U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              ---------------------

                                   FORM 10-QSB

(Mark One)

     X    Quarterly  report  pursuant to Section 13 or 15 (d) of the  Securities
   ----   Exchange Act of 1934

          For the quarterly period ended            March 31, 2000
                                                    ------------------

   ----   Transition report under Section 13 or 15 (d) of the Exchange Act
          For the transition period from               to
                                        ---------------  -----------------


          Commission file number                     000-26587
                                                     ---------


                         COMMUNITY BANCORP OF NEW JERSEY
             (Exact name of registrant as specified in its charter)


          New Jersey                                       22-3495579
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                3535 Highway 9 North, Freehold, New Jersey 07728
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (732) 863-9000
                                 --------------
               (Issuer's telephone number, including area code)

                                 Not Applicable
                                 --------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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
                             -----            -----


   Common Stock, No Par Value -1,918,957 shares outstanding as of May 11, 2000
 -------------------------------------------------------------------------------
<PAGE>

                                      INDEX

                         COMMUNITY BANCORP OF NEW JERSEY


PART I.  FINANCIAL INFORMATION                                          PAGE NO.

Item 1.  Financial Statements

         Consolidated Condensed Balance Sheets at March 31, 2000
         (Unaudited) and December 31, 1999                                  3

         Consolidated Condensed Statements of Income for the three
         months ended March 31, 2000 and 1999 (Unaudited)                   4

         Consolidated Condensed Statement of Changes in Stockholders'       5
         Equity at March 31, 2000 (Unaudited)

         Consolidated Condensed Statements of Cash Flows for the three
         months ended March 31, 2000 and 1999 (Unaudited)                   6

         Notes to Consolidated Condensed Financial Statements
         (Unaudited)                                                      7 - 10

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       11 - 21


PART II. OTHER INFORMATION

Item 1.           Legal Proceedings                                         22

Item 2.           Changes in Securities and Use of Proceeds                 22

Item 3.           Defaults Upon Senior Securities                           22

Item 4.           Submission of Matters to a Vote of Security Holders    22 - 23

Item 5.           Other Information                                         23

Item 6.           Exhibits and Reports on Form 8-K
                           a.  Exhibits - None                              23
                           b.  Reports on Form 8-K                          23

SIGNATURES                                                                  24

                                       2
<PAGE>
<TABLE>
<CAPTION>
                        COMMUNITY BANCORP OF NEW JERSEY
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                                                                March 31,
                                                                                  2000                  December 31,
                                                                               (Unaudited)                  1999
                                                                               -----------             -------------
                                                                                       (Dollars in thousands)
<S>                                                                            <C>                     <C>
ASSETS
Cash and cash equivalents:
     Cash and due from banks..........................................         $   5,297                $   4,991
     Federal funds sold...............................................            14,845                   20,275
                                                                             -----------             ------------
               Total cash and cash equivalents                                    20,142                   25,266

Investment securities available-for-sale..............................            17,376                    9,424
Investment securities held-to-maturity (fair value of $11,104
     at March 31, 2000 and $11,093 at December 31, 1999)..............            11,246                   11,245

Loans receivable......................................................            86,141                   82,632
Allowance for loan loss...............................................            (1,295)                  (1,237)
                                                                             -----------             ------------
               Net loans receivable                                               84,846                   81,395
                                                                             -----------             ------------
Premises and equipment, net...........................................             4,690                    4,631
Accrued interest receivable...........................................               808                      643
Other assets..........................................................               522                      207
                                                                             -----------             ------------
               Total Assets                                                    $ 139,630                $ 132,811
                                                                               =========                =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
     Non-interest bearing demand......................................         $.24,998                  $ 22,963
     Interest bearing - NOW...........................................           17,528                    16,490
     Savings and money market.........................................           45,681                    43,492
     Certificates of deposit, under $100,000..........................           19,796                    19,574
     Certificates of deposit, $100,000 and over.......................           12,336                    11,509
                                                                             -----------             ------------
               Total deposits                                                   120,339                   114,028
                                                                             -----------             ------------

Accrued interest payable..............................................              584                       292
Other liabilities.....................................................              347                       265
                                                                             -----------             ------------
               Total liabilities                                                121,270                   114,585
                                                                             -----------             ------------
Stockholders' equity
     Commonstock -  authorized  5,000,000  shares of no par  value;  issued  and
           outstanding, net of treasury shares, 1,827,766 shares at March 31,
           2000 and December 31, 1999.................................           20,523                    20,523
     Treasury stock, at cost - 22,357 shares..........................             (363)                     (363)
     Accumulated deficit..............................................           (1,777)                   (1,923)
     Accumulated other comprehensive income (loss)....................              (23)                      (11)
                                                                            -----------              ------------
               Total stockholders' equity                                        18,360                    18,226
                                                                            -----------              ------------
               Total Liabilities and Stockholder's Equity                     $ 139,630                 $ 132,811
                                                                              =========                 =========
</TABLE>
         See accompanying notes to consolidated condensed financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>
                         COMMUNITY BANCORP OF NEW JERSEY
           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)


                                                                                        Three Months Ended
                                                                                              March 31,
                                                                          ---------------------------------------------
                                                                                  2000                       1999
                                                                          (Dollars in thousands, except per share data)
<S>                                                                             <C>                        <C>
INTEREST INCOME
     Loans, including Fees............................................          $ 1,722                    $1,051
     Federal funds sold...............................................              170                       138
     Investment securities - taxable..................................              412                       193
                                                                            -----------              ------------
                Total interest income                                             2,304                     1,382
                                                                            -----------              ------------
INTEREST EXPENSE
     Interest bearing - NOW..........................................                62                        51
     Savings and money market.........................................              452                       331
     Certificates of deposit..........................................              453                        73
                                                                            -----------              ------------
                Total interest expense                                              967                       455
                                                                            -----------              ------------
                Net interest income                                               1,337                       927
Provision for loan losses.............................................               58                       111
                                                                            -----------              ------------
                Net interest income after provision
                     for loan losses                                              1,279                       816
                                                                            -----------              ------------
Non-interest income:
     Service fees on deposit accounts.................................               86                        47
     Other fees and commissions.......................................               66                        11
                                                                            -----------              ------------
                Total non-interest income                                           152                        58
                                                                            -----------              ------------
Non-interest expense:
     Salaries and wages...............................................              520                       311
     Employee benefits................................................               86                        58
     Occupancy expense................................................              104                        47
     Depreciation - occupancy, furniture & equipment..................              116                        76
     Other............................................................              459                       317
                                                                            -----------              ------------
                Total non-interest expense                                        1,285                       809
                                                                            -----------              ------------
                Net Income (loss)                                                 $ 146                      $ 65
                                                                            ===========              ============

Per Common Share:
     Net income (loss) - basic........................................         $   0.08                  $   0.03
     Net income (loss) - diluted......................................         $   0.08                  $   0.03

Weighted average shares outstanding (in thousands):
     Basic............................................................            1,919                     1,935
     Diluted..........................................................            1,928                     1,967
</TABLE>

     See accompanying notes to consolidated condensed financial statements.

                                       4

<PAGE>
<TABLE>
<CAPTION>

                         COMMUNITY BANCORP OF NEW JERSEY
      CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                                                   Accumulated
                                                                                      Other
                                       Common       Treasury     Accumulated      Comprehensive    Comprehensive    Stockholders'
                                        Stock        Stock         Deficit         Income (Loss)      Income           Equity
                                       -------      -------       ---------      ---------------   -------------    -------------
                                                                        (Dollars in Thousands)
<S>                                     <C>         <C>          <C>                 <C>             <C>               <C>
Balance December 31, 1999............   $20,523     $  (363)     $  (1,923)          $     (11)                        $18,226

Comprehensive Income:
    Net Income.......................         -           -            146                   -       $     146             146
    Increase in unrealized holding
    Losses on securities, net........         -           -              -                 (12)            (12)            (12)
                                                                                                    ----------      ----------
Total Comprehensive Income...........         -           -              -                   -       $     134
                                       --------     --------     ---------           ---------      ===========

Balance, March 32, 2000 (Unaudited)..   $20,523     $  (363)     $  (1,777)          $     (23)                        $18,360
               === ====                 =======     =======      =========           =========                         =======
</TABLE>


     See accompanying notes to consolidated condensed financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>
                         COMMUNITY BANCORP OF NEW JERSEY
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
                                                                               Three Months Ended March 31,
                                                                         -----------------------------------------
                                                                              2000                     1999
                                                                         ----------------         ----------------
                                                                                  (Dollars in thousands)
<S>                                                                        <C>              <C>
Cash flows from operating activities:
        Net income                                                         $    146         $     65
        Adjustments to reconcile net income to net cash
            provided by (used in) operating activities:
                 Depreciation and amortization                                  116               76
                 Provision for loan losses                                       58              111
                 Accretion of investment discount                               (30)              --
                 Amortization of investment premium                               3               --
                 Increase in accrued interest receivable                       (165)            (216)
                 Increase in other assets                                      (306)             (72)
                 Increase in accrued interest payable                           292                1
                 Increase in other liabilities                                   82              106
                                                                           --------         --------

                       Net cash provided by operating activities                196               71
                                                                           --------         --------

Cash flows from investing activities:
        Purchases of investment securities held-to-maturity                      --           (9,000)
        Purchases of investment securities available-for-sale                (8,447)
        Proceeds from maturities and calls of investment securities             500              500
        Net increase in loans made to customers                              (3,509)          (9,076)
        Purchases of premises and equipment                                    (175)            (940)
                                                                           --------         --------

                       Net cash used in investing activities                (11,631)         (18,516)
                                                                           --------         --------

Cash flows from financing activities:
        Net increase in demand deposits and savings accounts                  5,262            6,670
        Net increase in certificates of deposit                               1,049              844
        Net proceeds from common stock issued                                    --            1,014
                                                                           --------         --------

                       Net cash provided by financing activities              6,311            8,528
                                                                           --------         --------

Net (decrease) increase in cash and cash equivalents                         (5,124)          (9,917)
Cash and cash equivalents as of beginning of year                            25,266           28,566
                                                                           --------         --------

Cash and cash equivalents as of end of period                              $ 20,142         $ 18,649
                                                                           --------         ========


Supplemental disclosures of cash flow information:
        Cash paid during the period for interest                           $    675         $    454
        Cash paid during the period for income taxes                       $     34         $     --
</TABLE>


See accompanying notes to consolidated condensed financial statements.

                                       6

<PAGE>

COMMUNITY BANCORP OF NEW JERSEY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

NOTE A - BASIS OF PRESENTATION

The  consolidated  condensed  financial  statements  included  herein  have been
prepared  without audit pursuant to the rules and  regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations. The preparation of financial statements requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosures  of contingent  assets and  liabilities  as of the
financial  statement  date and the  reported  amounts of revenues  and  expenses
during  the  reporting  period.   Since  managements  judgment  involves  making
estimates  concerning the likelihood of future events,  the actual results could
differ from those  estimates  which will have a positive  or negative  effect on
future  period  results.  The  accompanying   consolidated  condensed  financial
statements  reflect all  adjustments  which are,  in the opinion of  management,
necessary to a fair statement of the results for the interim periods  presented.
Such adjustments are of a normal recurring nature. These consolidated  condensed
financial  statements  should be read in conjunction with the audited  financial
statements and the notes thereto as of and for the year ended December 31, 1999.
The  results  for the three  months  ended  March 31,  2000 are not  necessarily
indicative  of the results that may be expected for the year ended  December 31,
2000.

The  consolidated  condensed  financial  statements  include the accounts of the
Company and its wholly owned subsidiary,  the Community Bank of New Jersey.  All
significant inter-company accounts and transactions have been eliminated.

NOTE B - INVESTMENT SECURITIES

The Company classifies its investments in accordance with Statement of Financial
Accounting  Standards No. 115,  Accounting  for Certain  Investments in Debt and
Equity Securities, (SFAS 115). SFAS 115 requires that an enterprise classify its
investments in debt securities as either securities  held-to-maturity  (carrying
amount equals amortized cost),  securities  available-for-sale  (carrying amount
equals estimated fair value;  unrealized gains and losses recorded in a separate
component of stockholders  equity, net of taxes) or trading securities (carrying
amount equals estimated fair value;  unrealized gains and losses included in the
determination of net income).

Any  security  which  is a U.S.  Government  security,  U.S.  Government  agency
security,  an agency  mortgage-backed  security,  or an obligation of a state or
political subdivision may be placed in the held-to-maturity category if acquired
with the intent and ability to maintain  the  security  in the  portfolio  until
maturity.  Premiums and discounts on these  securities are amortized or accreted
on a basis that  approximates  the effective  yield method.  Realized  gains and
losses  from the  sale of  securities  available-for-sale  are  determined  on a
specific identification cost basis.

Management  determines the appropriate  classification of securities at the time
of  purchase.  The  Companys  stockholders  equity  will be affected by changing
interest  rates  which  affect  the  market  price  of the  Companys  securities
available-for-sale.  At March 31, 2000 and  December  31,  1999,  no  investment
securities were classified as trading securities.


                                       7
<PAGE>

COMMUNITY BANCORP OF NEW JERSEY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Continued

The following  tables present the book values,  fair values and gross unrealized
gains and losses of the Company's  investment  securities  portfolio as of March
31, 2000 and December 31, 1999 (Dollars in thousands).
<TABLE>
<CAPTION>
                                                                            March 31, 2000 (Unaudited)
                                                          ---------------------------------------------------------------
                                                                              Gross           Gross
                                                           Amortized        Unrealized      Unrealized          Fair
                                                              Cost            Gains           Losses           Value
                                                          -------------    -------------   -------------    -------------
<S>                                                           <C>                   <C>           <C>            <C>
Securities available-for-sale (1):
        U.S. Government and agency securities........         $ 17,390              $ 1           $ (40)         $17,351
        Other securities.............................               25                -               -               25
                                                          -------------    -------------   -------------    -------------
                                                              $ 17,415              $ 1           $ (40)         $17,376
                                                          =============    =============   =============    =============
Securities held-to-maturity:
        U.S. Government and agency securities........         $ 10,746              $ -          $ (142)         $10,604
        Other securities.............................              500                -               -              500
                                                          -------------    -------------   -------------    -------------
                                                              $ 11,246              $ -          $ (142)         $11,104
                                                          =============    =============   =============    =============
</TABLE>


        (1)   Net unrealized losses of $23 thousand, net of a tax benefit of $16
              thousand,  were reported as a decrease to stockholders'  equity at
              March 31, 2000.
<TABLE>
<CAPTION>
                                                                                December 31, 1999
                                                          ---------------------------------------------------------------
                                                                              Gross           Gross
                                                           Amortized        Unrealized      Unrealized          Fair
                                                              Cost            Gains           Losses           Value
                                                          -------------    -------------   -------------    -------------
<S>                                                           <C>                   <C>           <C>            <C>
Securities available-for-sale (2):
        U.S. Government and agency securities........          $ 9,418              $ -           $ (19)         $ 9,399
        Other securities.............................               25                -               -               25
                                                          -------------    -------------   -------------    -------------
                                                               $ 9,443              $ -           $ (19)         $ 9,424
                                                          =============    =============   =============    =============
Securities held-to-maturity:
        U.S. Government and agency securities........         $ 10,745              $ -          $ (152)         $10,593
        Other securities.............................              500                -               -              500
                                                          -------------    -------------   -------------    -------------
                                                              $ 11,245              $ -          $ (152)         $11,093
                                                          =============    =============   =============    =============
</TABLE>
        (2)   Net unrealized losses of $11 thousand,  net of a tax benefit of $8
              thousand,  were reported as a decrease to stockholders'  equity at
              December 31, 1999.
<PAGE>

The following table sets forth as of March 31, 2000 the maturity distribution of
the Company's investment portfolio (Dollars in thousands).
<TABLE>
<CAPTION>

                                                               Available-for-sale                Held-to-maturity
                                                          ------------------------------   ------------------------------
                                                           Amortized           Fair         Amortized           Fair
                                                              Cost            Value            Cost            Value
                                                          -------------    -------------   -------------    -------------
<S>                                                           <C>                   <C>           <C>            <C>
        Due in one year or less......................         $ 13,527          $13,504           $ 750            $ 750
        Due after one year through five years........            3,863            3,847           9,996            9,854
        Due after five years through ten years.......                -                -             500              500
        Due after ten years..........................               25               25               -                -
                                                          -------------    -------------   -------------    -------------
                                                              $ 17,415          $17,376         $11,246          $11,104
                                                          =============    =============   =============    =============
</TABLE>

        Securities with a carrying value of $1,300,000 at March 31, 2000 and $1,
        300,000 at December  31,  1999 were  pledged to secure  public  funds on
        deposit and for other purposes as required or permitted by law.

                                       8

<PAGE>
COMMUNITY BANCORP OF NEW JERSEY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Continued

NOTE C - LOANS RECEIVABLE and ALLOWANCE FOR LOAN LOSSES

The following table  summarizes the components of the loan portfolio as of March
31, 2000 and December 31, 1999 (Dollars in thousands).
<TABLE>
<CAPTION>
                                                                                Loan Portfolio By Type of Loan
                                                       --------------------------------------------------------------------
                                                              March 31, 2000
                                                               (Unaudited)                         December 31, 1999
                                                       -----------------------------         ------------------------------
                                                          Amount         Percent                Amount          Percent
                                                       -------------   -------------         --------------   -------------
<S>                                                        <C>                <C>                  <C>               <C>
Commercial and industrial loans......................      $  14,534          16.87%               $ 15,137          18.32%
Commercial mortgage loans............................         40,999          47.60%                 38,814          46.97%
Residential mortgages................................          7,249           8.42%                  7,254           8.78%
Construction loans...................................          9,645          11.20%                  8,895          10.76%
Consumer loans.......................................         13,552          15.73%                 12,476          15.10%
Other loans..........................................            162           0.19%                     56           0.07%
                                                       -------------   -------------         --------------   -------------

                                                           $ 86,141         100.00%               $ 82,632         100.00%
                                                       =============   =============         ==============   =============
</TABLE>

The following table represents the activity in the allowance for loan losses for
the  three  month  periods  ended  March  31,  2000 and 1999 and the year  ended
December 31, 1999 (Dollars in thousands).
<TABLE>
<CAPTION>
                                                                    Allowance For Loan Losses
                                                       ----------------------------------------------------
                                                            Three Months Ended
                                                                March 31,                     Year Ended
                                                               (Unaudited)                   December 31,
                                                       -----------------------------
                                                           2000            1999                  1999
                                                       -------------   -------------        --------------
<S>                                                         <C>               <C>                    <C>
Balance - beginning of period........................       $ 1,237           $ 914                  $ 914
Charge-offs..........................................            -               -                     (2)
Recoveries...........................................            -               -                      -
                                                       -------------   -------------         --------------
Net (charge-offs) recoveries.........................            -               -                     (2)
Provision for loan losses............................           58             111                    325
                                                       -------------   -------------         --------------

Balance - end of period..............................       $ 1,295         $ 1,025                $ 1,237
                                                       =============   =============         ==============
Balance of Allowance at period-end as a %
    of loans at period-end...........................         1.50%           1.87%                  1.50%
                                                       =============   =============         ==============
</TABLE>

NOTE D - EARNINGS PER SHARE

Earnings  per common  share are  computed by dividing net income by the weighted
average  number of common shares and common share  equivalents  (when  dilutive)

<PAGE>

outstanding  during  each  period  after  giving  retroactive  effect  to  stock
dividends  declared.  Basic EPS  excludes  dilution  and is computed by dividing
income available to common shareholders by the weighted-average number of common
shares  outstanding for the period.  Diluted EPS reflects the potential dilution
that could occur if  securities  or other  contracts  to issue common stock were
exercised or  converted  into common stock or resulted in the issuance of common
stock  that  then  shared in the  earnings  of the  Company.  The  common  share
equivalents  of options in the  computation  of  diluted  earnings  per share is
computed  utilizing the Treasury Stock method. For purposes of this computation,
the  average  market  price of common  stock  during  each  three-month  quarter
included in the period being reported upon, is used, when dilutive.


                                       9
<PAGE>

COMMUNITY BANCORP OF NEW JERSEY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Continued


NOTE E - RECLASSIFICATIONS

Certain  amounts in the  financial  statements  presented for prior periods have
been reclassified to conform with the year 2000 presentation.


NOTE F - SUBSEQUENT EVENT

On April 5, 2000 the Company announced that its Board of Directors approved a 5%
stock  dividend  payable May 1, 2000 to  shareholders  of record as of April 17,
2000.  Weighted  average  shares  outstanding  and  earnings per share have been
retroactively adjusted to reflect the stock dividend.


NOTE G - RECENTLY ISSUED ACCOUNTING STANDARDS

Accounting for Derivative Instruments and Hedging Activity
In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments  and Hedging  Activity".  SFAS No. 133  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments imbedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure those instruments at fair value. If
cer- tain conditions are met, a derivative may be  specifically  designated as a
hedge.  The accounting for changes in the fair value of a derivative  (gains and
losses) depends on the intended use of the derivative and resulting designation.
SFAS No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 1999.  Earlier  application is permitted only as of the beginning
of any fiscal quarter. Subsequent to SFAS No. 133, the FASB issued SFAS No. 137,
which  amended the effective  date of SFAS No. 133 to be all fiscal  quarters of
all fiscal years  beginning after June 15, 2000. The adoption of SFAS No. 133 is
not  anticipated  to have a  material  impact on the  Company's  consol-  idated
financial position or results of operations.

                                       10

<PAGE>

COMMUNITY BANCORP OF NEW JERSEY

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

This financial review presents management's discussion and analysis of financial
condition and results of operations.  It should be read in conjunction  with the
consolidated  condensed financial statements and the accompanying notes included
elsewhere herein.

FINANCIAL CONDITION

Total assets at March 31, 2000  increased by $6.8  million,  or 5.1%,  to $139.6
million  compared to $132.8 million at December 31, 1999.  Total assets averaged
$131.6  million in the first three  months of 2000, a $32.7  million,  or 33.1%,
increase  from the 1999  full  year  average  of $98.9  million.  Average  loans
increased $20.0 million, or 31.5%, to $83.4 million in the first three months of
2000,  from the 1999 full year  average  of $63.4  million.  Average  investment
securities  increased by $14.7 million,  or 118.5%,  to $27.1  million;  average
Federal funds sold decreased by $3.4 million,  or 21.9%,  to $12.1 million;  the
average  of all other  assets  increased  by $1.5  million,  or 17.2%,  to $10.2
million; and the loan loss reserve average increased $158 thousand, or 14.4%, to
$1.3  million  during the first three  months of 2000  compared to the full year
1999 averages.

These increases in average assets were funded  primarily by a $32.3 million,  or
40.5%,  increase in average deposits,  as the first three months of 2000 average
deposits  increased  to $112.1  million from the full year 1999 average of $79.8
million.


Lending Activity

Total  loans at March 31,  2000 were  $86.1  million,  a 4.2%,  or $3.5  million
increase from December 31, 1999. The loan portfolio  consists primarily of loans
secured by real estate,  and, to a lesser extent,  commercial,  construction and
consumer  loans.  Changes in the  composition of the loan  portfolio  during the
comparative  periods included  increases of $2.2 million in commercial  mortgage
loans,  $0.7 million in construction  loans,  $1.1 million in consumer loans and
$0.1  million  in other  loans.  These  increases  were  partially  off-set by a
reduction of $0.6 million in commercial and industrial loans.

The 4.2%  increase in loans at March 31, 2000  compared to December  31, 1999 is
partially  attributable to greater penetration of the Company's  marketplace and
an improvement in the general  economic  environment in New Jersey.  The Company
opened its second office in downtown  Freehold,  New Jersey,  in September 1997,
its third office in Howell,  New Jersey,  in November 1998 and its fourth office
in Matawan,  New Jersey,  in February 1999. In addition,  the Company opened its
fifth  branch in  Manalapan,  New  Jersey,  during  November,  1999.  Management
believes that the maturation of these branch  locations will continue to provide
the Company with lending opportunities as well as funding sources for the loans.

The  Company's  loans are  primarily to businesses  and  individuals  located in
Monmouth,  Middlesex,  and Ocean Counties, New Jersey.  Management believes that
its strategy of customer  service,  competitive rate  structures,  and selective
marketing  will  continue to enable the  Company to gain  market  entry to local

                                       11
<PAGE>

loans.  Bank mergers have also  contributed to the Company's  efforts to attract
borrowers. Management intends to continue to pursue quality loans in all lending
categories within the Company's market area.


Allowance for Loan Losses

The  allowance  for loan losses was $1.3  million,  or 1.50% of total loans,  at
March 31, 2000  compared to $1.2 million,  or 1.50% of total loans,  at December
31,  1999.  At March 31, 2000 the Company  had no  non-performing  loans and $12
thousand  in loans past due and still  accruing  compared  to no  non-performing
loans and no past due loans at December 31, 1999.

Management  attempts to maintain an  allowance  for loan losses at a  sufficient
level to provide for  potential  losses in the loan  portfolio.  Loan losses are
charged  directly to the allowance  when they occur and any recovery is credited
to the  allowance.  Risks within the loan portfolio are analyzed on a continuous
basis by our  officers,  by  outside,  independent  loan  review  auditors,  our
Directors  Loan Review  Committee  and the Board of  Directors.  A risk  system,
consisting of multiple grading categories,  is utilized as an analytical tool to
assess risk and set appropriate reserves. Along with the risk system, management
further evaluates risk  characteristics  of the loan portfolio under current and
anticipated  economic  conditions  and  considers  such factors as the financial
condition of the borrower, past and expected loss experience,  and other factors
management  feels deserve  recognition in establishing  an appropriate  reserve.
These  estimates are reviewed at least  quarterly,  and, as  adjustments  become
necessary,  they are  realized  in the  periods  in  which  they  become  known.
Additions to the  allowance  are made by  provisions  charged to expense and the
allowance is reduced by net charge-offs (i.e. - loans judged to be uncollectible
and charged  against the reserve,  less any recoveries on such loans).  Although
management attempts to maintain the allowance at a level deemed adequate, future
additions  to the  allowance  may be  necessary  based  upon  changes  in market
conditions.  In addition,  various regulatory  agencies  periodically review the
Company's  allowance for loan losses.  These agencies may require  management to
take additional provisions based on their judgements about information available
to them at the time of their examination.


Investment Securities Activity

Investment  securities  increased by $7.9 million, or 38.2%, to $28.6 million at
March 31, 2000 compared to $20.7 million at December 31, 1999. During the period
ended March 31, 2000 the Company utilized its liquidity in excess of loan demand
to  fund  additional  purchases  of  investment  securities   available-for-sale
amounting to $8.4 million,  which was partially  off-set by maturities and calls
amounting to $0.5 million.

Management  determines the appropriate  classification of securities at the time
of purchase. At March 31, 2000, investment securities of $17.4 million, or 60.8%
of   the   total   investment   securities   portfolio,   were   classified   as
available-for-sale  and investment  securities of $11.2 million, or 39.2% of the
total investment securities portfolio, were classified as held-to-maturity.  The
Company had no  investment  securities  classified  as trading  securities.  The

                                       12
<PAGE>

investment  portfolio  is  comprised  primarily  of U.S.  Government  and agency
securities  with maturities of three years or less and with call features of one
year or less.  Management  currently maintains an investment  portfolio of short
duration  in order to fund  projected  increased  loan volume and to provide for
other  liquidity  uses as needed,  and  secondarily  as an additional  source of
interest income.


Deposits

Deposits are the Company's primary source of funds.  Total deposits increased by
$6.3 million,  or 5.5%,  to $120.3  million at March 31, 2000 compared to $114.0
million at December  31, 1999.  The increase in deposits  during this period was
primarily due to the Company's  greater  penetration of its  marketplace and the
continued growth of its new locations.  In the first and fourth quarter of 1999,
the  Company  opened two new  offices,  which have  contributed  to its  deposit
growth.

Average total deposits  increased by $32.3 million,  or 40.5%, to $112.1 million
for the three months ended March 31, 2000 compared to the 1999 full year average
of $79.8  million.  Changes in the deposit mix for the three  months ended March
31, 2000  compared to the 1999 full year  averages  include a $6.3  million,  or
18.2%,  increase in savings deposits;  a $1.2 million,  or 9.1%, increase in NOW
account deposits; a $18.9 million, or 148.8%,  increase in time deposits; a $0.2
million,  or 7.4%,  increase in money market  deposits;  and a $5.8 million,  or
35.4%, increase in non-interest bearing demand deposits. Average certificates of
deposit  increased  due  primarily to the Manalapan  branch  opening  promotions
during the fourth  quarter of 1999 and to the  acceptance of municipal  deposits
starting in December,  1999. For the first quarter of 2000, the Manalapan branch
certificates  of deposit  averaged $9.5 million and  certificates  of deposit to
municipal agencies averaged $5.8 million.

The Company  emphasizes  relationships  with  commercial  customers and seeks to
obtain transactional accounts, which are frequently kept in non-interest bearing
deposits. The Company also emphasizes the origination of savings deposits, which
amounted to $42.7 million at March 31, 2000,  by offering  rates higher than our
peer group institutions. The primary savings product is the stepped rate savings
account.  The interest rate is based upon the amount on deposit, and the deposit
amount can be changed.  Management  may modify the  interest  rate paid  without
notice,  and the  depositor  may  withdraw  their  funds on demand.  The Company
markets this product as an alternative to time deposits and management  believes
it has  resulted in a higher rate of core  deposits and lower cost of funds than
our peer group  institutions.  Deposits are obtained  primarily  from the market
areas that the Company serves. As of March 31, 2000 the Company did not have any
brokered deposits and neither solicited nor offered premiums for such deposits.

Liquidity

Liquidity is a measurement  of the Company's  ability to meet present and future
funding obligations and commitments. The Company adjusts its liquidity levels in
order to meet funding needs for deposit outflows,  repayment of borrowings, when
applicable,  and the funding of loan  commitments.  The Company also adjusts its
liquidity level as appropriate to meet its asset/liability objectives. Principal
sources  of  liquidity  are  deposit  generation,  access  to  purchased  funds,

                                       13
<PAGE>

including borrowings from other financial  institutions,  repurchase agreements,
maturities and repayments of loans and investment  securities,  and net interest
income and fee income. Liquid assets (consisting of cash and Federal funds sold)
comprised  14.4% and 19.1% of the  Company's  total assets at March 31, 2000 and
December 31, 1999, respectively.

As shown in the Consolidated  Condensed  Statements of Cash Flows, the Company's
primary  source  of  funds  at  March  31,  2000  was  increased  deposits,  the
utilization  of  Federal  funds  sold,  and to a  lesser  extent  proceeds  from
maturities and calls of investment  securities.  Deposit  increases  amounted to
$6.3  million for the three  months  ended March 31,  2000;  Federal  funds sold
reductions  provided $5.5 million in funding;  and proceeds from  maturities and
calls of  investment  securities  amounted  to $0.5  million.  During  the first
quarter of 2000,  the Company  utilized  deposit growth and its liquid assets as
funding sources for increased loans made to customers amounting to $3.5 million,
securities  purchases  amounting to $8.4  million and  purchases of premises and
equipment used primarily for operations expansion, amounting to $0.2 million.

The Company also has several  additional  sources of  liquidity,  including  the
available-for-sale  investment  securities  portfolio,  which at March 31,  2000
amounted to $17.4  million.  Also,  many of the Company's  loans are  originated
pursuant to underwriting  standards which make them readily  marketable to other
financial  institutions or investors in the secondary  market.  In addition,  in
order to meet  liquidity  needs on a temporary  basis,  the Company has lines of
credit in the amount of $5.0  million  for the  purchase  of Federal  funds with
another financial institution.

The Company believes that its liquidity  position is sufficient to provide funds
to meet future loan demand or the possible  outflow of deposits,  in addition to
being able to adapt to changing interest rate conditions.


Capital Resources

Stockholder's  equity  increased by $134  thousand at March 31, 2000 compared to
December 31, 1999. The changes in  stockholders'  equity during the three months
ended  March 31,  2000 were  comprised  of an  increase  from net income of $146
thousand  partially  off-set by an  increase of $12  thousand in the  unrealized
losses, net of taxes, in the available-for-sale investment securities portfolio.

The Company's  regulators,  the Board of Governors of the Federal Reserve System
(which regulates bank holding companies),  and the Bank's Federal regulator, the
Federal Deposit Insurance  Corporation,  have issued guidelines  classifying and
defining  capital  into the  following  components:  (1) Tier I  Capital,  which
includes tangible  stockholders'  equity for common stock and certain qualifying
preferred   stock,   and   excludes   net   unrealized   gains  or   losses   on
available-for-sale  securities  and  deferred  tax assets that are  dependent on
projected  taxable income  greater than one year in the future,  and (2) Tier II
Capital  (Total  Capital),  which  includes a portion of the  allowance for loan
losses and certain  qualifying  long-term debt and preferred stock that does not
qualify for Tier I Capital.  The risk-based capital guidelines require financial
institutions  to apply  certain  risk factors  ranging from 0% to 100%,  against
assets to determine total risk-based assets. The minimum Tier I and the combined
Tier I and Tier II capital  to  risk-weighted  assets  ratios are 4.0% and 8.0%,
respectively.  The  Federal  Deposit  Insurance  Corporation  also  has  adopted

                                       14
<PAGE>

regulations  which  supplement  the risk-based  capital  guidelines to include a
minimum  leverage  ratio of Tier I Capital  to total  assets of 3.0%.  For those
institutions with higher levels of risk or that are experiencing or anticipating
significant growth, the minimum leverage ratio will be proportionately increased
by 100 to 200 basis points.

The following  table  summarizes the risk-based and leverage  capital ratios for
the Company and the Bank at March 31,  2000 as well as the  regulatory  required
minimum and "well capitalized" capital ratios:
<TABLE>
<CAPTION>
                                    March 31, 2000       Regulatory Requirement
                                   ---------------
                                 Company        Bank     Minimum     "Well Capitalized"
                                 -------        ----     -------     ------------------
<S>                               <C>         <C>         <C>              <C>
Risk-based Capital:
Tier I capital ratio...........   19.29%      19.29%      4.00%            6.00%
Total capital ratio............   20.54%      20.54%      8.00%           10.00%

Leverage ratio..................  13.97%      13.97%   3.00%-5.00%     5.00% or greater
</TABLE>

In addition,  pursuant to the order of the New Jersey  Department of Banking and
Insurance  approving the Bank's charter,  for its first five years of operation,
the Bank is required  to maintain a ratio of equity to total  assets of at least
10.00%.  As of March 31, 2000 the Bank's ratio of equity capital to total assets
was 13.17%.

As noted in the above table,  the Company's and the Bank's capital ratios exceed
the minimum regulatory and "well capitalized" requirements.


Impact of Inflation and Changing Prices

The  Company's  financial  statements  and notes  thereto,  presented  elsewhere
herein,  have been prepared in accordance  with  generally  accepted  accounting
principles,  which require the  measurement of financial  position and operating
results in terms of historical  dollars  without  considering  the change in the
relative purchasing power of money over time and due to inflation. The impact of
inflation is reflected in the increased cost of the Company's operations. Unlike
most industrial  companies,  nearly all of the Company's  assets and liabilities
are monetary. As a result, interest rates have a greater impact on the Company's
performance  than do the effects of general levels of inflation.  Interest rates
do not  necessarily  move in the same  direction  or to the same  extent  as the
prices of goods and services.

                                       15
<PAGE>

RESULTS OF OPERATIONS  for the three months ended March 31, 2000 compared to the
three months ended March 31, 1999

Net Income
The Company earned $146  thousand,  or $0.08 net income per share on a basic and
diluted basis, for the three months ended March 31, 2000, compared to net income
of $65 thousand,  or $0.03 for both basic and diluted net income per share,  for
the three months ended March 31, 1999.  The increase in net income was primarily
due to a $410  thousand,  or  44.2%,  increase  in net  interest  income,  a $94
thousand,  or 162.1%,  increase in  non-interest  income and a $53 thousand,  or
47.7%,  decrease in the  provision for loan losses;  these items were  partially
offset by a $476 thousand,  or 58.8%,  increase in  non-interest  expenses.  The
Company's  net income for the three months ended March 31, 1999 was benefited by
the   application  of  net  operating  loss   carryforwards   to  eliminate  tax
liabilities.  The results for the three months ended March 31, 2000  resulted in
the Company incurring a current tax liability of approximately $60 thousand.  As
the  Company  continues  to report  earnings,  the  valuation  allowance  on the
deferred tax assets is being reduced,  thereby reducing the total tax expense to
zero.  Management  will  continue  to  evaluate  the  necessity  of a  valuation
allowance throughout the remainder of the year.

Net Interest Income
Net interest income  increased $410 thousand,  or 44.2%, to $1.3 million for the
three  months  ended March 31, 2000 from $927  thousand  for the same prior year
period.  The  increase  in net  interest  income  was due  primarily  to  volume
increases as average  interest  earning assets,  net of average interest bearing
liabilities,  increased by $7.2 million, or 28.2%, for the first three months of
2000 compared to the same prior year period.

The Company's net interest  margin  (annualized  net interest  income divided by
average  interest  earning  assets)  for the three  months  ended March 31, 2000
declined to 4.37% from 5.02% for the same prior year period.  The decline in the
net  interest  margin  resulted  primarily  from an  increase  in the  amount of
interest earning assets being funded by interest bearing liabilities rather than
non-interest  bearing  sources  of funds  such as  non-interest  bearing  demand
deposits and shareholders' equity.  During December,  1998 and January, 1999 the
Company  completed a secondary  stock offering which resulted in net proceeds of
$7.6 million.  This non-interest  source of funds supported earning asset growth
during  the  first  quarter  of  1999.  In  addition,  the  percent  of  average
non-interest  bearing  deposits to total  average  deposits  decreased  to 19.8%
during the first  quarter of 2000  compared to 21.0% during the first quarter of
1999.

Interest income increased $922 thousand, or 66.7%, to $2.3 million for the three
months  ended  March 31, 2000  compared  to $1.4  million for the same period in
1999.  The  improvement  in interest  income was primarily due to volume related
increases in income from the loan  portfolio of $743  thousand,  volume  related
increases in income of $181 thousand in the investment securities portfolio, and
volume  related  increases in income of $3 thousand in Federal funds sold as the
Company's  growth  resulted in an increase  in average  earning  assets of $47.7
million,  or 63.7%,  to $122.6 million for the three months ended March 31, 2000
compared to $74.9 million for the same period in 1999.

The $927 thousand  volume related  increase in total interest income was reduced
by $18 thousand from rate related reductions as interest rates on earning assets
repriced to current yields. Interest earned on loans was reduced by $64 thousand
due to less fee income  included in loan  interest for the first quarter of 2000
compared  to the first  quarter  of 1999.  Total  interest  income  was  further
increased  by $13  thousand as a result of one  additional  day during the first
quarter of 2000 compared to the first quarter of 1999.

Interest expense for the first three months of 2000 increased $512 thousand,  or
112.5%, compared to the same prior year period. The increase in interest expense
was due primarily to net volume  increases in interest  bearing  deposits  which
accounted for $492 thousand of the expense increase;  $14 thousand  attributable
to net rate related increases;  and $6 thousand due to one additional day in the
first  quarter  of 2000.  The  volume  related  increases  in  interest  bearing

                                       16
<PAGE>

liabilities and expense rate decreases and increases are the result of marketing
and  pricing  decisions  made by  management  in  response  to the need for cost
effective sources of funds, primarily to provide for loan growth.

The following tables titled  "Consolidated  Average Balance Sheet with Resultant
Interest  and  Average  Rates" and  "Analysis  of Changes  in  Consolidated  Net
Interest  Income" present by category the major factors that  contributed to the
changes in net interest  income for the quarter ended March 31, 2000 compared to
the quarter ended March 31, 1999.

                                       17
<PAGE>
CONSOLIDATED AVERAGE BALANCE SHEETS
With Resultant Interest And Average Rates
<TABLE>
<CAPTION>
                                                               Three Months Ended                       Three Months Ended
                                                                 March 31, 2000                           March 31, 1999
                                                      -------------------------------------     ------------------------------------
                                                       Average      Interest      Average        Average      Interest      Average
                                                       Balance      Income/Expense Rate          Balance      Income/Expense Rate
                                                      ----------    -----------------------     ----------    ----------------------
                                                                            (In thousands, except percentages)
<S>                                                     <C>             <C>         <C>          <C>              <C>         <C>
ASSETS
Interest Earning Assets:
        Federal Funds Sold...........................   $ 12,102        $ 170       5.63%        $ 11,879         $ 138       4.71%
        Investment Securities........................     27,113          412       6.08%          13,980           193       5.52%
        Loans (net of unearned income) (1) (2).......     83,401        1,722       8.28%          49,078         1,051       8.68%
                                                      ----------    ---------                  ----------    ----------

               Total Interest Earning Assets.........    122,616        2,304       7.54%          74,937         1,382       7.48%
                                                      ----------    ---------                  ----------    ----------

Non-Interest Earning Assets:
        Loan Loss Reserve............................     (1,252)                                    (957)
        All Other Assets.............................     10,205                                    7,351
                                                      ----------                               ----------

               Total Assets..........................   $131,569                                 $ 81,331
                                                      ==========                               ==========

LIABILITIES & STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
        NOW Deposits.................................   $ 14,418           62       1.72%        $ 11,803            51       1.75%
        Savings Deposits.............................     41,002          425       4.16%          29,592           306       4.19%
        Money Market Deposits........................      2,907           27       3.73%           2,637            25       3.84%
        Time Deposits................................     31,556          453       5.76%           5,381            73       5.50%
        Short-term Borrowings........................          -            -       0.00%               -             -       0.00%
                                                      ----------    ---------                  ----------    ----------

               Total Interest Bearing Liabilities....     89,883          967       4.32%          49,413           455       3.73%
                                                      ----------    ---------                  ----------    ----------

Non-Interest Bearing Liabilities:
        Demand Deposits..............................     22,237                                   13,150
        Other Liabilities............................      1,119                                      522
                                                      ----------                               ----------

               Total Non-Interest Bearing Liabilities     23,356                                   13,672
                                                      ----------                               ----------

Stockholders' Equity.................................     18,330                                   18,246
                                                      ----------                               ----------

                 Total Liabilities and Stockholders'
                 Equity..............................   $131,569                                 $ 81,331
                                                      ==========                               ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                     <C>             <C>         <C>          <C>              <C>         <C>
NET INTEREST INCOME..................................                 $ 1,337                                     $ 927
                                                                    =========                                ==========

NET INTEREST SPREAD (3)..............................                                   3.22%                                 3.74%

NET INTEREST MARGIN (4)..............................                                   4.37%                                 5.02%
</TABLE>

  (1)   Included in interest income on loans are loan fees.
  (2)   Includes non-performing loans.
  (3)   The interest rate spread is the difference  between the weighted average
        yield on average  interest  earning assets and the weighted average cost
        of average interest bearing liabilities.
  (4)   The  interest  rate  margin is  calculated  by dividing  annualized  net
        interest income by average interest earning assets.

                                       18
<PAGE>

ANALYSIS OF CHANGES IN CONSOLIDATED NET INTEREST INCOME

<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31, 2000
                                                            Compared to Three Months Ended March 31, 1999
                                                        ------------------------------------------------------
                                                                     Increase (Decrease) Due To
                                                        ------------------------------------------------------
                                                         Volume         Rate         Time              Net
                                                        ----------    ---------    ----------       ----------
                                                                              (In thousands)
<S>                                                        <C>          <C>            <C>             <C>
Interest Earned On:
        Federal Funds Sold..............................   $  3         $ 28           $ 1             $ 32
        Investment Securities...........................    181           38             -              219
        Loans (net of unearned income)..................    743          (84)           12              671
                                                        ----------    ---------    ----------       ----------

                 Total Interest Income...................   927          (18)           13              922
                                                        ----------    ---------    ----------       ----------

Interest Paid On:
        NOW Deposits....................................     11           (1)            1               11
        Savings Deposits................................    119           (4)            4              119
        Money Market Deposits...........................      3           (1)            -                2
        Time Deposits...................................    359           20             1              380
        Short-term Borrowings...........................      -            -             -                -
                                                        ----------    ---------    ----------       ----------

                 Total Interest Expense.................    492           14             6              512
                                                        ----------    ---------    ----------       ----------

                 Net Interest Income....................  $ 435        $ (32)          $ 7            $ 410
                                                        ==========    =========    ==========       ==========
</TABLE>

                                       19
<PAGE>

Provision for Loan Losses
The  provision  for loan losses  decreased  to $58  thousand for the first three
months of 2000  compared to a provision of $111  thousand for the same period in
1999.  The provision is the result of  management's  review of several  factors,
including  increased  loan  balances  and  management's  assessment  of economic
conditions,  credit  quality and other loss  factors that may be inherent in the
existing loan portfolio.  Although the Company had no non-accrual loans and past
due  loans of only  $12  thousand  at March  31,  2000,  management  established
provisions for loan losses to create an adequate allowance based on management's
analysis of the loan portfolio and growth experienced over the periods,  as well
as the risks  inherent in the lending  function.  The  allowance for loan losses
totaled $1.3 million, or 1.50% of total loans, at March 31, 2000.


Non-Interest Income
Total  non-interest  income was $152 thousand for the first three months of 2000
compared to $58 thousand for the first three months of 1999,  an increase of $94
thousand,  or 162.1%.  The increase was  attributable  to an increase in service
fees on deposits of $39  thousand,  or 83.0%,  and an increase in other fees and
commissions of $55 thousand,  or 500.0%.  The growth in service fees on deposits
reflects the growth in transaction account average deposits,  which increased to
$12.0 million from $27.6  million,  or an increase of 43.5% for the three months
ended March 31, 2000 compared to the same prior year period. The growth in other
fees and commissions is primarily due to higher non-yield  related fee income on
loans which  increased  by $37  thousand at March 31, 2000  compared to the same
prior year  quarter.  The increase in  non-yield  related fee income on loans is
primarily  attributable to an increase in loan  participations  and the fees and
commissions generated on these transactions.


Non-Interest Expense
Total  non-interest  expense amounted to $1.3 million for the three months ended
March 31, 2000, an increase of $476 million,  or 58.8%, over the same prior year
period.  The increase was due primarily to increases in  employment  expenses as
well as increases in occupancy  expenses,  equipment expenses and other expenses
generally  attributable to the Company's  growth.  Of this increase,  employment
costs increased $237 thousand,  or 64.2%, and reflected  increases in the number
of employees from 44 full-time  equivalents  for the period ended March 31, 1999
to 58 full-time equivalents for the period ended March 31, 2000. The increase in
personnel is primarily attributable to the opening of the Manalapan,  New Jersey
office in November 1999 in addition to the  acquisition  of  additional  support
personnel required due to the Company's growth.

Occupancy expenses increased $57 thousand, or 121.3%, for the first three months
of 2000  compared  to the same period in 1999.  The  increase  was  attributable
primarily to increased lease expense and increased common area maintenance costs
due on existing branch offices in addition to costs on two new branch offices.

Depreciation  expenses  on  leasehold  improvements,  furniture,  and  equipment
increased $40 thousand, or 52.6%, for the first three months of 2000 compared to
the first three months of 1999 due primarily to  depreciation  costs  associated
with  the new  facilities  and on  purchases  of  enhanced  computer  processing
equipment.  Average depreciable assets amounted to $4.9 million during the three
months  ended  March 31, 2000  compared to $2.8  million for the same prior year
period, an increase of 75.0%.

                                       20
<PAGE>

Other expenses increased $142 thousand,  or 44.8%, for the first three months of
2000 compared to the first three months of 1999.  The increase was  attributable
to increased other expenses  resulting from the continued growth of the Company,
as  costs  of  data  processing  services  paid  to the  Company's  third  party
processors amounted to $118 thousand, an increase of $53 thousand;  professional
and  stockholder  fees  amounted to $42  thousand,  a decrease of $30  thousand;
marketing and  advertising  costs  amounted to $86 thousand,  an increase of $42
thousand;  stationery,  supplies and printing costs amounted to $61 thousand, an
increase of $4 thousand;  and all other expenses  amounted to $152 thousand,  an
increase of $73 thousand.


Income Tax Expense
The Company's net income for the three months ended March 31, 1999 was benefited
by  the  application  of net  operating  loss  carryforwards  to  eliminate  tax
liabilities.  The results for the three months ended March 31, 2000  resulted in
the Company incurring a current tax liability of approximately $60 thousand.  As
the  Company  continues  to report  earnings,  the  valuation  allowance  on the
deferred tax assets is being reduced,  thereby reducing the total tax expense to
zero.  Management  will  continue  to  evaluate  the  necessity  of a  valuation
allowance throughout the remainder of the year.

                                       21


<PAGE>
PART II.           OTHER INFORMATION

Item 1.            Legal Proceedings
                   The  Bank  is   periodically   involved   in  various   legal
                   proceedings  as a normal  incident  to its  business.  In the
                   opinion of management,  no material loss is expected from any
                   such pending lawsuit.

Item 2.            Changes in Securities
                   Not Applicable.

Item 3.            Defaults Upon Senior Securities
                   Not Applicable.

Item 4.            Submission of Matters to a Vote of Security Holders
                   The annual meeting of  shareholders  of Community  Bancorp of
                   New Jersey was held on April 27, 2000. The following were the
                   results of voting on the seven proposals presented:

                   Note:    Shares Outstanding were..........      1,827,766
                            Shares Voted were.................     1,434,674

                   Proposal No. 1 -  The re-election of nine nominees to the
                                     Board of Directors.

                                     Each  Director  received at least 97% of
                                     the  shares  voted  in  favor  of  their
                                     appointment.
<TABLE>
<CAPTION>
                                                                                  Votes
                     Elected Director                       Votes For            Withheld               %
                   ---------------------------------   ----------------      ----------------     -------------
<S>                <C>                                       <C>                       <C>               <C>
                   Charles P. Kaempffer, CPA                 1,425,737                 8,937             99.4%
                   Morris Kaplan                             1,422,647                12,027             99.2%
                   Robert M. Kaye                            1,425,737                 8,937             99.4%
                   Eli Kramer                                1,425,737                 8,937             99.4%
                   William J. Mehr, Esq.                     1,425,737                 8,937             99.4%
                   Robert D. O'Donnell                       1,397,641                37,033             97.4%
                   Howard M. Schoor                          1,425,737                 8,937             99.4%
                   Arnold G. Silverman                       1,401,973                32,701             97.7%
                   Lewis Wetstein, M.D.                      1,425,737                 8,937             99.4%
</TABLE>

                   Proposal No. 2 -  Approval of two Amendments to the Company's
                         APPROVED     Certificate of Incorporation to:

                                              a)  classify    the    Board    of
                                                  Directors  into three classes,
                                                  and
                                              b)  prevent  the  removal  of  the
                                                  Directors   by    shareholders
                                                  without cause.

                                                              Votes        %
                                                            ----------   -----
                                     For Approval........... 704,688     89.2%
                                     Withheld Approval......  84,992
                                     Abstain................  19,585


                   Proposal No. 3 -  Approval of an Amendment  to the  Company's
                         APPROVED    Certificate of Incorporation to require the
                                     affirmative  vote of 80% of the outstanding
                                     common stock of the Company for approval of
                                     certain business  combination  transactions
                                     and to further require an affirmative  vote
                                     of 80% of the  outstanding  common stock to
                                     amend this super-majority voting provision.

                                       22

<PAGE>
                                                               Votes        %
                                                            ----------    -----
                                     For Approval...........  693,563     88.2%
                                     Withheld Approval......   92,532
                                     Abstain................   23,170


                   Proposal No. 4 -  Approval of an Amendment  to the  Company's
                         APPROVED    Certificate  of  Incorporation  to  require
                                     advance notification of certain shareholder
                                     proposals and nominations.
                                                              Votes         %
                                                            ---------     -----
                                     For Approval........... 742,766      94.0%
                                     Withheld Approval......  47,449
                                     Abstain................  19,050


                   Proposal No. 5 -  Approval of an Amendment  to the  Company's
                         APPROVED    Certificate of Incorporation to provide for
                                     1,000,000 shares of series preferred stock,
                                     the terms,  conditions and  designations of
                                     which may be set by the Board of  Directors
                                     at the time of  issuance;  and to  increase
                                     the authorized  shares of common stock,  no
                                     par value, to 10,000,000 shares.

                                                              Votes         %
                                                            ----------   ------
                                     For Approval........... 714,372      88.7%
                                     Withheld Approval...... 90,782
                                     Abstain................  4,111


                   Proposal No. 6 -  Approval of the 2000 Employee Stock Option
                         APPROVED    Plan.
                                                               Votes        %
                                                            -----------   -----
                                     For Approval........... 709,568      88.5%
                                     Withheld Approval......  92,051
                                     Abstain................   7,646


                   Proposal No. 7 -  Approval of the 2000 Stock Option Plan for
                         APPROVED    Non-Employee Directors.
                                                               Votes        %
                                                            -----------  ------
                                     For Approval...........  696,935     87.1%
                                     Withheld Approval......  103,172
                                     Abstain.................   9,158


Item 5.            Other Information
                   Not Applicable.

Item 6.            Exhibits and Reports on Form 8-K
                     (a)    Exhibits - None

                     (b)    Reports on Form 8-K

                            The  Registrant  filed a Current  Report on Form 8-K
                            dated January 20, 2000 announcing its fourth quarter
                            1999 results of operations.

                                       23

<PAGE>


                                   SIGNATURE


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                 COMMUNITY BANCORP OF NEW JERSEY
                                              (Issuer)






Date:    May 11, 2000            By: /s/ Robert D. O'Donnell
         ------------                -----------------------
                                     ROBERT D. O'DONNELL
                                     President and Chief Executive Officer






                                 By: /s/ Michael Bis
                                     -----------------
                                     MICHAEL BIS
                                     Vice President and Chief Financial Officer