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, 2000

                                       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 $24.70 closing price of the Registrant's common stock as of March
26,  2001,  the  aggregate  market  value  of  the  28,784,098   shares  of  the
Registrant's  common stock deemed to be held by non-affiliates of the Registrant
was $711.0 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 26, 2001: 33,692,182.

                       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, 2000 are incorporated into Part II, Items 5 through 8 of this Form 10-K.

(2) Portions of the  definitive  proxy  statement for the 2001 Annual Meeting of
Stockholders  are  incorporated  into Part III,  Items 9 through 13 of this Form
10-K.


<PAGE>
                                TABLE OF CONTENTS

              PART I

ITEM 1.       BUSINESS                                                  PAGE NO.

              Description of Business                                       2
              Market Area and Competition                                   4
              Lending Activities                                            5
              Mortgage Banking Activities                                  13
              Asset Quality                                                15
              Securities Activities                                        21
              Sources of Funds                                             25
              Trust Activities                                             28
              Subsidiaries                                                 29
              Employees                                                    29
              Regulation General                                           30
              Regulation of Savings and Loan Holding Companies             30
              Regulation of Federal Savings Banks                          32
              Federal Taxation                                             38
              State and Local Taxation                                     39

              PART II

ITEM 2.       PROPERTIES                                                   40

ITEM 3.       LEGAL PROCEEDINGS                                            41

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS          41

ITEM 5.       MARKET OR REGISTRANT'S COMMON EQUITY AND                     41
              RELATED STOCKHOLDER MATTERS

ITEM 6.       SELECTED FINANCIAL DATA                                      41

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF                      41
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK    41

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                  41

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS                41
              ON ACCOUNTING AND FINANCIAL DISCLOSURE

              PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT           41


ITEM 11.      EXECUTIVE COMPENSATION                                       42

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS              42
              AND MANAGEMENT

ITEM 13.      CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS                42

              PART IV
ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND                 42
              REPORTS ON FORM 8-K


                                       2
<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 SI Bank & Trust  (the  "Bank" or  "SIBT"),  formerly
Staten  Island  Savings  Bank,  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.


                                       4
<PAGE>

SI Bank & Trust

         The Bank was originally  founded as a New York State chartered  savings
bank in 1864.  The Bank  maintains a network of 17  full-service  branch offices
located in Staten Island, New York, two branch offices located in Brooklyn,  New
York, three limited service branch offices in Staten Island, and 11 full service
branch offices in Ocean, Monmouth,  Union, and Middlesex counties of New Jersey.
The Bank also maintains a lending  center and Trust  Department on Staten Island
along with a commercial  lending office in Brooklyn.  The Bank is a traditional,
full-service, community bank headquartered in Staten Island, New York. SI Bank &
Trust is primarily  engaged in attracting  deposits from the general  public and
businesses  and using those and other  available  sources of funds to  originate
loans secured primarily by single-family (one to four units) residences,  and to
a lesser extent, commercial loans both secured and unsecured.

         The Bank has served the  communities and residents of Staten Island for
over 135 years and more recently,  the borough of Brooklyn and certain  counties
in the State of New Jersey. As of June 30, 2000 (the latest available data), the
Bank had the largest market share of any depository institution in Staten Island
with over 30.0% 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.   SIBT's  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 35
years and 31  years,  respectively,  of  service  with the Bank  while the other
executive officers of the Bank have an average of 13 years of service with SIBT.

         On  September  5, 2000 the Bank  changed its name to SI Bank & Trust to
reflect the expansion  into new product lines and new  geographic  markets which
has taken  place over the past five  years. In 1995, the Bank  acquired a $315.0
million  commercial  bank and  became the  leading  provider  of both  consumer,
commercial  and small  business  services in its  primary  market area of Staten
Island. At the same time, the Bank acquired a branch in Brooklyn and a Trust and
Investment Department. Since that acquisition, the Bank has achieved significant
growth in its  commercial  checking  and loan  business and remains the dominant
provider on Staten  Island.  Geographic  expansion  into the State of New Jersey
occurred in 2000 along with a new branch in Brooklyn.  Over the past five years,
the Bank has  transformed  into a full service  community  bank and the new name
accurately  defines that. The Bank's name is no longer  associated  with any one
geographic area allowing for expansion outside of Staten Island.

         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,  headquartered  in  Branchburg,  New
Jersey,  operates under the name Ivy Mortgage in 27 states. 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 also uses certain Mortgage Company

                                       5
<PAGE>
locations  to  offer  its  commercial  loan  products  including  loans to small
businesses. This has 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.  In March 2001, the Bank merged ACLS into the Mortgage  Company and
the former  operations  of ACLS will be  continued as a division of the Mortgage
Company.  The ACLS  division  operates as a  wholesale  lender  specializing  in
single-family  residential  construction  loan  products  throughout  the United
States.  The construction loans originated by ACLS facilitate 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 Bank's portfolio, if the loan meets the investment needs of the Bank. The
ACLS division is expected to enable the Bank to reach a broader customer base by
expanding its geographic  market area and providing an opportunity to add to the
revenue and income base for the Company.

         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 with the branches  operating  under the name of SI
Bank & Trust.  The branch  system of First State  consisted of four  branches in
Ocean County and two in Monmouth County,  New Jersey. In December 2000, the Bank
opened a new branch in  Jackson,  New Jersey and we expect to open  another  new
branch in Ocean  County,  New  Jersey in 2001.  Plans  for these  branches  were
underway at the time of the acquisition.  At the time of the acquisition,  First
State Bancorp had $374.0 million in assets and $319.0 million in deposits.

         On December  8, 2000 the Company  purchased  four  branches  from Unity
Bancorp,  New Jersey.  Three  branches  are  located in Union  County and one in
Middlesex County of New Jersey, bringing the Bank's branch network in New Jersey
to 11. The deposits acquired from Unity were approximately $41.0 million.

         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.

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

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

                                       6
<PAGE>
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, 2000, the Company's  total net loans held for
investment  amounted to $2.8 billion or 54.34% 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, 2000,  $2.2
billion or 77.5% of the  Company's  net loan  portfolio  were secured by single
family  residences  of which $839.4  million were located on Staten Island
and an additional $666.2 million were located in other areas of New York City.

         In addition to loans secured by single-family  residential real estate,
the Company's  mortgage loan portfolio includes loans secured by commercial real
estate,  which  amounted to $307.4 million or 10.8% of the net loan portfolio at
December 31, 2000,  construction and land loans, which totaled $153.0 million or
5.4% of the net loan  portfolio at December 31, 2000,  home equity loans,  which
totaled $10.7 million or .4% of the net loan portfolio at December 31, 2000, and
loans secured by multi-family  (over four units) residential  properties,  which
amounted to $49.0  million or 1.7% of the net loan  portfolio  at  December  31,
2000. In addition to mortgage loans, the Company  originates various other loans
including  commercial  business loans and consumer  loans. At December 31, 2000,
the Company's  total other loans  amounted to $123.5  million or 4.3% 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.

                                       7
<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,
                             (Dollars in Thousands)


                                                  2000                     1999                      1998
                                                  ----                     ----                      ----
                                                        Percent                  Percent                    Percent
                                           Amount      of Total       Amount    of Total        Amount     of Total
                                           ------      --------       ------    --------        ------     --------
<S>                                     <C>               <C>      <C>              <C>      <C>              <C>
Mortgage Loans:
Single-family residential ...........   $ 2,206,972       77.50%   $ 1,737,913      80.83%   $ 1,187,212      81.48%
Multi-family residential ............        49,034        1.72         42,501       1.98         33,328        2.29
Commercial real estate ..............       307,407       10.80        223,809      10.41        137,720        9.45
Construction and land ...............       152,956        5.37         60,105       2.80         42,420        2.91
Home equity .........................        10,699        0.38          5,390       0.25          6,121        0.42
                                        -----------      ------    -----------     ------    -----------      ------
Total mortgage loans ................     2,727,068       95.77      2,069,718      96.27      1,406,801       96.55

Other loans:
Student loans .......................           333        0.01            657       0.03            940        0.06
Automobile leases (1) ...............            --          --             --         --             --          --
Passbook loans ......................         6,237        0.22          5,357       0.25          5,989        0.41
Commercial business loans ...........        52,980        1.86         33,646       1.56         36,592        2.51
Other consumer loans ................        63,984        2.25         49,395       2.30         24,070        1.65
                                        -----------      ------    -----------     ------    -----------      ------
Total other loans ...................       123,534        4.34         89,055       4.14         67,591        4.63
                                        -----------      ------    -----------     ------    -----------      ------

Total loans receivable ..............     2,850,602      100.10      2,158,773     100.41      1,474,392      101.18

Less: ...............................         5,713        0.20          4,640       0.22          1,194        0.08
Premium (discount) on loans purchased
                                            (14,638)      (0.51)       (14,271)     (0.66)       (16,617)      (1.14)
Allowance for loan losses
Deferred loan costs, (fees) net .....         5,983        0.21            897       0.03         (1,910)      (0.12)
                                        -----------      ------    -----------     ------    -----------      ------
Loans receivable, net ...............   $ 2,847,660      100.00%   $ 2,150,039     100.00%   $ 1,457,059      100.00%
                                        ===========      ======    ===========     ======    ===========      ======

<CAPTION>
                                              1997                1996
                                              ----                ----
                                                         Percent                     Percent
                                           Amount       of Total      Amount        of Total
                                           ------       --------      ------        --------
<S>                                     <C>                <C>      <C>                <C>
Mortgage Loans:
Single-family residential ...........   $   863,694        79.7%    $  743,089         76.76%
Multi-family residential ............        28,218        2.61         26,444          2.73
Commercial real estate ..............       120,084       11.09        115,593         11.94
Construction and land ...............        40,476        3.74         28,779          2.97
Home equity .........................         6,538        0.60          7,464          0.78
                                        -----------       ------    ----------        ------
Total mortgage loans ................     1,059,010       97.80        921,369         95.18

Other loans:
Student loans .......................         4,033        0.37          4,522          0.47
Automobile Leases (1) ...............         --              --        28,249          2.92
Passbook loans ......................         6,929        0.64          5,933          0.61
Commercial business loans ...........        19,559        1.84         14,995          1.55
Other consumer loans ................        13,212        1.22          9,712          1.00
                                        -----------       ------    ----------        ------
Total other loans ...................        43,733        4.07         63,411          6.55
                                        -----------       ------    ----------        ------

Total loans receivable ..............     1,102,743      101.87        984,780        101.73

Less: ...............................          (729)      (0.07)        (3,475)        (0.36)
Premium (discount) on loans purchased
                                            (15,709)      (1.45)        (9,977)        (1.03)
Allowance for loan losses
Deferred loan costs, (fees) net .....        (3,387)      (0.32)        (3,313)        (0.34)
                                        -----------       ------    ----------        ------
Loans receivable, net ...............   $ 1,082,918       100.00%   $  968,015        100.00%
                                        ===========       ======    ==========        ======

</TABLE>

(1) Consists of loans secured by assignments  of automobile  lease payments
    This schedule does not include $116.2 million of net loans held for sale by
    SIBMC.

                                        8
<PAGE>


Loan Activity: The following table sets forth the Company's activity in its loan
portfolio.
<TABLE>
<CAPTION>


                                                   Year Ended December 31,
                                              2000         1999         1998
                                           ----------   ----------   ----------
                                                  (Dollars in Thousands)
<S>                                        <C>          <C>          <C>
Total loans held at beginning ..........   $2,203,302   $1,550,834   $1,102,743
  of period

Originations of loans:
Mortgage loans:
  Single-family residential ............    1,395,115    1,333,757      508,124
  Multi-family residential .............        9,907       14,372        9,988
  Commercial real estate ...............       70,665      126,561       41,294
  Construction and land ................      147,212       51,051       38,514
  Home equity ..........................        7,359        2,545        2,686
Other loans:
  Student loans ........................          871        1,475        2,205
  Passbook loans .......................        8,873        5,302        5,666
  Commercial business loans ............       62,774       56,625       23,180
  Other consumer loans .................        9,681       15,771       12,197
                                           ----------   ----------   ----------
    Total originations .................    1,712,457    1,607,459      643,854
Purchases of loans: (1)
  Mortgage loans:
    Single-family residential ..........       55,549           --       59,412(2)

    Multi-family residential ...........        3,020           --           --
    Commercial real estate .............       49,358           --           --
    Construction and land ..............       35,155           --           --
    Home equity ........................        3,566           --           --
  Other loans:
    Passbook loans .....................        3,608           --           --
    Commercial business loans ..........        5,235           --           --
    Other consumer loans ...............       12,866       16,088        6,855
                                           ----------   ----------   ----------
      Total purchases ..................      168,357       16,088       66,267
                                           ----------   ----------   ----------
        Total originations and purchases    1,880,814    1,623,547      710,121
                                           ----------   ----------   ----------
Loans sold:
  Mortgage loans:
    Single-family residential ..........      730,506      644,557       57,577
  Other loans:
    Student loans ......................           --           --           --
                                           ----------   ----------   ----------
      Total loans sold .................      730,506      644,557       57,577
Transfers to real estate owned .........          930          325        1,166
Transfers to repossessed assets ........          244           --           --
Charge-offs ............................        1,928        1,260        2,119
Repayments .............................      388,311      324,937      201,168
                                           ----------   ----------   ----------
Net activity in loans ..................      758,895      652,468      448,091
                                           ----------   ----------   ----------

Gross loans held at end of period ......   $2,962,197   $2,203,302   $1,550,834
                                           ==========   ==========   ==========
</TABLE>

(1) Includes the following amounts acquired from First State Bank, single family
    residential $19.5 million, multi-family residential $3.0 million, commercial
    real estate $49.4 million,  construction  and land $7.4 million,  commercial
    loans $5.2  million,  passbook  loans $3.6 million and  consumer  loans $2.1
    million.
(2) Represents loans acquired from Ivy Mortgage Corp.


                                       9
<PAGE>


         The  lending  activities  of SIBT are  subject to written  underwriting
standards and loan origination procedures established by management and approved
by the Bank's Board of Directors.

         The  Bank's  primary  source  of  loan   applications  for  residential
mortgages are  independent  mortgage  brokers  throughout the tri-state  area, a
group of whom are  authorized to accept and process  applications  on the Bank's
behalf.  Applications for mortgages and other loans are also 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.   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.  SI Bank & Trust  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 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 $19.9 million at December 31, 2000. As
of December  31,  2000,  the Bank's  largest  concentration  of loans to any one
borrower and related entities (excluding  intra-company loans) was $17.5 million
and the loans were performing in accordance with their terms.

         Single-Family   Residential.   Substantially   all  of  the   Company'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").  Approximately  38% of the Company's  single-family  residential
mortgage  loans  retained in the portfolio are secured by properties  located in
Staten Island and an additional  30% are secured by properties in other areas of
New York City. As of December 31, 2000, $2.2 billion, or 77.5%, of the Company's
net loans  consisted  of  single-family  residential  mortgage  loans.  The Bank
originated $635.0 million of single-family residential mortgage loans during the
year ended  December 31, 2000 and $714.7  million and $433.5 million in 1999 and
1998,  respectively.  In addition  SIBMC  originated  $760.1  million and $708.5
million of  single-family  residential  mortgage  loans  during the years  ended
December 31, 2000 and 1999, respectively.


                                       10
<PAGE>

         During the year 2000,  the Bank sold  $230.0  million of single  family
residential  loans,  primarily  fixed rates,  to maintain and improve the Bank's
level of interest rate risk. To a lesser extent, the sales were used as a source
of funds for the origination of higher yielding  adjustable rate loans. The Bank
anticipates that a significant  portion of its future new loan originations will
continue to be single-family  residential mortgage loans and that its fixed rate
loan  originations will be sold into the secondary market rather than being held
in portfolio.  During the years ended December 31, 2000 and 1999,  SIBMC sold to
investors  single-family  residential  loans totaling  $503.1 million and $642.9
million, respectively.  Also during those years $221.3 million and $91.0 million
of loans originated by SIBMC were retained for the Company's loan portfolio.

         The Bank's  residential  mortgage  loans  have  either  fixed-rates  of
interest or  interest  rates which  adjust  periodically  during the term of the
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, 2000,
$1.1 billion, or 51.6%, 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, 2000, the Bank's five-year and ten-year ARM loans amounted to $622.1 million
and  $244.5  million,  respectively.  The Bank's  adjustable-rate  single-family
residential  real estate loans  generally have a cap of 2% to 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,  which  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,  2000,  $1.1  million  or 48.4%  of the  Bank's
single-family  residential mortgage loans were adjustable-rate loans compared to
$565.7 million or 32.6% at December 31, 1999.

         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


                                       11
<PAGE>

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 a rising 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  supplements  its  origination  efforts with respect to ARMS by
purchasing ARM loans from SIBMC.  During 2000, the Bank purchased $146.9 million
of ARM loans  from  SIBMC.  SIBMC  also held  $74.4  million of ARM loans in its
portfolio.

         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  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, 2000, the Company's home equity loans amounted to $10.7
million or 0.4% of the Company'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, 2000, the Company's  commercial real estate loans and  multi-family
residential  mortgage  loans  amounted  to $307.4  million  and  $49.0  million,
respectively, or 10.8% and 1.7%, 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,
2000, the average size of the Bank's  commercial real estate loans was $435,000.
The Bank  originated  $70.7 million of  commercial  real estate loans during the
year ended  December 31, 2000  compared to $126.6  million and $41.3  million of
commercial real estate loan originations in 1999 and 1998, respectively .

         The Bank's multi-family  residential real estate loans are concentrated
in Brooklyn and, to a lesser extent,  Staten Island.  The Bank  originated  $9.9
million of  multi-family  residential  real estate  loans  during the year ended
December 31, 2000 compared to $14.4 million and $10.0 million of


                                       12
<PAGE>

originations in 1999 and 1998,  respectively.  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
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, 2000, $3.0 million or 1.0% of the Bank's  commercial
real estate  loans and  $340,000 or 0.7% of its  multi-family  residential  real
estate loans were non-accrual loans.

         Construction  and Land Loans.  The Company  originates  and  services a
majority of its  construction and land loans through the ACLS division of SIBMC.
To a lesser extent the Bank also  originates  construction  and land loans.  The
construction  loans originated are primarily  residential  construction loans to
real estate builders and, to a lesser extent,  residential construction loans to
individuals  who have a contract  with a builder for the  construction  of their
residence. ACLS will also originate construction loans for multi-family projects
and non-residential property. While the terms of the construction and land loans
offered by the Bank and the ACLS division are  substantially  similar,  the Bank
restricts its lending to the New York  metropolitan area while the


                                       13
<PAGE>

ACLS  division  has a  presence  in  six  states.  At  December  31,  2000,  the
construction  and land loan portfolio  amounted to $153.0 million or 5.4% of the
Company's  net loan  portfolio of which $88.8 million  consisted of  residential
construction  loans,  $5.6 million of  multi-family  construction  loans,  $19.4
million of  non-residential  construction loans and $39.4 million of land loans.
In addition, at such date the Company had $98.0 million of undisbursed funds for
construction  loans in process.  The Bank and ACLS  disbursed  $147.2 million of
construction  and land loans during the year ended December 31, 2000 compared to
$51.1  million  and  $38.5  million  of  construction  loans in 1999  and  1998,
respectively.  In the future,  the Company's  construction  lending  efforts are
expected to expand and be enhanced by the  operation of the ACLS  Division as an
originator of construction loans in a number of states. At December 31, 2000 the
outstanding  principal  balance  of loans in the ACLS loan  portfolio  was $95.8
million.

         The Company'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  Company's
construction  loans to  builders  are made on either a pre-sold  or  speculative
(unsold) basis. However, the Company 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  Company  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 Company
requires an appraisal of the property by independent  appraisers approved by the
Board of Directors.  The Company's  staff also reviews and inspects each project
at the  commencement  of construction  and prior to every  disbursement of funds
during the term of the  construction  loan.  Loan proceeds are  disbursed  after
inspections  of the project  based on a percentage  of  completion.  The Company
requires monthly interest payments during the construction term.

         The  Company  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 70% 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
Company 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  Company  than
construction loans to individuals on their personal residences.


                                       14
<PAGE>

         The Company 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 Company has adopted strict
underwriting  guidelines and other  requirements for loans which are believed to
involve  higher  elements of credit  risk.  It is also the  Company's  policy to
obtain personal guarantees from the principals of its corporate borrowers on its
construction and land loans.

         Other  Loans.  The  Company  offers a variety of other or  non-mortgage
loans  through the Bank.  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 $123.5 million or 4.3% of the
Bank's net loan portfolio at December 31, 2000.

         At December 31, 2000, the Bank's commercial  business loans amounted to
$53.0 million or 1.9% of the Company'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.  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.

         The Bank's commercial  business loans include  discounted loans,  which
amounted to $5.5 million or 0.2% of the Bank's  loans at December 31, 2000.  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 and or certain other assets of the Company.  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, 2000,  included in total other consumer loans was $29.5
million of loans primarily secured by manufactured housing. This represents 1.0%
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.


                                       15
<PAGE>

         The  balance of the Bank's  other loans  consists  of loans  secured by
savings 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 27 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 54 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.  SIBMC 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 the
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 a  flood  zone.  SIBMC's
underwriters  are authorized to approve loans based on the individual  investors
delegated  authority.  All limits also are subject to the 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, 2000,  SIBMC  originated a total of
$760.1  million of mortgage  loans,  of which $74.4 million were held in SIBMC's
portfolio at December 31, 2000.  During the year ended December 31, 1999,  SIBMC
originated  a total of $708.5  million of  residential  mortgage  loans of which
$50,000 were held in SIBMC's  portfolio.  The Bank  purchased  $146.9 million of
residential  mortgage  loans from SIBMC during the year ended December 31, 2000.
The loans held in  portfolio  and  purchased  by the Bank are  primarily  higher
yielding  ARM loans to  supplement  the Bank's  origination  of ARM loans in its
efforts 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 $325.0  million  line of credit to
finance  its loan  originations.  At  December  31,  2000,  $194.4  million  was
outstanding  on such line of credit.  In addition,  the Bank also has extended a
$15.0 million working  capital line of credit to SIBMC for day-to-day  operating
expenses,  of which $10.5  million was drawn as of December 31,  2000.  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

                                       16
<PAGE>

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,  2000,   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 could be up 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 to
income 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.  SIBMC was profitable for the third
and fourth  quarter of 2000 and the Company  expects that it will continue to be
profitable in 2001.

         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  2000,
SIBMC recognized no losses due to such recourse arrangements.

         Loan  Origination  Costs and Fees.  In addition  to interest  earned on
loans,  the Bank receives loan  origination fees or "points" on a portion 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. Loan costs,  which are deferred,  are primarily the direct costs to
originate a loan and fees paid to brokers.

         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


                                       17
<PAGE>

related direct loan origination costs and fees are offset, and the resulting net
amount is deferred and amortized as an  adjustment  to interest  income over the
contractual life, adjusted for prepayments, of the related loans resulting in an
adjustment to the yield of such loans.  For loans that are sold by the Bank, the
unamortized  portion of the deferred fees and costs is an adjustment to the gain
or loss on the sale.  At December  31,  2000,  the Bank had $6.0 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.

         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. When a loan is placed on  non-accrual  status,  previously  accrued  unpaid
interest is deducted from interest  income.  At December 31, 2000,  the Bank had
$9.8  million of loans in  non-accrual  status  compared to $12.5  million as of
December 31, 1999 and $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,  2000,  the Bank had  $893,000 in these  properties  compared to
$887,000 as of December 31, 1999.



                                       18
<PAGE>


         Delinquent Loans. The following table sets forth information concerning
delinquent  loans at December 31, 2000, 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, 2000
                                           ------------------------------------------------------------------------------------
                                                30-59 Days                     60-89 Days               90 Days or More (1)
                                           --------------------         -------------------------     -------------------------
                                                      Percent                           Percent                       Percent
                                                      of Loan                           of Loan                       of Loan
                                            Amount    Category           Amount         Category       Amount         Category
                                            ------    --------           ------         --------       ------         --------
                                                                         (Dollars in Thousands)
<S>                                         <C>           <C>            <C>                <C>         <C>             <C>
Mortgage loans:
  Residential:
    Single-family                           $8,864        0.40%          $2,264             0.10%       $5,919          0.27%
    Multi-family                                18        0.04               --             0.00            --          0.00
  Commercial real estate                     1,734        0.56            1,277             0.42           165          0.05
  Construction and land                        424        0.28              623             0.41           184          0.12
  Home equity                                  536        5.01               12             0.11            53          0.50
                                           -------        ----           ------             ----        ------          ----
    Total                                   11,576        0.42            4,176             0.15         6,321          0.23
                                           -------        ----           ------             ----        ------          ----

Other loans:
  Commercial business loans                  2,129        4.02              282             0.53           127          0.24
  Other consumer loans                       2,454        3.48              683             0.97           620          0.88
                                           -------        ----           ------             ----        ------          ----
     Total other loans                       4,583        3.71              965             0.78           747          0.60
                                           -------        ----           ------             ----        ------          ----

     Total loans                           $16,159        0.57%          $5,141             0.18%       $7,068          0.25%
                                           =======                       ======                         ======
</TABLE>

(1) Still accruing interest.

                                       19
<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,
                                                              --------------
                                          2000         1999         1998         1997         1996
                                        -------      -------      -------      -------      -------
                                                          (Dollars in Thousands)
<S>                                     <C>          <C>          <C>          <C>          <C>
Non-Accruing Assets
    Mortgage loans:
        Single-family residential .     $ 3,335      $ 2,899      $ 7,067      $ 9,395      $10,417
        Multi-family residential ..         340           --          131          319          322
        Commercial real estate ....       2,979        5,568        6,534        8,436       11,102
        Construction and land .....         524        1,793        1,761        1,131           --
        Home equity ...............           5          106          212          545          644
    Other loans:
        Automobile leases .........          --           --           --           --           15
        Commercial business loans .       1,482        1,783          346          835          106
        Other consumer loans ......       1,111          325          181          570          144
                                        -------      -------      -------      -------      -------

        Total non-accrual loans ...       9,776       12,474       16,232       21,231       22,750
    Other real estate owned, net ..         893          887          849          618        1,103
                                        -------      -------      -------      -------      -------
        Total non-accruing assets .     $10,669      $13,361      $17,081      $21,849      $23,853

Loans past due 90 days or more
        and still accruing ........       7,068        6,886        7,422           --           --
                                        -------      -------      -------      -------      -------
Non-accuring assets and loans past
    and due 90 days or more and
    still accruing ................     $17,737      $20,247      $24,503      $21,849      $23,853
                                        =======      =======      =======      =======      =======

Non-accruing assets to total loans         0.37%        0.62%        1.16%        1.98%        2.42%
Non-accruing assets to total assets        0.20%        0.30%        0.45%        0.82%        1.34%
Non-accruing loans to total loans .        0.34%        0.58%        1.10%        1.93%        2.31%
Non-accruing loans to total assets         0.19%        0.28%        0.43%        0.80%        1.28%
</TABLE>

         Non-accrual  loans and other real  estate  owned at  December  31, 2000
totaled  $10.7  million,  down from $13.4 million at December 31, 1999 and $17.1
million at December 31, 1998.

         The interest income that would have been recorded during the year ended
December  31,  2000 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
$728,000.  The actual amount of interest recorded as income (on a cash basis) on
such loans during 2000 amounted to $109,000.

         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
the weaknesses of substandard assets with the additional characteristic that the


                                       20
<PAGE>

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, 2000,  the Bank had an aggregate
of $26.0  million of classified  assets of which $16.2  million were  classified
substandard,  $9.4  million of assets  which were  deemed  special  mention  and
$327,000 of assets which were classified doubtful.

         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  evaluation  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,  2000,  the Bank's
allowance  for loan losses  amounted to $14.6 million or 149.7% and 0.51% of the
Bank's non-accrual loans and total loans receivable, respectively.

         As a result of the changing mix of loan origination,  management deemed
it prudent to provide a $652,000  provision for the allowance for loan losses in
2000  compared to a $1.8 million  benefit for the loan loss reserve for the year
ending December 31, 1999.

                                       21
<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,
                                                                                  -----------------------
                                                          2000             1999               1998          1997             1996
                                                        -------          -------            -------        ------          -------

<S>                                                     <C>              <C>                <C>            <C>             <C>
Allowance at beginning of period                        $14,271          $16,617            $15,709        $9,977          $10,704
Provisions (Benefit)                                        652            1,843              1,594         6,003            1,000
Increase as a result of acquisition                         847               --                 96            --               --
  Charge-offs:
    Mortgage loans:
      Single-family residential                             120              148                358           501            1,590
      Multi-family residential                               --               --                 31           100               --

     Commercial real estate                                 134              474                344           210              376
     Construction and land                                    6               --                 --            --               --
     Other loans                                          1,926            1,043              1,386           507              729
                                                          -----            -----              -----           ---              ---
      Total charge-offs                                   2,186            1,665              2,119         1,318            2,695
  Recoveries:
   Mortgage loans:
     Single-family residential                               19              456                267           533              408
     Commercial real estate                                  27               34                210           251              413
     Construction and land                                   --               --                  3            10               --
    Other loans                                           1,008              672                857           253              147
                                                        -------          -------            -------        ------          -------
      Total recoveries                                    1,054            1,162              1,337         1,047              968
                                                        -------          -------            -------        ------          -------
Allowance at end of period                              $14,638          $14,271            $16,617       $15,709           $9,977
                                                        =======          =======            =======       =======           ======

Allowance for loan losses to total
    non-accruing loans at end of  period                 149.73 %         114.40 %           102.37  %      73.69 %         43.85%
                                                        =======          =======            =======       =======           ======

Allowance for loan losses to total
     loans at end of period                               0.51%            0.66%              1.07%         1.42%            1.02%
                                                        =======          =======            =======       =======           ======

</TABLE>
                                       22
<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>



                       2000                    1999                    1998                     1997                    1996
                       ----                    ----                    ----                     ----                    ----
                          Percent of              Percent of              Percent of              Percent of             Percent
                          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
                ------    -----------   ------    -----------    ------   -----------    ------   -----------   ------   -----------
                                                               (Dollars in Thousands)
<S>             <C>           <C>       <C>          <C>        <C>          <C>        <C>          <C>       <C>          <C>
Residential     $ 2,686       79.60%    $ 5,890      83.88%     $ 5,562      84.89%     $ 5,853      82.97%    $ 3,192      80.27%
 Commercial       9,237       18.03       5,579      12.39        7,721      11.74        6,696      14.83       5,842      14.91
Other loans       2,715        2.48       2,802       4.10        3,334       4.40        3,160       4.04         943       6.55
                -------      ------     -------     ------      -------     ------      -------     ------     -------     ------
      Total     $14,638      100.11%    $14,271     100.37%     $16,617     101.03%     $15,709     101.84%    $ 9,977     101.73%
                =======      ======     =======     ======      =======     ======      =======     ======     =======     ======


</TABLE>


                                       23
<PAGE>
         The Bank will  continue  to monitor and modify its  allowance  for loan
losses as conditions dictate.  While management  believes,  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 those 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, 2000, the Company had securities  totaling
$1.9 billion or 36.0% of the Company's total assets at such date. The unrealized
depreciation  on the  Company's  securities  available for sale amounted to $2.9
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 parent Company's securities portfolio, on a non-consolidated basis,
as of December 31, 2000 was $118.8 million, consisting of equity investments and
certain  corporate  bonds which are not  permitted  investments  for a federally
chartered thrift.

         At December 31, 2000, 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, 2000, the Company  recognized a net loss
on  securities  transactions  of $569,000  compared to a net loss on  securities
transactions  of $5.5 million in 1999 and a net gain on securities  transactions
of $524,000 in 1998. The net loss on securities  transactions in 1999 included a
$9.0 million writedown 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 investment  policy of the Company and the Bank 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


                                       24
<PAGE>

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.

                                       25

<PAGE>

      The  following  table sets  forth the  activity  in the  Bank's  aggregate
securities portfolio during the periods indicated.

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                             -----------------------
                                                                2000                  1999                 1998
                                                             -----------           ----------           ----------
                                                                             (Dollars In Thousands)
<S>                                                           <C>                  <C>                 <C>
Securities at beginning of period.......                      $1,963,954           $2,029,041          $ 1,350,466
Purchases:
  U.S. government and agencies..........                         219,313              121,954               19,819
  State and municipals                                             1,515                   --                   --
  Agency mortgage-backed securities.....                          65,589              153,489              351,465
  Agency CMOs...........................                          10,981               66,637              199,852
  Private CMOs..........................                              16               38,130              374,353
  Other debt securities.................                          45,180               44,497              239,128
  Marketable equity securities..........                          39,038               92,408              119,768
                                                             -----------           ----------           ----------
    Total purchases.....................                         381,632              517,115            1,304,385
Sales:
  U.S. government and agencies..........                         198,212                   --                   --
  State and municipals                                                --                   --                   --
  Agency mortgage-backed securities.....                          26,075                   --                2,772
  Agency CMOs                                                        645                   --                   --
  Private CMOs..........................                              --                   --                   --
  Other debt securities.................                          39,797               23,681               88,168
  Marketable equity securities..........                          45,493               52,576               18,284
                                                             -----------           ----------           ----------
    Total sales.........................                         310,222               76,257              109,224
Repayments and prepayments:
  U.S. government and agencies..........                           8,100               33,050               49,943
  State and municipals..................                             140                   --                   --
  Agency mortgage-backed securities.....                         139,847              240,177              263,362
  Agency CMOs...........................                          35,805               46,949              134,220
  Private CMOs..........................                          24,592               69,754               72,082
  Other debt securities.................                             103                   --                   --
  Marketable equity securities..........                              --                   --                   60
                                                             -----------           ----------           ----------
  Total repayments and prepayments......                         208,587              389,930              519,667
Accretion of discount and (amortization
  of premium)...........................                           1,227             (10,497)              (2,392)
Write-down for permanently impaired  securities                       --              (9,069)                   --
Unrealized gains or (losses) on
  available-for-sale securities.........                          60,942             (96,449)                5,473
Securities at end of period                                  $ 1,888,946           $1,963,954           $2,029,041
                                                             ===========           ==========           ==========
</TABLE>

         Mortgage-Backed and Mortgage-Related  Securities. The Company purchases
mortgage backed securities and mortgage related  securities in order to generate
positive interest rate spreads with minimal  administrative  expense,  lower its
credit  risk as a result  of  guarantees  provided  by FNMA,  FHLMC,  and  GNMA,
increase the liquidity of the Company and utilize these securities as collateral
for  borrowing.  The Company  has  primarily  invested  in  mortgage  backed and
mortgage related  securities issued or sponsored by private issuers,  GNMA, FNMA
and FHLMC. At December 31, 2000, the Company's  securities included $1.3 billion
or 25.7% of total assets of mortgage backed and mortgage related securities.  At
such date, 18.6% of the mortgage backed and


                                       26
<PAGE>
mortgage related  securities were adjustable rate and 81.4% were fixed rate. The
portfolio of mortgage  backed and  mortgage  related  securities  had a weighted
average yield of 6.72% and a duration of 4.72 years as of December 31, 2000.

         The  portfolio  of  mortgage  backed and  mortgage  related  securities
consisted  of  $717.2  million  or 13.7%  of total  assets  of  mortgage  backed
securities  and $632.0  million or 12.0% of assets of CMOs at December 31, 2000.
The mortgage backed  securities were issued or guaranteed by GNMA, FHLMC or FNMA
and $221.3  million of the CMOs were issued or  guaranteed by FHLMC and GNMA and
$410.7 million were privately issued.

 U.S. Government and Agency Obligations

         At  December  31,  2000,  the  Company's  U.S.  Government   securities
portfolio  totaled $4.4 million with a weighted  average  maturity of 0.8 years.
The  U.S.  Government  agency  securities  portfolio,   consisting  of  callable
securities, totaled $173.7 million with a weighted average maturity of 6.0 years
and a weighted average life of 0.7 years to the call date.

Other Securities

         At  December  31,  2000,  the  Company's  other  securities   consisted
primarily of $143.3  million in corporate  bonds,  $12.9 million in asset backed
bonds,  $1.4  million in  municipal  bonds and  $250,000 in foreign  bonds.  The
corporate  bonds  consist of longer term  financial  institution  bonds of which
$54.1 million have adjustable rates using the three month LIBOR as the index and
$89.2 million have  fixed-rates for longer terms.  The weighted average maturity
of the corporate bond portfolio is 21.3 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) at
December 31, 2000.
<TABLE>
<CAPTION>
                                                                   At December 31, 2000
                                                                   --------------------
                                    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
                                      ----        -----       -----       -----     -----        -----     -----         -----
(Dollars in Thousands)
<S>                                <C>               <C>      <C>          <C>     <C>             <C>     <C>
U.S. Government and
  federal  agency  obligations.    $  3,250          7.12%    $ 70,480     6.20%   $  105,775      6.48%   $       --        --%
 Other securities .............          66          3.34       36,320     5.18        18,860      7.11       125,058      8.69
                                   --------                   --------             ----------              ----------
                                   $  3,316                   $106,800             $  124,635              $  125,058
                                   ========                   ========             ==========              ==========

</TABLE>
                                       27
<PAGE>
Equity Securities

         At December 31, 2000, the Company's investment in equity securities was
$203.7 million, consisting of $62.9 million of preferred stock, $24.5 million of
common stock, $80.6 million of FHLB stock and $35.7 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 when needed.

         Deposits.  The Bank offers a variety of deposit  accounts  which have a
range of interest  rates and terms.  At December  31, 2000,  the Bank's  deposit
accounts consisted of savings (including club accounts), NOW accounts,  checking
accounts,  money market accounts and certificates of deposit (including brokered
CDs).  The Bank also offers  certificates  of deposit  accounts with balances in
excess  of  $100,000  at  preferential  rates  (jumbo   certificates)  and  also
Individual Retirement Accounts ("IRA") and other qualified plan accounts.  While
jumbo  certificate of deposit  accounts are accepted by the Bank at preferential
rates,  the Bank does not solicit  such  deposits  outside of its market area as
such deposits are more difficult to retain than core deposits. Historically, the
Bank has not used  brokers  to obtain  deposits,  however,  in 2000 the Bank did
utilize  nationally  recognized  retail  brokerage  firms  to  obtain  deposits.
Dependent  on market  conditions,  the Bank will  continue to use such  brokered
deposits  primarily  to fund asset  growth and in its effort to manage  interest
rate risk.

         At December 31, 2000,  the Bank's  deposits  totaled $2.3  billion,  of
which 82.9% were interest bearing deposits at such date. Core deposits  (savings
accounts,  non-interest  bearing  commercial and retail demand  deposits,  money
market accounts and NOW accounts) were $1.4 billion or 59.6% and certificates of
deposit were $947.6 million or 40.4% of total  deposits.  Included in the Bank's
certificates of deposit were $74.9 million of brokered  deposits at December 31,
2000.  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 flow of deposits is influenced  significantly  by general  economic
conditions,  changes in prevailing  interest rates and  competition.  The Bank's
deposits are primarily  obtained from the areas in which its branch  offices are
located.  The Bank  relies  primarily  on  competitive  pricing  of its  deposit
products,  customer  service and long standing  relationships  with customers to
attract  and  retain  deposits.  The Bank also  utilizes  traditional  marketing
methods  including radio and print media and direct mail programs to attract new
customers and deposits.


                                       28
<PAGE>

         In addition,  the Bank's  business  development  officers have actively
solicited,  through  individual  meetings and other contacts,  deposit accounts,
particularly  commercial  accounts.  To attract  and retain  commercial  deposit
accounts,  the Bank offers a complete  line of commercial  account  products and
services.  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.

         While total deposits held by banks on Staten Island (the Bank's primary
market area) have declined over the past few years, the Bank has continued to be
the largest  depository  institution by maintaining over 30% of the market share
on Staten Island.

         For the  year  ended  December  31,  2000,  deposits,  before  interest
credited,   increased   $456.6   million  of  which  $368.4   million  was  from
acquisitions,  compared with an increase of $42.1 million in 1999.  Inclusive of
interest  credited,  deposits increased $525.0 million in 2000 and $91.2 million
in 1999.

         The  following  table sets forth the  activity  in the Bank's  deposits
during the periods indicated.

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                                    -----------------------

                                                              2000             1999          1998
                                                            ----------     ----------     ----------
                                                                    (Dollars In Thousands)
<S>                                                         <C>            <C>            <C>
 Beginning balance ....................................     $1,820,233     $1,729,060     $1,623,652
Net increase (decrease)
excluding acquired deposits ...........................         88,146         42,065         54,763
Acquired deposits .....................................        368,438
Interest credited .....................................         68,396         49,108         50,645
Net increase in deposits ..............................        524,980         91,173        105,408
                                                            ----------     ----------     ----------

Ending balance ........................................     $2,345,213     $1,820,233     $1,729,060
                                                            ==========     ==========     ==========
</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,
                                                                      ---------------

                                                         2000               1999                1998
                                                         ----               ----                ----

                       Interest Rate Paid                           (Dollars in Thousands)

<S>                                                  <C>                <C>               <C>
0.00% to 2.99%..........................                 $   --             $  343            $  4,343
3.00% to 3.99%..........................                    292              1,912               3,516
4.00% to 4.99%..........................                216,385            406,285             253,301
5.00% to 6.99%..........................                694,684            162,666             273,931
7.00% to 8.99%..........................                 36,223              1,837               2,063
                                                      ---------          ---------           ---------
    Total...............................              $ 947,584          $ 573,043           $ 537,154
                                                      =========          =========           =========

</TABLE>
                                       29

<PAGE>


Weighted Average Rate

         The following  table sets forth the amount and remaining  maturities of
the Bank's certificates of deposit at December 31, 2000.
<TABLE>
<CAPTION>

                                     Over Six        Over One        Over Two
                                      Months           Year            Years
                         Six          Through         Through         Through          Over
                       Months           One             Two            Three          Three
                      And Less          Year           Years           Years           Years
                      --------          ----           -----           -----           -----
                                               (Dollars In Thousands)
<S>                   <C>             <C>             <C>             <C>             <C>
3.00% to 3.99%        $    290        $      2        $     --        $     --        $     --
4.00% to 4.99%         157,353          39,915          14,787           1,522           2,808
5.00% to 6.99%         285,766         254,406         103,021          19,670          31,821
7.00% to 8.99%          24,928             135           1,710             824           8,626
                      --------        --------        --------        --------        --------
         Total        $468,337        $294,458        $119,518        $ 22,016        $ 43,255
                      ========        ========        ========        ========        ========

</TABLE>

         As  of  December  31,  2000,   the  aggregate   amount  of  outstanding
certificates  of  deposit  in  amounts  greater  than or equal to  $100,000  was
approximately $226.9 million. The following table presents the maturity of these
certificates of deposit at such date.

                                                            December 31, 2000
                                                            -----------------
                                                          (Dollars in Thousands)

3 months or less......................................         $  86,168
Over 3 months through 6 months........................            39,372
Over 6 months through 12 months.......................            68,225
Over 12 months........................................            33,137
                                                               ---------
                                                               $ 226,902
                                                               =========

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

                                                Year to Date Average as of December 31,
                                                ---------------------------------------
                                     2000                       1999                       1998
                                     ----                       ----                       ----
                         Year to Date    Weighted    Year to Date    Weighted   Year to Date     Weighted
                            Average       Average       Average       Average      Average       Average
                            Balance         Rate        Balance         Rate       Balance         Rate
                            -------         ----        -------         ----       -------         ----
                                                        (Dollars in Thousands)
<S>                                 <C>               <C>       <C>                <C>     <C>               <C>
Savings accounts .............     $  793,908        2.45%     $  752,131         2.49%   $  780,536        2.68%
Certificates of  deposits.....        827,504        5.41         556,635         4.76       528,686        5.08

Money market accounts.........        129,002        3.20          87,983         2.96        79,832        2.94
NOW accounts .................         90,085        2.03          77,088         2.01        38,486        1.98

Demand deposits ..............        382,814          --         321,414           --       230,297          --
                                   ----------        ----      ----------         ----    ----------        ----
     Total ...................     $2,223,313        3.16%     $1,795,251         2.75%   $1,657,837        3.07%
                                   ==========        ====      ==========         ====    ==========        ====

</TABLE>

                                       30
<PAGE>

         Borrowings. The Bank's primary source of borrowing consists of advances
from the FHLB  secured by the Bank's  residential  loan  portfolio  and  reverse
repurchase  agreements  entered  into  with the FHLB and  nationally  recognized
securities  brokerage firms. At December 31, 2000, the Bank had total borrowings
of $2.2 billion of which $1.3 billion were FHLB advances and $893.0 million were
reverse  repurchase  agreements.  In the  years  1998 and  1999,  the Bank  used
borrowings to fund  investments  at  acceptable  spreads to leverage its balance
sheet. In the year 2000,  borrowings were primarily used to fund the acquisition
of First State Bank and certain higher yielding loan  originations when the need
for funds exceeded the amount of funds provided by deposit gathering activities.
The Bank intends to reduce its utilization of borrowings in the year 2001 and to
emphasize more traditional funding sources such as deposit growth, especially in
its new markets.

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

<TABLE>
<CAPTION>
                                        At or For the Year Ended December 31,
                                        -------------------------------------

                                    2000                 1999                 1998
                                    ----                 ----                 ----
                                               (Dollars in Thousands)
<S>                              <C>                 <C>                 <C>
Maximum balance                  $2,249,963          $ 2,049,372         $ 1,349,477
Average balance                  $2,147,718          $ 1,673,755         $   664,822
Year end balance                 $2,241,011          $ 2,049,372         $ 1,344,477
Weighted
average
interest rate:
   At end of year                     6.28%                5.65%               5.24%
   During the year                    6.19%                5.35%               5.58%
</TABLE>


         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, 2000, the Trust Department  maintained
approximately  334  trust/fiduciary  accounts with an aggregate  value of $216.4
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,  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

                                       31
<PAGE>

Committee of the Board of Directors of SI Bank & Trust

Subsidiaries

         SIB  Mortgage  Corp.,  doing  business  as Ivy  Morytgage  (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 27 states and had assets
totaling $212.1 million at December 31, 2000.

         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 $655.6 million at December 31, 2000.

         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, 2000 were $858.9 million.

         SIB  Financial  Services   Corporation   (SIBFSC)  is  a  wholly  owned
subsidiary of the Bank incorporated in the State of New York in 2000. SIBFSC was
formed as a licensed  life  insurance  agency to sell the  products  of SBLI USA
Mutual Insurance Company,  Inc. SIBFSC has assets of $369,000 as of December 31,
2000.

         Employees.  The Bank had 1,056  full-time  employees  and 160 part-time
employees at December 31, 2000.  None of these  employees are  represented  by a
collective  bargaining agent and the Bank believes that it enjoys good relations
with its personnel.



                                       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
Bank Insurance Fund ("BIF").

         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 which applied to become
or was a unitary  savings and loan holding  company prior to May 4, 1999 and its
non-savings association subsidiaries.

         Under  the  enacted   Gramm-Leach-Bliley  Act  of  1999  (the  "GLBA"),
companies  which applied to the OTS after May 4, 1999 to become unitary  savings
and loan  holding  companies  are  restricted  to engaging  in those  activities
traditionally  permitted to multiple savings and loan holding  companies.  Under
the GLBA, 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.
Corporate  reorganizations  are  permitted,  but the  transfer of  grandfathered
unitary thrift holding company status through acquisition is not permitted.

         If the Director of the OTS determines that there is reasonable cause to
believe  that the  continuation  by a savings  and loan  holding  company  of an
activity  constitutes  a serious  risk to the  financial  safety,  soundness  or
stability of its subsidiary  savings  institution,  the Director may impose such
restrictions as deemed  necessary to address such risk,  including  limiting (i)
payment of dividends by the savings  institution;  (ii) transactions between the
savings institution and its affiliates;  and (iii) any activities of the savings
institution that might create a serious risk that the


                                       33
<PAGE>

liabilities  of the  holding  company and its  affiliates  may be imposed on the
savings institution.  Notwithstanding the above rules as to permissible business
activities of grandfathered unitary savings and loan holding companies under the
GLBA, if the savings  institution  subsidiary of such a holding company fails to
meet the Qualified Thrift Lender ("QTL") test, as discussed under "Regulation of
Federal Savings Banks - Qualified Thrift Lender Test," then such unitary holding
company also shall become subject to the activities  restrictions  applicable to
multiple savings and loan holding companies and, unless the savings  institution
requalifies as a QTL within one year  thereafter,  shall register as, and become
subject to the restrictions applicable to, a bank holding company.

         The GLBA also imposed new financial  privacy  obligations and reporting
requirements on all financial  institutions.  The privacy  regulations  require,
among other things, that financial  institutions  establish privacy policies and
disclose  such  policies  to its  customers  at the  commencement  of a customer
relationship and annually thereafter.  In addition,  financial  institutions are
required  to  permit  customers  to  opt  out  of  the  financial  institution's
disclosure of the  customer's  financial  information  to  non-affiliated  third
parties. Such regulations become mandatory as of July 1, 2001.

         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
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


                                       34
<PAGE>

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.

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.

         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: 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, or 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. These requirements
have been terminated by the OTS effective in 2001.

         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

                                       35
<PAGE>

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

         The Bank's tangible capital ratio was 7.53%, its core capital ratio was
7.54% and its total risk-based capital ratio was 15.10% at December 31, 2000.

         The OTS and the  FDIC  generally  are  authorized  to take  enforcement
action   against  a  savings   association   that  fails  to  meet  its  capital
requirements,  which action may include  restrictions  on operations and banking
activities,  the imposition of a capital directive,  a  cease-and-desist  order,
civil money penalties or harsher  measures such as the appointment of a receiver
or conservator or a forced merger into another institution.  In addition,  under
current  regulatory  policy,  an  association  that  fails to meet  its  capital
requirements is prohibited from paying any dividends.

         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.


                                       36
<PAGE>

         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
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.


                                       37
<PAGE>

         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.  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.

         At December 31, 2000, the Bank was in the  "well-capitalized"  category
for purposes of the above  regulations  and as such is not subject to any of the
above mentioned restrictions.

         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 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.


                                       38
<PAGE>

         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. All savings  institutions are required to
meet a QTL test to avoid certain  restrictions  on their  operations.  A savings
institution  that  does  not meet the QTL test  must  either  convert  to a bank
charter or comply with the following  restrictions  on its  operation.  Upon the
expiration of three years from the date the savings  institution  ceases to be a
QTL, it must cease any activity and not retain any  investment  not  permissible
for a national bank and immediately repay any outstanding FHLB advances (subject
to safety and soundness consideration).

         Currently,  the QTL test under HOLA regulations requires that 65% of an
institution's  "portfolio  assets" (as defined)  consist of certain  housing and
consumer-related  assets  on a  monthly  average  basis  in nine out of every 12
months.  Assets that  qualify  without  limit for  inclusion  as part of the 65%
requirement are loans made to purchase, refinance,  construct, improve or repair
domestic  residential  housing and  manufactured  housing;  home  equity  loans;
mortgage-backed   securities  (where  the  mortgages  are  secured  by  domestic
residential  housing or  manufactured  housing);  stock issued by the FHLB;  and
direct or indirect  obligations of the FDIC. In addition,  small business loans,
credit card loans,  student loans and loans for  personal,  family and household
purposes are allowed to be included without limitation as qualified investments.
The following  assets,  among  others,  also may be included in meeting the test
subject  to an  overall  limit  of 20% of the  savings  institution's  portfolio
assets: 50% of residential  mortgage loans originated and sold within 90 days of
origination;  100% of consumer and  educational  loans  (limited to 10% of total
portfolio assets);  and stock issued by the FHLMC or the FNMA.  Portfolio assets
consist  of total  assets  minus the sum of (i)  goodwill  and other  intangible
assets,  (ii) property used by the savings  institution to conduct its business,
and (iii) liquid assets up to 20% of the institution's total assets.

         At December 31, 2000, under the expanded QTL test,  approximately 89.5%
of the Bank's portfolio assets were qualified thrift investments.

         OTS regulations  also permit a savings  association to qualify as a QTL
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.



                                       39
<PAGE>


         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 $446,000 in insurance deposit premiums during 2000.

         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.

         Change of Control.  Subject to certain limited  exceptions,  no company
can acquire control

                                       40
<PAGE>

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 1996.

         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, 2000 is approximately  $3.6
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
debt reserve  method under


                                       41
<PAGE>
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, 2000 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, 2000,  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) 3.00% of "alternative  entire net income"  allocable to New York State
(c) 0.01% 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
Tax is imposed using similar alternative taxable income methods and rates.



                                       42
<PAGE>

         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,  2000,  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 2000 was
$150,000.  The Mortgage Company and the Construction Lending Company are subject
to taxes for the additional states that they operate in.

                                       43
<PAGE>


PART II

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

         The  executive  offices of the  Company  and the Bank are located in an
owned facility in Staten Island,  New York. In addition,  the Bank operates five
administrative  offices  located on Staten Island,  three of which are owned and
one lending office located in Brooklyn,  New York which is leased.  The Bank has
30 full service branch offices and three limited  service  branch  offices.  The
branch  facilities,  of which 14 are leased and 19 owned,  are located in Staten
Island,  New York (20),  Brooklyn,  New York (2) and New Jersey (11).  The final
lease expiration date for its properties is 2015.

         In addition,  the Bank maintains 52 automated teller machines  ("ATMs")
all of which are in Bank facilities.

         SIBMC  conducts it's business  from it's  executive and  administrative
office in Branchburg,  New Jersey and 54 retail loan  origination  offices in 27
states, all of which are leased with the final lease expiration date in 2005.

         ACLS  conducts it's  business  from it's  executive and  administrative
office in Wallingford,  Connecticut and two retail loan origination  offices all
of which are leased with the final expiration date in 2005.

         SIBIC  conducts  its  business  from its  executive  office  located in
Middletown, New Jersey which is leased with an expiration date in 2001.

                                       44
<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 35 and 36 of the Company's
2000 Annual Report to  Stockholders  for the year ended December 31, 2000 ("2000
Annual Report")

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

         The information  required herein is incorporated by reference from page
9 of the 2000 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
10 to 18 of the 2000 Annual Report.

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

         The information required herein is incorporated by reference from pages
10 to 12 of the 2000 Annual Report.

Item 8.  Financial Statements and Supplementary Data.
-----------------------------------------------------

         The information required herein is incorporated by reference from pages
19 to 35 of the 2000 Annual Report.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
         ---------------------------------------------------------------
         Financial Disclosure.
         ---------------------

         Not applicable.


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 May 10, 2001. ("Definitive Proxy Statement").


                                       45
<PAGE>

Item 11.  Executive Compensation.
---------------------------------

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

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,
                    2000 and 1999.
                  Consolidated Statements of Income for the Years Ended December
                     31, 2000, 1999 and 1998.
                  Consolidated Statements of Changes in Shareholders' Equity for
                     the Years Ended December 31, 2000, 1999 and 1998.
                  Consolidated  Statements  of Cash  Flows for the  Years  ended
                     December 31, 2000, 1999 and 1998.
                  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.

                                       46
<PAGE>

                                 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.
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
10.7              Employment Agreement between the Bank and Ira Hoberman.
13.0              2000 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

(*)      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, 2001.
(***)    Incorporated  herein by reference from the Company's Annual  Report  on
         Form  10-K  for the year  ended December 31, 2000.

         (b)      Reports on Form 8-K
                  -------------------

                      On December 15, 2000,  the Company filed a Current  Report
         on Form 8-K, dated as of December 8, 2000, indicating, pursuant to Item
         5, that the Company had acquired four branch offices and  approximately
         $41.0 million of deposits  from Unity Bank. A press  release  regarding
         such transaction was included as an exhibit to such Current Report.

                                       47
<PAGE>

                                   SIGNATURES

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

                                  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.
<TABLE>
<CAPTION>

       Name                                  Title                                       Date
       ----                                  -----                                       ----

<S>                                 <C>                                             <C>
/s/ Harry P. Doherty                Chairman and Chief Executive                    March 30, 2001
---------------------------         Officer
Harry P. Doherty


/s/ James R. Coyle                  Director, President and Chief                   March 30, 2001
---------------------------         Operating Officer
James R. Coyle


/s/ Edward J. Klingele              Senior Vice President and Chief                 March 30, 2001
--------------------------          Financial Officer (principal
Edward J. Klingele                  financial and accounting officer)



/s/ Harold Banks                    Director                                         March 30, 2001
--------------------------
Harold Banks



/s/ Charles J. Bartels              Director                                         March 30, 2001
--------------------------
Charles J. Bartels


/s/ William G. Horn                 Director                                         March 30, 2001
--------------------------
William G. Horn


/s/ Dennis P. Kelleher              Director                                         March 30, 2001
--------------------------
Dennis P. Kelleher



/s/ Julius Mehrberg                 Director                                         March 30, 2001
--------------------------
Julius Mehrberg


/s/ John R. Morris                  Director                                         March 30, 2001
--------------------------
John R. Morris


/s/Kenneth W. Nelson                Director                                         March 30, 2001
---------------------------
Kenneth W. Nelson


/s/ William E. O'Mara               Director                                         March 30, 2001
--------------------------
William E. O'Mara

</TABLE>