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 [NO FEE REQUIRED]

For the fiscal year ended        July 31, 1997
                          --------------------------------

                                    - or -

      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
[ ]   EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

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

Commission 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:     (201) 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. [ ]

      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 14, 1997 was $68,744,280.

       As of October 14, 1997 there were issued and outstanding 4,370,594 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, 1997. (Parts II and IV)
2.    Portions of Proxy  Statement for the 1997 Annual Meeting of  Stockholders.
      (Part III)


<PAGE>



PART I

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

General

     In August 1994, Lakeview Financial  Corporation,  a New Jersey Corporation,
(the  "Company")  became a unitary  savings and loan  holding  company  upon the
completion of the  reorganization  of Lakeview  Savings Bank  ("Lakeview" or the
"Savings  Bank") into a holding  company form of  ownership.  At that time,  the
Company  acquired all of the  outstanding  common stock of the Savings Bank. The
Savings Bank's common stock was originally issued in connection with the Savings
Bank's  conversion  from mutual to stock form in December  1993.  The  principal
asset of the Company  consists of 100% of the issued and  outstanding  shares of
common  stock of the  Savings  Bank.  The  Savings  Bank was  founded in 1922 as
Lakeview Building and Loan Association.

      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.  Lakeview  has eight  office
locations located in Bergen and Passaic Counties, New Jersey.

      On September  10, 1997,  the Company and  Westwood  Financial  Corporation
("Westwood"),  the holding company of Westwood  Savings Bank ("Westwood  Bank"),
Westwood,  New Jersey, signed a definitive agreement providing for the merger of
Westwood  into the  Holding  Company  and the merger of  Westwood  Bank into the
Savings Bank. It is anticipated that the transaction will close by approximately
March 1998 and will be accounted for under the purchase method of accounting.

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 its 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.



<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>

                                         1993                 1994                  1995                 1996               1997
                                     ------------        ---------------      ---------------       --------------   ---------------
                                      $        %           $        %          $           %         $        %         $         %
                                     ---      ---         ---      ---        ---         ---       ---      ---       ---       --

TYPE OF LOAN:
 Real Estate Loans:
  Construction loans:
<S>                               <C>          <C>     <C>        <C>       <C>        <C>       <C>       <C>     <C>       <C>   
    Residential (1-4 family) .....$     --        --%  $    190      --%    $    915      .6%    $   863      .5%  $     --     --%
    Multi-family/commercial ......      --        --        550      --           --      --          --      --        377     .2
                                  --------     -----   --------  ------      -------- ------    --------  ------   --------  ----- 
      Total construction loans ...      --        --        740      --           915     .6         863      .5        377     .2
  Residential (1-4 family) .......  76,832      54.7     79,383    57.3        84,051   57.8      84,006    50.3     82,647   36.2
  Multi-family/Commercial ........  19,322      13.7     20,879    15.1        22,186   15.3      33,063    19.8     68,192   29.9
  Commercial loans ...............      --        --         --      --            --     --         697      .4      8,982    3.9
  Home equity, second mortgage
   and home improvement loans ....  43,842      31.2     36,223    26.7        37,221   25.6      46,705    28.0     66,057   29.0
Consumer Loans:
  Passbook account loans .........     522        .4      1,242      .9         1,022     .7       1,517     1.0      1,914     .8
  Student loans ..................       7        --          6      --             1     --         --       --         --     --
                                  --------     -----   --------  ------      -------- ------    --------  ------   --------  ----- 
  Total loans ....................$140,525     100.0%  $138,473  100.00%     $145,396 100.00%   $166,851  100.00%  $228,169  100.0%
                                  ========     =====   ========  ======      ======== ======    ========  ======   ========  ===== 

TYPE OF SECURITY:
  Real Estate Loans
    1-4 family ...................$120,674      85.9%  $116,346    84.0%     $119,885   82.5%   $124,467    74.6%  $133,852   58.7%
    Multi-Family/Commercial ......  19,322      13.7     20,879    15.1        24,488   16.8      40,170    24.1     83,421   36.6
  Passbook accounts ..............     522        .4      1,242      .9         1,022     .7       1,517      .9      1,914     .8
  Student loans ..................       7        --          6      --             1     --          --      --         --     --
Commercial Loans:
  Commercial loans ...............      --        --         --      --            --     --         697      .4      8,982    3.9
                                  --------     -----   --------  ------      --------  ------    --------  -----    -------  ----- 
   Total loans ...................  140,525    100.0%   138,473   100.0%      145,396  100.0%    166,851   100.0%   228,169  100.0%
                                               =====              =====                =====               =====             ===== 
Less:
  Loans in process ...............      --                  191                   451                101                 --
  Deferred loan origination fees 
   and costs, net.................     578                  425                   287                220                194
  Allowance for loan losses ......   2,638                1,714                 2,535              3,073              3,411
                                  --------             --------              --------           --------           --------
  Total loans, net ...............$137,309             $136,143              $142,123           $163,457           $224,564
                                  ========             ========              ========           ========           ========
</TABLE>


                                              2

<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 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,  1997,  one year,
three year, and five year ARM loans  originated by the Savings Bank  constituted
24%, 26% and 50% of the originated ARM loan portfolio,  respectively.  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.



                                        3

<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.  The Savings Bank intends to increase  its  marketing  efforts
related to these loans in fiscal 1998.

      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.  The Savings Bank intends to
increase its marketing efforts related to these loans in fiscal 1998.

      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,  1997,  $6.8  million was  outstanding.  The
Company has a 6.02% investment in IMC. See "-- Subsidiaries".


                                        4

<PAGE>



Loan Maturity Table

      The  following  table sets forth the  maturity of the Savings  Bank's loan
portfolio at July 31, 1997. The table does not include  prepayments or scheduled
principal  repayments.  Prepayments and scheduled principal  repayments on loans
totalled  $22.4  million at July 31, 1997.  Adjustable-rate  mortgage  loans are
shown as maturing based on contractual maturities.

<TABLE>
<CAPTION>
                                                           Home Equity,
                                                          Second Mortgage
                             1-4 Family   Multi-Family,      and Home
                             Real Estate    Commercial      Improvement    Commercial
                              Mortgage     Real Estate       Loans(1)        Loans        Total
                             -----------  ------------    ---------------  ----------    --------

                                                        (In Thousands)
Amounts Due:
<S>                           <C>              <C>              <C>          <C>        <C>     
Within 3 months............   $    631         $ 3,019          $ 3,813      $   48     $  7,511
3 months to 1 Year.........        151             717            2,047       1,377        4,292
                               -------         -------          -------      ------     --------
                                   782           3,736            5,860       1,425       11,803
                               -------         -------          -------      ------     --------

After 1 year:
  1 to 3 years.............      2,969           2,777            2,818       6,839       15,403
  3 to 5 years.............      6,078           7,271           14,337         718       28,404
  5 to 10 years............     13,313          17,721           19,022          --       50,056
  10 to 20 years...........     29,275          26,648           25,572          --       81,495
  Over 20 years............     30,230          10,416              362          --       41,008
                               -------         -------          -------      ------     --------
Total due after one year...     81,865          64,833           62,111       7,557      216,366
                               -------         -------          -------      ------     --------

Total amount due...........    $82,647         $68,569          $67,971      $8,982     $228,169
                               =======         =======          =======      ======     ========

</TABLE>

----------
(1) Also includes passbook and student loans.

      The  following  table sets forth the dollar  amount of all loans due after
July 31, 1998, 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 ........................     $ 46,421      $ 35,444       $ 81,865
Multi-family and commercial real estate....       23,254        41,579         64,833
Home equity, second mortgage and              
  home improvement loans ..................       32,705        29,406         62,111
Commercial loans ..........................           --         7,557          7,557
                                                --------      --------       --------
  Total ...................................     $102,380      $113,986       $216,366
                                                ========      ========       ========
</TABLE>                                      
                                        


                                        5

<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,  1997 was $6.1
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,
1997 the Savings Bank's maximum loan-to-one  borrower limit was $5.9 million and
its  largest  loan  to  one  borrower  was a  commercial  letter  of  credit  of
approximately  $6.8  million.  This  loan was in excess  of the  Savings  Bank's
lending limit but was in compliance with regulations  applicable at the time the
loan was originated.  The second largest loan to one borrower  relationship is a
loan of  approximately  $3.1  million  secured  by  multi-family  properties  in
Passaic, New Jersey. Both of these loans were performing at July 31, 1997.

      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. 


                                        6

<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,
                                                  -------------------------------------------------
                                                   1993      1994       1995      1996       1997
                                                   ----      ----       ----      ----       ----
                                                                   (In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage loans:
 Permanent loans secured by 1-4 family
<S>                                               <C>       <C>       <C>        <C>       <C>     
    dwelling units(1) .....................       $12,373   $ 8,362   $  3,143   $2,316    $  3,007
  All other mortgage loans ................         1,167       566        229      101         804
                                                  -------   -------   --------   ------    --------
Total .....................................       $13,540   $ 8,928   $  3,372   $2,417    $  3,811
                                                  =======   =======   ========   ======    ========

Accruing loans which are contractually past
 due 90 days or more ......................       $    --   $    --   $     --   $   --    $     --
                                                  =======   =======   ========   ======    ========
Total non-accrual and accrual loans........       $13,540   $ 8,928   $  3,372   $2,417    $  3,811
                                                  =======   =======   ========   ======    ========
Real estate owned (net of allowance).......       $ 5,752   $ 3,574   $  3,608   $1,667    $  1,929
                                                  =======   =======   ========   ======    ========
Other non-performing assets ...............       $    --   $    --   $    850   $  494    $     --
                                                  =======   =======   ========   ======    ========
Total non-performing assets ...............       $19,292   $12,501   $  7,830   $4,578    $  5,740
                                                  =======   =======   ========   ======    ========
Total non-performing loans to
  net loans ...............................          9.86%     6.56%      2.37%    1.50%       1.70%
                                                  =======   =======   ========   ======    ========
Total non-performing loans to
  total assets ............................          6.53%     2.16%       .80%     .53%        .75%
                                                  =======   =======   ========   ======    ========
Total non-performing assets to total assets.         9.30%     3.02%      1.87%    1.00%       1.13%
                                                  =======   =======   ========   ======    ========

</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 had not been  recorded as  non-accrual  as of July 31, 1997,  totalled $7.3
million, or 1.4% of total assets. These loans are accruing but classified by the
Savings Bank as substandard.

      For  the  year  ended  July  31,  1997,   interest  income   amounting  to
approximately $256,000,  would have been recognized if interest on loans 90 days
or more in arrears had been recorded based on original contract terms.


                                        7

<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.  On the
basis of management's  review of its assets,  at July 31, 1997, the Savings Bank
had classified  $1.9 million as special  mention,  $11.6 million as substandard,
and $1.4 million as doubtful.

      The following is a summary of the Savings Bank's  potential  problem loans
with  balances  in excess of  $1,000,000  as of July 31,  1997.  There can be no
assurance  that  additional  reserves will not be required or additional  losses
will not be incurred on these loans.

      Ski Resort in Vernon,  New Jersey.  The  outstanding  loan balance of $2.4
million at July 31, 1997,  represents  Lakeview's 50 percent  participation in a
$5.0  million  loan.  The loan  consists of a March 1989  refinancing  of a $2.3
million  mortgage  (originally  made by Lakeview in July 1986) and an additional
$2.7 million of working capital.  The loan is secured by a first lien on the ski
resort as well as all equipment and rental  inventory  utilized in the operation
of the premises. Another unrelated lender has a second mortgage of $19.6 million
on the property.  The borrower  corporation and its parent corporation filed for
protection  under Chapter 11 of the Bankruptcy Code on April 2, 1996. As of July
31, 1997,  the loan was current as a result of payments  being  received from an
individual  guarantor of the loan. Both the borrower  corporation and its parent
corporation  have  experienced  operating losses in recent years. As of July 31,
1997,  the loan was  classified  substandard  and  continues  to be monitored by
management.


                                        8

<PAGE>




      Mortgage  Loans  Purchased from Capital  Resources.  At July 31, 1997, the
Savings Bank had  approximately  $3.6 million of residential  real estate second
mortgage loans that were acquired from Capital Resources, a now defunct mortgage
company. Of this total amount,  $910,000 was classified as non-accrual loans and
$2.7  million  was  classified  as  performing   loans.   However,   based  upon
management's  review,   $548,000  of  these  performing  loans  were  considered
potential  problem loans. At July 31, 1997, the Savings Bank allocated  $911,000
of the 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.

      The  Savings  Bank  records  loans  as  in-substance  foreclosures  if the
borrower  has  little or no equity in the  property  based  upon its  documented
current fair value,  the Savings  Bank can only expect  repayment of the loan to
come from the sale of the property and if the borrower has effectively abandoned
control of the  collateral or has continued to retain  control of the collateral
but because of the current financial status of the borrower,  it is doubtful the
borrower will be able to repay the loan in the foreseeable future.  There may be
significant  other  expenses  incurred  such as legal  and  other  extraordinary
servicing costs involved with in substance foreclosures.

      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
Association'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.


                                        9

<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,
                                                   ------------------------------------------------------------------
                                                     1993           1994         1995          1996          1997
                                                     ----           ----         ----          ----          ----
                                                                         (Dollars in Thousands)  

<S>                                                <C>           <C>           <C>           <C>           <C>      
Total loans outstanding, net of allowance ........ $ 137,309     $ 136,143     $ 142,123     $ 163,457     $ 224,564
                                                   =========     =========     =========     =========     =========
Average loans outstanding ........................ $ 142,935     $ 136,165     $ 139,442     $ 155,497     $ 192,822
                                                   =========     =========     =========     =========     =========
Allowance balance (at beginning of
  period) ........................................ $   2,493     $   2,638     $   1,714     $   2,535     $   3,073
Provision (credit):
  Residential ....................................     1,347         1,842         1,493           384           361
  Commercial real estate .........................       673           (77)         (145)          278           500
  Consumer .......................................        11           282            28             2            --
  Commercial .....................................        --            --            --            --           100
Charge-offs:
  Residential ....................................    (1,514)       (3,069)       (1,381)         (418)         (610)
  Commercial real estate .........................      (361)           --            --            --           (89)
  Consumer .......................................       (11)           (1)          (24)          (11)           --
  Commercial .....................................        --            --            --            --            --
Recoveries:
  Residential ....................................        --            99           850           303            76
  Commercial real estate .........................        --            --            --            --            --
  Consumer .......................................        --            --            --            --            --
  Commercial .....................................        --            --            --            --            --
                                                   ---------     ---------     ---------     ---------     ---------
Allowance balance (at end of period) ............. $   2,638     $   1,714     $   2,535     $   3,073     $   3,411
                                                   =========     =========     =========     =========     =========
Allowance for loan losses as a percent
  of total loans outstanding, net ................      1.92%         1.26%         1.78%         1.88%         1.52%
Net loans charged off as a percent of
  average loans outstanding ......................      1.32%         2.18%         0.40%          .09%          .32%

</TABLE>

<TABLE>
<CAPTION>

                                                                      At or for the year ended July 31,
                                                   ------------------------------------------------------------------
                                                        1993          1994          1995          1996          1997
                                                        ----          ----          ----          ----          ----
                                                                           (Dollars in Thousands)
Total real estate owned and in judgment, net of
<S>                                                <C>           <C>           <C>           <C>           <C>      
 allowance ....................................... $   5,752     $   3,574     $   3,608     $   1,667     $   1,929
                                                   =========     =========     =========     =========     =========
Allowance balance - beginning .................... $     709     $     823     $     188     $      --     $      --
Provision ........................................       847           713           502           654            44
Net charge-offs ..................................      (733)       (1,348)         (690)          654            44
                                                   ---------     ---------     ---------     ---------     ---------
Allowance balance - ending ....................... $     823     $     188     $     --      $      --     $      --
                                                   =========     =========     =========     =========     =========
</TABLE>

                                       10

<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,
                           ---------------------------------------------------------------------------------------------------------
                                 1993                   1994                  1995                  1996                  1997
                           -------------------   -------------------   -------------------  --------------------  ------------------
                                    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
                           -------  ----------  -------   ----------  --------  ----------  --------  ---------    ------ ----------
                                                                          (In Thousands)
<S>                         <C>        <C>      <C>          <C>      <C>          <C>      <C>         <C>       <C>       <C>  
Residential(1)............  $2,311     85.9%    $1,458       84.0%    $2,420       82.5%    $2,689      74.6%     $2,681    58.7%
Commercial real estate....     325      13.7       250        15.1       106        16.8       384      24.1         630    36.6
Consumer..................       2        .4         6          .9         9          .7        --        .9          --      .8
Commercial................      --        --        --          --        --          --        --        .4         100     3.9
                            ------     -----    ------       -----    ------       -----    ------     -----      ------   ----- 
                            $2,638     100.0%   $1,714       100.0%   $2,535       100.0%   $3,073     100.0%     $3,411   100.0%
                            ======     =====    ======       =====    ======       =====    ======     =====      ======   ===== 
</TABLE>


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

                                       11

<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, 1997, these 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   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 Bank
purchases   mortgage-backed   securities   guaranteed   by  GNMA  and  FNMA  and
participation certificates issued by the

                                       12

<PAGE>



FHLMC. GNMA mortgage-backed securities are certificates issued 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, 1997,  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, 1997  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) 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, 1997, the Savings Bank had CMOs with an aggregate
carrying amount  (including  discounts and premiums) of $40.6 million,  of which
$9.3 million,  or 22.9%,  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.


                                       13

<PAGE>



      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,  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, 1997, the market value of the
investment  securities  that are held to  maturity  was $144.3  million  and the
market value of investment  securities  available  for sale was $105.6  million,
with a cost basis of $83.2 million.

<TABLE>
<CAPTION>
                                                                         At July 31,
                                                   -------------------------------------------------------
                                                     1993       1994        1995        1996        1997
                                                    ------     ------      ------      ------      ------
                                                                       (In Thousands)
Investment Securities:
<S>                                                <C>        <C>        <C>          <C>        <C>     
U.S. agency securities available for sale(1)....   $     --   $     --   $     --     $ 58,045   $ 48,781
U.S. agency securities held to maturity ........         --     61,662     55,738       40,821     42,682
Mortgage-backed securities held to
 maturity ......................................     43,579    173,067    175,375      121,462    102,249
Equity securities available for sale(1)(2)......     12,898     11,269      8,567       12,601     41,846
Municipal bonds available for sale(1) ..........         --         --         --        3,083         --
GNMA mortgage-backed securities
  available for sale(1) ........................         --         --         --        4,684      4,192
FNMA/FHLMC CMO securities
  available for sale(1) ........................         --         --         --        2,034      1,489
Private Issue CMO securities
  available for sale(1) ........................         --         --         --        9,521      9,284
Equity securities restricted for sale(2) .......         --         --         --        7,806         --
Other Securities ...............................         16        975         --           --         --
                                                   --------   --------   --------     --------   --------
  Total Investment Securities ..................     56,493    246,973    239,680      260,057    250,523
Interest-bearing deposits ......................         99         --      5,632           --         --
Federal funds sold .............................         --        850         --           --         --
FHLB stock .....................................      1,511      1,856      2,587        2,587      3,550
                                                   --------   --------   --------     --------   --------
  Total Investments ............................   $ 58,103   $249,679   $247,899     $262,644   $254,073
                                                   ========   ========   ========     ========   ========
</TABLE>


---------------------
(1)   Carried at market value.
(2)   In 1996, equity securities restricted for sale 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.

                                       14

<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, 1997 by  contractural  maturity.  The expected
maturities  may  differ  from  contractural  maturities  due to the terms of the
securities which may have callable or prepayment obligations.

<TABLE>
<CAPTION>
                                                        After One Through   After Five Through
                                    One Year or Less        Five Years          Ten Years         Over Ten Years         Totals
                                   -------------------  ------------------  ------------------ ------------------- -----------------
                                   Carrying   Average   Carrying  Average   Carrying  Average  Carrying   Average  Carrying Average
                                     Value    Yield(4)    Value    Yield     Value    Yield      Value     Yield    Value   Yield(2)
                                   --------   --------  --------  --------  -------- --------  --------  ---------  ----------------
                                                                            (Dollars  Thousands)

U. S. agency securities available
<S>                                <C>        <C>       <C>         <C>    <C>         <C>    <C>           <C>    <C>         <C>  
 for sale .........................$     --     --%     $  2,980    5.34   $ 22,950    7.00%  $ 22,851      7.34%  $ 48,781    7.06%
U.S. agency securities held
 to maturity.......................      --     --            --      --      9,231    7.55     33,451      7.70     42,682    7.67
Mortgage-backed securities
 held to maturity .................      --     --        39,363    6.09     17,375    6.17     45,511      6.33    102,249    6.21
Equity securities available 
 for sale(1).......................  41,846    .62            --      --         --      --        --         --     41,846     .62
FHLB stock(1) .....................   3,550   6.25            --      --         --      --        --         --      3,550    6.25
GNMA mortgage-backed securities
  available for sale ..............      --     --            --      --         --      --      4,192      8.27      4,192    8.27
FNMA/FHLMC CMO's 
  available for sale ..............      --     --            --      --         --      --      1,489      4.64      1,489    4.64
Private issue CMO's
  available for sale ..............      --     --            --      --         --      --      9,284      6.37      9,284    6.37
                                   --------   ----      --------    ----   --------    ----   --------      ----   --------    ----
  Total ...........................$ 45,396   1.06%     $ 42,343    6.04%  $ 49,556    6.81%  $116,778      6.97   $254,073    5.73%
                                   ========   ====      ========    ====   ========    ====   ========      ====   ========    ==== 
</TABLE>


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







                                       15

<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, 1997.

      Deposit Portfolio.  Deposits in the Savings Bank as of July 31, 1997, 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
--------                   ----    -------------  --------------  -------    --------------  -------
                                                               (In Thousands)            (In Thousands)
<S>                        <C>         <C>         <C>            <C>             <C>       <C>    
NOW Accounts               None        1.7%        $   250        $ 52,926        14.2%     $47,464
Regular Savings and Club
Accounts                   None         2.4             10          75,967        20.5       74,396
Money Market Checking
Accounts                   None         2.4          2,500           7,871         2.1        8,032
Money Market Passbook
Accounts                   None         2.5          7,500          18,353         4.9       19,652

Certificates of Deposit:

Fixed Term, Fixed Rate     3-6 Months   4.7          2,500          38,250        10.3       37,527
Fixed Term, Fixed Rate     7-12 Months  5.2            500         104,560        28.2      100,153
Fixed Term, Fixed Rate     13-30        5.3            500          54,860        14.8       56,234
                           Months
Fixed Term, Fixed Rate     31-120       5.4            500          17,167         4.6       19,264
                           Months
Fixed Term, Variable Rate  18 Months    4.2            500             833          .2          918

Accrued interest on
   deposits                                                            679          .2           --
                                                                  --------       ------    --------
                           Total                                  $371,466      100.00%    $363,640
                                                                  ========      ======     ========
</TABLE>


                                       16

<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, 1997.

<TABLE>
<CAPTION>
                                                  Certificates
Maturity Period                                   of Deposits
---------------                                  --------------
                                                 (In Thousands)
<S>                                                 <C>     
Within three months............................     $  8,131
Three through six months.......................        6,873
Six through twelve months......................        7,031
Over twelve months.............................        1,956
                                                     -------
                                                     $23,991
                                                     =======
</TABLE>



      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 has in the past utilized 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,  1997,  the
Savings Bank had $39.0 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's  primary  method of  borrowing  since  August 1991 is
through  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 $57 million. The line of credit has
a term of one year  and  expired  in  August  1997.  This  program  has the same
collateral  requirement as the Regular  Advance  Program.  At July 31, 1997, the
Savings Bank had $20.3 million 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.



                                       17

<PAGE>



      The following tables set forth certain information regarding borrowings by
the Savings Bank.

<TABLE>
<CAPTION>
                                                             As of July 31,
                                          -----------------------------------------------------
                                            1993       1994      1995       1996       1997
                                            ----       ----      ----       ----       ----
Weighted average rate paid on:
<S>                                           <C>       <C>        <C>        <C>        <C>  
  FHLB advances/line of credit..........      3.13%     4.44%      5.81%      5.79%      5.53%
  Reverse Repurchase Agreements.........         --        --         --      6.33%      5.47%
  Line of credit........................         --        --         --         --      8.00%
  ESOP..................................         --     7.54%      8.96%      9.12%      6.16%
</TABLE>


<TABLE>
<CAPTION>
                                                     During the Year Ended July 31,
                                            ---------------------------------------------------
                                             1993       1994      1995       1996       1997
                                             ----       ----      ----       ----       ----
                                                             (In Thousands)
Maximum amount of borrowings outstanding 
  during the year:
<S>                                         <C>       <C>        <C>        <C>        <C>    
  FHLB advances/line of credit..........    $22,775   $51,909    $32,000    $50,460    $68,500

  Line of credit........................         --        --         --         --      2,000
  Reverse Repurchase Agreement..........         --        --         --     20,000     40,000
  ESOP..................................         --     1,100      1,021        859      2,354

Maximum  amount  of  short-term  
  borrowings outstanding  at any  month 
  end with respect to:
  FHLB advances/line of credit..........     18,500    36,000     30,500     49,450     67,750
  Reverse Repurchase Agreement..........         --        --         --     20,000     20,000
  ESOP..................................         --     1,100      1,021        859      2,354
  Line of credit........................         --        --         --         --      2,000

</TABLE>

Subsidiaries

Branchview, Inc. ("Branchview")

      Branchview,  a New Jersey  corporation,  owned by the  Company has a 6.02%
interest in IMC. IMC is a mortgage  banking company  involved in the origination
and securitization of equity mortgage products. See "-- Investment Portfolio".

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,  1997,  the  Company
recorded net  consolidated  income before taxes of $229,000.  LMD has opened two
additional offices during the year, one in South Jersey and one in Pennsylvania.
Additional expansion is planned for New York during the 1998 fiscal year.


                                       18

<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.  To date, no
revenues have been generated.

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.

Asset/Liability Management

      General. The difference between an institution's  interest-earning  assets
and interest-bearing  liabilities that mature or reprice within a specified time
period, based on certain estimates and assumptions, is called its "gap." At July
31, 1997,  the Savings Bank's  cumulative  one-year gap as a percentage of total
assets was a negative 6.5%,  making the Savings Bank  vulnerable to increases in
interest  rates.  A negative gap position in a period of rising  interest  rates
generally  results in a  decrease  in net  interest  income.  Management  of the
Savings Bank  believes  that  interest  rates may continue to rise and that this
could have a material impact on net interest  income.  When interest rates rise,
interest   income   increases  may  only  occur  through  the  addition  of  new
interest-earning  assets at current  rates  and/or,  to the extent that existing
assets can be repriced,  principally  through  prepayment  and repayment of loan
principal with reinvestment in higher rates. Because a higher volume of existing
liabilities  reprice  relative to the assets,  interest  expense  increases more
rapidly than interest  income.  The opposite  effect is realized on net interest
margin and  earnings  when  interest  rates fall.  Generally,  the rates paid on
existing   interest-earning  assets  decrease  more  slowly  than  the  rate  on
interest-bearing  liabilities due to the difference in shorter  repricing terms,
with the result that net interest margin and earnings improve.

      The  Savings  Bank,  like many other  thrift  institutions,  is subject to
interest  rate  risk  as  a  result  of  the   difference  in  the  maturity  on
interest-bearing  liabilities and interest-earning  assets and the volatility of
interest  rates.  Because  most  deposit  accounts  react more quickly to market
interest rate  movements  than do  traditional  mortgage  loans because of their
shorter  terms to maturity,  sharp  increases in interest  rates will  generally
adversely  affect the Savings Bank's  earnings.  Conversely,  this mismatch will
generally  benefit  the  Savings  Bank  during  periods of  declining  or stable
interest  rates.  To reduce  the  potential  volatility  of the  Savings  Bank's
earnings,  management  has  adopted a strategy  designed  to  improve  the match
between  asset  and  liability   maturities  and  rates,  while  maintaining  an
acceptable interest rate spread. Pursuant to this strategy, the Savings Bank has
been actively  originating for retention in its portfolio fixed-rate and balloon
mortgage  loans with terms to  maturity  of five,  seven and 15 years,  and one,
three  and  five  year  adjustable-rate   mortgage  loans.  At  July  31,  1997,
approximately  $114.0  million or 52.7% of the  Savings  Bank's  loan  portfolio
consisted  of  adjustable-rate  loans.  All 30 year  fixed-rate  mortgage  loans
originated by the Savings Bank are sold into the secondary mortgage market.

                                       19

<PAGE>



The Savings  Bank's  strategy is designed to maintain a mix of  adjustable-rate,
and  15-year  or less  fixed-rate  mortgage  loans  in its  loan  portfolio.  In
addition,   the  Savings  Bank  has  purchased   five  and  seven  year  balloon
mortgage-backed  securities and has increased its emphasis on making home equity
loans which have 15 year terms to maturity and provide for  adjustable  interest
rates.

      Gap  Analysis.  As rates on sources of funds have become  deregulated  and
subject to competitive pressures,  savings associations have become increasingly
concerned  with the  extent  to which  they  are  able to  match  maturities  of
interest-earning  assets and  interest-bearing  liabilities.  Such  matching  is
facilitated  by examining  the extent to which such assets and  liabilities  are
"interest  rate  sensitive"  and by  monitoring an  institution's  interest rate
sensitivity  "gap." An asset or  liability  is  considered  to be interest  rate
sensitive  if it will  mature or reprice  within a  specific  time  period.  The
interest rate sensitivity gap is defined as the difference between the amount of
interest-earning assets maturing or repricing within a specific time period over
interest-bearing  liabilities  maturing or repricing  within that time period. A
gap is considered  positive when the amount of interest  rate  sensitive  assets
exceeds the amount of interest rate sensitive  liabilities.  A gap is considered
negative  when the amount of interest  rate  sensitive  liabilities  exceeds the
amount of interest rate  sensitive  assets.  During a period of rising  interest
rates, a negative gap theoretically  would tend to adversely affect net interest
income.  Conversely,  during a period of falling  interest rates, a negative gap
position  would  theoretically  tend to result in an  increase  in net  interest
income.  Based upon the  assumptions  used in the following  table,  at July 31,
1997, the Company's  total  interest-bearing  liabilities  maturing or repricing
within one year exceed its total  interest-earning  assets maturing or repricing
in the same time period by $33.3  million,  representing  a one-year  cumulative
"gap," as a  percentage  of total  assets of  negative  6.5%.  As a result,  the
Company has limited vulnerability to increases in interest rates.

      The following table sets forth the amount of  interest-earning  assets and
interest-bearing liabilities outstanding at July 31, 1997, which are expected to
reprice or mature in each of the future time periods shown. The amount of assets
or  liabilities  shown which reprice or mature  during a particular  period were
determined in accordance  with the  contractual  terms of the asset or liability
and assumed  loan  prepayments  and  deposit  withdrawals.  The  Savings  Bank's
analysis of its interest-rate  sensitivity,  which is prepared  quarterly by the
Savings Bank,  incorporates  certain  assumptions  developed by the Savings Bank
based on its actual  experience  concerning the  amortization  and prepayment of
loans  and  other  interest-earning  assets  and  the  withdrawal  of  deposits.
Adjustable  rate loans,  and adjustable  rate  mortgage-backed  securities  will
reprice  at  contractual   repricing   intervals.   Fixed  rate  mortgage-backed
securities are assumed to have an annual  prepayment  rate of 8%. For fixed-rate
mortgage  loans with the  following  types of  security,  the  following  annual
prepayment rates are assumed:  10% for loans secured by one- to four family,  8%
for loans secured by multi-family  residential,  and 8% for  nonresidential  and
commercial property.  For other residential loans and all non-residential loans,
an annual  prepayment rate of 9% was assumed.  Decay Rates for NOW, money market
accounts,  and savings accounts were established at 4% to 30%, 12.5% to 25%, and
4% to 30%,  respectively.  These  assumptions  change  over time  based upon the
current economic outlook. Management believes that these assumptions approximate
actual  experience and considers them appropriate and reasonable.  However,  the
interest  rate   sensitivity  of  the  Savings  Bank's  assets  and  liabilities
illustrated  in the  following  table  would  vary  substantially  if  different
assumptions  were used or if actual  experience  differs from that  indicated by
such  assumptions.  No consideration  has been provided for the impact of future
commitments and loans in process.


                                       20

<PAGE>



      Certain  shortcomings are inherent in the methods of analysis presented in
the following table setting forth the maturing and repricing of interest-earning
assets and interest-bearing  liabilities.  For example,  although certain assets
and  liabilities may have similar  maturities or periods to repricing,  they may
react in  different  degrees to  changes in market  interest  rates.  Also,  the
interest  rates on certain  types of assets and  liabilities  may  fluctuate  in
advance of changes in market  interest rates while interest rates on other types
of assets may lag behind changes in market rates. Additionally,  certain assets,
such as adjustable-rate  loans, have features which restrict changes in interest
rates both on a short-term basis and over the life of the asset. Further, in the
event of a change in interest  rates,  prepayment  and early  withdrawal  levels
would likely deviate  significantly from those assumed in calculating the table.
Finally,  the  ability of many  borrowers  to make  scheduled  payments on their
adjustable-rate loans may decrease in the event of an interest rate increase. As
a result,  the actual  effect of  changing  interest  rates may differ from that
presented in the following table.

                                       21

<PAGE>


<TABLE>
<CAPTION>
                                                                                At July 31, 1997
                                       --------------------------------------------------------------------------------------------
                                                     Three                                            Over Ten
                                       Less Than     Months      Over One    Over Three  Over Five     Through     Over
                                         Three      Through      Through      Through     Through      Twenty     Twenty
                                         Months     One Year   Three Years   Five Years  Ten Years      Years     Years     Total
                                         ------     --------   -----------   ----------  ---------     -------    -----  ----------
                                                                                  (Dollars in Thousands)
Interest-earning assets:
<S>                                    <C>          <C>         <C>          <C>         <C>          <C>       <C>      <C>      
Mortgage loans ........................$   6,320    $  13,699   $ 26,470     $  56,843   $  36,483    $  9,522  $    26  $ 149,363
Home equity, second mortgage and
 consumer loans .......................   32,657        1,528      4,602        13,498      10,079       3,628       21     66,013
Commercial loans ......................    8,982           --         --            --          --          --       --      8,982
Mortgage-backed securities held-to
  maturities...........................   16,376       17,259     19,994        23,434      17,969       7,004      213    102,249
Investment securities(1) ..............   25,900       11,780      8,552            --          --          --       --     46,232
Investment securities available for 
  sale(2)..............................   57,266       32,160      5,929         1,049       2,813       5,279    1,096    105,592
                                       ---------    ---------   --------     ---------   ---------    --------  -------  ---------
                                       $ 147,501    $  76,426   $ 65,547     $  94,824   $  67,344    $ 25,433  $ 1,356  $ 478,431
Interest-bearing liabilities:
NOW and money market accounts .........$      --    $   4,588   $ 27,416     $  34,987   $  12,159    $     --  $    --  $  79,150
Savings and clubs accounts ............       --           --     22,790        37,983      15,193          --       --     75,966
Certificates of deposits ..............   59,138      129,894     24,042         2,463         134          --       --    215,671
FHLB of New York advances .............   39,000           --         --            --          --          --       --     39,000
FHLB of New York line of credit .......   20,250           --         --            --          --          --       --     20,250
Line of credit ........................    2,000           --         --            --          --          --       --      2,000
ESOP debt .............................    2,354           --         --            --          --          --       --      2,354
                                       ---------    ---------   --------     ---------   ---------    --------  -------  ---------
                                       $ 122,742    $ 134,482   $ 74,248     $  75,433   $  27,486    $   --    $    --  $ 434,391
Interest sensitivity gap ..............$  24,759    $ (58,056)  $ (8,701)    $  19,391   $  39,858    $ 25,433  $ 1,356  $  44,040

Cumulative interest sensitivity gap ...$  24,759    $ (33,297)  $(41,998)    $ (22,607)  $  17,251    $ 42,684  $44,040  $  44,040
Ratio of interest-earning assets to
  interest-bearing liabilities ........    120.2%      56.8 %     88.3 %       125.7 %     245.0  %         --%      --%     110.1%
Ratio of cumulative gap to total 
  assets ..............................      4.9%      (6.5)%     (8.3)%        (4.4)%       3.4  %        8.4%     8.7%       8.7%
</TABLE>


-------------------
(1)   Includes  investment  in  stock  of  Federal  Home  Loan  Bank of New York
      totaling $3.6 million.
(2)   Includes equity securities.

                                       22

<PAGE>



Net Interest Income

      The Savings Bank's earnings depend  primarily on its net interest  income.
Net interest income is affected by (i) the amount of interest-earning assets and
interest-bearing  liabilities, (ii) rates of interest earned on interest-earning
assets and rates paid on  interest-bearing  liabilities and (iii) the difference
("interest rate spread")  between rates of interest  earned on  interest-earning
assets and rates paid on  interest-bearing  liabilities.  When  interest-earning
assets approximate or exceed interest-bearing liabilities, any positive interest
rate spread will generate net interest income.


                                       23

<PAGE>



Average Balance Sheet

      The following table sets forth certain information relating to the Savings
Bank's  average  balance  sheet and  reflects  the  average  yield on assets and
average cost of  liabilities  for the periods  indicated and the average  yields
earned and rates paid.  Such yields and costs are derived by dividing  income or
expense by the average balance of assets or liabilities,  respectively,  for the
periods  presented.  Average  balances  are  derived  from  month-end  balances.
Management does not believe that the use of month-end  balances instead of daily
average  balances  has  caused  any  material  differences  in  the  information
presented.

<TABLE>
<CAPTION>
                                                                         Year Ended July 31,
                                   -------------------------------------------------------------------------------------------------
                                               1995                            1996                                1997
                                   ------------------------------  --------------------------------    -----------------------------
                                   Average              Average    Average                 Average     Average              Average
                                   Balance   Interest  Yield/Cost  Balance    Interest   Yield/Cost    Balance   Interest Yield/Cost
                                   --------  --------  ----------  -------    --------   ----------    -------   -------- ----------
Interest-earning assets:
<S>                                <C>        <C>           <C>    <C>          <C>            <C>    <C>        <C>          <C>  
 Loans receivable(1).............  $139,442   $12,509       8.97%  $155,497     $14,131        9.09%  $192,822   $16,841      8.73%
 Mortgage-backed securities......   171,867    11,163       6.50    149,373       9,605         6.43   112,464     7,319      6.51
 Investment securities(2)........    66,204     4,535       6.85     47,672       3,004         6.30    44,241     3,426      7.75
 Investment and mortgage-backed
   securities available for sale 
   (6)...........................     8,060       223       2.77     58,719       4,232         7.21    93,307     5,256      5.63
                                   --------   -------       ----   --------     -------        ----   --------   -------      ---- 
  Total interest-earning assets..  $385,573   $28,430       7.37%  $411,261     $30,972        7.53%  $442,834   $32,842      7.42%
                                    =======    ======      =====    =======      ======        ====    =======    ======      ====

Non-interest-earning assets......    31,983                          29,502                             30,058
                                   --------                        --------                           -------- 
  Total assets...................  $417,556                        $440,763                           $472,892
                                   ========                        ========                           ========

Interest-bearing liabilities:
 Deposit accounts................  $330,542   $11,944       3.61%  $340,771     $14,064        4.12%  $345,829   $13,987      4.04%
 Borrowings......................    26,902     1,595       5.93     42,162       2,485         5.89    59,810     3,331      5.57
                                   --------   -------       ----   --------     -------        ----   --------   -------      ---- 
   Total interest-bearing 
   liabilities...................  $357,444   $13,539       3.79%  $382,933     $16,549        4.32%  $405,639   $17,318      4.27%
                                   ========   =======       ====   ========     =======        ====   ========   =======      ==== 

Non-interest bearing liabilities.  $ 11,995                       $  12,212                          $  20,939
                                   --------                       ---------                          ---------
 Total liabilities...............  $369,439                       $ 395,145                           $426,578
                                   ========                       =========                           ========
Stockholders' equity.............  $ 48,117                       $  45,618                          $  46,314
                                   --------                       ---------                          ---------
 Total liabilities and 
  stockholders...................  $417,556                       $ 440,763                           $472,892
                                   ========                       =========                           ========
Net interest income..............             $14,891                           $14,423                          $15,524
                                              =======                           =======                          =======
Interest rate spread(3)..........                           3.58%                              3.21%                          3.15%
                                                            ====                               ====                           ====
Net yield on interest-earning 
  assets(4)......................                           3.86%                              3.51%                          3.51%
                                                            ====                               ====                           ====
Ratio of average interest-earning 
  assets to average interest-
  bearing liabilities............                           1.08X                              1.08X                          1.09X
                                                            ====                               ====                           ==== 

</TABLE>

---------------------------------
(1) Average balances include non-accrual loans.
(2) Includes  interest-bearing  deposits  in other  financial  institutions  and
    Federal Home Loan Bank of New York stock.
(3) Interest-rate  spread represents the difference between the average yield on
    interest-earning   assets   and  the   average   cost  of   interest-bearing
    liabilities.
(4) Net yield on  interest-earning  assets  represents net interest  income as a
    percentage of average interest-earning assets.
(5) Annualized (where  appropriate) for purposes of comparability  with year-end
    data.
(6) At market value.

                                       24

<PAGE>



Rate/Volume Analysis

      The table  below  sets  forth  certain  information  regarding  changes in
interest  income  and  interest  expense  of the  Savings  Bank for the  periods
indicated.  For each category of  interest-earning  assets and  interest-bearing
liabilities,  information is provided on changes  attributable to (i) changes in
volume (changes in average volume multiplied by old rate); (ii) changes in rates
(changes in rate multiplied by old average volume); (iii) changes in rate-volume
(changes in rate multiplied by the change in average volume).

<TABLE>
<CAPTION>
                                                            Year Ended July 31,
                              ----------------------------------------------------------------------------------------
                                        1995 vs. 1996                                1996 vs. 1997
                              ---------------------------------------     --------------------------------------------
                                      Increase (Decrease)                          Increase (Decrease)
                                             Due to                                       Due to
                              ---------------------------------------     --------------------------------------------
                                                    Rate/                                         Rate/
                               Volume      Rate     Volume       Net       Volume      Rate      Volume        Net
                              --------   --------  ---------   -------    ---------  ---------  ---------  -----------
                                                            (In Thousands)
Interest income:
<S>                           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>    
 Loans receivable .........   $ 1,440    $   163    $    19    $ 1,622    $ 3,392    $  (550)   $  (132)   $ 2,710
 Mortgage-backed securities    (1,461)      (112)        15     (1,558)    (2,373)       116        (29)    (2,286)
 Investment securities ....    (1,269)      (363)       101     (1,531)      (216)       687        (49)       422
Investment and mortgage-
   backed securities
   available for sa1e .....     1,402        358      2,249      4,009      2,493       (925)      (544)     1,024
                              -------    -------    -------    -------    -------    -------    -------    -------
  Total interest-earning
    assets ................   $   112    $    46    $ 2,384    $ 2,542    $ 3,296    $  (672)   $  (754)   $ 1,870
                              =======    =======    =======    =======    =======    =======    =======    =======

Interest expense:
 Savings accounts .........   $   370    $ 1,698    $    52    $ 2,120    $   209    $  (282)   $    (4)   $   (77)
 Borrowings ...............       904         (9)        (5)       890      1,040       (137)       (57)       846
                              -------    -------    -------    -------    -------    -------    -------    -------
   Total interest-bearing
    liabilities ...........   $ 1,274    $ 1,689    $    47    $ 3,010    $ 1,249    $  (419)   $   (61)   $   769
                              =======    =======    =======    =======    =======    =======    =======    =======

Net change in interest
  income ..................   $(1,162)   $(1,643)   $ 2,337    $  (468)   $ 2,047    $  (253)   $  (693)   $ 1,101
                              =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>



Employees

      At July 31,  1997,  the Savings  Bank had 69  full-time  and 36  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 Holding 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 Holding Company is a unitary savings and loan holding company
subject to  regulatory  oversight  by the OTS. As such,  the Holding  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 Holding 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

                                       25

<PAGE>



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 Holding Company generally is not subject to activity  restrictions,
provided the Association  satisfies the Qualified Thrift Lender ("QTL") test. If
the  Holding  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."

Regulation of the Savings Bank

      Insurance of Deposit  Accounts.  The Savings Bank's  deposit  accounts 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.   The  FDIC  may  also  prohibit  an  insured
depository institution from engaging in any activity the FDIC determines to pose
a serious threat to the SAIF.

      The FDIC charges an annual  assessment for the insurance of deposits based
on the risk a  particular  institution  poses  to its  deposit  insurance  fund,
depending upon the institution's risk  classification.  This risk classification
is based on an institution's  capital group and supervisory subgroup assignment.
In addition,  the FDIC is authorized to increase  deposit  insurance  rates on a
semi-annual  basis if it  determines  that such action is necessary to cause the
balance  in the  SAIF  to  reach  the  designated  reserve  ratio  of  1.25%  of
SAIF-insured  deposits  within a reasonable  period of time. The FDIC may impose
special  assessments  on SAIF members to repay  amounts  borrowed  from the U.S.
Treasury  or for any  other  reason  deemed  necessary  by the  FDIC.  Prior  to
September 30, 1996, savings  associations paid within a range of .23% to .31% of
domestic  deposits and the SAIF was  substantially  underfunded.  By comparison,
prior to  September  30,  1996,  members  of the Bank  Insurance  Fund  ("BIF"),
predominantly  commercial banks,  were required to pay  substantially  lower, or
virtually no, federal deposit insurance premiums.

      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.  The  Savings  Bank
recorded a $2.2 million  pre-tax  expense for this  assessment  at September 30,
1996. Beginning January 1, 1997, deposit insurance  assessments for SAIF members
were reduced to  approximately  .064% of deposits on an annual basis;  this rate
may continue through the end of 1999.  During this same period,  BIF members are
expected to be assessed approximately .013% of deposits. Thereafter, assessments
for BIF and SAIF members  should be the same and the SAIF and BIF may be merged.
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% from rates in
effect prior to September 30, 1996.


                                       26

<PAGE>



      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, 1997.

      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.

      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.

                                       27

<PAGE>




      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.

      New Jersey  banking  regulations  require  that a  depository  institution
maintain qualifying capital of at least 8% of its risk weighted assets. At least
4% 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, 1997.

      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, 1997,
the Savings Bank was in compliance with its QTL requirement.

      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, 1997,  the Savings Bank
met these reserve requirements.

      State-chartered  savings  banks have  authority to borrow from the Federal
Reserve Bank "discount  window," but Federal Reserve policy  generally  requires
savings banks to exhaust all reasonable  alternative  sources  before  borrowing
from the  Federal  Reserve  System.  The  Savings  Bank had no  discount  window
borrowings at July 31, 1997.


                                       28

<PAGE>



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

      The  Company  and the Savings  Bank  operate  from their main office and 7
branch offices.  The Savings Bank leases three branch offices.  The remainder of
the branch offices are owned by the Savings Bank.

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,  1997 (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 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.


                                       29

<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 Director,  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, 1997 and 1996 and the related
                  consolidated  statements of income,  changes in  stockholders'
                  equity  and cash flows for each of the years in the three year
                  period ended July 31, 1997,  together  with the related  notes
                  and the independent auditors' report of KPMG Peat Marwick LLP,
                  independent certified public accountants.

            (2)   Schedules omitted as they are not applicable.

                                       30

<PAGE>



      (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***
      11    Statement re Computation of Earnings Per Share
      13    Portions of the 1997 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 September  10, 1997,  the Company  filed a Form 8-K reporting the
            announcement  of  the  definitive  merger  agreement  with  Westwood
            Financial Corporation.



                                       31

<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 28, 1997.
                                                                
                                          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 28, 1997.
                                      

By: /s/ Kevin J. Coogan                   By: /s/ Leo J. Dean
   -------------------------------------     -----------------------------------
      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: /s/ Vincent A. Scola                  By: /s/ Anthony G. Gallo
   -------------------------------------     ----------------------------------
      Vincent A. Scola                          Anthony G. Gallo
      Director                                  Vice President and Chief
                                                  Financial Officer