SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 1999

                                       OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the transition period from __________ to _______________

                          Commission File No.: 1-13503


                           Staten Island Bancorp, Inc.
                -------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                       13-3958850
   -----------------------------                      ----------------
   (State or other jurisdiction                          (I.R.S. Employer
 of incorporation or organization)                    Identification Number)


     15 Beach Street Staten Island, New York                    10304
     ----------------------------------------                ------------
                   (Address)                                 (Zip Code)

       Registrant's telephone number, including area code: (718) 556-6518

   Securities registered pursuant to Section 12(g) of the Act: Not Applicable

           Securities registered pursuant to Section 12(b) of the Act

                     Common Stock (par value $.01 per share)
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

Based upon the $17.06 closing price of the Registrant's common stock as of March
24,  2000,  the  aggregate  market  value  of  the  32,123,421   shares  of  the
Registrant's  common stock deemed to be held by non-affiliates of the Registrant
was $548.1 million.  Although directors and executive officers of the Registrant
and certain of its employee benefit plans were assumed to be "affiliates" of the
Registrant for purposes of this  calculation,  the  classification  is not to be
interpreted as an admission of such status.

Number of shares of Common Stock outstanding as of March 24, 2000:  37,341,123

                       DOCUMENTS INCORPORATED BY REFERENCE
         List hereunder the following  documents  incorporated  by reference and
the Part of the Form 10-K into which the document is incorporated.

(1) Portions of the Annual Report to  Stockholders  for the year ended  December
31, 1999 are incorporated into Part II, Items 5 through 8 of this Form 10-K.

(2) Portions of the  definitive  proxy  statement for the 2000 Annual Meeting of
Stockholders  are  incorporated  into Part III,  Items 9 through 13 of this Form
10-K.

<PAGE>

PART I

Item 1.  Business

         In addition to historical information,  this Annual Report on Form 10-K
includes certain "forward-looking  statements," as defined in the Securities Act
of 1933 and the  Securities  Exchange Act of 1934,  based on current  management
expectations.  The Company's  actual results could differ  materially from those
management  expectations.  Such  forward-looking  statements  include statements
regarding the Company's  intentions,  beliefs or current expectations as well as
the assumptions on which such statements are based.  Stockholders  and potential
stockholders  are cautioned  that any such  forward-looking  statements  are not
guarantees of future performance and involve risks and  uncertainties,  and that
actual  results  may  differ   materially   from  those   contemplated  by  such
forward-looking statements. Factors that could cause future results to vary from
current  management  expectations  include,  but are  not  limited  to,  general
economic  conditions,  legislative and regulatory  changes,  monetary and fiscal
policies  of  the  federal  government,  changes  in  tax  policies,  rates  and
regulations  of federal,  state and local tax  authorities,  changes in interest
rates,  deposit  flows,  cost of funds,  demand  for loan  products,  demand for
financial  services,  competition,  changes in the quality or composition of the
Company's  loan and  investment  portfolios,  changes in accounting  principles,
policies  or  guidelines,  and other  economic,  competitive,  governmental  and
technological  factors affecting the Company's  operations,  markets,  products,
services and fees. The Company  undertakes no obligation to update or revise any
forward-looking  statements to reflect  changed  assumptions,  the occurrence of
unanticipated events or changes to future operating results over time.

Staten Island Bancorp, Inc.

         Staten Island Bancorp,  Inc. (the "Company") is a Delaware  corporation
organized  in July 1997 by Staten  Island  Savings  Bank (the  "Bank" or "Staten
Island  Savings") for the purpose of becoming a unitary  holding  company of the
Bank.  The Bank's  conversion  from the mutual to stock form and the  concurrent
offer and sale of the  Company's  common stock was  consummated  on December 22,
1997.  The only  significant  assets of the Company are the capital stock of the
Bank, the Company's loan to the Employee Stock Ownership Plan ("ESOP"),  and the
portion of the net conversion  proceeds retained by the Company for investments.
The business and  management of the Company  consists  primarily of the business
and  management of the Bank.  The Company  neither owns nor leases any property,
but instead uses the premises and  equipment of the Bank.  At the present  time,
the  Company  does not intend to employ any persons  other than  officers of the
Bank,  and the Company will  utilize the support  staff of the Bank from time to
time.  Additional  employees  will be hired as  appropriate  to the  extent  the
Company expands or changes its business in the future.

         The Company's  executive  office is located at the executive  office of
the Bank at 15 Beach Street,  Staten Island,  New York 10304,  and its telephone
number is (718) 556-6518.

                                       2
<PAGE>

Staten Island Savings Bank

         The Bank was originally  founded as a New York State chartered  savings
bank in 1864.  The Bank  maintains a network of 16  full-service  branch offices
located in Staten Island and one branch office  located in the Bay Ridge area of
Brooklyn,  New York, three limited service branch offices in Staten Island,  and
six full service branch offices in Monmouth and Ocean counties,  New Jersey. The
Bank also  maintains  a lending  center  and Trust  Department  office on Staten
Island along with a commercial  lending office in the Bay Ridge Brooklyn branch.
The  Bank  is a  traditional,  full-service,  community  oriented  savings  bank
headquartered  in  Staten  Island,  New  York.  Staten  Island  Savings  Bank is
primarily engaged in attracting deposits from the general public and using those
and other  available  sources of funds to originate  loans secured  primarily by
single-family  (one to four units)  residences  located in Staten Island and the
metropolitan New York area.

         The Bank has long-standing ties to Staten Island with over 134 years of
service to the  communities  and residents of Staten Island and, more  recently,
the Bay Ridge area of Brooklyn. As of June 30, 1999 (the latest available data),
the Bank was the largest depository institution in terms of deposit market share
in Staten Island with 30.4% of the total  deposits and 23.0% of the total number
of branch offices of depository institutions in Staten Island. Historically, the
Bank also has been  among  the  leaders  in terms of the  number  and  amount of
residential mortgage loan originations in Staten Island.  Staten Island Savings'
operating  strategy  emphasizes  customer  service and convenience and, in large
part, the Bank  attributes its commitment to maintaining  customer  satisfaction
for its market share position.  The Bank attempts to  differentiate  itself from
its  competitors  by providing  the type of  personalized  customer  service not
generally  available  from  larger  banks  while  offering a greater  variety of
products and services than is typically  available from smaller local depository
institutions.  The  Bank  has  an  experienced  management  team  directing  its
operations.  The Bank's Chairman and Chief  Executive  Officer and President and
Chief  Operating  Officer have 33 years and 29 years,  respectively,  of service
with the Bank while the other executive  officers of the Bank have an average of
16 years of service with Staten Island Savings Bank.

         In  recent  years,   the  Bank  has   facilitated  its  growth  through
acquisitions.  In 1998, the Bank's wholly-owned  subsidiary,  SIB Mortgage Corp.
(the "Mortgage Company" or "SIBMC") acquired  substantially all of the assets of
Ivy Mortgage Corp.  The Mortgage  Company,  located in  Branchburg,  New Jersey,
operates  under the name Ivy Mortgage in 22 states  primarily on the east coast.
The Mortgage Company originates loans and sells them to investors generating fee
income for the Company.  The Bank also purchases specific  adjustable rate loans
and higher  yielding  loans from the Mortgage  Company to fill in its  portfolio
with loan products the Bank  requires.  The Bank will also use certain  Mortgage
Company locations to offer its commercial loan products including loans to small
businesses.  This has slightly reduced the Bank's traditional  dependence on the
economy  of  Staten  Island  and  to  a  larger  extent  New  York  City.   (See
"Subsidiaries")

         In 1999 the Bank formed American  Construction Lending Services,  Inc.,
("ACLS"),   as  a  wholly  owned   subsidiary.   Headquartered  in  Wallingford,
Connecticut,  ACLS operates as a wholesale lender  specializing in single-family
residential  construction  loan  products  throughout  the  United  States.  The
construction  loans  originated by ACLS facilitates the Bank's ability to obtain
higher yielding, short-term loans for its balance sheet. The resultant permanent
loan is sold using the  resources  of the  Mortgage  Company or  retained in the

                                       3
<PAGE>

Bank's  portfolio if the loan meets the  investment  needs of the Bank.  ACLS is
expected to enable the Bank to reach a broader  customer  base by expanding  the
geographic  area it  operates  in and to  provide an  opportunity  to add to the
revenue and income base for the Company. (See "Subsidiaries")

         On January 14,  2000 the Company  acquired  First  State  Bancorp,  the
holding company for First State Bank, Howell,  New Jersey.  First State Bank was
merged  with and into the Bank  and the  Bank now  operates  the  former  branch
offices of First State as the First  State  Division  of Staten  Island  Savings
Bank. The First State Division has six full-service branch offices in New Jersey
and has two  additional  branch offices under  construction.  The current branch
structure consists of four branches in northern Ocean County and two in Monmouth
County and the new branches will be located in Ocean County and Monmouth County.
At the time of acquisition First State Bancorp had $374.0 million in assets.

         The Bank is subject to examination and comprehensive  regulation by the
Office of Thrift Supervision  ("OTS"),  which is the Bank's chartering authority
and primary federal regulator. The Bank is also regulated by the Federal Deposit
Insurance Corporation ("FDIC"), which is the administrator of the Bank Insurance
Fund  ("BIF").  The  Bank  is  also  subject  to  certain  reserve  requirements
established by the Board of Governors of the Federal  Reserve System ("FRB") and
is a member of the Federal Home Loan Bank ("FHLB") of New York,  which is one of
the 12 regional banks comprising the FHLB System.

         Staten Island Savings'  executive office is located at 15 Beach Street,
Staten Island, New York 10304, and its telephone number is (718) 556-6512.


Market Area and Competition

         The Bank  faces  significant  competition  both in making  loans and in
attracting  deposits.  There are a significant number of financial  institutions
located  within the Bank's  market area,  many of which have  greater  financial
resources than the Bank. The Bank's competition for loans comes principally from
commercial banks, other savings banks, savings associations and mortgage-banking
companies. The Bank's most direct competition for deposits has historically come
from savings  associations,  other savings  banks,  commercial  banks and credit
unions. The Bank faces additional competition for deposits from short-term money
market funds and other corporate and government  securities funds and from other
non-depository  financial  institutions  such as brokerage  firms and  insurance
companies.  Competition for banking  services may increase as a result of, among
other things,  the  elimination  of  restrictions  on  interstate  operations of
financial institutions.

Lending Activities

         General.  At December 31, 1999,  Staten Island Savings' total net loans
held for  investment  amounted to $2.2 billion or 47.9% of the  Company's  total
assets at such date. The Bank's primary  emphasis has been, and continues to be,
the  origination  of loans  secured by first liens on  single-family  residences
(which  includes  one to four family  residences)  located  primarily  in Staten
Island and, to a lesser  extent,  other areas in New York City.  At December 31,
1999,  $1.7  billion or 80.8% of the Bank's net loan  portfolio  were secured by
one- to four- family  residences of which $873.6  million were located on Staten

                                       4
<PAGE>

Island and an additional  $429.1 million were located in other areas of New York
City.

         In addition to loans secured by single-family  residential real estate,
the Bank's  mortgage loan portfolio  includes  loans secured by commercial  real
estate,  which  amounted to $223.8 million or 10.4% of the net loan portfolio at
December 31, 1999,  construction and land loans,  which totaled $60.1 million or
2.8% of the net loan  portfolio at December 31, 1999,  home equity loans,  which
totaled $5.4 million or .3% of the net loan  portfolio at December 31, 1999, and
loans secured by multi-family  (over four units) residential  properties,  which
amounted to $42.5  million or 2.0% of the net loan  portfolio  at  December  31,
1999. In addition to mortgage  loans,  the Bank  originates  various other loans
including  commercial  business loans and consumer  loans. At December 31, 1999,
the Bank's total other loans  amounted to $89.1  million or 4.1% of the net loan
portfolio.

         The types of loans that the Bank may  originate  are subject to federal
and state law and  regulations.  Interest rates charged by the Bank on loans are
affected principally by the demand for such loans, the supply of money available
for lending  purposes and the rates  offered by its  competitors.  These factors
are, in turn, affected by general and economic  conditions,  the monetary policy
of the federal government,  including the Federal Reserve Board, legislative tax
policies and governmental budgetary matters.
                                       5

<PAGE>

  Loan Portfolio Composition.  The following table sets forth the composition of
the Company's loan portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                      At December 31,
                                                                      ---------------

                                              1999                     1998                     1997
                                                                (Dollars in Thousands)

                                                        Percent of               Percent of              Percent of
                                             Amount       Total       Amount       Total       Amount       Total
                                             ------       -----       ------       -----       ------       -----
<S>                                       <C>             <C>     <C>              <C>     <C>              <C>
Mortgage loans:
 One to four family residential           $ 1,737,913     80.83%  $ 1,187,212      81.48%  $   863,694      79.76%
 Multi-family residential                      42,501      1.98        33,328       2.29        28,218       2.61
 Commercial real estate                       223,809     10.41       137,720       9.45       120,084      11.09
 Construction and land                         60,105      2.80        42,420       2.91        40,476       3.74
 Home equity                                    5,390      0.25         6,121       0.42         6,538       0.60
                                            ----------    ------     ---------     ------     ---------     ------
   Total mortgage loans                     2,069,718     96.27     1,406,801      96.55     1,059,010      97.80
Other loans:
 Student loans                                    657      0.03           940       0.06         4,033       0.37
 Automobile leases (1)                             --       --             --         --            --         --
 Passbook loans                                 5,357      0.25         5,989       0.41         6,929       0.64
 Commercial business loans                     33,646      1.56        36,592       2.51        19,559       1.81
Other consumer loans                           49,395      2.30        24,070       1.65        13,212       1.22
                                           ----------    ------     ---------     ------     ---------     ------
    Total other loans                          89,055      4.14        67,591       4.63        43,733       4.04
                                           ----------    ------     ---------     ------     ---------     ------
    Total loans receivable                  2,158,773    100.41%    1,474,392     101.18     1,102,743     101.84
Less:
 Premium (discount) on loans purchased          4,640      0.22         1,194       0.08          (729)     (0.07)
 Allowance for loan losses                    (14,271)    (0.66)      (16,617)     (1.14)      (15,709)     (1.45)
 Deferred loan costs, (fees) net                  897      0.03        (1,910)     (0.12)       (3,387)     (0.32)
                                           ----------    ------     ---------     ------     ---------     ------
 Loans receivable, net                    $ 2,150,039    100.00%   $1,457,059     100.00%  $ 1,082,918     100.00%
                                          ===========    ======    ==========     ======   ===========     ======
</TABLE>

(1) Consists of loans secured by assignments of automobile lease payments.

<PAGE>
<TABLE>
<CAPTION>

                                                              At December 31,
                                                              ---------------
                                                      1996                       1995
                                                          (Dollars in Thousands)

                                                          Percent of              Percent of
                                               Amount       Total       Amount      Total
                                               ------       -----       ------      -----
<S>                                       <C>               <C>     <C>             <C>
Mortgage loans:
 One to four family residential           $   743,089       76.76%  $   611,964     76.39%
 Multi-family residential                      26,444        2.73        25,977      3.24
 Commercial real estate                       115,593       11.94        99,000     12.36
 Construction and land                         28,779        2.97        18,123      2.26
 Home equity                                    7,464        0.78         8,193      1.02
                                            ---------      ------     ---------    ------
   Total mortgage loans                       921,369       95.18       763,257     95.27
Other loans:
 Student loans                                  4,522        0.47         6,072      0.76
 Automobile leases (1)                         28,249        2.92        18,705      2.33
 Passbook loans                                 5,933        0.61         5,683      0.71
 Commercial business loans                     14,995        1.55        15,257      1.90
Other                                           9,712        1.00         9,079      1.14
                                            ---------      ------     ---------    ------
    Total other loans                          63,411        6.55        54,796      6.84
                                            ---------      ------     ---------    ------
    Total loans receivable                    984,780      101.73       818,053    102.11
Less:
 Premium (discount) on loans purchased         (3,475)      (0.36)       (2,911)    (0.36)
 Allowance for loan losses                     (9,977)      (1.03)      (10,704)    (1.34)
 Deferred loan costs, (fees) net               (3,313)      (0.34)       (3,301)    (0.41)
                                            ---------      ------     ---------    ------
 Loans receivable, net                       $968,015      100.00%  $   801,137    100.00%
                                             ========      ======   ===========    ======
</TABLE>


(1) Consists of loans secured by assignments of automobile lease payments.

                                       6
<PAGE>

Loan Activity. The following table sets forth the Company's activity in its loan
portfolio:
                                             Year Ended December 31
                                      1999             1998             1997
                                      ----             ----             ----

                                             (Dollars In Thousands)
Total loans held at beginning
 of period .....................     $ 1,550,834      $ 1,102,743    $   984,780
Originations of loans:
 Mortgage loans:
  Single family residential .....      1,333,757          508,124        194,937
  Multi-family residential ......         14,372            9,988          4,603
  Commercial real estate ........        126,561           41,294         22,171
  Construction and land .........         51,051           38,514         27,936
  Home equity ...................          2,545            2,686          2,744
Other loans:
  Student loans .................          1,475            2,205          3,202
  Passbook loans ................          5,302            5,666          8,614
  Commercial business loans .....         56,625           23,180         13,942
  Other consumer loans ..........         15,771           12,197         11,363
                                       ---------          -------        -------
   Total  originations ..........      1,607,459          643,854        289,512

Purchases of loans:
  Mortgage loans:
Single-family  residential (1)                --           59,412             --
  Other consumer loans ........           16,088            6,855             --
                                       ---------          -------        -------
   Total purchases ............           16,088           66,267             --
                                       ---------          -------        -------
    Total originations and purchases   1,623,547          710,121        289,512
Loans sold:
 Mortgage loans:
  Single-family residential (2)..        644,557           57,577          1,104
 Other loans:
  Student loans .................             --               --          3,185
                                       ---------          -------        -------
   Total loans sold .............        644,557           57,577          4,289
Transfers to real estate owned ..            325            1,166          1,149
Charge-offs .....................          1,260            2,119          1,022
Repayments ......................        324,937          201,168        165,089
                                       ---------          -------        -------
Net activity in loans ...........        652,468          448,091        117,963
                                       ---------          -------        -------
Gross loans held at end of
period ..........................    $ 2,203,302       $1,550,834     $1,102,743
                                     ===========       ==========      =========


(1)      Represents loans acquired from Ivy Mortgage Corp.

(2)      For the years ended December 31, 1999 and 1998, consists primarily of
         loans originated by SIBMC and sold to third parties.



<PAGE>

         The lending  activities of Staten Island Savings are subject to written
underwriting standards and loan origination procedures established by management
and approved by the Bank's Board of  Directors.  Applications  for mortgages and
other loans are taken at all of the Bank's  branch  offices.  In  addition,  the
Bank's business development officers,  loan officers and branch managers call on
individuals in the Bank's market area in order to solicit new loan  originations
as well as other  banking  relationships.  The Bank also  relies on  independent
mortgage brokers,  a group of whom are authorized to accept and process mortgage
loan  applications  on the Bank's  behalf,  and a non-employee  commercial  loan
solicitor in order to obtain new loan  applications.  All loan  applications are
forwarded to the Bank's loan  origination  center for underwriting and approval.
The Bank's  employees at the loan  origination  center  supervise the process of
obtaining  credit reports,  appraisals and other  documentation  involved with a
loan. The Bank requires that a property appraisal be obtained in connection with
all new mortgage  loans.  Property  appraisals  are performed by an  independent
appraiser  from a list approved by the Bank's Board of Directors.  Staten Island
Savings  requires that title insurance and hazard insurance be maintained on all
collateral  properties (except for home equity loans and home secured loans) and
that flood insurance be maintained if the property is within a designated  flood
plain.

         Certain  officers  of the Bank  have  been  authorized  by the Board of
Directors to approve  loans up to certain  designated  amounts.  The Loan Review
Committee  of the Board of  Directors  must  approve  all loans where new monies
advanced would increase  borrowers or guarantors total  outstanding  credit with
the Bank above $1.5 million but not exceeding  $7.5 million.  Loans in excess of
$7.5 million must be approved by the full Board of Directors of the Bank.

         A  federal  savings  association  generally  may not make  loans to one
borrower and related  entities in an amount which exceeds 15% of its  unimpaired
capital and surplus,  although  loans in an amount equal to an additional 10% of
unimpaired  capital and surplus may be made to a borrower if the loans are fully
secured by readily marketable securities.  However, the Bank generally maintains
a more restrictive limit of loans to any one borrower and related entities of 5%
of the Bank's unimpaired  capital and surplus,  or $19.5 million at December 31,
1999. As of December 31, 1999, the Bank's largest  concentration of loans to any
one borrower  and related  entities  were $18.9  million and are  performing  in
accordance with their terms.

         Single   Family   Residential.   Substantially   all  of   the   Bank's
single-family   residential   mortgage  loans  consist  of  conventional  loans.
Conventional  loans are loans that are neither  insured by the  Federal  Housing
Administration  ("FHA") or partially  guaranteed  by the  Department of Veterans
Affairs  ("VA").  The vast  majority  of the  Bank's  single-family  residential
mortgage  loans  retained in the portfolio are secured by properties  located in
Staten  Island  and,  to  a  lesser  extent,  other  areas  of  New  York  City.
Historically,  the Bank has retained  substantially  all mortgage loans which it
has originated and has not engaged in sales of residential mortgage loans. As of
December 31, 1999, $1.7 billion,  or 80.8%, of the Bank's net loans consisted of
single-family  residential mortgage loans. The Bank originated for its portfolio
$714.7 million of one to four family residential  mortgage loans during the year
ended  December 31, 1999 and $433.5 million and $194.9 million in 1998 and 1997,
respectively.  The Bank anticipates that a significant portion of its future new
loan originations will continue to be single-family residential mortgage loans.

         The bank's  residential  mortgage  loans  have  either  fixed-rates  of
interest or  interest  rates which  adjust  periodically  during the term of the

                                       8
<PAGE>

loan. Fixed-rate loans generally have maturities ranging from 10 to 30 years and
are fully amortizing with monthly or bi-weekly loan payments sufficient to repay
the total  amount of the loan with  interest  by the end of the loan  term.  The
bank's  fixed-rate  loans generally are originated  under terms,  conditions and
documentation  which  permit  them  to  be  sold  to  U.S.  Government-sponsored
agencies,  such as the Federal Home Loan  Mortgage  Corporation  ("FHLMC"),  and
other  investors in the secondary  market for  mortgages.  At December 31, 1999,
$1.2 billion, or 67.4%, of the bank's  single-family  residential mortgage loans
were fixed-rate loans. Substantially all of the Bank's single-family residential
mortgage loans contain due-on-sale clauses, which permit the Bank to declare the
unpaid  balance to be due and payable  upon the sale or transfer of any interest
in the property  securing the loan. The bank enforces such due-on-sale  clauses.

         The adjustable-rate  single-family  residential  mortgage ("ARM") loans
currently  offered by the Bank have interest rates which adjust every one, three
or five years in  accordance  with a  designated  index such as one-,  three- or
five-year U.S.  Treasury  obligations  adjusted to a constant  maturity ("CMT"),
plus a stipulated margin. In addition,  the Bank offers an ARM with a fixed-rate
for the first ten years which adjusts on an annual basis thereafter. At December
31, 1999, the Bank's five-year and ten-year ARM loans amounted to $244.6 million
and  $240.1  million,  respectively.  The Bank's  adjustable-rate  single-family
residential  real  estate  loans  generally  have a cap of 2%  through 5% on any
increase or decrease in the interest rate at any adjustment  date, and include a
specified cap on the maximum  interest rate over the life of the loan, whose cap
is generally 5% or 6% above the initial rate.  The Bank may offer ARM loans with
initial rates which are below the fully indexed rate.  Such loans  generally are
underwritten based on the fully indexed rate. The Bank's  adjustable-rate  loans
require that any payment adjustment resulting from a change in the interest rate
of an  adjustable-rate  loan be sufficient to result in full amortization of the
loan by the end of the loan term and,  thus,  do not permit any of the increased
payment to be added to the principal  amount of the loan, or so-called  negative
amortization.  At  December  31,  1999,  $565.7  million  or 32.6% of the Bank's
single-family residential mortgage loans were adjustable-rate loans.

         Adjustable-rate  loans  decrease the risks  associated  with changes in
interest  rates but involve  other risks,  primarily  because as interest  rates
increase,  the loan payment by the borrower increases to the extent permitted by
the terms of the loan, thereby  increasing the potential for default.  Moreover,
as with fixed-rate  loans, as interest rates increase,  the marketability of the
underlying  collateral  property  may be adversely  affected by higher  interest
rates. The Bank believes that these risks, which have not had a material adverse
effect on the Bank to date,  generally,  are less than the risks associated with
holding fixed-rate loans in an increasing interest rate environment.

         The volume and types of ARMs  originated by the Bank have been affected
by such market  factors as the level of interest  rates,  competition,  consumer
preferences  and  availability  of funds.  Accordingly,  although  the Bank will
continue to offer  single-family  ARMs,  there can be no  assurance  that in the
future the Bank will be able to originate a sufficient  volume of  single-family
ARMs to  increase  or  maintain  the  proportion  that these loans bear to total
loans.  The Bank  facilitates  its  origination  efforts with respect to ARMS by
purchasing ARM loans from SIBMC.  During 1999, the Bank purchased  $85.0 million
of ARM loans from SIBMC (the  majority of which loans were secured by properties
located in the New York metropolitan area.)

         The Bank's  single-family  residential  mortgage loans generally do not
exceed $750,000.  In addition,  the maximum  loan-to-value ("LTV") ratio for the
Bank's single-family residential mortgage

                                      9

<PAGE>

loans generally is 95% of the appraised value of the secured property, provided,
however,  that  private  mortgage  insurance  is  obtained on the portion of the
principal amount that exceeds 80% of the appraised value. Loans purchased by the
Bank  from  SIBMC  are  underwritten  on  substantially  similar  terms as loans
originated  directly by the Bank.

         At December  31, 1999,  the Bank's home equity  loans  amounted to $5.4
million  or 0.3% of the Bank's net loans.  The Bank  offers  floating  rate home
equity  lines of credit.  Home  equity  loans,  like  single-family  residential
mortgage  loans,  are  secured  by  the  underlying  equity  in  the  borrower's
residence.  However,  the Bank generally  obtains a second mortgage  position to
secure home equity  loans.  The Bank's home equity loans  generally  require LTV
ratios of 80% or less after taking into consideration any first mortgage loan.

         Commercial  Real Estate Loans and  Multi-Family  Residential  Loans. At
December  31, 1999,  the Bank's  commercial  real estate loans and  multi-family
residential  mortgage  loans  amounted  to $223.8  million  and  $42.5  million,
respectively, or 10.4% and 2.0%, respectively, of the Bank's net loan portfolio.
Commercial real estate and multi-family residential real estate loans often have
adjustable interest rates,  shorter terms to maturity and higher yields than the
Bank's single-family  residential real estate loans. Because of such factors, in
recent years the Bank has increased its efforts in originating  commercial  real
estate loans and multi-family residential loans.

         The Bank's  commercial real estate loans generally are secured by small
office  buildings,  retail and industrial use buildings,  strip shopping centers
and other  commercial  uses  located  in the  Bank's  market  area.  The  Bank's
commercial  real estate loans seldom exceed $1.5 million and, as of December 31,
1999, the average size of the Bank's  commercial real estate loans was $320,000.
The Bank  originated  $126.6 million of commercial  real estate loans during the
year ended  December  31,  1999  compared to $41.3  million  and $22.2  million,
respectively, of commercial real estate loan originations in 1998 and 1997.

         The Bank's multi-family  residential real estate loans are concentrated
in Brooklyn and, to a lesser extent,  Staten Island.  The Bank originated  $14.4
million of  multi-family  residential  real estate  loans  during the year ended
December 31, 1999 compared to $10.0 million and $4.6 million,  respectively,  of
originations  in 1998 and 1997.  The Bank  generally  has not been a substantial
originator  of  multi-family  residential  real estate loans due to, among other
factors,  the  relatively  limited  amount of apartment  and other  multi-family
properties in Staten Island.

         The Bank's  commercial real estate and multi-family  residential  loans
generally  are three or  five-year  adjustable-rate  loans  indexed to  three-or
five-year U.S. Treasury obligations adjusted to a CMT, plus a margin. Generally,
fees of between .50% and 1.50% of the principal  loan balance are charged to the
borrower  upon  closing.  The Bank  generally  charges  prepayment  penalties on
commercial real estate and  multi-family  residential  mortgage loans.  Although
terms for  multi-family  residential  and commercial real estate loans may vary,
the Bank's underwriting  standards generally provide for terms of up to 25 years
with  amortization  of principal over the term of the loan and LTV ratios of not
more than 75%. Generally, the Bank obtains personal guarantees of the principals
as  additional   security  for  any  commercial  real  estate  and  multi-family
residential loans.

         The Bank  evaluates  various  aspects of  commercial  and  multi-family
residential  real estate loan  transactions in an effort to mitigate risk to the

                                       10
<PAGE>

extent  possible.  In underwriting  these loans,  consideration  is given to the
stability of the property's  cash flow history,  future  operating  projections,
current and projected occupancy,  position in the market,  location and physical
condition.  The Bank has also generally imposed a debt coverage ratio (the ratio
of net cash from  operations  before payment of debt service to debt service) of
not less than 125%. The underwriting  analysis also includes credit checks and a
review of the financial condition of the borrower and guarantor,  if applicable.
An appraisal report is prepared by an independent appraiser  commissioned by the
Bank to  substantiate  property  values  for every  commercial  real  estate and
multi-family  loan  transaction.  All appraisal reports are reviewed by the Bank
prior to the  closing  of the loan.

         Commercial  real estate and  multi-family  residential  lending entails
substantially different risks when compared to single-family residential lending
because such loans often  involve  large loan  balances to single  borrowers and
because the  payment  experience  on such loans is  typically  dependent  on the
successful operation of the project or the borrower's business.  These risks can
also be  significantly  affected  by supply and demand  conditions  in the local
market for apartments,  offices, warehouses, or other commercial space. The Bank
attempts  to minimize  its risk  exposure  by  limiting  such  lending to proven
businesses,  only  considering  properties with existing  operating  performance
which  can  be  analyzed,  requiring  conservative  debt  coverage  ratios,  and
periodically monitoring the operation and physical condition of the collateral.

         As of December 31, 1999, $5.6 million or 2.5% of the Bank's  commercial
real estate  loans and none of its  multi-family  residential  real estate loans
were non-accrual loans.

         Construction and Land Loans. The Bank originates primarily  residential
construction  loans to real  estate  builders  and,  to a  significantly  lesser
extent, the Bank originates such loans to individuals who have a contract with a
builder  for  the  construction  of  their  residence.  At  December  31,  1999,
construction  and land loans  amounted to $60.1 million or 2.8% of the Company's
net loan portfolio of which $52.0 million  consisted of  construction  loans and
$8.1 million  consisted of land loans.  In addition,  at such date, the Bank had
$27.1 million of undisbursed funds for construction  loans in process.  The Bank
originated  $51.1 million of  construction  and land loans during the year ended
December 31, 1999,  compared to $38.5 million and $27.9 million of  construction
loans in 1998 and 1997, respectively.  In the future, the Company's construction
lending efforts are expected to be enhanced by ACLS, which commenced  operations
in October 1999.

         The Bank's construction loans generally have floating rates of interest
for a term of up to two years. Construction loans to builders are typically made
with a maximum  loan to value  ratio of 75%.  The Bank's  construction  loans to
builders are made on either a pre-sold or speculative  (unsold) basis.  However,
the Bank generally  limits the number of unsold homes under  construction to its
builders,  with the amount  dependent  on the  reputation  of the  builder,  the
present outstanding obligations of the builder, the location of the property and
prior  sales of homes in the  development  and the  surrounding  area.  The Bank
generally limits the number of construction  loans for speculative  units to two
to four model homes per project.

         Prior to making a  commitment  to fund a  construction  loan,  the Bank
requires an appraisal of the property by independent  appraisers approved by the
Board of  Directors.  The Bank's staff also reviews and inspects each project at
the commencement of construction and prior to every disbursement of funds during

                                       11
<PAGE>

the term of the construction loan. Loan proceeds are disbursed after inspections
of the project based on a percentage of  completion.  The Bank requires  monthly
interest payments during the construction term.

         The Bank originates land loans to developers for the purpose of holding
or developing the land (i.e.,  roads,  sewer and water) for sale. Such loans are
secured by a lien on the property, are generally limited to 60% of the appraised
value of the secured  property and are typically  made for a period of up to two
years with a floating  interest rate based on the prime rate.  The Bank requires
monthly interest payments during the term of the land loan. The principal of the
loan is reduced as lots are sold and released.  In addition,  the Bank generally
obtains  personal  guarantees  from its borrowers and  originates  such loans to
developers with whom it has established relationships.

Construction and land lending  generally is considered to involve a higher level
of risk as compared to permanent  single-family  residential lending, due to the
concentration  of principal in a limited  number of loans and  borrowers and the
effects of general economic conditions on developers and builders.  Moreover,  a
construction  loan  can  involve   additional  risks  because  of  the  inherent
difficulty  in estimating  both a property's  value at completion of the project
and the estimated cost (including  interest) of the project. The nature of these
loans is such that they are generally more difficult to evaluate and monitor. In
addition,  speculative  construction  loans to a builder  are  secured by unsold
homes and thus pose a greater potential risk to the Bank than construction loans
to individuals on their personal residences.

         The Bank has attempted to minimize the foregoing  risks by, among other
things,  limiting the extent of its  construction  and land lending to primarily
residential  properties.  In addition,  the Bank has adopted strict underwriting
guidelines and other requirements for loans which are believed to involve higher
elements  of credit  risk.  It is also the  Bank's  policy  to  obtain  personal
guarantees  from the principals of its corporate  borrowers on its  construction
and land loans.

         Other Loans. The Bank offers a variety of other or non-mortgage  loans.
Such other loans,  which include  commercial  business  loans,  passbook  loans,
student loans,  overdraft loans,  manufactured home loans and a variety of other
personal  loans,  amounted  to  $89.1  million  or 4.1% of the  Bank's  net loan
portfolio at December 31, 1999.

         At December 31, 1999, the Bank's commercial  business loans amounted to
$33.6 million or 1.6% of the Bank's net loan  portfolio.  The Bank's  commercial
business  loans have a term of up to five years and may have either  fixed-rates
of interest or, to a lesser  extent,  floating rates tied to the prime rate. The
Bank's  commercial  business loans are made to small to medium sized  businesses
within  the Bank's  market  area.  A  substantial  portion  of the Bank's  small
business loans are unsecured with the remainder  generally  secured by perfected
security  interests in accounts  receivable  and  inventory  or other  corporate
assets.  In addition,  the Bank generally  obtains personal  guarantees from the
principals of the borrower with respect to all  commercial  business  loans.  In
addition,  the Bank may extend loans for a commercial business purpose which are
secured by a mortgage on the proprietor's home or the business property. In such
cases, the loan, while  underwritten to commercial  business loan standards,  is
reported as a single-family or commercial real estate mortgage loan, as the case
may be.  Commercial  business  loans  generally  are deemed to involve a greater
degree of risk than single-family residential mortgage loans.

                                       12
<PAGE>

         The Bank's commercial  business loans include  discounted loans,  which
amounted to $5.3 million or 0.2% of the Bank's  loans at December 31, 1999.  The
Bank's  discounted  loans,  which are made  primarily to local  businesses,  are
designed  to provide an interim  source of  financing  and require no payment of
principal  or  interest  until the due date of the loan,  which may be up to one
year but  generally  is 60 or 90 days  from the date of  origination.  While the
borrower is contractually  obligated to repay the entire face amount of the loan
at  maturity,  the Bank  advances  only a portion  of the face  amount  with the
difference   constituting  the  interest  component.  In  addition  to  personal
guarantees, discounted loans may also be secured by perfected security interests
in receivables.  However,  due to the lack of an  amortization  schedule and, in
certain cases,  the absence of perfected  security  interests,  discounted loans
generally  may be deemed to  involve a greater  risk of loss than  single-family
residential mortgage loans.

         At December 31, 1999,  included in total other consumer loans was $22.0
million of loans  primarily  secured by  manufactured  housing.  This represents
1.20% of the Bank's  net loan  portfolio.  The Bank  currently  purchases  these
loans,  after a  review  of the loan  documentation  and  underwriting  which is
prepared  by the company  originating  the loan.  The  majority of the loans are
secured by manufactured  housing and are located in the northeastern  section of
the  country.  The Bank  services  the loan and is assisted  by the  originating
company in the collection process.

         The  balance of the Bank's  other loans  consists  of loans  secured by
passbook accounts,  loans on overdraft accounts, home improvement loans, student
loans and various other personal loans.

         Mortgage  Banking  Activities.  On November 20, 1998, the Bank's wholly
owned  subsidiary,  SIB  Mortgage  Corp.,  acquired  substantially  all  of  the
residential  mortgage  production   operations  and  certain  other  assets  and
liabilities of Ivy Mortgage Corp. SIBMC conducts business as a licensed mortgage
banker in 22 states under the name "Ivy Mortgage."  SIBMC's primary  business is
to originate and sell residential  mortgage loans on a servicing  released basis
to the secondary  market.  The primary source of loans  originated by SIBMC is a
network of  approximately  100 retail  commissioned  loan  officers  who solicit
business  through  realtors,  financial  planners,  insurance  agents  and other
referral  sources.  To a lesser  extent  SIBMC also  derives  applications  from
third-party  sources  such as  mortgage  brokers  and  from the  Internet.  Loan
applications  are  generally  processed  on a  de-centralized  basis in  SIBMC's
network of 29 offices.  SIBMC's primary method of credit  underwriting the loans
is to electronically  submit the necessary data to the major mortgage  agencies'
(FHLMC  or  FNMA)  automated  underwriting  facilities.  The  company  also  has
underwriters  in all of its regions who manually  underwrite  loans that are not
eligible for Agency submission,  in which case, loans are originated for re-sale
to individual  investors in the secondary market. All credit decisions are based
on individual  investors'  underwriting  guidelines.  In most instances SIBMC is
delegated  to make  underwriting  decisions  for its  private  investors  either
directly or through automated intelligence.  Generally,  all properties securing
loans must be appraised by a licensed appraiser on SIBMC's approved list. Credit
reports,  flood  zone  certifications  and real  estate tax  certifications  are
required on all loans. SIBMC also requires title insurance, hazard insurance and
flood  insurance  when  a  loan  is  determined  to be in  flood  zone.  SIBMC's
underwriters  are authorized to approve loans based on the individual  investors
delegated authority. All limits also are subject to Staten Island Savings Bank's
limitations  and SIBMC is subject to the same  limitations as the Bank for loans
to one borrower.

         During the year ended  December 31, 1999,  SIBMC  originated a total of
$708.5 million of mortgage loans, of which the Bank purchased $85.0 million. The
Bank  purchases ARM loans  originated  by SIBMC in order to supplement  the ARMs
originated directly by the Bank in its efforts

                                       13
<PAGE>

to  manage  interest  rate  risk.   SIBMC  originates   primarily   conventional
single-family  residential  mortgage loans and, to a lesser extent,  FHA-insured
single-family residential mortgage loans.

         The Bank has  provided  SIBMC  with a $95.4  million  line of credit to
finance  its  loan  originations.  At  December  31,  1999,  $43.9  million  was
outstanding  on such line of credit.  In addition,  the Bank also has extended a
$10.6 million working  capital line of credit to SIBMC for day-to-day  operating
expenses, of which $6.2 million was drawn as of December 31, 1999. Interest paid
by SIBMC  on such  loans  is  eliminated  upon  consolidation  in the  Company's
financial statements.

         SIBMC originates loans which conform to the underwriting  standards for
purchase by the FHLMC and FNMA  ("conforming  loans") as well as  non-conforming
loans.  Non-conforming loans generally consist of loans which, primarily because
of  size  or  other  underwriting  technicalities  which  may be  cured  through
seasoning,  do not satisfy the  guidelines for resale to FNMA or FHLMC and other
private  secondary  market  investors  at the  time of  origination.  Management
believes  that  these  loans  are  essentially  of the same  credit  quality  as
conforming  loans.  During  the year ended  December  31,  1999,  non-conforming
conventional  loans  represented  approximately  20% of SIBMC's  total volume of
mortgage loans originated.

         Loan  origination  activities  performed by SIBMC  include  soliciting,
completing  and  processing   mortgage  loan   applications  and  preparing  and
organizing the necessary loan documentation.  Loan applications are examined for
compliance with  underwriting  criteria and, if all  requirements are met, SIBMC
issues a commitment to the  prospective  borrower  specifying  the amount of the
loan and the loan origination  fees,  points and closing costs to be paid by the
borrower or seller and the date on which the commitment expires.

         Typically,  when a mortgage  loan is  originated,  the borrower pays an
origination  fee.  These  fees are  generally  in the range of 0% to 3.0% of the
principal  amount of the mortgage  loan,  and are payable at the closing of such
loan. SIBMC receives these fees on mortgage loans originated  through its retail
branches.  SIBMC may charge additional fees depending upon market conditions and
regulatory considerations as well as SIBMC's objectives concerning mortgage loan
origination  volume and  pricing.  SIBMC  incurs  certain  costs in  originating
mortgage loans, including overhead, out-of-pocket costs and in some cases, where
the mortgage loans are subject to a purchase  commitment from private investors,
related  commitment  fees.  The  volume  and  type  of  mortgage  loans  and  of
commitments made by investors vary with competitive and economic fluctuations in
revenues  from  mortgage  loan  originations.   Generally  accepted   accounting
principles   ("GAAP")  require  that  general  operating  expenses  incurred  in
originating  mortgage  loans be charged  using the  interest  method,  until the
repayment  or sale of the related  mortgage  loans.  Loans  originated  by SIBMC
generally are sold in  approximately  45 days.  Revenues from SIBMC's loan sales
are recorded as other income in the Company's consolidated financial statements.

         When SIBMC sells loans, it assumes  limited  recourse for first payment
defaults fraud and non-compliance with its investors'  underwriting  guidelines.
The first payment default recourse is generally limited to a loan that goes into
foreclosure where the delinquency occurred within the first 90 days after a loan
is sold to an investor.  The recourse obligation for fraud and non-compliance to
underwriting standards is generally for the life of the loan. During 1999, SIBMC
recognized no losses due to such recourse arrangements.

                                       14
<PAGE>

         Loan  Origination  and Loan Fees.  In addition  to  interest  earned on
loans, the Bank receives loan origination fees or "points" for many of the loans
it  originates.  Loan points are a  percentage  of the  principal  amount of the
mortgage loan and are charged to the borrower in connection with the origination
of the loan.

         In  accordance  with SFAS No. 91, which  addresses the  accounting  for
non-refundable  fees and costs  associated with  originating or acquiring loans,
the Bank's loan  origination  fees and certain  related direct loan  origination
costs are offset,  and the  resulting  net amount is deferred  and  amortized as
interest  income over the contractual  life,  adjusted for  prepayments,  of the
related loans as an adjustment to the yield of such loans. At December 31, 1999,
the Bank had $0.9 million of such deferred loan costs, net.

Asset Quality

         General.  As a part of the Bank's efforts to improve its asset quality,
it has developed and  implemented  an asset  classification  system.  All of the
Bank's assets are subject to review under this classification  system. Loans are
periodically  reviewed  and the  classifications  are  reviewed  by the Board of
Directors on at least a quarterly  basis. In addition,  the Bank has retained an
independent third party consultant to review the Bank's  classifications,  among
other things,  on a periodic  basis.  The Bank has also added staff and enhanced
the procedures of the loan administration area in the collection and loan review
area.

         When a borrower  fails to make a required  payment on a loan,  the Bank
attempts to cure the deficiency by contacting the borrower and seeking  payment.
Contacts  are  generally  made 16 days  after a payment is due.  In most  cases,
deficiencies are cured promptly.  If a delinquency  continues,  late charges are
assessed  and  additional  efforts are made to collect the loan.  While the Bank
generally  prefers to work with  borrowers  to resolve such  problems,  when the
account becomes 90 days  delinquent,  the Bank  institutes  foreclosure or other
proceedings, as necessary, to minimize any potential loss.

         Loans  are  placed on  non-accrual  status  when,  in the  judgment  of
management,  the  probability of collection of interest is deemed to be doubtful
and the value of the  collateral  is not  sufficient  to satisfy  all  interest,
principal and potential costs due on the loan.  Prior to 1998, the Bank's policy
was to cease accruing interest on any loan which was 90 days or more past due as
to principal or interest.  Commencing  in 1998,  management  reviews  individual
secured loans to determine  their accrual status when they approach 90 days past
due. The Bank does not accrue  interest on  unsecured  loans that are 90 days or
more past due. When a loan is placed on non-accrual  status,  previously accrued
unpaid interest is deducted from interest income.  At December 31, 1999 the Bank
had $12.5 million of loans in non-accrual status compared to $16.2 million as of
December 31, 1998.

         Real  estate  acquired  by the  Bank  as a  result  of  foreclosure  or
deed-in-lieu of foreclosure is classified as real estate owned until sold. These
foreclosed  assets are considered  held for sale and are carried at the lower of
fair value minus the  estimated  costs to sell the  property.  After the date of
acquisition,  all costs incurred in maintaining  the property are capitalized up
to the  extent  of  their  net  realizable  value.  The  Bank  performs  ongoing
inspections of the properties and adjusts the carrying value as needed. The Bank
attempts to sell all properties  through  brokers and through its own personnel.
At December  31, 1999, the Bank had  $887,000  in these  properties  compared to
$849,000 as of December 31, 1998.

                                       15
<PAGE>

         Delinquent Loans. The following table sets forth information concerning
delinquent  loans at December 31, 1999, in dollar amounts and as a percentage of
each category of the Bank's loan portfolio.  The amounts presented represent the
total  outstanding  principal  balances  of the related  loans,  rather than the
actual payment amounts which are past due.

<TABLE>
<CAPTION>
                                                     December 31, 1999
                                                     -----------------
                                                   (Dollars in Thousands)

                                      30-59 Days              60-89 Days             90 Days or More
                                      ---------               -----------           ---------------

                                             Percent of              Percent of                Percent of
                                               Loan                    Loan                       Loan
                                Amount       Category      Amount    Category     Amount        Category
                                ------       --------      ------    --------     ------        --------
<S>                            <C>             <C>       <C>           <C>       <C>             <C>
Mortgage loans:
Residential:
  Single-family ...........      $39,880         2.29%     $ 7,291       0.42%     $ 4,616         0.27%
  Multi-family ............        1,502         3.53          123       0.29           41         0.10
  Commercial real estate ..        8,752         3.91        1,498       0.67          535         0.24
  Construction and land ...        3,597         5.98          736       1.22          466         0.78
  Home equity .............           58         1.08           --         --           33         0.61
                                  ------                   -------                 -------
Total .....................       53,789         2.64        9,648       0.47        5,691         0.27
Other loans:

  Commercial business loans        1,778         5.28          418       1.24          744         2.21
  Other loans .............        1,491         2.69          361       0.65          451         0.81
                                  ------                   -------                 -------
Total other loans .........        3,269         3.67          779       0.87        1,195         1.34
                                  ------                   -------                 -------
Total loans ...............      $57,058         2.63%     $10,427       0.48%     $ 6,886         0.32%
                                 =======                   =======                 =======
</TABLE>

                                       16
<PAGE>

Loans Past Due 90 Days or More and Still Accruing And Non-Accruing  Assets.  The
following table sets forth information with respect to,  non-accruing loans, and
other real estate owned and loans past due 90 days or more and still accruing.
<TABLE>
<CAPTION>
                                                                  At December 31,

                                            1999         1998          1997          1996          1995
                                            ----         ----          ----          ----          ----
                                                              (Dollars in Thousands)
<S>                                      <C>           <C>           <C>           <C>           <C>

Non-Accruing Assets
 Mortgage loans:
  Single-family residential .........    $ 2,899       $ 7,067       $ 9,395       $10,417       $11,159
  Multi-family residential ..........         --           131           319           322            98
  Commercial real estate ............      5,568         6,534         8,436        11,102        11,653
  Construction and land .............      1,793         1,761         1,131            --           379
  Home equity .......................        106           212           545           644           124
  Other loans:
  Automobile leases .................         --            --            --            15            18
  Commercial business loans .........      1,783           346           835           106           175
  Other consumer loans ..............        325           181           570           144           307
                                         -------       -------       -------       -------       -------
 Total non-accrual loans ...........      12,474        16,232        21,231        22,750        23,913
  Other real estate owned, net ......        887           849           618         1,103           627
                                         -------       -------       -------       -------       -------
   Total non-accruing assets ........    $13,361       $17,081       $21,849       $23,853       $24,540

 Loans past due 90 days or more
  and still accruing                       6,886         7,422            --            --            --
                                         -------       -------       -------       -------       -------
 Non-accuring assets and loans past
  due 90 days or more and
  still accruing                         $20,247       $24,503       $21,849       $23,853       $24,540
                                         =======       =======       =======       =======       =======

Non-accruing loans to total loans         0.62%         1.16%         1.98%         2.42%         3.00%
Non-accruing assets to total assets       0.30%         0.45%         0.82%         1.34%         1.42%
Non-accruing loans to total loans         0.58%         1.10%         1.93%         2.31%         2.92%
Non-accruing loans to total assets        0.28%         0.43%         0.80%         1.28%         1.38%
</TABLE>


Non-accrual  loans and other real  estate  owned at December  31,  1999  totaled
$13.4 million, down from $17.1 million at December 31, 1998 and $21.8 million at
December 31, 1997.

The interest income that would have been recorded during the year ended December
31,  1999 if all of the Bank's  non-accrual  loans at the end of such period had
been current in accordance with their terms during such period was $746,000. The
actual  amount of  interest  recorded  as income (on a cash basis) on such loans
during 1999 amounted to $935,000.

<PAGE>

         Classified and Criticized Assets. Federal regulations require that each
insured  institution  classify its assets on a regular  basis.  Furthermore,  in
connection with  examinations of insured  institutions,  federal  examiners have
authority to identify  problem assets and, if appropriate,  classify them. There
are three  classifications  for problem  assets:  "substandard,"  "doubtful" and
"loss."  Substandard  assets  have  one  or  more  defined  weaknesses  and  are
characterized  by the distinct  possibility  that the insured  institution  will
sustain some loss if the  deficiencies  are not corrected. Doubtful assets have

                                       17
<PAGE>

the weaknesses of substandard assets with the additional characteristic that the
weaknesses  make  collection  or  liquidation  in full on the basis of currently
existing  facts,  conditions  and  values  questionable  and  there  is  a  high
probability of loss. An asset  classified as a loss is considered  uncollectable
and of such little value that  continuance as an asset of the institution is not
warranted.  Another  category  designated  as  "special  mention"  also  must be
established  and maintained for assets which do not currently  expose an insured
institution  to a  sufficient  degree  of  risk  to  warrant  classification  as
substandard,  doubtful or loss. At December 31, 1999,  the Bank had an aggregate
of $25.1  million of classified  assets of which $11.6  million were  classified
substandard and $13.5 million of assets which were deemed special mention.

         Allowance  for Loan Losses.  The level of the allowance for loan losses
is based on  management's  continuing  review of the adequacy of the  allowance.
Such review is based on the  composition  of the loan portfolio and its inherent
risk characteristics,  the level of chargeoffs, both current and historic, local
and national economic conditions  including the direction of real estate values,
current levels of delinquent and  non-accruing  loans, and the current trends in
regulatory  supervision.  At December 31, 1999,  the Bank's  allowance  for loan
losses  amounted to $14.3 million or 114.4% and 0.66% of the Bank's  non-accrual
loans and total loans receivable,  respectively. As a result of the reduction in
the  Bank's  non-accruing  loans  and  the  overall  quality  of the Bank's loan
portfolio, management deemed it prudent to reverse $1.9 million of the allowance
for loan losses which was the primary  reason for the $1.8  million  benefit for
the loan loss  reserve for 1999  compared to a provision  of $1.6 million in the
year 1998.
                                       18
<PAGE>


         Allowance for Loan Losses.  The following table sets forth the activity
in the Bank's allowance for loan losses during the periods indicated.
<TABLE>
<CAPTION>

                                                                   Year Ended December 31,
                                                                   -----------------------


                                            1999           1998            1997          1996           1995
                                            ----           ----            ----          ----           ----
                                                                  (Dollars in Thousands)
<S>                                      <C>             <C>            <C>            <C>            <C>
Allowance at beginning of period ..      $ 16,617        $ 15,709       $  9,977       $ 10,704       $  3,124
Provisions (Benefit ) .............        (1,843)          1,594          6,003          1,000             --
Increase as a result of acquisition            --              96             --             --          8,026
 Charge-offs:
  Mortgage loans:
   Single-family residential .........        148             358            501          1,590            606
   Multi-family residential ..........         --              31            100             --             --
   Commercial real estate ............        474             344            210            376             --
  Other loans ........................      1,043           1,386            507            729            176
                                         --------        --------       --------       --------       --------
   Total charge-offs .................      1,665           2,119          1,318          2,695            782
 Recoveries:
  Mortgage loans:
  Single-family residential ..........        456             267            533            408            198
   Commercial real estate ............         34             210            251            413             19

   Construction and land .............         --               3             10             --             --
  Other loans ........................        672             857            253            147            119
                                         --------        --------       --------       --------       --------

   Total recoveries ..................      1,162           1,337          1,047            968            336
                                         --------        --------       --------       --------       --------
 Allowance at
 end of period .......................   $ 14,271        $ 16,617       $ 15,709       $  9,977       $ 10,704
                                         ========        ========       ========       ========       ========


Allowance for loan losses to total
 non-accruing loans at end of period       114.40%         102.37%         73.69%         43.85%         44.20%
                                         ========        ========       ========       ========       ========
Allowance for loan losses to total
 loans at end of period ............         0.66%           1.07%          1.42%          1.02%          1.32%
                                         ========        ========       ========       ========       ========
</TABLE>

                                       19
<PAGE>


         The following table sets forth information concerning the allocation of
the Bank's allowance for loan losses by loan category at the dates indicated.
<TABLE>
<CAPTION>


                                                                         At December 31,
                                                                         ---------------
                                  1999                   1998                 1997                  1996                   1995
                                  ----                   ----                 ----                  ----                   ----
                                                                     (Dollars in Thousands)

                                Percent of            Percent of           Percent of            Percent of             Percent of
                                Loan in               Loan in              Loan in               Loan in                Loan in
                                Category to            Category to          Category to           Category to            Category to
                       Amount  Total Loans    Amount  Total Loans  Amount  Total Loans   Amount  Total Loans    Amount  Total Loans
                       ------  -----------    ------  -----------  ------  -----------   ------  -----------    ------  -----------
<S>                   <C>         <C>        <C>        <C>       <C>         <C>       <C>          <C>       <C>         <C>
Mortagage Loans
Residential ......    $ 5,890     83.88%     $ 5,562    84.89%    $ 5,853     82.97%    $ 3,192      80.27%    $ 2,002     80.65%
Commercial .......      5,579     12.39        7,721    11.74       6,696     14.83       5,842      14.91       7,735     14.62
Other Loans ......      2,802      4.10        3,334     4.40       3,160      4.04         943       6.55         967      6.84
                      -------    ------      -------   ------     -------    ------     -------     ------     -------    ------
Total ............    $14,271    100.37%     $16,617   101.03%    $15,709    101.84%    $ 9,977     101.73%    $10,704    102.11%
                      =======    ======      =======   ======     =======    ======     =======     ======     =======    ======

</TABLE>

                                       20

<PAGE>

         The Bank will  continue  to monitor and modify its  allowance  for loan
losses  as  conditions  dictate.   While  management  believes  that,  based  on
information  currently  available,  the  Bank's  allowance  for loan  losses  is
sufficient  to cover  losses  inherent in its loan  portfolio  at this time,  no
assurance  can be given that the Bank's level of allowance  for loan losses will
be sufficient  to absorb future loan losses  incurred by the Bank or that future
adjustments  to the  allowance for loan losses will not be necessary if economic
and other conditions differ substantially from the economic and other conditions
used by  management  to determine  the current  level of the  allowance for loan
losses.  In addition,  the OTS, as an integral part of its examination  process,
periodically  reviews  the Bank's  allowance  for loan  losses.  Such agency may
require the Bank to make  adjustments  to the loan loss reserve based upon their
own judgements which could differ from those of management.

Securities Activities

         General.  As of December 31, 1999, the Company had securities  totaling
$2.0 billion or 43.7% of the Company's total assets at such date. The unrealized
depreciation  on the Company's  securities  available for sale amounted to $34.6
million,  net of income taxes. The securities  investment policy of the Bank and
Company,  which has been  established  by the Board of  Directors,  is designed,
among  other  things,  to  assist  the  Bank in its  asset/liability  management
policies.  The investment policy emphasizes  principal  preservation,  favorable
returns on investments,  maintaining  liquidity  within  designated  guidelines,
minimizing  credit risk and  maintaining  flexibility.  The  current  securities
investment  policies  permit  investments  in various types of assets  including
obligations  of  the  U.S.  Treasury  and  federal  agencies,  investment  grade
corporate  obligations,  various types of mortgage-backed  and  mortgage-related
securities,  commercial  paper,  certificates  of deposit,  equities and federal
funds sold to financial institutions approved by the Board of Directors.

         The Bank  converted  to a federally  chartered  mutual  savings bank in
August 1997. Prior to that date, the Bank operated as a New York State chartered
mutual savings bank.  While operating  under its New York Charter,  the Bank was
permitted  to make certain  investments  in equity  securities  and stock mutual
funds. Pursuant to the current law for federally chartered thrifts, the Bank was
required to divest or  transfer  such  securities.  The Bank  transferred  these
securities  with a market value of $60.8 million to the Company during the month
of February 1998. The Company's securities portfolio as of December 31, 1999 was
$145.3 million,  consisting of equity  investments  and certain  corporate bonds
which are not legal investments for a federally chartered thrift.

         At December 31, 1999, all of the Company's  securities  were classified
as available for sale.  Such  classification  as available for sale provides the
Company  with the  flexibility  to sell  securities  if  deemed  appropriate  in
response  to,  among  other  factors,  changes  in  interest  rates.  Securities
classified as available for sale are carried at fair value. Unrealized gains and
losses on available for sale  securities are  recognized as direct  increases or
decreases in equity, net of applicable income taxes.

         In the year ended December 31,1999,  the Company  recognized a net loss
on  security  transactions  of  $5.5  million  which  included  a  $9.1  million
write-down of two corporate bonds which management  determined to be permanently
impaired due to the  deterioration  of the financial  condition of the issuer of
those  bonds.  The Company  recognized  a net gain on security  transactions  of
$524,000  and a net loss of $85,000  for the years ended  December  31, 1998 and
1997, respectively.

                                       21
<PAGE>

         The Bank's investment policy provides  management with the authority to
sell securities  provided,  among other things,  any losses on such sales do not
exceed  $750,000,  in which event prior  approval of the Board of  Directors  is
required. Generally, management will enter into such securities sales only if it
believes that it can replace the securities sold with newly purchased securities
that,  due to their higher  yield,  will offset the losses within a twelve month
period.


<PAGE>

         The following table sets forth the activity in the Company's  aggregate
securities portfolio during the periods indicated.
<TABLE>
<CAPTION>

                                                                    Year Ended December 31,

                                                        1999                 1998                1997
                                                        ----                 ----                ----

                                                                    (Dollars In Thousands)
<S>                                                  <C>                <C>                <C>
Securities at beginning of period ............       $ 2,029,041        $ 1,350,466        $   703,134
Purchases:
U.S. government and agencies .................           121,954             19,819             25,073
Agency mortgage-backed securities ............           153,489            351,465            519,430
Agency CMOs ..................................            66,637            199,852            166,015
Private CMOs .................................            38,130            374,353            165,137
Other debt securities ........................            44,497            239,128                167
Marketable equity securities .................            92,408            119,768             34,483
                                                     -----------        -----------        -----------
Total purchases...............................           517,115          1,304,385            910,305
Sales:
U.S. government and agencies .................                --                 --             30,000
Agency mortgage-backed securities ............                --              2,772             18,183
Private CMOs .................................                --                 --             24,952
Other debt securities ........................            23,681             88,168                 --
Marketable equity securities .................            52,576             18,284             24,822
                                                     -----------        -----------        -----------
Total sales ..................................            76,257            109,224             97,957
Repayments and prepayments: ..................
U.S.government and agencies ..................            33,050             49,943             22,025
State and municipals .........................                --                 --              3,045
Agency mortgage-backed securities ............           240,177            263,362            104,187
Agency CMOs...................................            46,949            134,220             33,366
Private CMOs .................................            69,754             72,082             16,866
Other debt securities ........................                --                 --              1,000
Marketable equity securities .................                --                 60                 --
                                                     -----------        -----------        -----------
Total repayments and prepayments .............           389,930            519,667            180,489

Accretion of discount and (amortization
of premium) ..................................           (10,497)            (2,392)              (520)
Write-down for permanently impaired securities            (9,069)                --                 --
Unrealized gains or (losses)
on available-for-sale securities .............           (96,449)             5,473             16,435
Realized gains or (losses) on trading assets .                --                 --               (442)
                                                     -----------        -----------        -----------
Securities at end of period ..................       $ 1,963,954        $ 2,029,041        $ 1,350,466
                                                     ===========        ===========        ===========

</TABLE>


         Mortgage-Backed and Mortgage-Related  Securities. At December 31, 1999,
the Company's  securities  included $793.6 million, or 17.7% of total assets, of
mortgage  participation  certificates  (which are also known as  mortgage-backed
securities).

         Mortgage-backed securities represent a participation interest in a pool
of single-family or multi-family mortgages.  The principal and interest payments
on  mortgage-backed  securities  are passed from the  mortgage  originators,  as

<PAGE>

servicer,   through  intermediaries  (generally  U.S.  Government  agencies  and
government-sponsored  enterprises)  that pool and  repackage  the  participation
interests,  in the form of securities,  to investors such as the Bank. Such U.S.
Government agencies and government  sponsored  enterprises,  which guarantee the
payment of principal and interest to investors, primarily include the FHLMC, the
Federal  National  Mortgage  Association  ("FNMA") and the  Government  National
Mortgage Association ("GNMA").

         Mortgage-backed  securities  typically are issued with stated principal
amounts and the securities are

                                       23
<PAGE>

backed by pools of mortgages that have loans with interest rates that are within
a range and have varying  maturities.  The  underlying  pool of mortgages can be
composed of either fixed-rate or  adjustable-rate  loans. As a result,  the risk
characteristics  of the  underlying  pool of  mortgages,  (i.e.,  fixed-rate  or
adjustable-rate)  as well as prepayment  risk, are passed on to the  certificate
holder.  The life of a mortgage-backed  pass-through  security thus approximates
the life of the underlying mortgages.

         The Bank's  securities also include $656.8  million,  or 14.6% of total
assets, in collateralized mortgage obligations ("CMOs"), which are also known as
mortgage-related  securities. A CMO can be collateralized by loans or securities
which are  insured  or  guaranteed  by the  FHLMC,  the FNMA or the GNMA.  As of
December 31, 1999,  $238.6 million of the Bank's CMOs were insured or guaranteed
by the FHLMC,  FNMA or GNMA and the remaining  $418.2 million of the Bank's CMOs
were privately  issued.  While  non-agency  private issue CMOs are somewhat less
liquid  than  CMOs  insured  or  guaranteed  by the GNMA,  FNMA or  FHLMC,  they
generally  have a higher  yield than  agency  insured  or  guaranteed  CMOs.  In
contrast  to  pass-through  mortgage-backed  securities  in which  cash  flow is
received  pro rata by all  security  holders,  the cash flow from the  mortgages
underlying  a CMO is  segmented  and  paid in  accordance  with a  predetermined
priority  schedule to investors  holding various CMO classes.  By allocating the
principal  and  interest  cash flows from the  underlying  collateral  among the
separate CMO classes,  different classes of bonds are created, each with its own
stated   maturity,   estimated   average  life,   coupon  rate  and   prepayment
characteristics.  The regular  interests of some CMOs are like  traditional debt
instruments because they have stated principal amounts and traditionally defined
interest  rate  terms.  Purchasers  of certain  other CMOs are  entitled  to the
excess, if any, of the issuer's cash inflows,  including  reinvestment earnings,
over the cash outflows for debt service and administrative  expenses. These CMOs
may include  instruments  designated as residual  interests,  which represent an
equity  ownership  interest in the underlying  collateral,  subject to the first
lien of the  investors  in the other  classes of the CMO.  Certain  residual CMO
interests may be riskier than many regular CMO interests to the extent that they
could result in the loss of a portion of the original investment. Moreover, cash
flows from  residual  interests are very  sensitive to  prepayments  and,  thus,
contain a high degree of interest rate risk. As of December 31, 1999, the Bank's
CMOs did not include any residual interests,  or interest-only or principal-only
securities.  As a matter  of  policy,  the  Bank  does not  invest  in  residual
interests of CMOs or interest-only and principal-only securities.

         Mortgage-backed and  mortgage-related  securities  generally yield less
than  the  loans  which  underlie  such  securities  because  of  their  payment
guarantees or credit  enhancements which offer nominal credit risk. In addition,
mortgage-backed  and related securities are more liquid than individual mortgage
loans and may be used to collateralize  borrowings of the Bank.  Mortgage-backed
securities  issued or guaranteed by the FNMA or the FHLMC (except  interest-only
securities or the residual interests in CMOs) are weighted at no more than 20.0%
for  risk-based  capital  purposes,  compared to a weight of 50.0% to 100.0% for
residential loans.

         The  Bank   generally   does  not   invest   in   mortgage-backed   and
mortgage-related  securities with estimated average lives exceeding 10 years. At
December 31, 1999,  the  estimated  duration of the Bank's  mortgage-backed  and
mortgage-related  securities was approximately 5.1 years. The actual maturity of
a  mortgage-backed  or  mortgage-related  security  may be less than its  stated
maturity due to prepayments of the underlying  mortgages.  Prepayments  that are
faster  than  anticipated  may shorten the life of the  security  and  adversely
affect its yield to maturity.  The yield is based upon the  interest  income and

<PAGE>

the  amortization  of any  premium  or  accretion  of  discount  related  to the
mortgage-backed  security.  In accordance with GAAP,  premiums are amortized and
discounts are accreted over the estimated lives of the loans, which decrease and
increase  interest  income,  respectively.  The prepayment  assumptions  used to
determine the amortization  period for premiums and discounts can  significantly
affect the yield of the mortgage-backed or mortgage-related  security, and these
assumptions are reviewed  periodically to reflect actual  prepayments.  Although
prepayments of underlying

                                       24
<PAGE>

mortgages  depend on many factors,  including the type of mortgages,  the coupon
rate, the age of mortgages,  the  geographical  location of the underlying  real
estate  collateralizing  the  mortgages  and general  levels of market  interest
rates, the difference between the interest rates on the underlying mortgages and
the prevailing  mortgage  interest  rates,  generally,  is the most  significant
determinant of the rate of prepayments.

         During periods of rising  mortgage  interest rates, if the coupon rates
of the underlying  mortgages are less than the prevailing  market interest rates
offered  for  mortgage  loans,  refinancings  generally  decrease  and  slow the
prepayment of the underlying  mortgages and the related securities.  Conversely,
during periods of falling  mortgage  interest  rates, if the coupon rates of the
underlying  mortgages  exceed the prevailing  market  interest rates offered for
mortgage loans,  refinancing  generally increases and accelerates the prepayment
of  the   underlying   mortgages   and  the  related   securities.   Under  such
circumstances,  the Bank may be subject to reinvestment  risk to the extent that
the Bank's  mortgage-backed and  mortgage-related  securities amortize or prepay
faster  than  anticipated  because  the  Bank  may not be able to  reinvest  the
proceeds of such  repayments and  prepayments at a comparable  rate. At December
31,  1999,  of  the  $1.5  billion  of  mortgage-backed   and   mortgage-related
securities, an aggregate of $1.1 billion were secured by fixed-rate loans and an
aggregate of $338.4 million were secured by adjustable-rate loans.


                                       25
<PAGE>

U.S. Government and Agency Obligations

         At  December  31,  1999,  the  Company's  U.S.  Government   securities
portfolio  totaled $12.3 million with a weighted  average maturity of 0.9 years.
The  U.S.  Government  agency  securities  portfolio,   consisting  of  callable
securities, totaled $143.5 million with a weighted average maturity of 7.4 years
and a weighted average life of 2.4 years to the call date.

Other Securities

         At  December  31,  1999,  the  Company's  other  securities   consisted
primarily of $140.7  million in corporate  bonds,  $11.6 million in asset backed
bonds,  and $0.5 million in foreign bonds. The corporate bonds consist of longer
term financial  institution  bonds of which $67.6 million have adjustable  rates
using the 3 month  LIBOR as the index and $73.1  million  have  fixed-rates  for
longer terms.  The weighted  average maturity of the corporate bond portfolio is
20.0 years.

         The  following  table  sets forth  certain  information  regarding  the
contractual  maturities of the Bank's U.S.  Government  Agency  obligations  and
other  securities  (all of which  were  classified  as  available  for  sale)
<TABLE>
<CAPTION>

                                                               At December 31, 1999,

                              Maturing   Weighted    Maturing  Weighted    Maturing   Weighted    Maturing   Weighted
                              Under 1    Average      1 - 5     Average     6 - 10    Average     Over 10    Average
                               Year       Yield       Years      Yield      Years      Yield       Years      Yield
<S>                           <C>         <C>       <C>         <C>       <C>          <C>       <C>         <C>
                                                             (Dollars in Thousands)
U.S.Government and
federal agency obligations    $ 8,000     7.82%     $38,000     6.19%     $118,775     6.39%     $     --       -- %
Other Securities                  100     8.13       20,500     6.52        15,250     6.83       129,837     8.00
                              -------               -------               --------               --------
                              $ 8,100               $58,500               $134,025               $129,837
                              =======               =======               ========               ========

</TABLE>

Equity Securities

         At December 31, 1999, the Company's investment in equity securities was
$205.0 million, consisting of $69.6 million of preferred stock, $40.9 million of
common stock, $60.2 million of FHLB stock and $34.3 million of mutual funds. All
equity investments are classified as available for sale.

Sources of Funds

         General. Deposits,  repayments and prepayments of loans and securities,
proceeds from sales of loans and securities,  proceeds from maturing  securities
and cash flows from  operations are the primary  sources of the Bank's funds for
use in lending, investing and for other general purposes. The Bank also utilizes
borrowings, primarily FHLB advances and reverse repurchase  agreements,  to fund
its operations and on a longer term basis for general business.

                                       26

<PAGE>

         Deposits.  The Bank's  deposit  products  include a broad  selection of
deposit instruments,  including negotiable order of withdrawal ("NOW") accounts,
money  market  accounts,   noninterest  bearing  checking  accounts,  commercial
checking accounts,  regular savings accounts and term certificate accounts.  The
Bank also offers jumbo certificate of deposit accounts and Individual Retirement
Accounts ("IRA") and other qualified plan accounts.  While jumbo  certificate of
deposit  accounts  are  accepted by the Bank and may be subject to  preferential
rates,  the Bank does not actively  solicit such  deposits as such  deposits are
more difficult to retain than core deposits. Deposit account terms vary with the
principal  differences being the minimum balance required,  the time periods the
funds must remain on deposit and the interest rate.

         At December 31, 1999,  the Bank's  deposits  totaled $1.8  billion,  of
which 81.3% were interest bearing  deposits.  Core deposits  (savings  accounts,
non-interest  bearing  commercial  and  retail  demand  deposits,  money  market
accounts  and NOW  accounts)  were $1.2  billion  or 68.5% and  certificates  of
deposit were $573.0 million or 31.5% at December 31, 1999. Although the Bank has
a significant portion of its deposits in core deposits,  management monitors the
activity in these  accounts and,  based on historical  experience and the Bank's
current pricing strategy, believes it will continue to retain a large portion of
these  deposits.  The Bank is not limited with respect to the rates it may offer
on deposit products.

         The  Bank  utilizes  traditional   marketing  methods  to  attract  new
customers and savings  deposits.  In addition,  the Bank's business  development
officers  have  actively  solicited,   through  individual  meetings  and  other
contacts, deposit accounts, particularly commercial accounts. The Bank's lending
officers  and branch  managers  have  increased  their  efforts  to solicit  new
deposits from the Bank's loan  customers and other  residents and  businesses in
their market area.  Total  deposits held by banks in the Bank's market area have
decreased  over the past few years.  However  the Bank has  continued  to be the
largest depository institution, by deposit market share, in Staten Island. While
the Bank historically has not accepted brokered deposits,  the Bank is currently
in the process of  establishing  relationships  with deposit brokers and may, in
the future, utilize brokered deposits as a funding source, depending upon market
conditions.

         For the  year  ended  December  31,  1999,  deposits,  before  interest
credited,  increased $42.1 million compared with an increase of $54.8 million in
1998.  Inclusive of interest credited, deposits  increased $91.2 million in 1999
and $105.4 million in 1998.

                                       27
<PAGE>
The following  table sets forth the activity in the Bank's  deposits  during the
periods indicated.
<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                       1999              1998             1997
                                       ----              ----             ----
                                                (Dollars In Thousands)
<S>                                 <C>             <C>               <C>
Beginning balance...............    $ 1,729,060     $1,623,652        $1,577,748
Net increase (decrease) before
interest credited...............         42,065         54,763            (9,386)
Interest credited...............         49,107         50,645            55,290
                                    -----------     ----------        ----------
Net increase in deposits........         91,172        105,408            45,904
                                    -----------     ----------        ----------
Ending balance .................    $ 1,820,232     $1,729,060        $1,623,652
                                    ===========     ==========        ==========

</TABLE>


The following table sets forth, by various interest rate categories,
the certificates of deposit with the Bank at the dates indicated.
<TABLE>
<CAPTION>
                                                          At December 31,
                                               ------------------------------------
                                                   1999         1998         1997
                                                   ----         ----         ----
                                                        (Dollar in Thousands)
<S>                                            <C>           <C>           <C>
0.00% to 2.99% ..........................      $    343      $  4,343      $     --
3.00% to 3.99% ..........................         1,912         3,516         9,704
4.00% to 4.99% ..........................       406,285       253,301       128,150
5.00% to 6.99%...........................       162,666       273,931       380,820
7.00% to 8.99% ..........................         1,837         2,063         2,019
                                               --------      --------      --------
Total ...................................      $573,043      $537,154      $520,693
                                               ========      ========      ========
</TABLE>
<PAGE>
Weighted Average Rate

The following table sets forth the amount and remaining maturities of
the Bank's certificates of deposit at December 31, 1999.
<TABLE>
<CAPTION>
                                           Over Six      Over One       Over Two
                                            Months         Year          Years
                              Six Months  Through One   Through Two  Through Three    Over Three
                                or Less      Years         Years         Years          Years
                               --------      -----         ----          -----          -----
                                                (Dollars in Thousands)

<S>      <C>                 <C>           <C>           <C>           <C>             <C>
0.00% to 2.99%........       $    343      $     --      $     --      $     --        $     --
3.00% to 3.99%........          1,361           551            --            --              --
4.00% to 4.99%........        297,030        72,812        29,221         2,554           4,668
5.00% to 6.99%........         63,859        32,044        43,763         9,691          13,309
7.00% to 8.99% .......          1,837            --            --            --              --
                             --------      --------      --------      --------        --------
 Total ...............       $364,430      $105,407      $ 72,984      $ 12,245        $ 17,977
                             ========      ========      ========      ========        ========

</TABLE>

         As  of  December  31,  1999,   the  aggregate   amount  of  outstanding
certificates  of  deposit  in  amounts  greater  than or equal to  $100,000  was
approximately $161.6 million. The following table presents the maturity of these
certificates of deposit at such date.

                                         December 31,  1999
                                         ------------------

                                       (Dollars in Thousands)
                                       ----------------------
3 months or less .....................      $ 86,518
Over 3 months through 6 months........        23,547
Over 6 months through 12 months......         29,760
Over 12 months .......................        21,778
                                            --------
                                            $161,603
                                            ========

                                       28
<PAGE>

         The  following  table sets forth the dollar  amount of  deposits in the
various types of deposit accounts offered by the Bank at the dates indicated.
<TABLE>
<CAPTION>


                                                                        At December 31,
                                                                        ---------------
                                                1999                            1998                          1997
                                                ----                            ----                          ----
                                         Amount        Percentage       Amount        Percentage     Amount          Percentage
                                        ------        ----------       ------        ----------     ------          ----------
                                                                     (Dollars in Thousands)

<S>                                 <C>                  <C>       <C>                  <C>       <C>                  <C>
Savings accounts.............       $  737,794           40.53%    $  730,614           42.25%    $  709,074           43.67%
Certificates of
deposit .....................          573,043           31.48        537,154           31.07        520,693           32.07
Money market accounts .......           89,003            4.89         82,360            4.76         76,088            4.69
NOW accounts ................           80,352            4.41         73,541            4.26         67,076            4.13
Demand  deposits ............          340,040           18.69        305,392           17.66        250,721           15.44
                                    ----------          ------     ----------          ------     ----------          ------
Total .......................       $1,820,232          100.00%    $1,729,061          100.00%    $1,623,652          100.00%
                                    ==========          ======     ==========          ======     ==========          ======

</TABLE>


         Borrowings.  During 1999, the Bank continued to leverage its capital by
utilizing borrowings as an additional source of funds for investments and loans.
At December 31, 1999 the Bank had borrowings of $2.0 billion which  consisted of
FHLB advances and reverse  repurchase  agreements  from the FHLB and established
brokerage  firms.  These  borrowings  are  collaterized  primarily by the Bank's
mortgage-backed  securities  portfolio  and the single family  residential  loan
portfolio.

         The Bank's  strategy to invest  borrowings  at  acceptable  spreads has
increased the overall cost of funds while incrementally  increasing net interest
income and decreasing  the net interest rate spread.  The Bank intends to reduce
its  utilization of borrowings to fund asset growth during 2000 and to emphasize
more traditional funding sources such as deposit growth.

                                       29
<PAGE>



         The  following  table  sets  forth  information  with  respect  to  the
Company's borrowings at and during the periods indicated.

                                     At or For the Year Ended December 31,
                                     -------------------------------------

                                     1999              1998              1997
                                     ----              ----              ----
                                             (Dollars in Thousands)

Maximum balance                  $2,049,372        $1,349,477        $  250,000
Average balance                  $1,673,755        $  664,822        $   81,071
Year end balance                 $2,049,372        $1,344,477        $  250,000
Weighted average
interest rate:
At end of year                     5.65%               5.24%             5.86%
During the year                    5.35%               5.58%             5.88%


         Trust  Activities.  The Bank also  provides  a full  range of trust and
investment  services,  and acts as executor or  administrator  of estates and as
trustee for various types of trusts.  Trust and investment  services are offered
through the Bank's Trust  Department  which was acquired in 1995.  Fiduciary and
investment  services are provided  primarily to persons and entities  located in
Staten Island, New York.  Services offered include fiduciary services for trusts
and  estates,  money  management,  custodial  services  and pension and employee
benefits  consulting.  As of December 31, 1999, the Trust Department  maintained
approximately  348  trust/fiduciary  accounts with an aggregate  value of $133.3
million.

         The  accounts  maintained  by the  Trust/Investment  Services  Division
consist of "managed" and "non-managed"  accounts.  "Managed"  accounts are those
for  which  the  Bank  has  responsibility  for  administration  and  investment
management and/or investment advice.  "Non-managed"  accounts are those accounts
for which  the Bank  merely  acts as a  custodian.  The  Company  receives  fees
depending  upon the level and type of  service  provided.  The Trust  Department
administers  various  trust  accounts  (revocable,  irrevocable  and  charitable
trusts,  and trusts under  wills),  agency  accounts  (various  investment  fund
products),  estate accounts and employee  benefit plan accounts  (assorted plans
and IRA  accounts).  Two trust  officers  and related  staff are assigned to the
Trust  Department.  The  administration  of trust  and  fiduciary  accounts  are
monitored by the Trust  Committee  of the Board of  Directors  of Staten  Island
Savings.

                                       30
<PAGE>


         Savings  Bank Life  Insurance. During the year, the Bank  maintained  a
Savings Bank Life  Insurance  "SBLI"  department  which issues life insurance to
individuals.   The  financial   statements  of  the  SBLI   Department  are  not
consolidated with the Bank's and the SBLI department's activities are segregated
from the Bank. The SBLI Department pays its own expenses and reimburses the Bank
for expenses  incurred on its behalf.  At December 31, 1999, the SBLI department
had policies  totaling  $1.5 billion in force.  In  accordance  with  regulatory
mandate,  at December 31, 1999, the operations of the SBLI department ceased and
all assets, policies and surplus were transferred to a newly created mutual life
insurance  company.  The Bank has formed a new  subsidiary  as a  licensed  life
insurance agency to sell the products of the new mutual insurance company.  This
new  subsidiary  will  retain all  commission  income from  policies  previously
generated and serviced by the SBLI department.

Subsidiaries

         SIB Mortgage  Corp.  (SIBMC) is a  wholly-owned  subsidiary of the Bank
incorporated  in the State of New Jersey in 1998.  SIBMC was formed to  purchase
substantially all of the assets of Ivy Mortgage Corp. SIBMC currently originates
loans in 22 states and had assets totaling $54.0 million at December 31, 1999.

         Staten Island Funding  Corporation (SIFC) is a wholly-owned  subsidiary
of SIBIC  incorporated  in the  State of  Maryland  in 1998 for the  purpose  of
establishing a Real Estate Investment Trust ("REIT").  The Bank transferred real
estate mortgage loans totaling $648.0 million,  net. In return the Bank received
all the shares of common stock and preferred  stock in SIFC.  The assets of SIFC
totaled $655.4 million at December 31, 1999.

         SIB Investment Corporation (SIBIC) is a wholly-owned  subsidiary of the
Bank that was incorporated in the State of New Jersey in 1998 for the purpose of
managing certain  investments of the Bank. The Bank transferred the common stock
and a majority of the preferred stock of SIFC to SIBIC. The consolidated  assets
of SIBIC at December 31, 1999 were $718.4 million.

         American  Construction Lending Services,  Inc. (ACLS) is a wholly owned
subsidiary of the Bank  incorporated  in the State of Connecticut in 1999.  ACLS
commenced  operations  in October  of 1999.  ACLS was  formed to  originate  and
service residential  construction loans throughout the United States. The assets
of ACLS totaled $5.7 million at December 31, 1999.

         ACLS   originates   short-term,   generally   six-month   to  one-year,
construction  loans  primarily to  individuals  for their own  residences.  ACLS
generally originates  construction loans only when the borrower has a commitment
from a financial  institution  for a permanent  mortgage  loan.  SIBMC  provides
permanent  financing for a significant  amount of the loans  originated by ACLS,
which  permanent  mortgage  loans  generally  are then sold  into the  secondary
market.  In addition,  the Bank will provide  permanent loans for certain of the
construction  loans  originated  by ACLS,  which are  primarily  for  properties
located in the New York City  metropolitan  area.  During 1999,  ACLS originated
$8.6 million in  construction  loans.  ACLS  currently  conducts  business in 16
states.

                                       31
<PAGE>

         SIB Financial  Corporation  (SIBFC) is a wholly owned subsidiary of the
Bank  incorporated  in the  State of New York in 2000.  SIBFC  was  formed  as a
licensed life insurance  agency to sell the products of the new mutual insurance
company formed by the Savings Bank Life Insurance Department of New York.

         Employees.  The  Bank  had 907  full-time  employees  and 98  part-time
employees at December 31, 1999.  None of these  employees are  represented  by a
collective  bargaining agent and the Bank believes that it enjoys good relations
with its personnel.

         Year 2000. In the third quarter of 1998, the Company  converted most of
its mission critical systems such as deposits and loans to a Year 2000 compliant
platform provided by a new data processing  service  provider.  The cost of Year
2000 compliance was borne by the servicer under terms of the company's  contract
with them. In 1999, the Company's other information technology systems were also
upgraded   for  year  2000   compliance.   Comprehensive   tests  of  Year  2000
functionality were completed in 1999 and no significant  problems were noted. In
accordance   with  regulatory   guidelines,   the  Company  also  developed  and
successfully tested a Year 2000 business resumption contingency plan. During the
century  turnover and to date,  the Company did not or has not  experienced  any
disruptions  to its  information  technology  systems or in the level of service
provided to customers. For the year ended 1999, the Company incurred expenses of
approximately $150,000 related to Year 2000 compliance.

                                       32


<PAGE>
                                   REGULATION

General

         The Bank is a federally  chartered and insured  savings bank subject to
extensive  regulation  and  supervision  by  the  OTS,  as the  primary  federal
regulator of savings associations, and the FDIC, as the administrator of the BIF
(Bank Insurance Fund).

         The federal banking laws contain numerous provisions  affecting various
aspects of the business and operations of savings  associations  and savings and
loan holding  companies.  The following  description of statutory and regulatory
provisions and proposals,  which is not intended to be a complete description of
these  provisions  or their  effects on the Company or the Bank, is qualified in
its entirety by reference to the particular  statutory or regulatory  provisions
or proposals.

Regulation of Savings and Loan Holding Companies

         Holding Company Acquisitions. The Company is a savings and loan holding
company  within the meaning of the Home Owners'  Loan Act, as amended  ("HOLA").
The HOLA and OTS  regulations  generally  prohibit  a savings  and loan  holding
company, without prior OTS approval, from acquiring, directly or indirectly, the
ownership  or  control of any other  savings  association  or  savings  and loan
holding company,  or all, or substantially all, of the assets or more than 5% of
the voting shares thereof.  These provisions also prohibit,  among other things,
any director or officer of a savings and loan holding company, or any individual
who owns or controls more than 25% of the voting shares of such holding company,
from  acquiring  control of any savings  association  not a  subsidiary  of such
savings and loan holding company, unless the acquisition is approved by the OTS.

         Holding Company  Activities.  The Company operates as a unitary savings
and loan  holding  company.  Generally,  there are limited  restrictions  on the
activities  of a unitary  savings and loan holding  company and its  non-savings
association subsidiaries. If the Company ceases to be a unitary savings and loan
holding company,  the activities of the Company and its non-savings  association
subsidiaries would thereafter be subject to substantial restrictions.

         The HOLA requires every savings association subsidiary of a savings and
loan  holding  company  to give the OTS at least 30 days  advance  notice of any
proposed   dividends   to  be  made  on  its   guarantee,   permanent  or  other
non-withdrawable stock, or else such dividend will be invalid.

         Affiliate Restrictions.  Transactions between a savings association and
its "affiliates" are subject to quantitative and qualitative  restrictions under
Sections  23A  and 23B of the  Federal  Reserve  Act.  Affiliates  of a  savings
association include,  among other entities,  the savings  association's  holding
company  and  companies   that  are  under  common   control  with  the  savings
association.

         In  general,  Sections  23A  and  23B and  OTS  regulations  issued  in
connection  therewith  limit the  extent to which a savings  association  or its
subsidiaries may engage in certain "covered  transactions" with affiliates to an
amount equal to 10% of the  association's  capital and  surplus,  in the case of
covered  transactions  with any one affiliate,  and to an amount equal to 20% of
such  capital  and  surplus,  in the  case  of  covered  transactions  with  all
affiliates.  In addition,  a savings association and its subsidiaries may engage
in covered  transactions and certain other  transactions only on terms and under

                                       33
<PAGE>

circumstances  that are  substantially the same, or at least as favorable to the
savings  association  or its  subsidiary,  as those  prevailing  at the time for
comparable transactions with nonaffiliated companies. A "covered transaction" is
defined to include a loan or extension of credit to an affiliate;  a purchase of
investment  securities  issued by an  affiliate;  a purchase  of assets  from an
affiliate,  with certain  exceptions;  the acceptance of securities issued by an
affiliate as collateral  for a loan or extension of credit to any party;  or the
issuance  of a  guarantee,  acceptance  or  letter  of  credit  on  behalf of an
affiliate.

         In addition,  under the OTS regulations,  a savings association may not
make a loan or  extension  of credit to an  affiliate  unless the  affiliate  is
engaged only in activities  permissible  for bank holding  companies;  a savings
association  may not purchase or invest in securities of an affiliate other than
shares of a  subsidiary;  a savings  association  and its  subsidiaries  may not
purchase a low-quality  asset from an affiliate;  and covered  transactions  and
certain other transactions between a savings association or its subsidiaries and
an affiliate must be on terms and conditions  that are consistent  with safe and
sound  banking  practices.  With certain  exceptions,  each loan or extension of
credit by a savings  association  to an affiliate  must be secured by collateral
with a  market  value  ranging  from  100% to  130%  (depending  on the  type of
collateral) of the amount of the loan or extension of credit.

         The OTS  regulation  generally  excludes all  non-bank and  non-savings
association  subsidiaries of savings  associations from treatment as affiliates,
except to the extent that the OTS or the Federal  Reserve Board decides to treat
such   subsidiaries  as  affiliates.   The  regulation  also  requires   savings
associations to make and retain records that reflect  affiliate  transactions in
reasonable detail, and provides that certain classes of savings associations may
be required to give the OTS prior notice of affiliate transactions.

         Financial  Modernization. Under the Gramm-Leach Bliley Act enacted into
law on November 12, 1999,  no company may acquire  control of a savings and loan
holding  company  after May 4,  1999,  unless the  company  is  engaged  only in
activities  traditionally  permitted  to a  multiple  savings  and loan  holding
company or newly permitted to a financial  holding company under Section 4(k) of
the Bank Holding Company Act.  Existing  savings and loan holding  companies and
those formed  pursuant to an application  filed with the OTS before May 4, 1999,
may engage in any activity  including  non-financial  or  commercial  activities
provided such companies control only one savings and loan association that meets
the Qualified Thrift Lender test. Corporate  reorganizations are permitted,  but
the transfer of  grandfathered  unitary  thrift  holding  company status through
acquisition is not permitted.

Regulation of Federal Savings Banks

         Regulatory  System.  As  a  federally  insured  savings  bank,  lending
activities and other  investments of the Bank must comply with various statutory
and regulatory requirements.  The Bank is regularly examined by the OTS and must
file periodic reports concerning its activities and financial condition.

         Although the OTS is the Bank's primary regulator,  the FDIC has "backup
enforcement  authority" over the Bank. The Bank's eligible  deposit accounts are
insured by the FDIC under the BIF, up to applicable limits.

                                       34
<PAGE>

         Federal Home Loan Banks. The Bank is a member of the FHLB System. Among
other  benefits,  FHLB  membership  provides  the  Bank  with a  central  credit
facility.  The Bank is  required  to own  capital  stock in an FHLB in an amount
equal to the greater of: (i) 1% of its aggregate outstanding principal amount of
its residential  mortgage loans, home purchase contracts and similar obligations
at the beginning of each calendar year, (ii) .3% of total assets, or (iii) 5% of
its FHLB advances (borrowings). The current investment in FHLB stock is based on
5% of the Bank's borrowings outstanding from the FHLB.

         Liquid  Assets.  Under OTS  regulations,  for each  calendar  month,  a
savings bank is required to maintain an average  daily  balance of liquid assets
(including  cash,   certain  time  deposits  and  savings   accounts,   bankers'
acceptances,  certain government  obligations and certain other investments) not
less  than a  specified  percentage  of the  average  daily  balance  of its net
withdrawable accounts plus short-term borrowings (its liquidity base) during the
preceding  calendar  month.  This liquidity  requirement,  which is currently at
4.0%,  may be changed from time to time by the OTS to any amount between 4.0% to
10.0%, depending upon certain factors. OTS regulations also require each savings
association  to maintain an average daily  balance of  short-term  liquid assets
equal to not less than 1.0% of the average daily balance of its net withdrawable
accounts and short-term borrowings during the preceding calendar month. The Bank
maintains liquid assets in compliance with these regulations.

         Regulatory  Capital  Requirements.   OTS  capital  regulations  require
savings  banks  to  satisfy  minimum  capital   standards,   risk-based  capital
requirements, a leverage requirement and a tangible capital requirement. Savings
banks must meet each of these standards in order to be deemed in compliance with
OTS capital requirements. In addition, the OTS may require a savings association
to maintain capital above the minimum capital levels.

         All savings  banks are  required to meet a minimum  risk-based  capital
requirement of total capital (core capital plus supplementary  capital) equal to
8% of  risk-weighted  assets  (which  includes  the credit risk  equivalents  of
certain  off-balance  sheet items). In calculating total capital for purposes of
the risk-based  requirement,  supplementary  capital may not exceed 100% of core
capital. Under the leverage requirement,  a savings bank is required to maintain
core capital equal to a minimum of 3% of adjusted  total assets.  A savings bank
is also  required  to maintain  tangible  capital in an amount at least equal to
1.5% of its adjusted total assets.

         These capital  requirements are viewed as minimum standards by the OTS,
and most  institutions  are expected to maintain  capital  levels well above the
minimum.  In addition,  the OTS regulations  provide that minimum capital levels
higher than those provided in the  regulations may be established by the OTS for
individual  savings   associations,   upon  a  determination  that  the  savings
association's  capital is or may become inadequate in view of its circumstances.
The OTS regulations  provide that higher individual  minimum  regulatory capital
requirements  may be appropriate in  circumstances  where,  among others:  (1) a
savings  association  has a high  degree of  exposure  to  interest  rate  risk,
prepayment  risk,  credit  risk,  concentration  of credit risk,  certain  risks
arising from nontraditional activities, or similar risks or a high proportion of
off-balance sheet risk; (2) a savings association is growing,  either internally
or through acquisitions,  at such a rate that supervisory problems are presented
that  are not  dealt  with  adequately  by OTS  regulations;  and (3) a  savings
association  may be  adversely  affected by the  activities  or condition of its
holding   company,   affiliates,   subsidiaries  or  other  persons  or  savings
associations with which it has significant business  relationships.

                                       35
<PAGE>

         The Bank  is not subject  to any  such  individual  minimum  regulatory
capital requirement.

         The Bank's tangible capital ratio was 8.93%, its core capital ratio was
8.97% and its total risk-based capital ratio was 19.80% at December 31, 1999.

         Prompt  Corrective  Action.  The prompt corrective action regulation of
the OTS, promulgated under the Federal Deposit Insurance Corporation Improvement
Act of 1991  ("FDICIA"),  requires  certain  mandatory  actions  and  authorizes
certain  other  discretionary  actions to be taken by the OTS  against a savings
bank that falls within certain  undercapitalized capital categories specified in
the regulation.

         The regulation  establishes five categories of capital  classification:
"well capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically  undercapitalized." Under the regulation, the
ratio of total capital to  risk-weighted  assets,  core capital to risk-weighted
assets and the leverage  ratio are used to determine  an  institution's  capital
classification.  The Bank meets the capital requirements of a "well capitalized"
institution under applicable OTS regulations.

         In  general,  the prompt  corrective  action  regulation  prohibits  an
insured  depository  institution from declaring any dividends,  making any other
capital  distribution,  or paying a management  fee to a controlling  person if,
following the  distribution or payment,  the institution  would be within any of
the three  undercapitalized  categories.  In  addition,  adequately  capitalized
institutions  may accept brokered  deposits only with a waiver from the FDIC and
are  subject  to  restrictions  on the  interest  rates that can be paid on such
deposits.  Undercapitalized  institutions  may not  accept,  renew or  roll-over
brokered deposits.

         Institutions  that are  classified as  undercapitalized  are subject to
certain mandatory  supervisory actions,  including:  (i) increased monitoring by
the  appropriate  federal banking agency for the institution and periodic review
of the institution's efforts to restore its capital, (ii) a requirement that the
institution  submit a capital  restoration  plan  acceptable to the  appropriate
federal  banking  agency and implement  that plan,  and that each company having
control of the institution  guarantee  compliance  with the capital  restoration
plan in an amount  not  exceeding  the lesser of 5% of the  institution's  total
assets at the time it received notice of being  undercapitalized,  or the amount
necessary to bring the  institution  into  compliance  with  applicable  capital
standards  at the time it fails to comply with the plan,  and (iii) a limitation
on the  institution's  ability  to make any  acquisition,  open  any new  branch
offices, or engage in any new line of business without the prior approval of the
appropriate federal banking agency for the institution or the FDIC.

         The  regulation  also  provides  that the OTS may  take any of  certain
additional  supervisory actions against an  undercapitalized  institution if the
agency determines that such actions are necessary to resolve the problems of the
institution at the least possible  long-term cost to the deposit insurance fund.
These  supervisory  actions  include:  (i)  requiring the  institution  to raise
additional  capital or be acquired by another  institution or holding company if
certain grounds exist, (ii) restricting transactions between the institution and
its  affiliates,  (iii)  restricting  interest rates paid by the  institution on
deposits,  (iv)  restricting  the  institution's  asset growth or requiring  the
institution to reduce its assets, (v) requiring  replacement of senior executive
officers and directors, (vi) requiring the institution to alter or terminate any
activity  deemed to pose excessive risk to the  institution,  (vii)  prohibiting
capital  distributions by bank holding  companies  without prior approval by the
FRB,  (viii)  requiring  the  institution  to divest  certain  subsidiaries,  or
requiring the institution's holding company to divest the institution or certain

                                       36
<PAGE>

affiliates of the institution, and (ix) taking any other supervisory action that
the agency believes would better carry out the purposes of the prompt corrective
action provisions of FDICIA.

         Institutions  classified  as  undercapitalized  that  fail to  submit a
timely, acceptable capital restoration plan or fail to implement such a plan are
subject  to the  same  supervisory  actions  as  significantly  undercapitalized
institutions.  Significantly  undercapitalized  institutions  are subject to the
mandatory provisions applicable to undercapitalized institutions. The regulation
also makes mandatory for significantly  undercapitalized institutions certain of
the supervisory  actions that are discretionary  for institutions  classified as
undercapitalized,  creates  a  presumption  in  favor of  certain  discretionary
supervisory actions, and subjects significantly undercapitalized institutions to
additional restrictions,  including a prohibition on paying bonuses or raises to
senior executive  officers without the prior written approval of the appropriate
federal bank  regulatory  agency.  In addition,  significantly  undercapitalized
institutions  may be  subjected  to certain of the  restrictions  applicable  to
critically undercapitalized institutions.

         The   regulation   requires   that  an   institution   be  placed  into
conservatorship  or  receivership  within 90 days  after it  becomes  critically
undercapitalized,  unless the OTS, with concurrence of the FDIC, determines that
other action would better achieve the purposes of the prompt  corrective  action
provisions of FDICIA.  Any such  determination  must be renewed every 90 days. A
depository  institution also must be placed into receivership if the institution
continues to be critically undercapitalized on average during the fourth quarter
after the institution initially became critically  undercapitalized,  unless the
institution's  federal bank  regulatory  agency,  with  concurrence of the FDIC,
makes certain positive determinations with respect to the institution.

         Critically  undercapitalized  institutions  are  also  subject  to  the
restrictions generally applicable to significantly undercapitalized institutions
and to a number of other severe  restrictions.  For  example,  beginning 60 days
after  becoming  critically  undercapitalized,  such  institutions  may  not pay
principal or interest on  subordinated  debt  without the prior  approval of the
FDIC. (However, the regulation does not prevent unpaid interest from accruing on
subordinated  debt  under  the  terms  of the  debt  instrument,  to the  extent
otherwise   permitted   by  law.)  In  addition,   critically   undercapitalized
institutions  may  be  prohibited  from  engaging  in a  number  of  activities,
including entering into certain  transactions or paying interest above a certain
rate on new or renewed liabilities.

         If the OTS  determines  that an  institution is in an unsafe or unsound
condition,  or if the  institution  is deemed to be  engaging  in an unsafe  and
unsound  practice,  the  OTS  may,  if  the  institution  is  well  capitalized,
reclassify  it as  adequately  capitalized;  if the  institution  is  adequately
capitalized  but not well  capitalized,  require it to comply with  restrictions
applicable  to  undercapitalized  institutions;   and,  if  the  institution  is
undercapitalized,  require it to comply with certain restrictions  applicable to
significantly undercapitalized institutions.

         Conservatorship/Receivership.  In  addition  to the  grounds  discussed
under "Prompt Corrective Action," the OTS (and, under certain circumstances, the
FDIC) may appoint a conservator or receiver for a savings association if any one
or more of a number of circumstances exist, including,  without limitation,  the
following:  (i) the  institution's  assets  are  less  than its  obligations  to
creditors and others,  (ii) a substantial  dissipation of assets or earnings due
to any  violation of law or any unsafe or unsound  practice,  (iii) an unsafe or
unsound  condition  to transact  business,  (iv) a willful  violation of a final
cease-and-desist  order, (v) the concealment of the institution's books, papers,
records or assets or refusal to submit such items for inspection to any examiner
or lawful  agent of the  appropriate  federal  banking  agency or state  bank or
savings association  supervisor,  (vi) the institution is likely to be unable to
pay its  obligations  or meet its  depositors'  demands in the normal  course of
business, (vii) the institution has incurred, or is likely to incur, losses that
will deplete all or substantially all of its capital, and there is no reasonable
prospect for the institution to become  adequately  capitalized  without federal
assistance,  (viii) any  violation of law or unsafe or unsound  practice that is
likely to cause  insolvency or  substantial  dissipation  of assets or

                                       37
<PAGE>

earnings,  weaken the institution's  condition, or otherwise seriously prejudice
the interests of the  institution's  depositors or the federal deposit insurance
fund,  (ix) the  institution  is  undercapitalized  and the  institution  has no
reasonable  prospect  of  becoming  adequately  capitalized,   fails  to  become
adequately  capitalized  when  required  to do so,  fails to submit a timely and
acceptable  capital  restoration  plan,  or  materially  fails to  implement  an
accepted   capital   restoration   plan,  (x)  the   institution  is  critically
undercapitalized  or otherwise has substantially  insufficient  capital, or (xi)
the institution is found guilty of certain  criminal  offenses  related to money
laundering.

         Enforcement Powers. The OTS and, under certain  circumstances the FDIC,
have  substantial  enforcement  authority with respect to savings  associations,
including  authority  to bring  various  enforcement  actions  against a savings
association and any of its  "institution-affiliated  parties" (a term defined to
include,  among  other  persons,  directors,  officers,  employees,  controlling
stockholders,  agents and  stockholders  who  participate  in the conduct of the
affairs  of the  institution).  This  enforcement  authority  includes,  without
limitation:  (i) the  ability  to  terminate  a  savings  association's  deposit
insurance, (ii) institute cease-and-desist proceedings,  (iii) bring suspension,
removal,  prohibition and criminal  proceedings  against  institution-affiliated
parties,  and  (iv)  assess  substantial  civil  money  penalties.  As part of a
cease-and-desist  order,  the agencies may require a savings  association  or an
institution-affiliated  party to take affirmative  action to correct  conditions
resulting from that party's  actions,  including to make  restitution or provide
reimbursement, indemnification or guarantee against loss; restrict the growth of
the institution; and rescind agreements and contracts.

         Capital Distribution Regulation.  As a subsidiary of a savings and loan
holding company the Bank is required to provide advance notice to the OTS of any
proposed capital distribution on its capital stock.

         Qualified  Thrift Lender Test.  In general,  savings  associations  are
required to maintain at least 65% of their portfolio assets in certain qualified
thrift  investments  (which  consist  primarily  of loans and other  investments
related  to  residential  real  estate  and  certain  other  assets).  A savings
association   that  fails  the  qualified  thrift  lender  test  is  subject  to
substantial restrictions on activities and to other significant penalties.

         Recent  legislation  permits  a savings  association  to  qualify  as a
qualified  thrift  lender not only by  maintaining  65% of  portfolio  assets in
qualified thrift  investments (the "QTL test") but also, in the alternative,  by
qualifying  under the Code as a "domestic  building and loan  association."  The
Bank is a domestic building and loan association as defined in the Code.

         Recent  legislation  also  expands  the  QTL  test to  provide  savings
associations with greater  authority to lend and diversify their portfolios.  In
particular,  credit  card  and  educational  loans  may now be  made by  savings
associations  without regard to any  percentage-of-assets  limit, and commercial
loans  may be made in an  amount  up to 10  percent  of  total  assets,  plus an
additional 10 percent for small business loans.  Loans for personal,  family and
household  purposes  (other than credit card,  small  business  and  educational

                                       38
<PAGE>

loans) are now included  without limit with other assets that, in the aggregate,
may  account for up to 20% of total  assets.  At December  31,  1999,  under the
expanded  QTL test,  approximately  89.04% of the Bank's  portfolio  assets were
qualified thrift investments.

         FDIC  Assessments.  The deposits of the Bank are insured to the maximum
extent  permitted by the BIF, which is  administered by the FDIC, and are backed
by the full faith and credit of the U.S.  Government.  As  insurer,  the FDIC is
authorized to conduct examinations of, and to require reporting by, FDIC-insured
institutions. It also may prohibit any FDIC-insured institution from engaging in
any activity the FDIC determines by regulation or order to pose a serious threat
to the FDIC.  The FDIC also has the  authority to initiate  enforcement  actions
against savings  institutions,  after giving the OTS an opportunity to take such
action.

         The FDIC may terminate the deposit insurance of any insured  depository
institution,  including  the Bank,  if it  determines  after a hearing  that the
institution has engaged or is engaging in unsafe or unsound practices,  is in an
unsafe  or  unsound  condition  to  continue  operations,  or has  violated  any
applicable law, regulation,  order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance  temporarily  during the hearing
process for the permanent  termination of insurance,  if the  institution has no
tangible  capital.  If insurance of accounts is terminated,  the accounts at the
institution at the time of the termination,  less subsequent  withdrawals  shall
continue to be insured for a period of six months to two years, as determined by
the FDIC. Management is aware of no existing circumstances which would result in
termination of the Bank's deposit insurance.

         The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured  depository  institutions  are placed into one of
nine  categories  and  assessed  insurance  premiums  based upon their  level of
capital and supervisory evaluation. Under the system, institutions classified as
well   capitalized   and  considered   healthy  pay  the  lowest  premium  while
institutions  that  are less  than  adequately  capitalized  and  considered  of
substantial  supervisory concern pay the highest premium. Risk classification of
all insured  institutions  is made by the FDIC for each  semi-annual  assessment
period. The Bank paid $207,000 in insurance deposit premiums during 1999.

         Community   Reinvestment  Act  and  the  Fair  Lending  Laws.   Savings
associations have a responsibility under the Community  Reinvestment Act ("CRA")
and  related  regulations  of the OTS to help  meet  the  credit  needs of their
communities,  including low- and moderate-income neighborhoods. In addition, the
Equal  Credit  Opportunity  Act and the Fair  Housing Act  (together,  the "Fair
Lending Laws") prohibit lenders from  discriminating  in their lending practices
on the basis of  characteristics  specified in those statutes.  An institution's
failure to comply  with the  provisions  of CRA could,  at a minimum,  result in
regulatory  restrictions on its activities,  and failure to comply with the Fair
Lending  Laws could result in  enforcement  actions by the OTS, as well as other
federal regulatory agencies and the Department of Justice.

         Safety and Soundness Guidelines.  The OTS and the other federal banking
agencies  have  established  guidelines  for  safety and  soundness,  addressing
operational  and  managerial,  as  well  as  compensation  matters  for  insured
financial  institutions.  Institutions  failing  to  meet  these  standards  are
required to submit compliance plans to their appropriate federal regulators. The
OTS and the other  agencies have also  established  guidelines  regarding  asset
quality and earnings standards for insured institutions.

                                       39
<PAGE>


         Change of Control.  Subject to certain limited  exceptions,  no company
can acquire control of a savings  association  without the prior approval of the
OTS, and no individual may acquire  control of a savings  association if the OTS
objects.  Any company that acquires control of a savings  association  becomes a
savings and loan holding company subject to extensive registration,  examination
and regulation by the OTS. Conclusive control exists,  among other ways, when an
acquiring party acquires more than 25% of any class of voting stock of a savings
association or savings and loan holding  company,  or controls in any manner the
election  of a  majority  of  the  directors  of the  company.  In  addition,  a
rebuttable  presumption  of control  exists if,  among  other  things,  a person
acquires more than 10% of any class of a savings association or savings and loan
holding  company's  voting  stock (or 25% of any class of stock)  and, in either
case, any of certain additional control factors exist.

         Companies  subject to the Bank Holding  Company Act that acquire or own
savings associations are no longer defined as savings and loan holding companies
under the HOLA and,  therefore,  are not generally  subject to  supervision  and
regulation  by the OTS.  OTS  approval is no longer  required for a bank holding
company to  acquire  control of a savings  association,  although  the OTS has a
consultative  role  with the FRB in  examination,  enforcement  and  acquisition
matters.

                                    TAXATION

Federal Taxation

         General.  The  Company  and the  Bank are  subject  to  federal  income
taxation in the same general manner as other  corporations  with some exceptions
discussed below.  The following  discussion of federal taxation is intended only
to  summarize  certain  pertinent  federal  income  tax  matters  and  is  not a
comprehensive  description  of the tax rules  applicable to the Bank. The Bank's
federal  income tax returns have been audited or closed without audit by the IRS
through 1995.

         Method  of  Accounting.  For  federal  income  tax  purposes,  the Bank
currently  reports its income and expenses on the accrual  method of  accounting
and uses a tax year  ending  December  31 for  filing its  consolidated  federal
income tax returns.  The Small Business  Protection Act of 1996 (the "1996 Act")
eliminated  the use of the reserve method of accounting for bad debt reserves by
savings institutions, effective for taxable years beginning after 1995.

         Bad Debt  Reserves.  Prior to the 1996 Act,  the Bank was  permitted to
establish a reserve for bad debts and to make annual  additions  to the reserve.
These additions could,  within specified formula limits, be deducted in arriving
at the Bank's taxable income. As a result of the 1996 Act, the Bank must use the
specific chargeoff method in computing its bad debt deduction beginning with its
1996  Federal tax return.  In  addition,  the federal  legislation  requires the
recapture  (over a six year  period) of the excess of tax bad debt  reserves  at
December 31, 1995 over those  established as of December 31, 1987. The amount of
such reserve subject to recapture as of December 31, 1999 is approximately  $4.8
million. The Bank began to recapture the reserve in 1998.

         As discussed more fully below, the Bank and subsidiaries  file combined
New York State  Franchise and New York City Financial  Corporation  tax returns.
The basis of the determination of each tax is the greater of a tax on entire net
income (or on  alternative  entire  net  income)  or a tax  computed  on taxable
assets. However, for state purposes, New York State enacted legislation in 1996,
which  among  other  things,  decoupled  the Federal and New York State tax laws
regarding  thrift bad debt  deductions  and permits the continued use of the bad

                                       40
<PAGE>

debt reserve  method under  section 593.  Thus,  provided the Bank  continues to
satisfy certain definitional tests and other conditions,  for New York State and
City income tax  purposes,  the Bank is permitted to continue to use the special
reserve method for bad debt  deductions.  The deductible  annual addition to the
state reserve may be computed using a specific  formula based on the Bank's loss
history  ("Experience  Method")  or a statutory  percentage  equal to 32% of the
Bank's New York State or City taxable income ("Percentage Method").

         Taxable  Distributions  and Recapture.  Prior to the 1996 Act, bad debt
reserves created prior to January 1, 1988 were subject to recapture into taxable
income should the Bank fail to meet certain thrift asset and definitional tests.
New  federal  legislation  eliminated  these  thrift  related  recapture  rules.
However, under current law, pre-1988 reserves remain subject to recapture should
the Bank make  certain  non-dividend  distributions  or cease to maintain a bank
charter.

         At December  31, 1999 the Bank's  total  federal  pre-1988  reserve was
approximately  $11.7 million.  This reserve  reflects the cumulative  effects of
federal tax deductions by the Bank for which no Federal income tax provision has
been made.

         Minimum Tax. The Code imposes an  alternative  minimum tax ("AMT") at a
rate of 20% on a base of regular  taxable  income plus  certain tax  preferences
("alternative  minimum  taxable  income" or  "AMTI").  The AMT is payable to the
extent such AMTI is in excess of an exemption  amount.  Net operating losses can
offset no more than 90% of AMTI. Certain payments of alternative minimum tax may
be used as credits against regular tax liabilities in future years. The Bank has
not  been  subject  to the  alternative  minimum  tax and  has no  such  amounts
available as credits for carryover.

         Net Operating Loss Carryovers.  A financial  institution may carry back
net  operating  losses to the  preceding  three taxable years and forward to the
succeeding  15 taxable  years.  This  provision  applies to losses  incurred  in
taxable years  beginning  after 1986. At December 31, 1999,  the Bank had no net
operating loss carryforwards for federal income tax purposes.

         Corporate  Dividends-Received  Deduction.  The Company may exclude from
its  income  100% of  dividends  received  from the Bank as a member of the same
affiliated group of corporations.  The corporate dividends-received deduction is
80% in the case of dividends  received from  corporations with which a corporate
recipient does not file a consolidated tax return,  and  corporations  which own
less than 20% of the stock of a corporation  distributing  a dividend may deduct
only 70% of dividends received or accrued on their behalf.

State and Local Taxation

         New York State and New York City  Taxation.  The  Company  and the Bank
report  income on a combined  calendar year basis to both New York State and New
York City. New York State  Franchise Tax on corporations is imposed in an amount
equal to the  greater of (a) 9% of "entire  net  income"  allocable  to New York
State (b) 3.25% of "alternative  entire net income"  allocable to New York State
(c) 0.02% of the  average  value of assets  allocable  to New York  State or (d)
nominal  minimum  tax.  Entire net income is based on  federal  taxable  income,
subject  to  certain  modifications.  Alternative  entire net income is equal to
entire net income without certain  modifications.  The New York City Corporation

                                       41
<PAGE>

Tax is imposed using similar alternative taxable income methods and rates.

         A temporary  Metropolitan  Transportation  Business  Tax  Surcharge  on
Banking  corporations  doing  business  in the  Metropolitan  District  has been
applied since 1982.  The Bank  transacts a  significant  portion of its business
within this  District and is subject to this  surcharge.  For the tax year ended
December  31,  1999,  the  surcharge  rate  is 17% of the  State  franchise  tax
liability

         Delaware  State  Taxation.  As a Delaware  holding  company not earning
income in Delaware, the Company is exempt from Delaware corporate income tax but
is required to file an annual report with and pay an annual franchise tax to the
State of Delaware. The tax is imposed as a percentage of the capital base of the
Company  with an annual  maximum  of  $150,000.  The  Delaware  tax for 1999 was
$150,000.  The Mortgage Company and the Construction Lending Company are subject
to taxes for the additional states that they operate in.

                                       42
<PAGE>
PART II

Item 2.  Properties

         At  December  31,  1999,  the  Bank  conducted  its  business  from its
executive and  administrative  offices in Staten  Island,  New York, and 16 full
service  branch  offices in Staten  Island,  one full service  branch  office in
Brooklyn as well as three limited  service branch  offices,  a loan  origination
center  and its  Trust  Department  in  Staten  Island.  In  addition,  the Bank
maintains 37 automated teller machines ("ATMs").

         SIBMC  conducts  its business  from its  executive  and  administrative
office in Branchburg, New Jersey and eight retail loan origination offices.

          SIBIC  conducts  its  business  in its  executive  office  located  in
Middletown, New Jersey.

         ACLS conducts its business from its  executive  office in  Wallingford,
Connecticut.

         The  following  table sets forth  certain  information  relating to the
Company's  offices at  December 31, 1999.
<TABLE>
<CAPTION>


                                           Lease     Improvements at      Deposit at
                               Owned or  Expiration    December 31,      December 31,
                                Leased     Date           1999               1999
Location (1)

Executive Office:

<S>                             <C>                      <C>               <C>
15 Beach  Street                Owned                    $1,806                  --
Staten Island, NY 10304


Branch Offices:

81-91 Water Street              Owned                       225            $161,126
Staten Island, NY 10304

15 Hyatt Street                 Owned                       109              63,678
Staten Island, NY 10301

257 New Dorp Lane               Owned                        35             142,941
Staten Island,
NY 10305

260 New Dorp Lane               Owned                       471                  (1)
Staten Island, NY 10305

1837 Victory Boulevard          Owned                       149             162,176
Staten Island, NY 10314

1850 Victory Boulevard          Owned                       149                  (2)
Staten Island, NY 10314
</TABLE>

                                       43
<PAGE>
<TABLE>
<CAPTION>
<S>                             <C>                      <C>               <C>
1320 Hylan Boulevard            Owned                       435             160,498
Staten Island, NY  10305

461-465, 475 Forest Avenue      Owned                       669             107,770
Staten Island, NY 10310

3150 Amboy Road                 Owned                       401             101,621
Staten Island, NY 10308

900 Huguenot Avenue             Leased     2000 (3)         345              71,457
Staten Island, NY 10312

5472 Amboy Road                 Owned                     1,178                  (4)
Staten Island, NY  10309

2700 Hylan Boulevard            Leased     2005 (3)         374             123,290
Staten Island, NY 10306

4025 Amboy Road                 Owned                       230             104,921
Staten Island,  NY 10308

6975 Amboy Road                 Owned                     1,330              71,397
Staten Island, NY
10309

1630 Forest Avenue              Owned                     1,103              89,836
Staten Island, NY 10302

43 Richmond Hill Road           Leased     2009             491              77,073
Staten Island,
NY 10314

800 Forest Avenue               Owned                       796              60,817
Staten Island, NY 10310

1630 Richmond Road              Owned                     1,080             169,862
Staten Island, NY 10304

4310-4312-4320 Amboy Road       Leased     2007 (3)         256              73,444
Staten Island, NY 10312

9512-20 3rd Avenue              Leased     2004             265              72,932
Brooklyn, NY 11209

Other Offices:

45 Beach Street                 Owned                       574                  (5)
Staten Island, NY 10304

260 Christopher Lane            Leased     2003             194                  (6)
Staten Island, NY 10314

96 Prospect Street              Owned                       923                  (5)
Staten Island, NY 10304
</TABLE>

                                       44
<PAGE>
<TABLE>
<CAPTION>
<S>                             <C>                      <C>               <C>
1591 Richmond Road              Owned                       615                  (7)
Staten Island, NY
10304

176 Broadway                    Leased     2000              --                  (8)
New York, NY
10038

1500 Victory Blvd.              Leased     2002(3)           42                  (5)
Staten Island, NY 10314

SIB Mortgage Corp. Executive    Leased     2001              52                  (6)
Offices/Branch
1250 Route 28
Branchburg, NJ 08876

99 Merimack Street              Leased     2001               5                  (6)
Haverhill,Ma

86 Summit Avenue                Leased     2002               6                  (6)
Summit, NJ 07901

400 West Cummings Park          Leased     2001              10                  (6)
Suite 4900 Woburn, MA 01801

1 Neshamiy Interplex            Leased     2002               0                  (6)
Suite 102
Trevose, PA 19053

Plaza 800 Islington Street      Leased     2001               1                  (6)
Portsmouth, NH

29 Emmons Drive                 Leased     2002               0                  (6)
W Windsor, NJ

1111 Street Road                Leased     2000               0                  (6)
Southampton, PA 18966

317 Brick  Boulevard            Leased     2003               4                  (6)
Brick, NJ 08723

100 N.E. 5th Avenue             Owned                         6                  (6)
Delray Beach,  FL

ACLS                            Leased     2004              14                  (6)
Executive Office
102 Barnes Road
Wallingford, CT 06492

SIB Investment Corporation      Leased     2000               0                  (6)
Executive Office 1650 Route 35
South Middletown, NJ 07748
</TABLE>
                                       45
<PAGE>


(1) Consists of two ATMs and a manned drive-in facility.
(2) Consists of three ATMs and a manned drive-in facility.
(3) Excludes options to extended term.
(4) An automated drive through facility with two ATMs.
(5) Administrative office.
(6) Loan origination office.
(7) Trust Department office.
(8) SBLI Department.(to be closed March 31, 2000)

                                       46
<PAGE>
Item 3.  Legal Proceedings.

         The  Company  is not  involved  in any  legal  proceedings  other  than
immaterial proceedings occurring in the ordinary course of business.

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

         Not applicable.

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

         The  information  required  herein  to  stockholders,   to  the  extent
applicable,  is  incorporated  by reference from page 37 and 38 of the Company's
1999 Annual Report ("1999 Annual Report")

Item 6.  Selected Financial Data.
--------------------------------

         The information  required herein is incorporated by reference from page
10 of the 1999 Annual Report.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.
--------------------------------------------------------------------------------

         The information required herein is incorporated by reference from pages
13 to 20 of the 1999 Annual Report.

Item 7A.  Quantitative and Qualitative Disclosure about Market Risk.
--------------------------------------------------------------------

         The information required herein is incorporated by reference from pages
11 to 13 of the 1999 Annual Report.

Item 8.  Financial Statements and Supplementary Data.

         The information required herein is incorporated by reference from pages
21 to 37 of the 1999 Annual Report.

Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure.
--------------------------------------------------------------------------------
         Not applicable.

<PAGE>

PART III.

Item 10.  Directors and Executive Officers of the Registrant.
-------------------------------------------------------------

         The information required herein is incorporated by reference from pages
3 to 6 of the definitive  proxy  statement of the Company for the Annual Meeting
of Stockholders to be held on April 27, 2000. ("Definitive Proxy Statement").

Item 11.  Executive Compensation.

         The information required herein is incorporated by reference from pages
10 to 14 of the Definitive Proxy Statement.


                                       47
<PAGE>
Item 12.  Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------

         The information required herein is incorporated by reference from pages
7 and 9 of the Definitive Proxy Statement.

Item 13.  Certain Relationships and Related Transactions.

         The information required herein is incorporated by reference from pages
14 and 15 of the Definitive Proxy Statement.

PART IV.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
-------------------------------------------------------------------------

         (a)  Documents Filed as Part of this Report
              --------------------------------------

                  (1) The following  financial  statements are  incorporated  by
                  reference  from Item 8 hereof (see  Exhibit  13.0):

                  Report of Independent Auditors

                  Consolidated  Statements  of Condition as of December 31, 1999
                  and 1998.

                  Consolidated Statements of Income for the Years Ended December
                  31, 1999, 1998 and 1997.

                  Consolidated Statements of Changes in Shareholders' Equity for
                  the Years Ended December 31, 1999, 1998 and 1997.

                  Consolidated  Statements  of Cash  Flows for the  Years  ended
                  December  31,  1999,  1998 and  1997.

                  Notes to Consolidated Financial Statements.

         (2)      All  schedules for which  provision is made in the  applicable
                  accounting  regulation  of the SEC are omitted  because of the
                  absence of conditions under which they are required or because
                  the  required  information  is  included  in the  consolidated
                  financial statements and related notes thereto.

         (3)      The  following  exhibits  are filed as part of this Form 10-K,
                  and this list includes the Exhibit Index.


Index                                   Exhibit Index
-----                                   -------------

 3.1*             Certificate of Incorporation of Staten Island Bancorp, Inc.
 3.2*             Bylaws of Staten Island Bancorp, Inc.
 4.0*             Specimen Stock Certificate of Staten Island Bancorp, Inc.
10.1*             Form of  Employment  Agreement  among Staten  Island  Bancorp,
                  Inc.,   Staten  Island  Savings  Bank  and  certain  executive
                  officers.
10.2*             Form of Employment  Agreement  between Staten Island  Bancorp,
                  Inc.and each of Harry P. Doherty and James R. Coyle.
10.3*             Form of Employment  Agreement  between  Staten Island  Savings
                  Bank and each of Harry P. Doherty and James R. Coyle.
<PAGE>

10.4**            Amended and Restated 1998 Stock Option Plan
10.5**            Amended and Restated 1998  Recognition  and Retention Plan and
                  Trust Agreement
10.6***           Deferred Compensation Plan
13.0              1999 Annual Report to Stockholders
21.0              Subsidiaries of the Registrant - Reference is made to "Item 2.
                    "Business" for the required information
23.0              Consent of Arthur Andersen, LLP
27.0              Financial Data Schedule

                                       48
<PAGE>

(*)      Incorporated  herein  by  reference  from  the  Company's  Registration
         Statement on Form S-1 (Registration No. 333-32113) filed by the Company
         with the SEC.
(**)     Incorporated  herein by reference from the Company's  definitive  proxy
         statement dated March 29, 2000.
(***)    Incorporated  herein by reference  from the Company's  Annual Report on
         Form 10-K for the year ended December 31, 1998


                                   SIGNATURES

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

                            By: /s/ Harry P. Doherty
                                --------------------
                                Harry P. Doherty
                               Chairman and Chief Executive Officer


        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this Report has been signed by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.


    Name                                  Title                    Date

/s/ Harry P. Doherty              Chairman and Chief             March 30, 2000
--------------------              Executive Officer
Harry P. Doherty

/s/ James R. Coyle                Director, President            March 30, 2000
------------------                and Chief Operating
James R. Coyle                    Officer

/s/ Edward J. Klingele            Senior Vice President and      March 30, 2000
----------------------            Chief Financial Officer
Edward J. Klingele                (principal financial and
                                  accounting officer)

/s/ Harold Banks                  Director                       March 30, 2000
-----------------
Harold Banks

/s/ Charles J. Bartels            Director                       March 30, 2000
----------------------
Charles J. Bartels

/s/ William G. Horn               Director                       March 30, 2000
-------------------
William G. Horn

/s/ Dennis P. Kelleher            Director                       March 30, 2000
----------------------
Dennis P. Kelleher


                                       49
<PAGE>
/s/ Julius Mehrberg               Director                       March 30, 2000
-------------------
Julius Mehrberg

/s/ John R. Morris                Director                       March 30, 2000
------------------
John R. Morris


/s/Kenneth W. Nelson              Director                       March 30, 2000
---------------------
Kenneth W. Nelson


/s/ William E. O'Mara             Director                       March 30, 2000
---------------------
William E. O'Mara

                                       50