the  period.
      Diluted EPS reflects the potential dilution of securities that could share
      in  the  earnings  of  an  entity,  similar  to  fully  diluted  EPS.  The
      computation of EPS will be compatible with international standards, as the
      International  Accounting Standards Committee recently issued a comparable
      standard.

                                        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 remained relatively stable,  decreasing $134,000 at March 31,
1997 as compared to December  31,  1996.  Net loans  increased  by $5.0  million
primarily  due to loan  originations  of $7.7  million  offset  somewhat by loan
repayments.   Mortgage-backed  securities  decreased  by  $5.5  million  due  to
repayments and no new purchases.

      Total deposits  remained  relatively  stable,  decreasing,  after interest
credited, by $763,000.

      Accounts payable and other  liabilities  increased by $1.8 million to $3.0
million at March 31, 1997.  This increase was due in most part to the repurchase
of  121,670  shares  of the  Company's  stock  in  connection  with  the  Bank's
Management Stock Bonus Plan. The total cost of the stock was approximately  $1.7
million.  The  trade  date for the  transaction  was  March  26,  1997,  and the
settlement

                                        6

<PAGE>



date was April 1, 1997. To a much lesser degree, the Company's dividend declared
on March 11,  1997 and payable on or about May 1, 1997 also  contributed  to the
increase. The dividend amounted to approximately $82,000.

      Total stockholders' equity decreased by $1.3 million, primarily due to the
purchase  of 121,670  shares of stock at an average  price of $13.875 per share.
The total price was approximately $1.7 million.  These shares were purchased for
future distribution  through the Management Stock Bonus Plan. The trade date for
this  transaction was March 26, 1997, and the settlement date was April 1, 1997.
Equity was also  reduced  $82,000  due to a dividend  declared  on March 11, and
payable on May 1, 1997. These were offset in part by earnings for the quarter.

Non-performing Assets

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


                                      At                 At               At
                                   March 31,        December 31,       March 31,
                                   --------         ------------       ---------
                                     1997               1996             1996
                                     ----               ----             ----

Total non-performing loans.....     $ 1,967            $ 1,901          $ 2,748
Real estate owned..............         774                857            1,718
                                    -------            -------          -------
Total non-performing assets....     $ 2,741            $ 2,758          $ 4,466
                                    =======            =======          =======
Total non-performing loans to
  net loans....................        1.61%              1.62%            2.80%
                                    =======            =======          =======
Total non-performing loans to
  total assets.................         .65%               .63%             .96%
                                    =======            =======          =======
Total non-performing assets to
  total assets.................         .90%               .91%            1.56%
                                    =======            =======          =======


Comparison of Earnings for the Three Months Ended March 31, 1997 and 1996

      Net Income. Net income for the three months ended March 31, 1997 increased
$133,000 or 42.6% to $445,000  over the same period of 1996.  This  increase was
due primarily to an increase of $187,000 in net interest  income,  a decrease of
$78,000 in deposit  insurance  premiums,  offset  somewhat by  increases  in the
provision  for loan  losses  and income tax  expense  of  $30,000  and  $99,000,
respectively.

      Total Interest  Income.  Interest income  increased by $270,000 or 5.7% to
$5.0  million for the three months ended March 31, 1997 as compared to the three
months ended March 31, 1996.  This  increase was due in most part to an increase
of $12.8 million in the average balance of interest earning assets. In addition,
the average rate earned on interest  earning assets  increased by 8 basis points
to  6.86%  from  6.78%.  This  increase  was due in part  to the  change  in the
composition of average interest earning assets. For the three months ended March
31, 1997, loans made up 40.9% of all interest earning assets,  up from 35.1% for
the three  months  ended  March 31,  1996.  The  average  balance of  investment
securities increased to 17.7% from 11.7%. Conversely, mortgage-backed securities
made up 37.8% of the average interest earning assets for the quarter ended March
31, 1997,  down from 44.3% for the first quarter of 1996. The average balance of
federal funds sold and interest  bearing deposits in banks decreased to 2.95% of
all interest earning assets for the quarter ended March 31, 1997, from 8.41% for

                                        7

<PAGE>



the quarter ended March 31, 1996. 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 $83,000 or 2.9% for
the quarter  ended  March 31, 1997 as compared to the same period of 1996.  This
increase was  primarily  due to the increase in the average  balance of interest
bearing  liabilities  of $18.1  million  partially  offset by a decrease  in the
average  cost of funds of 15 basis  points to 4.65% for the quarter  ended March
31, 1997 as compared to the quarter ended March 31, 1996.

      Net Interest Income.  Net interest income increased $187,000 or 10.4%, due
to the reasons  discussed in the two  previous  sections.  In addition,  the net
interest spread,  the difference between the average rate earned and the average
rate paid, increased by 24 basis points to 2.21% for the quarter ended March 31,
1997 from 1.97% for the quarter ended March 31, 1996.

      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 increased $30,000 in
the quarter  ended  March 31,  1997 as compared to the same period in 1996.  The
primary  cause for the  increase  for the three month period was the increase in
the balance of the loan portfolio,  as well as  management's  intent to increase
the level of the allowance for loan losses.

      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,
                                       ------------------
                                        1997        1996
                                       -------    -------
                                         (In thousands)
Balance - beginning ................   $ 1,090    $   958
Provisions charged to operations ...        60         30
Loans charged off, net of recoveries      (142)       (57)
                                       -------    -------
Balance-ending .....................   $ 1,008    $   931
                                       =======    =======


      Impaired  loans and related  amounts  recorded in the  allowance  for loan
losses at March 31, 1997 are summarized as follows (in thousands):

      With recorded allowances............           $1,612

      Without recorded allowances.........               --
                                                     ------
      Total impaired loans................            1,612
      Related allowance for loan losses...              245
                                                     ------
      Net impaired loans..................           $1,367
                                                     ======


      Non-interest Income. Non-interest income increased by $2,000 for the three
months  ended March 31, 1997 as  compared  to the three  months  ended March 31,
1996.

      Non-interest  Expense.  Non-interest expense decreased by $72,000 or 5.4%,
for the three  months  ended  March 31, 1997 as compared to the same period last
year.  The decrease  was  primarily  due to  decreases in the deposit  insurance
premiums and occupancy expense, offset somewhat by increases in compensation and
employee  benefits  and  miscellaneous   expense.   Deposit  insurance  premiums
decreased $78,000 for the first quarter of 1997 due to the FDIC reduction of the
premium  charged  SAIF  members.  This was the  result of the  one-time  special
assessment  charged by the FDIC in September 1996.  Occupancy  expense decreased
$37,000  due in  most  part  to the  closing  of two  branch  offices  in  1996.
Compensation and employee benefits  increased by $21,000 due in most part to the
adoption of the Management Stock Bonus Plan ("MSBP") in the second half of 1996.
The MSBP expense for the three months ended March 31, 1997 was $25,000. This was
partially offset with a reduction in personnel costs associated with the closing
of two branch offices  previously  discussed.  Miscellaneous  expense  increased
$21,000,  primarily  due to the MSBP  expense for the  directors.  For the three
months ended March 31, 1997, the MSBP expense for the directors was $19,000.

      Income  Tax  Expense.  Income  tax  expense  increased  from  $171,000  to
$270,000, due to the increase of pre-tax income for the same periods.


                                        9

<PAGE>



Liquidity and Capital Resources

      On March 31, 1997,  the Bank was in compliance  with its three  regulatory
capital requirements as follows:
                                                  Amount                Percent
                                                     (Dollars in thousands)
Tangible capital............................     $26,156                  8.71%
Tangible capital requirement................       4,505                  1.50%
                                                  ------                ------
Excess over requirement.....................     $21,651                  7.21%
                                                  ======                ======

Core capital................................     $26,156                  8.71%
Core capital requirement....................       9,009                  3.00%
                                                  ------                ------
Excess over requirement.....................     $17,147                  5.71%
                                                  ======                ======

Risk based capital..........................     $26,474                 27.28%
Risk based capital requirement..............       7,762                  8.00%
                                                  ------               -------
Excess over requirement.....................     $18,712                 19.28%
                                                  ======               =======


      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, 1997, the
Bank had $33.6 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, 1997, the Bank had mortgage commitments
to fund loans of $4.4 million.  Also, at March 31, 1997,  there were commitments
on unused  lines of credit  relating  to home equity  loans of $3.0  million and
commitments to purchase investment  securities of $2.0 million.  Certificates of
deposit scheduled to mature in one year or less at March 31, 1997 totaled $110.4
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 5% of its net
withdrawable accounts plus short term borrowings.  Short term liquid assets must
consist of not less than 1% of such  accounts  and  borrowings,  which amount is
also included within the 5% requirement. Those levels may

                                       10

<PAGE>



be  changed  from time to time by the  regulators  to reflect  current  economic
conditions.   The  Bank  has  maintained   liquidity  in  excess  of  regulatory
requirements.

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,
                                         -----------------------
                                          1997(1)      1996(1)
                                          -------      -------
Earnings per common share (2) ........   $   0.17     $   0.11
Return on average assets .............       0.59%        0.43%
Return on average equity .............       4.44%        2.89%
Interest rate spread .................       2.21%        1.97%
Net interest margin ..................       2.73%        2.59%
Noninterest expense to average assets        1.69%        1.84%
Net charge-offs to average outstanding
  loans ..............................       0.12%        0.03%


                                                  At March 31,   At December 31,
                                                      1997            1996
                                                  ------------   ---------------
 
Tangible book value per share.................       $13.16          $13.56

----------------
(1)   The ratios for the three month period are annualized.
(2)   The average  number of shares  outstanding  during the three  months ended
      March 31, 1997 and 1996 was 2,568,791 and 2,800,438, respectively.




                                       11

<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,  1997.  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,  1997 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

            On April 17,  1997,  the  Company  held its Annual  Meeting.  At the
            Meeting,  C. Evan  Daniels,  Norman A. Parker and Edward J. Seugling
            were elected as directors,  each for a three-year term. In addition,
            stockholders  also ratified the  appointment of Radics & Co., LLC as
            auditors  for the Company for the fiscal  year ending  December  31,
            1997.

ITEM 5.     OTHER MATERIALLY IMPORTANT EVENTS

            On March 26, the  Company  completed  its  purchase of stock for the
            Bank's  Management  Stock  Bonus  Plan.  The  Plan was  approved  by
            shareholders  at a special  meeting held on July 9, 1996. A total of
            121,670 shares of common stock was purchased at an average net price
            of  $13.875.   The  total  price  was  approximately  $1.7  million.
            Settlement date for the transaction was April 1, 1997.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits

                  Exhibit 11 - Earnings Per Share Calculation

                  Exhibit 27 Financial Data Schedule (in electronic filing only)

            (b)   Reports on Form 8-K

                  None.



                                       12

<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, 1997            By:  /s/ Leonard G. Romaine
          ---                       ----------------------------------------
                                    Leonard G. Romaine
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



Date: May  15, 1997            By:  /s/ Richard Capone
          ---                       ----------------------------------------
                                    Richard Capone
                                    Senior Vice President and
                                    Chief Financial Officer
                                    (Principal Officer)