SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           -------------------------

                                    FORM 10-K
(Mark One)
         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|X|      EXCHANGE ACT OF 1934

For the fiscal year ended                    July 31, 1998                  
                          --------------------------------------------------

                                     - or -

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

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

Commission Number:      0-25106     
                        -------

                            LAKEVIEW FINANCIAL CORP.
            -------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

                      New Jersey                               22-3334052     
---------------------------------------------              ------------------
(State or other jurisdiction of incorporation               (I.R.S. Employer
  or organization)                                         Identification No.)

1117 Main Street, Paterson, New Jersey                            07503         
--------------------------------------                     ------------------- 
(Address of principal executive offices)                         Zip Code

Registrant's telephone number, including area code:          (973) 890-1234  
                                                             -----------------

Securities registered pursuant to Section 12(b) of the Act:          None      
                                                             -----------------

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $2.00 per share
                     ---------------------------------------
                                (Title of Class)

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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K (ss.229.405 of this chapter) 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. [X]

         The aggregate  market value of the voting stock held by  non-affiliates
of the Registrant,  based on the closing price of the registrant's  Common Stock
on October 13, 1998 was $38.1 million.

         As of October  13,  1998 there were  issued and  outstanding  4,818,478
shares of the Registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions of Annual  Report to  Stockholders  for the Fiscal Year Ended July
     31, 1998. (Parts II and IV)
2.   Portions of Proxy  Statement for the 1998 Annual  Meeting of  Stockholders.
     (Part III)
<PAGE>



Part I

         Lakeview  Financial  Corporation  (the "Company") may from time to time
make  written  or  oral  "forward-looking   statements",   including  statements
contained in the Company's  filings with the Securities and Exchange  Commission
(including  this Annual  Report on Form 10-K and the exhibits  thereto),  in its
reports to stockholders and in other  communications  by the Company,  which are
made in good faith by the Company  pursuant to the "safe  harbor"  provisions of
the Private Securities Litigation Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of the Company's plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations;  the effects of, and changes in, trade, monetary and fiscal policies
and laws,  including  interest  rate  policies of the board of  governors of the
federal  reserve  system,   inflation,   interest  rates,  market  and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the Company and the perceived  overall  value of these  products and
services by users,  including  the  features,  pricing  and quality  compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Company's products and services;  the
success of the  Company in  gaining  regulatory  approval  of its  products  and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and  saving  habits;  and the  success  of the  Company  at  managing  the risks
resulting from these factors.

         The Company  cautions that the listed  factors are not  exclusive.  The
Company does not  undertake  to update any  forward-looking  statement,  whether
written  or oral,  that may be made  from  time to time by or on  behalf  of the
Company.

Item 1.  Business
-----------------

General

         The Company,  a New Jersey  Corporation,  is a unitary savings and loan
holding  company.  The  principal  asset of the Company  consists of 100% of the
issued  and  outstanding  shares  of  common  stock  of  Lakeview  Savings  Bank
("Lakeview" or the "Savings  Bank").  On February 27, 1998, the Company acquired
Westwood  Financial  Corporation  ("Westwood"),  the holding company of Westwood
Savings Bank ("Westwood Bank"), Westwood, New Jersey. With the completion of the
Westwood  Acquisition,  the Company added two additional  Bergen County branches
and three  additional  ATM's,  bringing the total branch network to ten branches
and nine ATM's.  In September  1998,  the Company's  eleventh  branch office was
opened in Fairview, Bergen County, New Jersey.

         The principal business of the Savings Bank is the acceptance of savings
deposits from the general  public and the  origination  and purchase of mortgage
loans for the purpose of  constructing,  financing or  refinancing  one- to four
family residences and the purchase of  mortgage-backed  securities.  The Savings
Bank also originates home equity loans.



<PAGE>




         On October 8, 1998, the Company  announced that the Company's  Board of
Directors  has been  evaluating  strategic  alternatives  in  order to  maximize
shareholder value. Included in the Company strategic  alternatives is a possible
sale of the  Company;  however,  at this time,  it is not  possible to determine
whether the Company will receive any  expressions of interest or, if so, whether
any such  expressions  of interest  will be  acceptable or result in the Company
entering into negotiations with any potential acquirer. The Company has retained
Sandler   O'Neill  &  Partners,   L.P.  to  assist  in  its  evaluation  of  its
alternatives.  As a matter of  policy,  the  Company  does not intend to comment
publicly  concerning  any  proposals  that  may  be  received  or  any  possible
negotiations  the Company may enter into in connection  with any such  proposals
until the Company determines that public disclosure would be appropriate.

Competition

         The Savings  Bank's  primary market area consists of Bergen and Passaic
counties  in  northern  New Jersey,  and is one of many  financial  institutions
serving this market area. The competition for deposit  products comes from other
insured financial institutions such as commercial banks, thrift institutions and
credit  unions in the Savings  Bank's  market  area.  Deposit  competition  also
includes a number of  insurance  products  sold by local  agents and  investment
products  such as mutual funds and other  securities  sold by local and regional
brokers.  Loan competition comes from other insured financial  institutions such
as commercial banks, thrift institutions and credit unions.

                                        2

<PAGE>



Lending Activities

         Loan Portfolio  Data. The following table sets forth the composition of
the Savings Bank's loan portfolio by loan type and security type as of the dates
indicated,   including  a   reconciliation   of  gross  loans  receivable  after
consideration of the allowance for loan losses,  loans in process,  and deferred
loan origination fees and costs.

<TABLE>
<CAPTION>

                                             1994                1995              1996              1997                1998
                                     ------------------ ------------------- ----------------  -----------------  -------------------
                                          $         %         $        %        $        %         $       %          $          %
                                         ---       ---       ---      ---      ---      ---       ---     ---        ---        ---
                                                                         (Dollars in thousands)
TYPE OF LOAN:
 Real Estate Loans:
  Construction loans:
<S>             <C>                   <C>       <C>     <C>        <C>    <C>         <C>      <C>      <C>       <C>        <C>
    Residential (1-4 family)..........$    190     .13%  $    915     .63% $    863      .52%   $    --      --%  $    300      .10%
    Multi-family/commercial...........     550     .40         --      --        --       --        377     .16      1,797      .61
                                      --------    ----    -------  ------   -------   ------    ------- -------     ------    -----
      Total construction loans........     740     .53        915     .63       863      .52        377     .16      2,097      .71
  Residential (1-4 family)............  79,383   57.33     84,051   57.81    84,006    50.35     82,647   36.22     99,184    33.97
  Multi-family/Commercial.............  20,879   15.08     22,186   15.26    33,063    19.81     68,192   29.89     79,386    27.19
  Commercial loans....................      --      --         --      --       697      .42      8,982    3.94     14,186     4.86
  Home equity, second mortgage and    
   home improvement loans.............  36,223   26.16     37,221   25.60    46,705    27.99     66,057   28.95     93,633    32.07
Consumer Loans:
  Passbook account loans..............   1,242     .90      1,022     .70     1,517      .91      1,914     .84      3,508     1.20
  Student loans.......................       6      --          1      --        --       --         --      --         --       --
                                      --------  ------    -------  ------  --------   ------    ------- -------  ---------   ------
  Total loans.........................$138,473  100.00%  $145,396  100.00% $166,851   100.00%  $228,169  100.00%  $291,994   100.00%
                                       =======  ======    =======  ======   =======   ======    =======  ======    =======   ======

TYPE OF SECURITY:
Real Estate Loans
  1-4 family..........................$116,346   84.02%  $119,885   82.46% $124,467    74.60%  $133,852   58.66%  $174,191    59.66%
Multi-Family/Commercial...............  20,879   15.08     24,488   16.84    40,170    24.07     83,421   36.56    100,109    34.28
Consumer Loans:
  Passbook accounts...................   1,242     .90      1,022     .70     1,517      .91      1,914     .84      3,508     1.20
  Student loans.......................       6      --          1      --        --       --         --      --         --       --
Commercial loans......................      --      --         --      --       697      .42      8,982    3.94     14,186     4.86
                                      -------- -------   --------  ------   -------   ------    ------- -------     ------   ------

  Total loans.........................$138,473  100.00%  $145,396  100.00% $166,851   100.00%  $228,169  100.00%  $291,994   100.00%
                                       ======= =======    =======  ======   =======   ======   =======   ======    =======   ======

</TABLE>


                                        3

<PAGE>



         One- to Four  Family  Mortgage  Loans.  The Savings  Bank offers  first
mortgage  loans secured by one- to four family  residences in the Savings Bank's
market area.  Typically,  such  residences are single family homes that serve as
the primary residence of the owner. Additionally,  this loan category includes a
relatively  small amount of loans  collateralized  by mixed use properties which
are primarily  residential,  but have some  commercial  use as well. The Savings
Bank currently offers 15 and 30 year fixed-rate  mortgage loans, 15 year balloon
mortgage loans with five to seven year maturities,  and adjustable rate mortgage
("ARM") loans with one, three or five year adjustment  periods and 15 to 30 year
maturities. The Savings Bank retains ARM loans, 15 year fixed-rate mortgages and
balloon  mortgage loans.  Fixed-rate loans with more than 15 year maturities are
sold in the secondary market.

         Monthly  payments on balloon loans are based on a 15 year  amortization
schedule.  Renewal of balloon  mortgage  loans is based on the credit history as
well as the  current  qualification  of the  borrower  at time of  renewal.  The
Savings Bank offers  balloon  mortgages  in an effort to make its mortgage  loan
portfolio  more interest rate  sensitive.  Interest  rates charged on fixed-rate
loans are  competitively  priced  based on the local  competitive  market.  Loan
origination  fees on these  loans  are  generally  up to 2% of the  loan  amount
depending on the interest rate accepted by the borrower.

         Balloon loans pose a different credit risk from 15 year mortgage loans.
The  balloon  loans  mature in five to seven years but  payments  are based on a
fifteen year  amortization  schedule.  At the time of the loan's  maturity,  the
borrower  must  either pay the balloon  payment or  refinance  the loan.  If the
borrower is ineligible  for  refinancing at the time of loan maturity and cannot
make the large balloon  payment,  the loan will go into default.  In the case of
standard  mortgage  loans,  payments  are spread out evenly over the term of the
loan, thereby decreasing this credit risk.

         The Savings Bank  currently  offers ARM loans with interest  rates that
adjust every one, three or five years with a maximum rate increase cap of 2% per
year, and a lifetime cap of 6%. The interest rate on these  mortgages since 1985
has been the U.S.  Treasury  bill rate plus 3%. As of July 31,  1998,  one year,
three year,  and five year ARM loans  totaled $34.0 million or 34.2% of the one-
to four family portfolio. ARM loans are originated for a term of up to 30 years.
The Savings Bank  originates one- to four family  residential  mortgage loans in
amounts up to 80% of the appraised value of the mortgaged property.  The Savings
Bank retains the ARM loans it originates for its loan portfolio.

         Generally,  ARM  loans  pose  credit  risks  different  than the  risks
inherent in fixed-rate  loans,  primarily  because as interest  rates rise,  the
underlying  payments of the borrower rise,  thereby increasing the potential for
default.  At the same time, the marketability of the underlying  property may be
adversely affected by higher interest rates. The Savings Bank attempts to reduce
this  credit  risk by  qualifying  ARM loan  borrowers  based on the first  full
interest  rate  adjustment.  The Savings Bank does not originate ARM loans which
provide for negative amortization.

         The  Savings  Bank  also  offers  15 year  fixed-rate  mortgage  loans.
Interest rates charged on fixed-rate loans are competitively priced based on the
Federal Home Loan Mortgage  Corporation  ("FHLMC") buy rates.  Loan  origination
fees on these  loans are  generally  2% of the loan  amount.  The  Savings  Bank
retains these 15 year mortgage loans for its loan portfolio.



                                        4

<PAGE>



         Multi-Family  and Commercial  Real Estate.  The Savings Bank originates
multi-family  real  estate  loans  usually  secured by  property  located in the
Savings Bank's primary  market area. The Savings Bank's  commercial  real estate
loans are  secured by such  property  as mixed use and office  buildings,  small
retail stores and  industrial  buildings.  The Savings Bank's  multi-family  and
commercial  real  estate  loans are five or seven year  balloon  mortgages  with
amortization  periods  typically  of 15 years and loan to value ratios of 80% or
less.

         Multi-family   and  commercial  real  estate  may  entail   significant
additional  credit risks  compared to one- to four family  residential  lending.
Commercial and  multi-family  real estate  mortgage loans may involve large loan
balances to single borrowers or groups of related  borrowers.  In addition,  the
payment experience on loans secured by income producing  properties is typically
dependent on the successful  operation of the properties and thus may be subject
to a greater  extent to adverse  conditions  in the real estate market or in the
general economy.

         Home Equity,  Second Mortgage and Home  Improvement  Loans. The Savings
Bank originates home equity,  second mortgage and home improvement loans secured
by one-family  residences.  These loans  generally are  originated as adjustable
rate loans which adjust  monthly and have terms of from 15 to 30 years.  No loan
origination fee is usually charged on these loans. Loans made on owner-occupied,
one-family  residences  are  generally  subject to a 70% combined  loan-to-value
limitation,  including any other outstanding mortgages or liens, and are made at
an  adjustable  rate of 185  points  over the  prime  rate.  Loans on  non-owner
occupied properties are limited to a 65% loan to value ratio, and are made at an
adjustable rate of 210 points over the prime rate.

     Commercial Loans. On January 12, 1996, the Savings Bank granted to Industry
Mortgage  Company  ("IMC") a line of credit for $7 million with an interest rate
of 10%. At July 31, 1998, $ 6.8 million was  outstanding.  To date, such loan is
not in  compliance  with the Savings  Bank's  loans to one  borrower  limit.  In
addition,  the  Company  has a 5.40%  investment  in IMC.  See "--  Loans to One
Borrower."


                                        5

<PAGE>



Loan Maturity Table

         The following  table sets forth the maturity of the Savings Bank's loan
portfolio at July 31, 1998. The table does not include  prepayments or scheduled
principal  repayments.  Prepayments and scheduled principal  repayments on loans
totaled  $42.0  million  during the year ended  July 31,  1998.  Adjustable-rate
mortgage loans are shown as maturing based on contractual maturities.
<TABLE>
<CAPTION>

                                                                   Home Equity,
                                                   Multi-Family   Second Mortgage
                                     1-4 Family         and          and Home
                                     Real Estate    Commercial      Improvement    Commercial
                                      Mortgage    Real Estate(2)     Loans(1)        Loans        Total
                                      --------    --------------     --------        -----        -----
                                                                   (In thousands)
Amounts Due:
<S>                                <C>             <C>             <C>            <C>         <C>     
Within 3 months...............      $    842        $ 2,123         $ 5,625        $ 1,351     $  9,941
3 months to 1 Year............         1,275          1,671           4,793          8,910       16,649
                                      ------         ------          ------         ------      -------
                                       2,117          3,794          10,418         10,261       26,590
After 1 year:
  1 to 3 years................         6,228          3,771           5,981          1,525       17,505
  3 to 5 years................         6,009          9,144          22,488          2,400       40,041
  5 to 10 years...............        19,965         18,581          20,810              -       59,356
  10 to 20 years..............        38,896         41,094          37,144              -      117,134
  Over 20 years...............        25,969          5,099             300              -       31,368
                                      ------         ------          ------        -------      -------
Total due after one year......        97,067         77,689          86,723          3,925      265,404
                                      ------         ------          ------         ------      -------

Total amount due..............       $99,184        $81,483         $97,141        $14,186     $291,994
                                      ======         ======          ======         ======      =======

</TABLE>

(1)  Also includes passbook and student loans.
(2)  Also includes construction loans.

         The following table sets forth the dollar amount of all loans due after
July 31, 1999, which have pre-determined  interest rates and which have floating
or adjustable interest rates.
<TABLE>
<CAPTION>

                                                             Floating or
                                             Fixed Rates   Adjustable Rates     Total
                                             -----------   ----------------     -----
                                                           (In thousands)

<S>                                            <C>            <C>             <C>     
One-to four family.....................        $ 63,584       $ 33,783        $ 97,367
Multi-family and commercial real estate          21,138         56,251          77,389
Home equity, second mortgage and                         
  home improvement loans...............          56,217         30,506          86,723
Commercial loans.......................               -          3,925           3,925
                                               --------        -------         -------
  Total................................        $140,939       $124,465        $265,404
                                                =======        =======         =======

</TABLE>


                                        6

<PAGE>



         Loan  Approval  Authority  and  Underwriting.  Upon receipt of any loan
application from a prospective  borrower,  a credit report and verifications are
ordered  to  confirm  specific  information  relating  to the  loan  applicant's
employment, income and credit standing. An appraisal of the real estate intended
to secure a first  mortgage  proposed loan is undertaken by an  independent  fee
appraiser  approved  by the  Board of  Directors.  In  connection  with the loan
approval process, the Savings Bank's loan officers analyze the loan applications
and the property involved.  All loans are processed at the Savings Bank's office
by the Savings Bank's loan  servicing  department.  The Savings Bank  originates
residential  first mortgage loans that conform to the FHLMC and Federal National
Mortgage Association ("FNMA") guidelines,  so that such loans can be sold if the
Savings Bank desires to do so.

         All  mortgage  loans are  underwritten  under  guidelines  and policies
issued by the Board of Directors.  The Savings Bank's Loan Committee reviews all
loans and the full Board of Directors then ratifies the actions of the staff and
committee in regard to all loans except consumer loans and passbook loans. Fixed
rate loans with terms of 30 years are immediately sold after funding to FHLMC or
other  private   secondary   mortgage   market   purchasers   depending  on  the
attractiveness of the pricing.

         Loan  applicants  are promptly  notified of the decision of the Savings
Bank by a letter  setting forth the terms and  conditions  of the  decision.  If
approved,  these terms and conditions  include the amount of the loan,  interest
rate  basis,  amortization  term,  a  brief  description  of real  estate  to be
mortgaged  to the  Savings  Bank,  and the notice of  requirement  of  insurance
coverage to be maintained to protect the Savings  Bank's  interest.  The Savings
Bank requires title,  fire and casualty  insurance for all first mortgage loans,
as well as an escrow  account for the payment of real estate  taxes.  Disability
insurance is available but not required.

         Loan Commitments. The Savings Bank generally grants commitments to fund
real estate  mortgage loans for periods of up to 90 days at a specified term and
interest rate. These are primarily for fixed-rate loans. The total amount of the
Savings  Bank's  commitments  to  originate  loans as of July 31,  1998 was $5.3
million.

         Loans to One Borrower.  Regulations limit loans-to-one  borrowers in an
amount equal to 15% of unimpaired capital and unimpaired surplus on an unsecured
basis and an additional amount equal to 10% of unimpaired capital and unimpaired
surplus if the loan is secured by  readily  marketable  collateral.  At July 31,
1998, the Savings Bank's maximum loan-to-one borrower limit was $5.4 million and
its largest loans to one borrower  relationship  was a commercial line of credit
(the "IMC line of credit")  with $6.8 million  outstanding.  The second  largest
loans  to one  borrower  relationships  are  aggregated  loans  of $5.5  million
outstanding,   secured  by  multi-family  properties  in  Englewood  Cliffs  and
Glenrock,  New Jersey. Such loans were in compliance with regulations applicable
at the time the loans were  originated.  The Savings  Bank is  currently  in the
process  of  remedying  such  non-compliance.   Both  loans  are  performing  in
accordance with contractual terms.

         Non-Performing  Loans  and Asset  Classification.  The  Savings  Bank's
collection  policy provides for a late charge to be added to the amount due when
a loan  is 15 days  past  due.  The  borrower  is  immediately  notified  of the
assessment  and  payment  is  requested.  Periodic  contacts  are made at 30 day
intervals. At 60 days past due, a letter is sent by the Savings Bank's attorney.
At 120 days, the attorney is authorized to take final action up to initiation of
foreclosure proceedings, if deemed warranted.


                                        7

<PAGE>



         Loans are reviewed on a monthly  basis and are placed on a  non-accrual
status when, in the opinion of management, the collection of additional interest
is doubtful.  Loans are placed on a non-accrual  status when either principal or
interest is 90 days or more past due.  Interest accrued and unpaid at the time a
loan is placed  on  non-accrual  status  is  charged  against  interest  income.
Subsequent  payments are either applied to the outstanding  principal balance or
recorded  as  interest  income,  depending  on the  assessment  of the  ultimate
collectibility of the loan.

         The following table sets forth  information with respect to the Savings
Bank's  non-performing  assets for the  periods  indicated.  During the  periods
indicated  the  Savings  Bank had no  restructured  loans  within the meaning of
Statement of Financial Accounting Standards No. 15 ("SFAS 15").
<TABLE>
<CAPTION>

                                                                          At July 31,
                                               -----------------------------------------------------------------------

                                                  1994           1995           1996           1997           1998
                                                  ----           ----           ----           ----           ----
                                                                       (Dollars In thousands)
<S>                                            <C>            <C>            <C>            <C>            <C>       
Loans accounted for on a non-accrual basis:    
Mortgage loans:                                
 Permanent loans secured by 1-4 family         
    dwelling units(1)........................   $   8,362      $   3,143      $   2,316      $    3,007     $    1,884
  All other mortgage loans...................         566            229            101             804            910
                                                ---------      ---------      ---------      ----------     ----------
Total........................................   $   8,928      $   3,372      $   2,417      $    3,811     $    2,794
                                                 ========       ========       ========       =========      =========
Real estate owned (net of allowance).........   $   3,762      $   3,608      $   1,667      $    1,929     $      505
                                                 ========       ========       ========       =========      =========
Other non-performing assets..................   $      --      $     850      $     494      $       --     $       --
                                                 ========       ========       ========       =========      =========
Total non-performing assets..................   $  12,690      $   7,830      $   4,578      $    5,740     $    3,299
                                                 ========       ========       ========       =========      =========
Total non-performing loans to                  
  net loans..................................        6.56%          2.37%          1.48%           1.70%           .97%
                                                     ====           ====           ====            ====           ====
Total non-performing loans to                  
  total assets...............................        2.16%           .80%           .53%            .75%           .47%
                                                     ====           ====           ====            ====           ====
Total non-performing assets to total assets..        3.07%          1.87%          1.00%           1.13%           .56%
                                                     ====           ====           ====            ====           ====
</TABLE>                                       
                                               
------------------------                    
(1) Includes home equity, home improvement and second mortgage loans.

         Management of the Savings Bank regularly  reviews the loan portfolio in
order to identify  potential problem loans, and classifies any potential problem
loan as a special mention, substandard, doubtful, or loss asset according to the
Department classification of asset regulations. The Savings Bank does not accrue
interest on any loan that is 90 days or more delinquent. Potential problem loans
that have not been recorded as non-accrual  loans as of July 31, 1998,  totalled
$5.5 million,  or .93% of total assets.  These loans are accruing but classified
by the Savings Bank as substandard.

         For the  year  ended  July  31,  1998,  interest  income  amounting  to
approximately $242,000,  would have been recognized if interest on loans 90 days
or more in arrears had been recorded based on original contract terms.


                                        8

<PAGE>



         Classified Assets. OTS regulations provide for a classification  system
for problem assets of insured  institutions.  Under this classification  system,
problem  assets  of  insured   institutions  are  classified  as  "substandard,"
"doubtful," or "loss." An asset is considered  substandard if it is inadequately
protected by the current net worth and paying  capacity of the obligor or of the
collateral  pledged,  if any.  Substandard assets include those characterized by
the "distinct possibility" that the insured institution will sustain "some loss"
if the deficiencies are not corrected. Assets classified as doubtful have all of
the  weaknesses  inherent in those  classified  as  substandard,  with the added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable  and  improbable."  Assets  classified as loss are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the  establishment  of a specific loss reserve is not warranted.  Assets
may be designated  "special mention" because of potential weakness that does not
currently warrant classification in one of the aforementioned categories.

         When  an  insured  institution  classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem assets as loss, it is required either to establish a specific  allowance
for losses equal to 100% of that portion of the asset so classified or to charge
off such amount. An institution's  determination as to the classification of its
assets and the amount of its  valuation  allowances  is subject to review by the
OTS, which may order the  establishment  of additional  general or specific loss
allowances.  A portion of general loss allowances  established to cover possible
losses  related to assets  classified as substandard or doubtful may be included
in determining an institution's  regulatory  capital,  while specific  valuation
allowances for loan losses generally do not qualify as regulatory capital.

         In accordance  with its  classification  of assets policy,  the Savings
Bank regularly  reviews the problem assets in its portfolio to determine whether
any assets require classification in accordance with applicable regulations.  At
July 31, 1998, the Savings Bank had classified $686,000 as special mention, $7.4
million as substandard, $678,000 as doubtful, and $38,000 as loss.

         Mortgage Loans Purchased from Capital Resources.  At July 31, 1998, the
Savings Bank had  approximately  $2.7 million of residential  real estate second
mortgage loans that were acquired from Capital Resources, a now defunct mortgage
company. Of this total amount,  $643,000 was classified as non-accrual loans and
$2.0  million  was  classified  as  performing   loans.   However,   based  upon
management's  review,   $640,000  of  these  performing  loans  were  considered
potential  problem loans. At July 31, 1998, the Savings Bank allocated  $934,000
of the  loan  loss  allowance  to the  mortgage  loans  purchased  from  Capital
Resources.

         Real Estate Owned. Real estate acquired by the Savings Bank as a result
of  foreclosure  or by deed in lieu of  foreclosure is classified as real estate
owned until it is sold. Real estate acquired in settlement of loans is initially
recorded at fair value at the date of foreclosure establishing a new cost basis.
After foreclosure,  valuations are periodically  performed by management and the
real estate is carried at the lower of cost or fair value,  minus estimated cost
to sell.




                                        9

<PAGE>



         Allowances for Loan Losses.  It is  management's  policy to provide for
losses on unidentified loans in its loan portfolio.  A provision for loan losses
is charged to  operations  based on  management's  evaluation  of the  potential
losses  that  may be  incurred  in  the  Savings  Bank's  loan  portfolio.  Such
evaluation, which includes a review of all loans of which full collectibility of
interest and  principal  may not be  reasonably  assured,  considers the Savings
Bank's past loan loss  experience,  known and inherent  risks in the  portfolio,
adverse  situations that may affect the borrower's  ability to repay,  estimated
value of any underlying collateral, and current economic conditions.

         The following  table sets forth the  allocation  of the Savings  Bank's
allowance  for loan  losses by loan  category  and the  percent of loans in each
category to total loans  receivable at the dates  indicated.  The portion of the
loan loss allowance allocated to each loan category does not represent the total
available for future losses that may occur within the loan category  because the
total loan loss allowance is a valuation  reserve  applicable to the entire loan
portfolio.


                                       10

<PAGE>



Analysis of the Allowances for Losses on Loans and Real Estate Owned

         The following tables set forth  information with respect to the Savings
Bank's allowance for loan losses and REO at the dates indicated:
<TABLE>
<CAPTION>

                                                                         At or for the year ended July 31,
                                                      --------------------------------------------------------------------------
                                                        1994           1995            1996              1997           1998
                                                        ----           ----            ----              ----           ----
                                                                              (Dollars in thousands)
<S>                                                   <C>            <C>             <C>               <C>            <C>     
Total loans outstanding, net of allowance............ $136,143       $142,123        $163,457          $224,564       $286,869
                                                       =======        =======         =======           =======        =======

Average loans outstanding............................ $136,165       $139,442        $155,497          $192,822       $252,935
                                                       =======        =======         =======           =======        =======

Allowance balance (at beginning of
  period)............................................ $  2,638       $  1,714        $  2,535           $ 3,073      $   3,411
Acquired from Westwood...............................       --             --              --                --            428
Provision (credit):
  Residential........................................    1,842          1,493             384               361            800
  Commercial real estate.............................      (77)          (145)            278               500            550
  Consumer...........................................      282             28               2                --             --
  Commercial.........................................       --             --              --               100            150
Charge-offs:
  Residential........................................   (3,069)        (1,381)           (418)             (610)          (614)
  Commercial real estate.............................       --             --              --               (89)          (373)
  Consumer...........................................       (1)           (24)            (11)               --             --
Recoveries:
  Residential........................................       99            850             303                76            126
                                                       -------        -------         -------           -------       --------
Allowance balance (at end of period)................. $  1,714       $  2,535        $  3,073          $  3,411      $   4,478
                                                       =======        =======         =======           =======       ========
Allowance for loan losses as a percent
  of total loans outstanding, net....................     1.26%          1.78%           1.88%             1.52%          1.56%
Net loans charged off as a percent of
  average loans outstanding..........................     2.18%           .40%            .08%              .32%           .34%

</TABLE>
<TABLE>
<CAPTION>
                                                                              At or for the year ended July 31,
                                                       -------------------------------------------------------------------------
                                                         1994            1995            1996              1997           1998
                                                         ----           -----            ----              ----           ----
                                 (In thousands)
<S>                                                    <C>             <C>             <C>               <C>           <C> 
Total real estate owned, net of allowance........      $ 3,762         $3,608          $1,667            $1,929         $  505
                                                        ======          =====           =====             =====          =====
Allowance balance - beginning....................      $   823         $  188          $   --            $   --         $   --
Provision........................................          713            502             654                44             58
Net charge-offs..................................       (1,348)          (690)           (654)              (44)           (58)
                                                        ------          -----           ------            ------         -----
Allowance balance - ending.......................      $   188         $   --          $    --           $    --        $   --
                                                        ======          =====           ======            ======         =====

</TABLE>


                                       11

<PAGE>



Analysis of the Allowance for Loan Losses

         The  following  table sets forth the  allocation  of the  allowance  by
category,  which  management  believes can be allocated  only on an  approximate
basis.  The  allocation  of the  allowance to each  category is not  necessarily
indicative  of future loss and does not  restrict  the use of the  allowance  to
absorb losses in any category:
<TABLE>
<CAPTION>
                                                                                  At July 31,         
                                        --------------------------------------------------------------------------------------------
                                              1994                 1995              1996              1997              1998
                                        ------------------  -----------------  ----------------- ----------------- -----------------
                                                Percent of         Percent of         Percent of        Percent of        Percent of
                                                 Loans in           Loans in           Loans in          Loans in          Loans in
                                                 Category          Category            Category          Category          Category
                                                 to Total           to Total           to Total          to Total          to Total
                                        Amount    Loans      Amount  Loans     Amount    Loans   Amount   Loans    Amount    Loans
                                        ------   -------     ------ --------   ------   ------  -------   -------  ------   -------
                                                                             (Dollars in thousands)
<S>                                     <C>       <C>       <C>      <C>      <C>      <C>      <C>       <C>     <C>      <C>   
Residential(1)........................   $1,458     84.02%   $2,420    82.46%  $2,689    74.60%  $2,681     58.66% $2,880     59.66%
Multi-family/Commercial real estate...      250     15.08       106    16.84      384    24.07      630     36.56   1,348     34.28
Consumer..............................        6       .90         9      .70       --      .91       --       .84      --      1.20
Commercial............................       --        --        --       --       --      .42      100      3.94     250      4.86
                                        -------    ------    ------   ------   ------   ------   ------    ------  ------    ------
                                         $1,714    100.00%   $2,535   100.00%  $3,073   100.00%  $3,411    100.00% $4,478    100.00%
                                          =====    ======     =====   ======    =====   ======    =====    ======   =====    ======

</TABLE>

(1) Includes  residential  construction,  home equity,  second mortgage and home
    improvement loans.

                                       12

<PAGE>



Investment Activities and Mortgage-Backed Securities

         General.  Income  from  investment  securities  provides a  significant
source of income for the Savings Bank. The Savings Bank maintains a portfolio of
investment   securities   such  as  U.S.   government  and  agency   securities,
non-governmental  securities,  and interest-bearing deposits, in addition to the
Savings Bank's mortgage-backed securities held to maturity portfolio. The amount
of short-term  investments reflects  management's  response to the significantly
increasing  percentage  of savings  deposits  with short  maturities.  It is the
intention of management  to maintain  shorter  maturities in the Savings  Bank's
investment portfolio in order to better match the interest rate sensitivities of
its assets  and  liabilities.  However,  during  periods  of  rapidly  declining
interest  rates,  such  investments  also decline at a faster rate than does the
yield on long-term investments.

         Investment  decisions are made within policy guidelines  established by
the Board of Directors. The investment policy of the Savings Bank established by
the Board of Directors is based on its  asset/liability  management  goals.  The
intent of the policy is to  establish a portfolio of high  quality,  diversified
investments in order to optimize net interest income within acceptable limits of
safety and liquidity.

         Purchases of securities other than equity securities are generally made
with the intent of holding them to maturity.  Currently, the policy is to invest
in instruments with an expected average life of five to ten years, to be held to
maturity.  Investments  and  mortgage-backed  securities  held to  maturity  are
recorded at amortized cost.  Premiums are amortized and discounts  accreted on a
level yield method over the life of the investment.

         The Savings Bank  maintains a portfolio of  investments  available  for
sale and trading to enhance total return on investments and reduce interest rate
and credit risk.  These  investments are accounted at market value.  The Savings
Bank's  Investment  Policy  designates what securities may be maintained in this
portfolio.  The Savings  Bank's  trading  portfolio is comprised of U.S.  agency
securities.  As of July 31, 1998, there were no trading  securities  outstanding
and  the  available  for  sale   portfolio  was  comprised  of   mortgage-backed
securities, U.S. agency securities, and equity securities.

         Mortgage-Backed   Securities.   The  Savings   Bank's   mortgage-backed
securities, or pass-through certificates,  represent a participation interest in
a pool of single-family  mortgages, the principal and interest payments on which
are passed from the  mortgage  originators,  through  intermediaries  (generally
quasi-governmental  agencies) that pool and repackage the participation interest
in the  form  of  securities,  to  investors  such  as the  Savings  Bank.  Such
quasi-governmental agencies that guarantee the payment of principal and interest
to  investors  include  the  FHLMC,  Government  National  Mortgage  Association
("GNMA"),  or the Federal National Mortgage Association  ("FNMA").  Pass-through
certificates  typically  are  issued  with  stated  principal  amounts,  and the
securities  are backed by pools of mortgages that have loans with interest rates
and  maturities  that are  within a  specified  range.  The  underlying  pool of
mortgages  can be composed  of either  fixed rate  mortgage  loans or ARM loans.
Mortgage-backed  securities are generally referred to as mortgage  participation
certificates or pass-through  certificates.  As a result, the interest rate risk
characteristics  of the  underlying  pool of  mortgages,  (i.e.,  fixed  rate or
adjustable  rate) as well as prepayment  risk, are passed on to the  certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying  mortgages.  Mortgage-backed  securities issued by FHLMC, FNMA
and GNMA make up a majority of the pass-through market.  Generally,  the Savings
Bank  purchases  mortgage-backed  securities  guaranteed  by GNMA  and  FNMA and
participation  certificates issued by the FHLMC. GNMA mortgage-backed securities
are certificates issued

                                       13

<PAGE>



and backed by the GNMA and are secured by interests in pools of mortgages  which
are fully  insured by the Federal  Housing  Administration  ("FHA") or partially
guaranteed  by  the  Veterans'   Administration  ("VA").  FHLMC  mortgage-backed
securities are participation certificates issued and guaranteed by the FHLMC and
secured by interests in pools of  conventional  mortgages  originated by savings
associations.

         Mortgage-backed  securities  provide for monthly  payments of principal
and interest and  generally  have  contractual  maturities  ranging from five to
thirty years.  However, due to expected repayment terms being significantly less
than the underlying  mortgage loan pool  contractual  maturities,  the estimated
lives of these securities could be significantly shorter.

         The  Savings  Bank  also  purchases   mortgage-backed   securities  and
collateralized  mortgage  obligations  ("CMOs")  issued by government  agencies,
private  issuers and financial  institutions,  some of which are qualified under
the Internal  Revenue  Code of 1986,  as amended  (the  "Code"),  as Real Estate
Mortgage Investment  Conduits  ("REMICs").  CMOs and REMICs  (collectively CMOs)
have been developed in response to investor  concerns  regarding the uncertainty
of cash flows associated with the prepayment option of the underlying  mortgagor
and are  typically  issued  by  governmental  agencies,  governmental  sponsored
enterprises  and  special  purpose  entities,  such as trusts,  corporations  or
partnerships,   established   by  financial   institutions   or  other   similar
institutions.  Some CMO instruments are most like  traditional  debt instruments
because  they  have  stated   principal   amounts  and   traditionally   defined
interest-rate terms. Purchasers of certain other CMO instruments are entitled to
the  excess,  if any,  of the  issuer's  cash  inflows,  including  reinvestment
earnings,  over the cash outflows for debt service and administrative  expenses.
These  mortgage  related  instruments  may  include  instruments  designated  as
residual  interests,  which  represent  an  equity  ownership  interest  in  the
underlying  collateral,  subject to the first lien of the investors in the other
classes of the CMO.  Certain  residual  CMO  interests  may be riskier than many
regular  CMO  interests  to the extent  that they could  result in the loss of a
portion of the original investment. Moreover, cash flows from residual interests
are  very  sensitive  to  prepayments  and,  thus,  contain  a  high  degree  of
interest-rate risk.

         At July 31, 1998, the Savings Bank's investment in CMOs did not include
any residual  interests or  interest-only  or  principal-only  securities.  As a
matter of policy, the Savings Bank does not invest in residual interests of CMOs
or interest-only  and  principal-only  securities.  The CMOs held by the Savings
Bank at July 31, 1998  consisted of floating rate and fixed rate  tranches.  The
interest  rate of a majority  of the  Savings  Bank's  floating-rate  securities
adjusts monthly and provides the institution with net interest margin protection
in an increasing market interest rate environment.  The securities are backed by
mortgages on one-to-four  family  residential  real estate and have  contractual
maturities up to 30 years.  The  securities are primarily PACs and TACs (Planned
and  Targeted  Amortization  Classes)  and are  designed  to  provide a specific
principal and interest cash-flow.

         Private  issued CMOs tend to have  greater  prepayment  and credit risk
than those issued by  government  agencies or government  sponsored  enterprises
(e.g.,  FHLMC, FNMA, and GNMA) generally because they often are secured by jumbo
loans  (i.e.,  loans with  aggregate  outstanding  balances  above the limit for
purchases by FHLMC or FNMA). At July 31, 1998, the Savings Bank had CMOs with an
aggregate  carrying amount (including  discounts and premiums) of $43.4 million,
of which $8.6 million,  or 19.8% were privately  issued. To minimize the risk of
private  issued  CMOs,  the Savings Bank only  purchases  those CMOs rated AA or
better by one of the rating agencies.

         Mortgage-backed  securities  generally  yield less than the loans which
underlie  such  securities   because  of  their  payment  guarantees  or  credit
enhancements which offer nominal credit risk. In addition,

                                       14

<PAGE>



mortgage-backed  and related securities are more liquid than individual mortgage
loans and may be used to  collateralize  borrowings  of the Savings  Bank in the
event that the Savings  Bank  determined  to utilize  borrowings  as a source of
funds.  Mortgage-backed securities issued or guaranteed by the GNMA, FNMA or the
FHLMC (except  interest-only  securities or the residual  interests in CMOs) are
weighted at no more than 20.0% for risk-based  capital  purposes,  compared to a
weight of 50.0% to 100.0% for residential loans.

Investment Portfolio

         The  following  table sets forth the  carrying  value of the  Company's
investment  portfolio,  short-term  investments,  and  Federal  Home  Loan  Bank
("FHLB") stock at the dates indicated. At July 31, 1998, the market value of the
investment securities that are held to maturity was $83.1 million and the market
value of investment securities available for sale was $37.9 million, with a cost
basis of $29.6 million.
<TABLE>
<CAPTION>
                                                                                         At July 31,
                                                       -------------------------------------------------------------------------   
                                                         1994             1995              1996              1997         1998
                                                        ------           ------            ------            ------       ------
                                                                                       (In thousands)
<S>                                                  <C>               <C>                <C>              <C>         <C>     
Investment Securities:
 U.S. agency securities available for sale(1)..       $     --          $     --            58,045         $ 48,781     $  2,995
 U.S. agency securities held to maturity.......         61,662            55,738            40,821           42,682       81,965
 Mortgage-backed securities held to
  maturity.....................................        173,067           175,375           121,462          102,249      101,771
 Equity securities available for sale(1).......         11,269             8,567            12,601           41,846       21,862
 Municipal bonds available for sale(1).........             --                --             3,083               --           --
 Municipal bonds held to maturity..............             --                --                --               --        1,866
 GNMA mortgage-backed securities
   available for sale(1).......................             --                --             4,684            4,192        3,352
 FNMA/FHLMC CMO securities
   available for sale(1).......................             --                --             2,034            1,489        1,038
 Private Issue CMO securities
   available for sale(1).......................             --                --             9,521            9,284        8,620
 Equity securities restricted for sale(2)......             --                --             7,806               --           --
 Other Securities..............................            975                --                --               --           --
                                                       -------           -------           -------          -------      -------
   Total Investment Securities.................        246,973           239,680           260,057          250,523      223,469
 Interest-bearing deposits.....................             --             5,632                --               --           --
 Federal funds sold............................            850                --                --               --       39,900
 FHLB stock....................................          1,856             2,587             2,587            3,550        4,626
                                                       -------           -------           -------          -------      -------
   Total Investments...........................       $249,679          $247,899          $262,644         $254,073     $267,995
                                                       =======           =======           =======          =======      =======

</TABLE>

---------------------
(1)      Carried at market value.
(2)      In 1996, equity securities  restricted for sale ("IMC investment") were
         carried at cost due to  restrictions  on the sale or  transfer of these
         securities.  During  the  fourth  quarter  ended  July  31,  1997,  the
         restrictions  were changed and the securities were  reclassified to the
         available for sale portfolio and such  securities are carried at market
         value.


                                       15

<PAGE>



         The  following  table  sets forth  certain  information  regarding  the
carrying  values,  weighted  average yields and maturities of the Savings Bank's
investment  securities portfolio at July 31, 1998 by contractual  maturity.  The
expected  maturities may differ from contractual  maturities due to the terms of
the securities which may have callable or prepayment obligations.
<TABLE>
<CAPTION>

                                                          After One Through  After Five Through       Over
                                        One Year or Less     Five Years          Ten Years         Ten Years           Totals
                                        ----------------- -----------------  ------------------  ----------------  ----------------
                                        Carrying  Average Carrying  Average  Carrying  Average   Carrying Average  Carrying Average
                                          Value    Yield    Value    Yield     Value    Yield      Value   Yield    Value    Yield
                                        --------   ------ --------  -------  --------  --------  --------  ------  --------  ------
                                                                           (Dollars in thousands)
<S>                                      <C>        <C>    <C>        <C>   <C>         <C>   <C>           <C>   <C>         <C>  
U. S. agency securities available                                                                                               
 for sale...............................  $ 2,995   5.34%  $    --      --%  $    --      --%  $     --       --% $  2,995    5.34%
U.S. agency securities held to maturity.    3,500   5.49     1,500    6.71    22,000    7.27     54,965     7.47    81,965    7.32
Mortgage-backed securities held to
 maturity...............................    8,887   6.17    25,127    5.83    13,934    6.16     53,823     6.14   101,771    6.07
Equity securities available for sale(1).   21,862    .51        --      --        --      --         --       --    21,862     .51
Municipal bonds held to maturity........    1,459   3.55       407    5.25        --      --         --       --     1,866    3.92
FHLB stock(1)...........................    4,626   7.43        --      --        --      --         --       --     4,626    7.43
GNMA mortgage-backed securities
  available for sale....................       --     --        --      --        --      --      3,352     8.26     3,352    8.26
FNMA/FHLMC CMO's
  available for sale....................       --     --        --      --        --      --      1,038     6.84     1,038    6.84

Private issue CMO's
  available for sale....................       --     --        --      --        --      --      8,620     6.36     8,620    6.36
Federal funds...........................   39,900   5.50        --      --        --      --         --       --    39,900    5.50
                                           ------          -------          --------           --------            -------
  Total.................................  $83,229   4.29%  $27,034    5.75%  $35,934    6.74%  $121,798     6.82% $267,995    5.92%
                                           ======   ====    ======    ====    ======    ====    =======     ====   =======    ====

</TABLE>

------------------
(1)  Equity securities and other securities have been classified as  maturing in
     one year or less, since they have no stated maturity.







                                       16

<PAGE>



Sources of Funds

         General.  Deposits are the major source of the Savings Bank's funds for
lending and other investment purposes. In addition to deposits, the Savings Bank
derives funds from loan and mortgage-backed securities principal repayments, and
maturities  of  investment  securities.   Loan  and  mortgage-backed  securities
payments are a relatively  stable  source of funds,  while  deposit  inflows are
significantly influenced by general interest rates and money market conditions.

         Deposits.  The Savings Bank offers a wide variety of deposit  accounts,
although a majority of such deposits are in fixed-term,  market-rate certificate
accounts.  Deposit  account  terms vary,  primarily as to the  required  minimum
balance amount, the amount of time that the funds must remain on deposit and the
applicable  interest rate. The Savings  Bank's  deposits are typically  obtained
from the area in which its offices are located. The Savings Bank had no brokered
certificates of deposits as of July 31, 1998.

     Deposit  Portfolio.  Deposits in the Savings Bank as of July 31, 1998, were
represented by various types of savings programs described below.
<TABLE>
<CAPTION>
                                                    Weighted       Minimum                           Percentage of       Average
Category                         Term            Average Rates  Balance Amount        Balance        Total Deposits      Balance
--------                         ----            -------------  --------------        -------        --------------      -------
                                                                                (Dollars in thousands)
<S>                              <C>                  <C>        <C>                <C>                   <C>          <C>      
NOW Accounts                     None                 1.31%      $   250            $ 73,335               16.05%       $ 61,072
Regular Savings and Club
Accounts                         None                 2.24           100              93,213               20.40          82,427
Money Market Checking
Accounts                         None                 2.35         2,500              10,763                2.36           8,805
Money Market Passbook
Accounts                         None                 2.54         7,500              16,917                3.70          17,289

Certificates of Deposit:

Fixed Term, Fixed Rate           3-6 Months           4.51         2,500              28,324                6.20          31,592
Fixed Term, Fixed Rate           7-12 Months          5.43           500             177,910               38.94         135,921
Fixed Term, Fixed Rate           13-30                5.29           500              39,103                8.56          48,683
                                 Months
Fixed Term, Fixed Rate           31-120               5.43           500              16,600                3.63          16,158
                                 Months
Fixed Term, Variable Rate        18 Months            5.26           500                 715                 .16             742
                                                                                     -------              ------         -------
                                 Total                                              $456,880              100.00%       $402,689
                                                                                     =======              ======         =======
</TABLE>



                                       17

<PAGE>



         Certificates  of Deposit  with  Balances  Greater  Than  $100,000.  The
following  table  indicates  the amount of the Savings  Bank's  certificates  of
deposit of  $100,000  or more by time  remaining  until  maturity as of July 31,
1998.

                                             Certificates
Maturity Period                              of Deposits
---------------                             --------------
                                            (In thousands)
Within three months...................         $  8,199
Three through six months..............           10,454
Six through twelve months.............           10,160
Over twelve months....................            1,786
                                                 ------
                                                $30,599
                                                 ======


         Borrowings.  Although deposits are the Savings Bank's primary source of
funds,  the  Savings  Bank's  policy  has  been  to  utilize  borrowings  as  an
alternative  or less costly source of funds.  The Savings Bank obtains  advances
from the FHLB of New York. Such advances are made pursuant to several  different
credit  programs,  each  of  which  has its  own  interest  rate  and  range  of
maturities.  The maximum amount that the FHLB of New York will advance to member
institutions,  including  the Savings  Bank,  for  purposes  other than  meeting
withdrawals, fluctuates from time to time in accordance with the policies of the
FHLB of New York.  The maximum  amount of FHLB of New York  advances to a member
institution generally is reduced by borrowings from any other source.

         The Savings Bank  utilizes the Regular  Advance  Program of the FHLB of
New York under an  advances,  collateral,  pledge and  security  agreement.  The
program  offers a wide range of interest  rates and  maturities on advances that
are  collateralized  by various  assets.  At July 31, 1998, the Savings Bank had
$55.0 million  outstanding  under the Regular Advance Program.  The Savings Bank
will  continue  to use this  program in the  future to meet long term  operating
needs.

         The Savings Bank utilizes the FHLB  Overnight  Line of Credit  Program.
The line of credit  has a variable  rate of  interest  and  matures  daily.  The
maximum  amount that can be borrowed under this program is  approximately  $62.8
million.  The line of credit has a term of one year and expired in August  1998.
This program has the same collateral requirement as the Regular Advance Program.
At July 31, 1998,  the Savings  Bank had no  borrowings  outstanding  under this
program.

         The Savings Bank has a blanket pledge with the FHLB of New York and has
pledged  all  of  its  stock  in the  FHLB,  federal  funds  sold,  U.S.  agency
securities, certain qualifying loans, and mortgage-backed securities.



                                       18

<PAGE>



         The following tables set forth certain information regarding borrowings
by the Savings Bank.
<TABLE>
<CAPTION>
                                                                                           As of July 31,
                                                            --------------------------------------------------------------------- 
                                                                 1994            1995            1996            1997       1998
                                                                 ----            ----            ----            ----       ----
Weighted average rate paid on:
<S>                                                             <C>             <C>             <C>             <C>        <C>  
  FHLB advances/line of credit............................      4.44%           5.81%           5.79%           5.53%       5.64%
  Reverse Repurchase Agreements...........................        --              --            6.33            5.47         --
  Line of credit..........................................        --              --              --            8.00        8.08
  ESOP....................................................      7.54            8.96            9.12            6.16        5.93

</TABLE>

<TABLE>
<CAPTION>

                                                                                  During the Year Ended July 31,
                                                            ---------------------------------------------------------------------
                                                                1994            1995            1996            1997      1998
                                                                ----            ----            ----            ----      ----
                                                                                           (In thousands)
<S>                                                         <C>             <C>             <C>             <C>          <C>    
Maximum amount of borrowings outstanding during the year:
  FHLB advances/line of credit............................  $ 51,909        $ 32,000        $ 50,460        $ 68,500     $89,900
  Reverse Repurchase Agreement............................        --              --          20,000          40,000          --
  Line of credit..........................................        --              --              --           2,000       9,450
  ESOP....................................................     1,100           1,021             859           2,354       8,782

Maximum  amount  of  short-term  borrowings  outstanding  
  at any  month end with respect to:
  FHLB advances/line of credit............................   $36,000         $30,500         $49,450         $67,750     $85,250
  Reverse Repurchase Agreement............................        --              --          20,000          20,000          --
  Line of credit..........................................        --              --              --           2,000       9,450
  ESOP....................................................     1,100           1,021             859           2,354       8,782

</TABLE>

Subsidiaries

Branchview, Inc. ("Branchview")

         Branchview,  a New Jersey corporation owned by the Company, has a 5.40%
interest in IMC. IMC is a mortgage  banking company  involved in the origination
and  securitization  of equity mortgage  products.  At July 31, 1998, the market
value of the IMC stock was $16.6 million with a cost basis of $7.8  million.  On
October  16,  1998,  IMC  announced  that they intend to explore  financial  and
strategic  alternatives  including  the  possible  sale of IMC. At such date the
market value of the IMC stock decreased to $1.8 million. For further information
please  refer  to the  Annual  Report  - Note 22 to the  Consolidated  Financial
Statements.

Lakeview Mortgage Depot, Inc. ("LMD")

         LMD, a New Jersey mortgage corporation, is 90% owned by the Company and
was  formed in October  1995.  For the year ended  July 31,  1998,  the  Company
recorded net  consolidated  income before taxes of $62,000.  During fiscal 1998,
LMD closed its Pennsylvania office and its sole office is located in New Jersey.

                                       19

<PAGE>




Lakeview Investment Services, Inc. ("LISI")

         LISI  was  organized  by the  Savings  Bank to  provide  brokerage  and
insurance  services to the Savings Bank's  customers,  utilizing the services of
Cross Marketing, Inc., a registered broker dealer.
LISI is not a significant source of revenues or expenses.

Lakeview Credit Card Services, Inc. ("LCCS")

         LCCS,  a wholly  owned  subsidiary  of the  Savings  Bank was formed in
January  1996. On October 1, 1996,  LCCS entered into a joint venture  agreement
with IMC Credit Card, Inc., ("IMCC") a wholly owned subsidiary of IMC, to market
secured credit cards through IMCC's retail loan centers and correspondents.  The
Savings Bank dissolved the Agreement during 1998 and LCCS is currently inactive.

North Properties, Inc. ("North Properties")

         North  Properties,  a wholly owned  subsidiary of the Savings Bank, was
formed in May 1997 to hold real estate owned properties.

Market Risk

         Market risk is the risk of loss from adverse  changes in market  prices
and rates.  The Savings  Bank's market risk arises  primarily from interest rate
risk inherent in its lending,  investment  and deposit  taking  activities.  The
Savings Bank's  profitability  is affected by  fluctuations in interest rates. A
sudden and  substantial  increase in  interest  rates may  adversely  impact the
Savings  Bank's  earnings to the extent that the interest  rates borne by assets
and  liabilities  do not change at the same speed,  to the same extent or on the
same basis. To that end,  management  actively monitors and manages its interest
rate risk exposure.

         The  principal  objective  of the  Savings  Bank's  interest  rate risk
management  is to evaluate the interest  rate risk  inherent in certain  balance
sheet accounts, determine the level of risk appropriate given the Savings Bank's
business strategy, operating environment, capital and liquidity requirements and
performance  objectives,  and  manage  the risk  consistent  with  the  Board of
Directors' approved guidelines.  Through such management, the Savings Bank seeks
to minimize the  vulnerability  of its operations to changes in interest  rates.
The Savings Bank's Board of Directors  reviews their interest rate risk position
quarterly.  The Savings  Bank's  Asset/Liability  Committee  is comprised of the
Savings Bank's senior  management under the direction of the Board of Directors,
with senior management responsible for reviewing with the Board of Directors its
activities and strategies,  the effect of those strategies on the Savings Bank's
net  interest  margin,  the market  value of the  portfolio  and the effect that
changes in interest  rates will have on the  Savings  Bank's  portfolio  and the
Savings Bank's exposure limits.

         The Savings Bank utilizes the following  strategies to manage  interest
rate risk: (1) emphasizing the origination and retention of fixed-rate  mortgage
loans having terms to maturity of not more than 15 years,  adjustable-rate loans
and  consumer  loans  consisting  primarily  of home  equity  loans and lines of
credit; (2) selling  substantially all fixed-rate conforming mortgage loans with
terms of thirty years without  recourse and on a  servicing-retained  basis; and
(3) investing primarily in adjustable-rate mortgage-backed securities, which may
generally  bear lower yields as compared to longer term  investments,  but which
better  position the Savings Bank for increases in market  interest  rates,  and
holding the majority of these securities as available for sale. The Savings Bank
currently does not participate in hedging programs,

                                       20

<PAGE>



interest rate swaps or other activities  involving the use of off-balance  sheet
derivative  financial  instruments,  but  may do so in the  future  to  mitigate
interest rate risk.

         Net Portfolio  Value.  The Savings Bank's interest rate  sensitivity in
monitored by management through the use of the inhouse model which estimates the
change  in the  Savings  Bank's  net  portfolio  value  ("NPV")  over a range of
interest  rate  scenarios.  The NPV is defined as the  current  market  value of
assets, minus the current market value of liabilities, plus or minus the current
value of off-balance  sheet items.  The market values are estimated  through two
cash flow-based valuation methodologies and an option-based valuation model: (1)
static  discounted  cash flow analysis,  (2) an  option-based  pricing  analysis
(modified discounted cash flow analysis to value embedded options),  and (3) the
Black-Scholes model to value-off balance sheet items. The change in NPV measures
an  institution's  vulnerability  to changes in interest rates by estimating the
change in the market value of an  institution's  assets,  liabilities,  and off-
balance sheet  contracts in response to an  instantaneous  change in the general
level of interest rates.

         The following table lists the Savings Bank's percentage  changes in NPV
assuming an immediate change of plus or minus of up to 400 basis points from the
level of interest  rates at July 31,  1998.  As the table  shows,  increases  in
interest  rates  would  result in  decreases  in the Savings  Bank's NPV,  while
decreases in interest rates would result in increases in the Savings Bank's NPV.
All market  risk  instruments  presented  in this table are held to  maturity or
available for sale. The Savings Bank has no trading securities.

   Changes In
   Market Rate
 Interest Rates
    In Basis                                         NPV as a % of Portfolio
     Points             Net Portfolio Value              Value of Assets 
 -------------   ---------------------------------- -------------------------

                                                                Basis Points
  (Rate Shock)     Amount     $ Change    % Change   NPV Ratio %   Change
 -------------   ---------   -----------  ---------  -----------  --------  
                              (Dollars in thousands)
       +400        35,185     (21,352)      (38)       6.68         (316)
       +300        42,675     (13,862)      (25)       7.90         (194)
       +200        48,977      (7,560)      (13)       8.85          (99)
       +100        54,111      (2,426)       (4)       9.57          (27)
          0        56,537           -         -        9.84            -
       -100        60,288       3,751         7       10.29           45
       -200        61,319       4,782         8       10.31           47
       -300        59,870       3,333         6        9.96           12
       -400        59,047       2,510         4        9.70          (14)


         Certain  shortcomings are inherent in the methodology used in the above
interest rate risk  measurements.  Modeling changes in NPV require the making of
certain  assumptions  which may or may not  reflect  the manner in which  actual
yields and costs respond to changes in market  interest  rates.  In this regard,
the NPV model  presented  assumes  that the  composition  of the Savings  Bank's
interest sensitive assets and liabilities  existing at the beginning of a period
remains constant over the period being

                                       21

<PAGE>



measured  and  also  assumes  that a  particular  change  in  interest  rates is
reflected  uniformly  across  the yield  curve  regardless  of the  duration  to
maturity or repricing of specific assets and liabilities.  Accordingly, although
the NPV measurements and net interest income models provide an indication of the
Savings Bank's  interest rate risk exposure at a particular  point in time, such
measurements  are not  intended to and do not provide a precise  forecast of the
effect of changes in market  interest  rates on the Savings  Bank's net interest
income and will differ from actual results.

         The following table shows the Savings Bank's financial instruments that
are sensitive to changes in interest  rates,  categorized by expected  maturity,
and the  instruments'  fair  values  at July 31,  1998.  Market  risk  sensitive
instruments are generally  defined as  on-and-off-balance  sheet derivatives and
other financial instruments.

Expected Maturity/Principal Repayment at July 31,
<TABLE>
<CAPTION>
                              Interest                                                        Total                        Fair
                                Rates     1999      2000       2001     2002       2003   Thereafter     Balance (1)       Value
                              --------  ---------  --------  -------- ---------  --------  ----------    -----------    ----------
                                                                      (Dollars in thousands)
<S>                             <C>     <C>        <C>       <C>       <C>       <C>         <C>         <C>            <C>     
Interest-earning assets  
-----------------------  
Mortgage loans..............     8.33%   $ 21,171   $16,660   $17,413   $15,647   $14,709     $95,067     $180,667       $181,433
Home equity, second
  mortgage and home 
  improvements loans........     9.01%     18,468     9,803     8,568    13,126    11,195      35,981       97,141         97,553
Commercial loans............     9.88%     10,574     1,477       266     1,375       494          --       14,186         14,541
Mortgage-backed
  securities held              
  to maturity...............     6.07%      9,646    15,394    24,691     6,033    12,631      33,376      101,771        101,798
Investment securities held
  to maturity(1)............     6.71%    108,773     5,697     1,533        --        --      12,354      128,357        127,635
Securities available for    
  sale......................     3.08%     26,158     1,171     1,054       948       853       7,683       37,867         37,867

Interest-bearing liabilities
----------------------------
NOW and money market         
  accounts..................     1.38%      2,691    29,767    29,767    10,370    10,370      18,050      101,015        101,015
Savings and clubs           
  accounts..................     2.24%         --    27,964    27,964     9,321     9,321      18,643       93,213         93,213
Certificates of deposits....     5.31%    238,165    17,734     4,855       814       983         101      262,652        266,215
FHLB of New York            
  advances..................     5.43%     10,000    30,000        --        --        --      15,000       55,000         63,086
Line of credit..............     8.25%      9,928        --        --        --        --          --        9,928          9,928
ESOP debt...................     8.40%        314       314       314       314       314       7,213        8,783          8,783
</TABLE>

---------------
(1)      Includes federal funds totaling $39.9 million.

         Expected maturities are contractual matures adjusted for prepayments of
principal. The Savings Bank uses certain assumptions to estimate fair values and
expected maturities.  For assets, expected maturities are based upon contractual
maturity,  call dates,  projected  repayments and prepayments of principal.  The
prepayment experience reflected herein is based on the Savings Bank's historical
experience.  The Savings Bank's average Constant  Prepayment Rate ("CPR") on its
total fixed-rate  portfolio is 10%, and 8% on its adjustable-rate  portfolio for
interest-earning assets (excluding investment

                                       22

<PAGE>



securities,  which do not have prepayment features). For deposit liabilities, in
accordance with standard industry practice and the Savings Bank's own historical
experience,  decay  factors used to estimate  NOW,  money market  accounts,  and
savings accounts were 0% to 30%, 12.5% to 25% and 0% to 30%, respectively.

Employees

         At July 31, 1998,  the Savings  Bank had 70 full-time  and 42 part-time
employees.  None of the Savings Bank's employees are represented by a collective
bargaining  group.  The Savings Bank  believes  that its  relationship  with its
employees is good.

                                   REGULATION

         Set forth below is a brief description of certain laws which related to
the  regulation of the Company and the Savings Bank.  The  description  does not
purport  to be  complete  and is  qualified  in its  entirety  by  reference  to
applicable laws and regulations.

Company Regulation

         General.  The  Company is a unitary  savings and loan  holding  company
subject to regulatory  oversight by the OTS. As such, the Company is required to
register  and  file  reports  with  the OTS and is  subject  to  regulation  and
examination by the OTS. In addition,  the OTS has enforcement authority over the
Company and its non-savings association  subsidiaries,  should such subsidiaries
be formed,  which also permits the OTS to restrict or prohibit  activities  that
are determined to be a serious risk to the subsidiary savings association.  This
regulation  and  oversight  is  intended  primarily  for the  protection  of the
depositors of the  Association  and not for the benefit of  stockholders  of the
Holding Company.

         Qualified  Thrift  Lender Test.  As a unitary  savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the  Association  satisfies  the Qualified  Thrift  Lender  ("QTL") test. If the
Company  acquires   control  of  another  savings   association  as  a  separate
subsidiary, it would become a multiple savings and loan holding company, and the
activities of the Holding  Company and any of its  subsidiaries  (other than the
Association or any other SAIF-insured  savings association) would become subject
to  restrictions   applicable  to  bank  holding  companies  unless  such  other
associations  each also  qualify  as a QTL and were  acquired  in a  supervisory
acquisition.  See "--  Regulation of the Savings Bank - Qualified  Thrift Lender
Test."

         Insurance of Deposit Accounts. The deposit accounts held by the Savings
Bank are insured by the SAIF to a maximum of $100,000  for each  insured  member
(as defined by law and  regulation).  Insurance of deposits may be terminated by
the FDIC upon a finding  that the  institution  has engaged in unsafe or unsound
practices,  is in an unsafe or unsound  condition to continue  operations or has
violated any applicable law, regulation, rule, order or condition imposed by the
FDIC or the institution's primary regulator.

         As a member of the SAIF, the Savings Bank pays an insurance  premium to
the FDIC  equal to a  minimum  of 0.23% of its  total  deposits.  The FDIC  also
maintains another insurance fund, the Savings Bank Insurance Fund ("BIF"), which
primarily  insures  commercial  bank  deposits.  In 1996,  the annual  insurance
premium for most BIF members was lowered to $2,000. The lower insurance premiums
for BIF  members  placed  SAIF  members  at a  competitive  disadvantage  to BIF
members.

                                       23

<PAGE>




         Effective  September  30,  1996,  federal  law was revised to mandate a
one-time  special  assessment  on  SAIF  members  such  as the  Savings  Bank of
approximately  .657% of deposits  held on March 31, 1995.  Beginning  January 1,
1997,  the deposit  insurance  assessment  for most SAIF  members was reduced to
 .064% of deposits on an annual basis  through the end of 1999.  During this same
period,  BIF members will be assessed  approximately  .013% of  deposits.  After
1999,  assessments  for BIF and SAIF members  should be the same. It is expected
that these continuing  assessments for both SAIF and BIF members will be used to
repay outstanding Financing  Corporation bond obligations.  As a result of these
changes,  beginning January 1, 1997, the rate of deposit insurance  assessed the
Savings Bank declined by approximately 70%.

         Capital  Requirements.  Under FDIC  regulations,  the  Savings  Bank is
required to maintain a minimum  leverage  capital  requirement  consisting  of a
ratio of Tier 1 capital to total  risk-weighted  assets of 4%. For  institutions
other than those most highly rated by the FDIC,  an  additional  "cushion" of at
least 100 to 200 basis points is  required.  Tier 1 capital is the sum of common
stockholders'  equity,  noncumulative  perpetual  preferred stock (including any
related surplus) and minority investments in certain subsidiaries,  less certain
intangible  assets,  deferred tax assets,  certain identified losses and certain
investments in securities subsidiaries. As a SAIF-insured, state-chartered bank,
the Savings Bank must  currently also deduct from Tier 1 capital an amount equal
to its  investments  in, and  extensions of credit to,  subsidiaries  engaged in
certain activities not permissible for national banks.

         In addition to the leverage  ratio,  the Savings  Bank must  maintain a
minimum ratio of qualifying  total capital to  risk-weighted  assets of at least
8.0%,  of  which  at  least  four  percentage  points  must be  Tier 1  capital.
Qualifying total capital consists of Tier 1 capital plus Tier 2 or supplementary
capital  items which  include  allowances  for loan losses in an amount of up to
1.25% of risk-weighted  assets,  cumulative  preferred stock and preferred stock
with a maturity  of over 20 years and certain  other  capital  instruments.  The
includable  amount of Tier 2 capital  cannot  exceed  the  institution's  Tier 1
capital. Qualifying total capital is further reduced by the amount of the bank's
investments in banking and finance  subsidiaries  that are not  consolidated for
regulatory  capital purposes,  reciprocal  cross-holdings of capital  securities
issued by other banks and certain other deductions. Under the FDIC risk-weighted
system,  all of a bank's balance sheet assets and the credit equivalent  amounts
of certain  off-balance sheet items are assigned to risk weight categories.  The
aggregate  dollar  amount of each  category  is  multiplied  by the risk  weight
assigned to that category.  The sum of these  weighted  values equals the bank's
risk-weighted assets.

         Pursuant to New Jersey banking law the minimum  leverage  capital for a
depository  institution  is a ratio of Tier 1  capital  to  total  risk-weighted
assets of four percent.  However, the Commissioner of the Department may require
a higher ratio for a particular depository  institution.  New Jersey banking law
requires that a depository  institution  maintain qualifying capital of at least
eight  percent  of its risk  weighted  assets.  At least  four  percent  of this
qualifying  capital shall be in the form of Tier 1 capital.  For purposes of New
Jersey banking law, risk weighted assets,  Tier 1 capital,  and total assets are
defined in the same manner as in the FDIC regulations.

         The Savings  Bank was in  compliance  with both the FDIC and New Jersey
capital requirements at July 31, 1998.

         Capital Distributions. Earnings of the Savings Bank appropriated to bad
debt reserves and deducted for Federal income tax purposes are not available for
payment of cash dividends or other distributions to stockholders without payment
of taxes at the then  current  tax rate by the  Savings  Bank on the  amount  of
earnings removed from the reserves for such distributions.

                                       24

<PAGE>




         Dividends  payable by the Savings  Bank to the  Company  and  dividends
payable  by the  Company to  stockholders  are  subject  to  various  additional
limitations imposed by federal and state laws,  regulations and policies adopted
by federal  and state  regulatory  agencies.  The  Savings  Bank is  required by
federal law to obtain FDIC approval for the payment of dividends if the total of
all  dividends  declared by the Savings Bank in any year exceed the total of the
Savings  Bank's net  profits (as  defined)  for that year and the  retained  net
profits (as defined) for the preceding two years, less any required transfers to
surplus.  Under New Jersey law, the Savings Bank may not pay  dividends  unless,
following payment, the capital stock of the Savings Bank would be unimpaired and
(a) the  Savings  Bank will have a surplus  of not less than 50% of its  capital
stock, or, if not, (b) the payment of such dividends will not reduce the surplus
of the Savings Bank.

         Under applicable regulations, the Savings Bank would be prohibited from
making any capital distributions if, after making the distribution,  the Savings
Bank would have: (i) a total risk-based  capital ratio of less than 8.0%; (ii) a
Tier 1 risk-based  capital ratio of less than 4.0%; or (iii) a leverage ratio of
less than 4.0%,  unless a higher  ratio is required by the  Commissioner  of the
Department.

         Federal Home Loan Bank System. The Savings Bank is a member of the FHLB
of New  York,  which  is one of 12  regional  FHLBs  that  administers  the home
financing credit function of savings institutions. Each FHLB serves as a reserve
or central bank for its members within its assigned region. The FHLB of New York
is  funded  primarily  from  proceeds  derived  from  the  sale of  consolidated
obligations  of the FHLB  System.  The FHLB of New York  makes  loans to members
(i.e.,  advances) in accordance with policies and procedures  established by the
Board of Directors of the FHLB.

         As a member,  the Savings  Bank is required  to purchase  and  maintain
stock in the FHLB of New York in an amount equal to at least 1% of its aggregate
unpaid   residential   mortgage  loans,  home  purchase   contracts  or  similar
obligations at the beginning of each year.

         Qualified  Thrift  Lender  Test.  The  Savings  Bank must  maintain  an
appropriate level of certain  investments  ("Qualified Thrift  Investments") and
otherwise qualify as a "Qualified  Thrift Lender" ("QTL"),  in order to continue
to enjoy  full  borrowing  privileges  from the FHLB of New York.  The  required
percentage  of  Qualified  Thrift  Investments  is 65% of portfolio  assets.  In
addition,  savings  banks may include  shares of stock of the Federal  Home Loan
Banks, FNMA and FHLMC as qualifying QTL assets.  Compliance with the QTL test is
measured on a monthly basis in nine out of every 12 months. As of July 31, 1998,
the Savings Bank was in compliance with its QTL requirement.

         Federal Reserve  System.  The Board of Governors of the Federal Reserve
System (the "FRB") requires all depository institutions to maintain non-interest
bearing  reserves  at  specified  levels  against  their  transaction   accounts
(primarily checking,  NOW and Super NOW checking accounts) and non-personal time
deposits.  The balances maintained to meet the reserve  requirements  imposed by
the FRB may be used to satisfy the  liquidity  requirements  that are imposed by
the NJDB. At July 31, 1998, the Savings Bank met these reserve requirements.

Item  2.  Properties and Equipment
----------------------------------

         The Company and the Savings  Bank operate from their main office and 10
branch offices.  Of the total,  the Savings Bank leases three branch offices and
all other branch offices are owned by the Savings Bank.

                                       25

<PAGE>



Item 3.  Legal Proceedings
--------------------------

         There are  various  claims  and  lawsuits  in which the  Company or the
Savings  Bank are  periodically  involved,  such as  claims  to  enforce  liens,
condemnation  proceedings on properties in which the Savings Bank holds security
interests, claims involving the making and servicing of real property loans, and
other  issues  incident  to the  Savings  Bank's  business.  In the  opinion  of
management,  no material  loss is expected  from any of such  pending  claims or
lawsuits.

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

         None.

                                     PART II

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

         The information  contained in the section  captioned "Market For Common
Stock" in the  Management  Discussion  and Analysis of Financial  Condition  and
Results of Operations of the Company's  Annual Report to Shareholders for fiscal
year  ended  July 31,  1998 (the  "Annual  Report")  is  incorporated  herein by
reference.

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

         The information  contained in the section captioned "Selected Financial
Data" of the Annual Report is incorporated herein by reference.

Item 7.  Management's Discussion and Analysis or Plan of Operation
------------------------------------------------------------------

         The  information  contained  in  the  section  captioned  "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
--------------------------------------------------------------------

         Refer to Market Risk disclosure beginning on page 20.

Item 8.  Financial Statements
-----------------------------

         The   Company's   financial   statements   listed  under  Item  14  are
incorporated herein by reference.

Item 9. Change In and Disagreements with Accountants on Accounting and Financial
        Disclosure
--------------------------------------------------------------------------------

         Not applicable.



                                       26

<PAGE>



                                    PART III

Item 10.  Directors and Executive Officers
------------------------------------------

         The information  contained under the sections  captioned "Section 16(a)
Beneficial  Ownership  Reporting  Compliance," "I - Information  with Respect to
Nominees for Directors,  Directors Continuing In Office, and Executive Officers"
and "Biographical  Information" in the Proxy Statement is incorporated herein by
reference.

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

         The  information  contained under the section  captioned  "Director and
Executive  Compensation"  in the  Proxy  Statement  is  incorporated  herein  by
reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

         (a)      Security Ownership of Certain Beneficial Owners

                  Information  required by this item is  incorporated  herein by
                  reference  to the first  chart in the section  captioned  "I -
                  Information  with Respect to Nominees for Director,  Directors
                  Continuing  in Office,  and  Executive  Officers" in the Proxy
                  Statement.

         (b)      Security Ownership of Management

                  Information  required by this item is  incorporated  herein by
                  reference  to the first  chart in the section  captioned  "I -
                  Information  with Respect to Nominees for Director,  Directors
                  Continuing  in Office,  and  Executive  Officers" in the Proxy
                  Statement.

         (c)      Management  of  the  Registrant   knows  of  no  arrangements,
                  including  any  pledge  by any  person  of  securities  of the
                  Registrant,  the  operation of which may at a subsequent  date
                  result in a change in control of the Registrant.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

         The  information   contained  under  the  section  captioned   "Certain
Relationships  and Related  Transactions" in the Proxy Statement is incorporated
herein by reference.

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

         (a) Listed below are all  financial  statements  and exhibits  filed as
part of this report.

                  (1)      The consolidated balance sheets of Lakeview Financial
                           Corp. and  subsidiaries  as of July 31, 1998 and 1997
                           and the related  consolidated  statements  of income,
                           stockholders'  equity  and cash flows for each of the
                           years in the three year period  ended July 31,  1998,
                           together with the related  notes and the  independent
                           auditors'   report   of  KPMG   Peat   Marwick   LLP,
                           independent certified public accountants.


                                       27

<PAGE>



                  (2) Schedules omitted as they are not applicable.

                  (3)      Exhibits

                  The following exhibits are filed as part of this report.

                   3.1 Certificate of Incorporation of Lakeview Financial Corp.*
                   3.2 Bylaws of Lakeview Financial Corp.*
                   4   Stock Certificate of Lakeview Financial Corp.*
                  10.1 Form of Lakeview Savings Bank 1993 Stock Option Plans*
                  10.2 Lakeview  Savings  Bank  Management  Stock Bonus Plan and
                       Trust Agreement*
                  10.3 Employment Agreements**
                  10.4 Supplemental Retirement Plan for Senior Officers***
                  13   Portions of the 1998 Annual Report to Stockholders
                  21   Subsidiaries of the Registrant (See-"Part I - Business").
                  23   Independent Auditors' Consent
                  27   Financial Data Schedule (electronic filing only)

------------------
*        Incorporated herein by reference to the registration statement  on Form
         S-4 (File No. 33-77646).
**       Incorporated herein by reference to the Form 10-K for fiscal year ended
         July 31, 1994.
***      Incorporated herein by reference to the Form 10-K for fiscal year ended
         July 31, 1996.

         (b)      On October 8, 1998, the Company filed a Form 8-K reporting the
                  announcement   of  the   Company's   evaluation  of  strategic
                  alternatives in order to maximize shareholder value.



                                       28





<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 as of October 22, 1998.

                                            LAKEVIEW FINANCIAL CORP.



                                       By:  /s/Kevin J. Coogan
                                            ------------------------------------
                                            Kevin J. Coogan
                                            President, Chief Executive
                                            Officer and Director

         Pursuant to the  requirement  of the  Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities as of October 22, 1998.

By:  /s/Kevin J. Coogan                         By: 
     -----------------------------------            ----------------------------
     Kevin J. Coogan                                Leo J. Dean
     President, Chief Executive Officer             Director
     and Director




By:  /s/Leo J. Costello                         By: /s/Michael R. Rowe
     -----------------------------------            ----------------------------
     Leo J. Costello                                Michael R. Rowe
     Chairman of the Board                          Director



By:  /s/Robert J. Davenport                     By: /s/Dennis D. Pedra
     -----------------------------------            ----------------------------
     Robert J. Davenport                            Dennis D. Pedra
     Director                                       Director



By:                                             By: /s/Anthony G. Gallo
     -----------------------------------            ----------------------------
     Vincent A. Scola                               Anthony G. Gallo
     Director                                       Vice President and Chief
                                                    Financial Officer