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 September 30, 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                                       22-3666589
-----------------------------------                     ------------------
  (State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                       Identification No.)


                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 November 7, 2000

<PAGE>

                                      INDEX

                         COMMUNITY BANCORP OF NEW JERSEY


PART I.  FINANCIAL INFORMATION                                              PAGE

Item 1.  Financial Statements

         Consolidated Condensed Balance Sheets at September 30, 2000
         (Unaudited) and December 31, 1999                                   3

         Consolidated Condensed Statements of Income for the three and
         nine months ended September 30, 2000 and 1999 (Unaudited)           4

         Consolidated Condensed Statement of Changes in Stockholders'
         Equity at September 30, 2000 (Unaudited)                            5

         Consolidated  Condensed Statements of Cash Flows for the three
         and nine months ended September 30, 2000 and 1999  (Unaudited)      6

         Notes to Consolidated Condensed Financial Statements (Unaudited)   7-9


Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                         10-24


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                  25

Item 2.  Changes in Securities and Use of Proceeds                          25

Item 3.  Defaults Upon Senior Securities                                    25

Item 4.  Submission of Matters to a Vote of Security Holders                25

Item 5.  Other Information                                                  25

Item 6.  Exhibits and Reports on Form 8-K
                  a.  Exhibits - None                                       25
                  b.  Reports on Form 8-K                                   25


SIGNATURES                                                                  26

                                       2
<PAGE>

                         COMMUNITY BANCORP OF NEW JERSEY
                      CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              September 30,
                                                                                  2000                 December 31,
                                                                               (Unaudited)                1999
                                                                              --------------         ---------------
                                                                               (Dollars  in
                                                                                 thousands)

ASSETS Cash and cash equivalents:
<S>                                                                            <C>                       <C>
       Cash and due from banks                                                 $   5,730                 $   4,991
       Federal funds sold                                                         16,500                    20,275
----------------------------------------------------------------------------   ---------                 ---------

                 Total cash and cash equivalents                                  22,230                    25,266
----------------------------------------------------------------------------   ---------                 ---------

Investment securities available-for-sale                                          22,007                     9,424
Investment securities held-to-maturity (fair value of $10,385
       at September 30, 2000 and $11,093 at December 31, 1999)                    10,497                    11,245
Loans receivable                                                                 105,298                    82,632
Allowance for loan loss                                                           (1,430)                   (1,237)
----------------------------------------------------------------------------   ---------                 ---------
                 Net loans receivable                                            103,868                    81,395
----------------------------------------------------------------------------   ---------                 ---------

Premises and equipment, net                                                        4,849                     4,631
Accrued interest receivable                                                        1,050                       643
Other assets                                                                         529                       207
----------------------------------------------------------------------------   ---------                 ---------

                 Total Assets                                                  $ 165,030                 $ 132,811
----------------------------------------------------------------------------   =========                 =========


LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
       Non-interest bearing demand                                             $  29,648                 $  22,963
       Interest bearing - NOW                                                     15,542                    16,490
       Savings and money market                                                   55,131                    43,492
       Certificates of deposit, under $100,000                                    30,006                    19,574
       Certificates of deposit, $100,000 and over                                 14,298                    11,509
----------------------------------------------------------------------------   ---------                 ---------

                 Total deposits                                                  144,625                   114,028
----------------------------------------------------------------------------   ---------                 ---------


Accrued interest payable                                                           1,028                       292
Other liabilities                                                                    415                       265
----------------------------------------------------------------------------   ---------                 ---------

                 Total liabilities                                               146,068                   114,585
----------------------------------------------------------------------------   ---------                 ---------


Stockholders' equity
       Commonstock - authorized 5,000,000 shares of no par value; issued and
          outstanding, net of treasury shares, 1,918,957 and 1,827,766 shares
          at September 30, 2000 and December 31, 1999, respectively               21,662                    20,523
       Accumulated deficit                                                        (2,327)                   (1,923)
       Accumulated other comprehensive income (loss)                                 (10)                      (11)
       Treasury stock, 22,357 shares, at cost                                       (363)                     (363)
----------------------------------------------------------------------------   ---------                 ---------
                 Total stockholders' equity                                       18,962                    18,226
----------------------------------------------------------------------------   ---------                 ---------

                 Total Liabilities and Stockholder's Equity                    $ 165,030                 $ 132,811
----------------------------------------------------------------------------   =========                 =========
</TABLE>



     See accompanying notes to consolidated condensed financial statements.


                                       3

<PAGE>

                         COMMUNITY BANCORP OF NEW JERSEY
           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                              September 30,
                                                                    -----------------------------------
                                                                        2000                 1999
                                                                    -----------------------------------
                                                               (Dollars in thousands, except per share data)
INTEREST INCOME
<S>                                                                        <C>                  <C>
       Loans, including Fees                                               $2,233               $1,404
       Federal funds sold                                                     299                  198
       Investment securities - taxable                                        516                  142
---------------------------------------------------------------     --------------       --------------
                      Total interest income                                 3,048                1,744
---------------------------------------------------------------     --------------       --------------

INTEREST EXPENSE
       Interest bearing - NOW                                                  75                   57
       Savings and money market                                               596                  402
       Certificates of deposit                                                704                  169
       Short-term borrowings                                                    -                    -
---------------------------------------------------------------     --------------       --------------
                      Total interest expense                                1,375                  628
---------------------------------------------------------------     --------------       --------------
                      Net interest income                                   1,673                1,116
Provision for loan losses                                                      55                   45
---------------------------------------------------------------     --------------       --------------
                      Net interest income after provision
                             for loan losses                                1,618                1,071
---------------------------------------------------------------     --------------       --------------

Non-interest income:
       Service fees on deposit accounts                                        88                   67
       Other fees and commissions                                             108                  102
---------------------------------------------------------------     --------------       --------------
                      Total non-interest income                               196                  169
---------------------------------------------------------------     --------------       --------------

Non-interest expense:
       Salaries and wages                                                     588                  404
       Employee benefits                                                       89                   60
       Occupancy expense                                                       86                   81
       Depreciation - occupancy, furniture & equipment                        117                   91
       Other                                                                  571                  444
---------------------------------------------------------------     --------------       --------------
                      Total non-interest expense                            1,451                1,080
---------------------------------------------------------------     --------------       --------------

                      Income before income taxes                              363                  160
Income tax expense                                                             12                    -
---------------------------------------------------------------     --------------       --------------

                      Net Income                                            $ 351                $ 160
---------------------------------------------------------------     ==============       ==============

Per Common Share:
       Net income - basic                                                   $0.18                $0.08
       Net income - diluted                                                 $0.18                $0.08

Weighted average shares outstanding (in thousands):
       Basic                                                                1,919                1,919
       Diluted                                                              1,937                1,951

<CAPTION>

                                                                              Nine Months Ended
                                                                                September 30,
                                                                      -----------------------------------
                                                                          2000                 1999
                                                                      -----------------------------------
                                                                  (Dollars in thousands, except per share data)
INTEREST INCOME
<S>                                                                          <C>                  <C>
       Loans, including Fees                                                 $5,931               $3,617
       Federal funds sold                                                       618                  516
       Investment securities - taxable                                        1,408                  479
-----------------------------------------------------------           --------------       --------------
                      Total interest income                                   7,957                4,612
-----------------------------------------------------------           --------------       --------------

INTEREST EXPENSE
       Interest bearing - NOW                                                   207                  162
       Savings and money market                                               1,539                1,112
       Certificates of deposit                                                1,656                  353
       Short-term borrowings                                                      -                    1
-----------------------------------------------------------           --------------       --------------
                      Total interest expense                                  3,402                1,628
-----------------------------------------------------------           --------------       --------------
                      Net interest income                                     4,555                2,984
Provision for loan losses                                                       193                  267
-----------------------------------------------------------           --------------       --------------
                      Net interest income after provision
                             for loan losses                                  4,362                2,717
-----------------------------------------------------------           --------------       --------------

Non-interest income:
       Service fees on deposit accounts                                         267                  165
       Other fees and commissions                                               346                  242
-----------------------------------------------------------           --------------       --------------
                      Total non-interest income                                 613                  407
-----------------------------------------------------------           --------------       --------------

Non-interest expense:
       Salaries and wages                                                     1,705                1,062
       Employee benefits                                                        273                  176
       Occupancy expense                                                        283                  189
       Depreciation - occupancy, furniture & equipment                          357                  259
       Other                                                                  1,608                1,074
-----------------------------------------------------------           --------------       --------------
                      Total non-interest expense                              4,226                2,760
-----------------------------------------------------------           --------------       --------------

                      Income before income taxes                                749                  364
Income tax expense                                                               12                    -
-----------------------------------------------------------           --------------       --------------

                      Net Income                                              $ 737                $ 364
-----------------------------------------------------------           ==============       ==============

Per Common Share:
       Net income - basic                                                     $0.38                $0.19
       Net income - diluted                                                   $0.38                $0.19

Weighted average shares outstanding (in thousands):
       Basic                                                                  1,919                1,926
       Diluted                                                                1,932                1,957
</TABLE>


     See accompanying notes to consolidated condensed financial statements.


                                       4

<PAGE>


                         COMMUNITY BANCORP OF NEW JERSEY
       CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                    Common                Treasury               Accumulated
                                                                     Stock                  Stock                  Deficit
                                                                ----------------       ----------------       ------------------
                                                                                    (Dollars in thousands)

<S>                                                                   <C>                     <C>                     <C>
Balance December 31, 1999 ............................                $20,523                 $ (363)                 $(1,923)

5% stock dividend (91,191 shares).....................                  1,139                      -                   (1,139)
Cash in lieu of fractional shares.....................                      -                      -                       (2)

Comprehensive Income:
        Net Income....................................                      -                      -                      737
        Increase in unrealized holding
               losses on securities, net..............                      -                      -                        -


Total Comprehensive Income............................                      -                      -                        -
                                                                ----------------       ----------------       ------------------

Balance, June 30, 2000 (Unaudited) ...................                $21,662                 $ (363)                 $(2,327)
                                                                ================       ================       ==================

<CAPTION>

                                                             Accumulated
                                                                 Other                                                 Total
                                                             Comprehensive          Comprehensive                 Stockholders'
                                                             Income (Loss)            Income                         Equity
                                                          ------------------     ----------------------     ----------------------

<S>                                                                 <C>             <C>                                <C>
Balance December 31, 1999 ............................              $ (11)                                             $ 18,226

5% stock dividend (91,191 shares).....................                  -                                                     -
Cash in lieu of fractional shares.....................                  -                                                    (2)

Comprehensive Income:
        Net Income....................................                  -                      $ 737                        737
        Increase in unrealized holding
               losses on securities, net..............                  1                          1                          1
                                                                                 ----------------------     ----------------------

Total Comprehensive Income............................                  -                      $ 738
                                                          ------------------     ======================

Balance, June 30, 2000 (Unaudited) ...................              $ (10)                                             $ 18,962
                                                          ==================                                ======================

</TABLE>

     See accompanying notes to consolidated condensed financial statements.


                                       5
<PAGE>

                         COMMUNITY BANCORP OF NEW JERSEY
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>

                                                                                         Nine Months Ended September 30,
                                                                                   ------------------------------------------
                                                                                         2000                     1999
                                                                                   ------------------      ------------------
                                                                                              (Dollars in thousands)
Cash flows from operating activities:
<S>                                                                                            <C>                     <C>
          Net income ....................................................                      $ 737                   $ 364
          Adjustments to reconcile net income to net cash
                 provided by (used in) operating activities:
                       Depreciation and amortization ....................                        357                     259
                       Provision for loan losses ........................                        193                     267
                       Accretion of investment discount .................                       (113)                     (1)
                       Amortization of investment premium ...............                          3                       2
                       Increase in accrued interest receivable ..........                       (407)                   (302)
                       Increase in other assets .........................                       (325)                   (206)
                       Increase in accrued interest payable .............                        736                      48
                       Increase in other liabilities ....................                        150                     953
------------------------------------------------------------------------------     ------------------      ------------------

                                Net cash provided by operating activities                      1,331                   1,384
------------------------------------------------------------------------------     ------------------      ------------------

Cash flows from investing activities:
          Purchases of investment securities held-to-maturity ...........                          -                 (12,302)
          Purchases of investment securities available-for-sale .........                    (14,661)                      -
          Proceeds from maturities and calls of investment securities ...                      2,940                   6,500
          Net increase in loans made to customers .......................                    (22,666)                (26,082)
          Purchases of premises and equipment ...........................                       (575)                 (1,462)
------------------------------------------------------------------------------     ------------------      ------------------

                                Net cash used in investing activities ...                    (34,962)                (33,346)
------------------------------------------------------------------------------     ------------------      ------------------

Cash flows from financing activities:
          Net increase in demand deposits and savings accounts ..........                     17,376                  15,847
          Net increase in certificates of deposit .......................                     13,221                   7,448
          Stock dividend-cash paid in lieu of fractional shares .........                         (2)                      -
          Net proceeds from common stock issued .........................                          -                   1,014
          Purchase of common stock for treasury and options for retirement                         -                    (674)
------------------------------------------------------------------------------     ------------------      ------------------

                                Net cash provided by financing activities                     30,595                  23,635
------------------------------------------------------------------------------     ------------------      ------------------

Net decrease in cash and cash equivalents ...............................                     (3,036)                 (8,327)
Cash and cash equivalents as of beginning of year .......................                     25,266                  28,566
------------------------------------------------------------------------------     ------------------      ------------------

Cash and cash equivalents as of end of period ...........................                   $ 22,230                $ 20,239
------------------------------------------------------------------------------     ==================      ==================


Supplemental disclosures of cash flow information:
          Cash paid during the period for interest ......................                    $ 2,666                 $ 1,580
          Cash paid during the period for income taxes ..................                      $ 288                     $ -
</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 of Community  Bancorp of New
Jersey (the Company)  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
management's  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 and
nine months  ended  September  30, 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 - EARNINGS PER SHARE

The Company follows the provisions of SFAS No. 128, Earnings Per Share. SFAS No.
128 eliminates  primary and fully diluted  earnings per share (EPS) and requires
presentation of basic and diluted EPS in conjunction  with the disclosure of the
methodology  used in  computing  such EPS.  Basic EPS  excludes  dilution and is
computed by dividing  income  available to common  shareholders  by the weighted
average  common  shares  outstanding  during the period.  Diluted EPS takes into
account the potential dilution that could occur if securities or other contracts
to issue common stock were  exercised  and converted  into common stock.  EPS is
computed  based on the  weighted  average  number  of  shares  of  common  stock
outstanding.

NOTE C - RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998,  SFAS No. 133,  Accounting for Derivative  Instruments and Hedging
Activities was issued.  Subsequent to this statement,  SFAS No. 137 and 138 were
issued,  which  amended  the  effective  date of SFAS No.  133 to be all  fiscal
quarters  of all  fiscal  years  beginning  after  June 15,  2000.  Based on the
Company's  minimal use of derivatives at the current time,  management  does not
anticipate  the  adoption  of SFAS No.  133 will  have a  significant  impact on
earnings or financial position of the Company. However, the impact from adopting
SFAS No. 133 will depend on the nature and purpose of the derivative instruments
in use by the Company at that time.

NOTE D - STOCK DIVIDEND

On April 5, 2000 the Company's  Board of Directors  approved a 5% stock dividend
that was paid May 1,  2000 to  shareholders  of  record  as of April  17,  2000.
Weighted  average shares  outstanding and earnings per share were  retroactively
adjusted to reflect the stock dividend.


                                       7
<PAGE>

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

NOTE E - INVESTMENT SECURITIES

The following  tables present the book values,  fair values and gross unrealized
gains  and  losses  of  the  Company's  investment  securities  portfolio  as of
September 30, 2000 and December 31, 1999 (Dollars in thousands).

<TABLE>
<CAPTION>

                                                                            September 30, 2000 (Unaudited)
                                                 -------------------------------------------------------------------------------
                                                                           Gross               Gross
                                                    Amortized           Unrealized           Unrealized             Fair
                                                       Cost                Gains               Losses               Value
                                                 -----------------   ------------------   -----------------   ------------------
Securities available-for-sale:
<S>                                                      <C>                      <C>                <C>                <C>
          U.S. Government and agency securities          $ 21,997                 $ 16               $ (31)             $21,982
          Other securities                                     25                    -                   -                   25
                                                 -----------------   ------------------   -----------------   ------------------
                                                         $ 22,022                 $ 16               $ (31)             $22,007
                                                 =================   ==================   =================   ==================
Securities held-to-maturity:
          U.S. Government and agency securities           $ 9,997                  $ -              $ (118)             $ 9,879
          Other securities                                    500                    6                   -                  506
                                                 -----------------   ------------------   -----------------   ------------------
                                                         $ 10,497                  $ 6              $ (118)             $10,385
                                                 =================   ==================   =================   ==================
<CAPTION>
                                                                                  December 31, 1999
                                                 ------------------------------------------------------------------------------
                                                                          Gross               Gross
                                                    Amortized          Unrealized           Unrealized             Fair
                                                       Cost               Gains               Losses               Value
                                                 -----------------  ------------------   -----------------   ------------------
Securities available-for-sale:
<S>                                                       <C>                     <C>               <C>                <C>
          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>

The  following   table  sets  forth  as  of  September  30,  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>
 ue in one year or less                          $ 18,173                $18,150               $ 5,000                $ 4,958
 ue after one year through five years               3,824                  3,832                 4,997                  4,921
 ue after five years through ten years                  -                      -                   500                    506
 ue after ten years                                    25                     25                     -                      -
                                         -----------------     ------------------     -----------------     ------------------
                                                 $ 22,022                $22,007               $10,497                $10,385
                                         =================     ==================     =================     ==================
</TABLE>


                                       8
<PAGE>

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

NOTE E - INVESTMENT SECURITIES

The  following  table  summarizes  the  components  of the loan  portfolio as of
September 30, 2000 and December 31, 1999 (Dollars in thousands).

<TABLE>
<CAPTION>

                                                                 Loan Portfolio By Type of Loan
                                    ----------------------------------------------------------------------------------------
                                                September 30, 2000
                                                   (Unaudited)                                 December 31, 1999
                                    -------------------------------------------     ----------------------------------------
                                          Amount                  Percent                Amount                Percent
                                    --------------------     ------------------     -----------------     ------------------
<S>                                       <C>                      <C>                  <C>                     <C>
Commercial and industrial loans           $ 20,073                 19.06%               $15,137                 18.32%
Commercial mortgage loans                   47,595                 45.20%                38,814                 46.97%
Residential mortgages                        8,211                  7.80%                 7,254                  8.78%
Construction loans                          14,642                 13.91%                 8,895                 10.76%
Consumer loans                              14,683                 13.94%                12,476                 15.10%
Other loans                                     94                  0.09%                    56                  0.07%
                                    --------------------     ------------------     -----------------     ------------------

                                         $ 105,298                100.00%               $82,632                100.00%
                                    ====================     ==================     =================     ==================
</TABLE>


The following table represents the activity in the allowance for loan losses for
the nine month  periods  ended  September  30,  2000 and 1999 and the year ended
December 31, 1999 (Dollars in thousands).

<TABLE>
<CAPTION>
                                                                     Allowance For Loan Losses
                                               -----------------------------------------------------------------
                                                           Nine Months Ended
                                                             September 30,
                                                              (Unaudited)                          Year Ended
                                               -------------------------------------------         December 31,
                                                      2000                    1999                    1999
                                               --------------------     ------------------     -----------------
<S>                                                        <C>                      <C>                   <C>
 Balance - beginning of period                             $ 1,237                  $ 914                 $ 914
 Charge-offs                                                     -                     (2)                   (2)
 Recoveries                                                      -                      -                     -
                                               --------------------     ------------------     -----------------
 Net (charge-offs) recoveries                                    -                     (2)                   (2)
 Provision for loan losses                                     193                    267                   325
                                               --------------------     ------------------     -----------------

 Balance - end of period                                   $ 1,430                $ 1,179               $ 1,237
                                               ====================     ==================     =================
 Balance of Allowance at period-end as a %
     of loans at period-end                                  1.36%                  1.64%                 1.50%
                                               ====================     ==================     =================
</TABLE>

                                       9
<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 September  30, 2000  increased by $32.2  million,  or 24.2%,  to
$165.0  million  compared to $132.8  million at December 31, 1999.  Total assets
averaged  $145.8 million in the first nine months of 2000, a $46.9  million,  or
47.4%, increase from the 1999 full year average of $98.9 million.  Average loans
increased $29.1 million,  or 45.9%, to $92.5 million in the first nine months of
2000,  from the 1999 full year  average  of $63.4  million.  Average  investment
securities  increased by $18.0 million,  or 145.2%,  to $30.4  million;  average
Federal funds sold decreased by $2.3 million,  or 14.8%,  to $13.2 million;  the
average  of all other  assets  increased  by $2.3  million,  or 26.4%,  to $11.0
million; and the loan loss reserve average increased $236 thousand, or 21.6%, to
$1.3 million during the first nine months of 2000 compared to the full year 1999
averages.

These increases in average assets were funded  primarily by a $46.1 million,  or
57.8%,  increase in average  deposits,  as the first nine months of 2000 average
deposits  increased  to $125.9  million from the full year 1999 average of $79.8
million.

Lending Activity
----------------

Total loans at September 30, 2000 were $105.3 million, a 27.5%, or $22.7 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 $8.8 million in commercial  mortgage
loans,  $5.7  million in  construction  loans,  $5.0 million in  commercial  and
industrial loans, $2.2 million in consumer loans and $1.0 million in residential
mortgage and other loans.

The 27.5%  increase in loans at September 30, 2000 compared to December 31, 1999
is partially  attributable  to greater  penetration  of our  marketplace  and an
improvement in the general  economic  environment in New Jersey.  From September
1997 through  November  1999, we opened four new offices in our Monmouth  County
market area.  Management  believes that the maturation of these branch locations
will  continue  to  provide  us with  lending  opportunities  as well as funding
sources for the loans.

Our loans are  primarily  to  businesses  and  individuals  located in Monmouth,
Middlesex,  and Ocean  Counties,  New Jersey.  We believe  that our  strategy of
customer  service,  competitive  rate structures,  and selective  marketing will
continue to enable us to gain market  entry to local  loans and  deposits.  Bank
mergers  and  consolidations  have also  contributed  to our  efforts to attract
borrowers and  depositors.  We intend to continue to pursue quality loans in all
lending categories within our market area.

                                       10
<PAGE>

Allowance for Loan Losses
-------------------------

The  allowance  for loan losses was $1.4  million,  or 1.36% of total loans,  at
September  30,  2000  compared  to $1.2  million,  or 1.50% of total  loans,  at
December 31,  1999.  At  September  30, 2000 and  December  31, 1999,  we had no
non-performing  loans.  The decline in the  allowance as a  percentage  of loans
reflects the continued growth of our loan portfolio.

We attempt 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
we feel 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 we attempt 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 our allowance for loan losses.  These
agencies may require us 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 $11.8 million, or 57.0%, to $32.5 million at
September 30, 2000  compared to $20.7  million at December 31, 1999.  During the
period ended  September  30, 2000,  we utilized our  liquidity in excess of loan
demand to fund additional purchases of investment securities  available-for-sale
amounting to $14.7 million,  which was partially off-set by maturities and calls
amounting to $2.9 million.

Management  determines the appropriate  classification of securities at the time
of purchase.  At September 30, 2000,  investment securities of $22.0 million, or
67.7%  of  the  total  investment  securities  portfolio,   were  classified  as
available-for-sale  and investment  securities of $10.5 million, or 32.3% of the
total investment securities portfolio,  were classified as held-to-maturity.  We
had no investment  securities  classified as trading securities.  The 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. We
currently  maintain 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.

                                       11
<PAGE>

Deposits
--------

Deposits  are our primary  source of funds.  Total  deposits  increased by $30.6
million,  or 26.8%,  to $144.6  million at September 30, 2000 compared to $114.0
million at December  31, 1999.  The increase in deposits  during this period was
primarily due to greater penetration of our marketplace and the continued growth
of our new locations. In the first and fourth quarter of 1999, we opened two new
offices, which have contributed to our deposit growth.

Average total deposits  increased by $46.1 million,  or 57.8%, to $125.9 million
for the nine months  ended  September  30,  2000  compared to the 1999 full year
average of $79.8  million.  Changes in the  deposit  mix  averages  for the nine
months ended September 30, 2000 compared to the 1999 full year averages  include
a $8.7 million,  or 25.0%,  increase in savings  deposits;  a $2.6  million,  or
19.7%, increase in NOW account deposits; a $23.9 million, or 188.2%, increase in
time deposits; a $1.9 million, or 70.4%, increase in money market deposits;  and
a $9.0 million,  or 54.9%,  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 nine months of
2000, the Manalapan  branch  certificates of deposit  averaged $11.2 million and
certificates  of deposit to municipal  agencies  averaged  $6.0  million.  Short
duration certificate of deposit promotions, targeted to retain maturing deposits
and to gain market penetration,  have also increased deposit growth. During July
2000, a 12 month  certificate of deposit  promotion  generated  $10.3 million in
funds as total  deposits for the month of July 2000  increased by $14.2 million.
Management  intends to continue to promote  targeted deposit products as funding
needs and other balance sheet management considerations arise.

We  emphasize  relationships  with  commercial  customers  and  seek  to  obtain
transactional  accounts,  which  are  frequently  kept in  non-interest  bearing
deposits. We also emphasize the origination of savings deposits,  which amounted
to $45.2 million at September  30, 2000, by offering  rates higher than our peer
group  institutions.  Our 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.  We may modify the interest rate paid without notice, and
the depositor may withdraw  their funds on demand.  We market this product as an
alternative  to time deposits and we believe 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 we serve. As of September 30,
2000 we did not have any  brokered  deposits and neither  solicited  nor offered
premiums for such deposits.

Liquidity
---------

Liquidity is a  measurement  of our ability to meet  present and future  funding
obligations  and  commitments.  We adjust our liquidity  levels in order to meet
funding needs for deposit  outflows,  repayment of borrowings,  when applicable,
and the  funding of loan  commitments.  We also  adjust our  liquidity  level as
appropriate  to  meet  our  asset/liability  objectives.  Principal  sources  of
liquidity  are  deposit  generation,   access  to  purchased  funds,   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
13.5% and 19.1% of our total assets at September 30, 2000 and December 31, 1999,
respectively.


<PAGE>


As shown in the  Consolidated  Condensed  Statements of Cash Flows,  our primary
source of funds at September 30, 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 $30.6 million for the nine
months ended  September 30, 2000;  Federal funds sold  reductions  provided $3.8
million  in  funding;  and  proceeds  from  maturities  and calls of  investment
securities  amounted to $2.9  million.  During the first nine months of 2000, we
utilized deposit growth and liquid assets as funding sources for increased loans
made to customers amounting to $22.7 million,  securities purchases amounting to
$14.7  million and  purchases  of premises  and  equipment  used  primarily  for
operations expansion, amounting to $0.6 million.

We  also  have  several   additional   sources  of   liquidity,   including  the
available-for-sale  investment securities portfolio, which at September 30, 2000
amounted to $22.0 million.  Also,  many of our 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, we have established lines of credit in the
amount of $9.0  million for the purchase of Federal  funds with other  financial
institutions.

We believe that our  liquidity  position is  sufficient to provide funds to meet
future loan demand or the possible outflow of deposits,  in addition to enabling
us to adapt to changing interest rate conditions.

Capital Resources
-----------------

Stockholder's  equity  increased by $736 thousand at September 30, 2000 compared
to December 31, 1999. The changes in stockholders' equity during the nine months
ended  September 30, 2000 were  comprised of an increase from net income of $737
thousand  partially  off-set  by a decrease  of $1  thousand  in the  unrealized
losses, net of taxes, in the available-for-sale investment securities portfolio,
and the payment of $2 thousand of cash in lieu of fractional shares from a stock
dividend.

Our  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.  Our
Regulators have also adopted 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.

                                       13
<PAGE>

The following  table  summarizes the risk-based and leverage  capital ratios for
the  Company  and  the  Bank at  September  30,  2000 as well as the  regulatory
required minimum and "well capitalized" capital ratios:

                           September 30, 2000        Regulatory Requirement
                           -------------------   ------------------------------
                            Company     Bank      Minimum    "Well Capitalized"
                            -------     ----      -------    ------------------
Risk-based Capital:
Tier I capital ratio....... 16.43%     16.43%      4.00%            6.00%
Total capital ratio........ 17.67%     17.67%      8.00%           10.00%

Leverage ratio............. 11.65%     11.65%   3.00%-5.00%   5.00% or greater

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 September  30, 2000 the Bank's  ratio of equity  capital to total
assets was 11.50%.

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

Our 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 our  operations.  Unlike  most  industrial
companies,  nearly all of our assets and liabilities are monetary.  As a result,
interest rates have a greater impact on our  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.

                                       14
<PAGE>

RESULTS OF OPERATIONS  for the nine months ended  September 30, 2000 compared to
the nine months ended September 30, 1999

Net Income
----------

We earned  $737  thousand,  or $0.38 net income per share on a basic and diluted
basis,  for the nine months ended September 30, 2000,  compared to net income of
$364 thousand,  or $0.19 per basic and diluted share,  for the nine months ended
September  30,  1999.  The increase in net income was  primarily  due to a $1.58
million, or 53.0%,  increase in net interest income, a $206 thousand,  or 50.6%,
increase in non-interest  income and a $74 thousand,  or 27.7%,  decrease in the
provision for loan losses. These items were partially offset by a $1.47 million,
or 53.3%, increase in non-interest expenses. For the nine months ended September
30,  2000,  we  recognized  $12 thousand in State income tax expense and did not
recognize  any Federal  income tax expense.  Tax expense for the period has been
offset by the benefit from the reduction in the Company's valuation allowance on
its deferred tax asset as of September 30, 2000.  We would have reported  income
tax expense of  approximately  $285  thousand,  without  the  benefit  from this
valuation  allowance  reduction.  Based upon the current and projected levels of
profit, it is anticipated that we will further reduce the valuation allowance to
zero,  and begin to record  Federal  income tax expense in the first  quarter of
2001.

Net Interest Income
-------------------

Net interest income increased $1.58 million,  or 53.0%, to $4.56 million for the
nine months ended  September 30, 2000 from $2.98 million 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 $8.8 million,  or 32.7%, for the first nine months of
2000 compared to the same prior year period.

Our net  interest  margin  (annualized  net interest  income  divided by average
interest  earning  assets) for the nine months ended September 30, 2000 declined
to 4.46%  from  4.70% 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. In prior periods, a
higher  proportion  of assets were  funded by  non-interest  bearing  sources of
funds, such as non-interest  bearing demand deposits and  shareholders'  equity.
During December, 1998 and January, 1999, we 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 nine months of 1999. In
addition,  during  July  2000,  a 12  month  certificate  of  deposit  promotion
generated  $10.3  million  in  funds  at a yield  cost of  7.15%,  resulting  in
approximately  a 8  basis  point  decrease  in our  net  interest  margin  as of
September 30, 2000.

Interest income increased $3.35 million, or 72.7%, to $7.96 million for the nine
months ended September 30, 2000 compared to $4.61 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 $2.04 million and volume related
increases in income of $784 thousand in the investment securities portfolio, and
was offset by volume  related  decreases  in income of $34  thousand  in Federal
funds sold as our growth  resulted in an increase in average  earning  assets of
$51.2 million,  or 60.3%,  to $136.1 million for the nine months ended September
30, 2000 compared to $84.9 million for the same period in 1999.

                                       15
<PAGE>

In addition to the volume related  increase,  total interest income increased by
$538 thousand from rate related  increases as interest  rates on earning  assets
repriced to current higher yields.  Total interest income was further  increased
by $14 thousand as a result of one  additional  day during the first nine months
of 2000 compared to the first nine months of 1999.

Interest  expense for the first nine months of 2000 increased $1.77 million,  or
108.6%, 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 $1.47 million of the expense increase;  $291 thousand attributable
to net rate related increases;  and $9 thousand due to one additional day in the
first nine months of 2000.  The volume  related  increases  in interest  bearing
liabilities  and expense rate  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 September 30, 2000 compared
to the quarter ended  September 30, 1999 and the nine months ended September 30,
2000 compared to the same prior year period.

                                       16
<PAGE>
CONSOLIDATED AVERAGE BALANCE SHEETS

With Resultant Interest And Average Rates

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                     September 30, 2000
                                                                       -----------------------------------------------
                                                                         Average          Interest          Average
                                                                         Balance          Income/Expense     Rate
                                                                       -------------     ---------------  ------------
                                                                             (In thousands, except percentages)
ASSETS
Interest Earning Assets:
<S>                                                                       <C>                 <C>              <C>
          Federal Funds Sold........................................      $ 18,043            $ 299            6.57%
          Investment Securities.....................................        32,946              516            6.26%
          Loans (net of unearned income) (1) (2)....................       101,494            2,233            8.73%
                                                                       -------------     ------------

                      Total Interest Earning Assets.................       152,483            3,048            7.93%
                                                                       -------------     ------------

Non-Interest Earning Assets:
          Loan Loss Reserve.........................................       (1,394)
          All Other Assets..........................................       11,777
                                                                       -------------

                      Total Assets..................................     $162,866
                                                                       =============

LIABILITIES & STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
          NOW Deposits..............................................     $ 16,442               75            1.81%
          Savings Deposits..........................................       46,105              498            4.29%
          Money Market Deposits.....................................        7,667               98            5.07%
          Time Deposits.............................................       44,216              704            6.32%
          Short-term Borrowings.....................................            -                -            0.00%
                                                                       -------------     ------------

                      Total Interest Bearing Liabilities............      114,430            1,375            4.77%
                                                                       -------------     ------------

Non-Interest Bearing Liabilities:
          Demand Deposits...........................................       27,727
          Other Liabilities.........................................        1,948
                                                                       -------------

                      Total Non-Interest Bearing Liabilities........       29,675
                                                                       -------------

Stockholders' Equity................................................       18,761
                                                                       -------------

                      Total Liabilities and Stockholders'
                      Equity........................................     $162,866
                                                                       =============

NET INTEREST INCOME.................................................     $  1,673
                                                                       =============

NET INTEREST SPREAD (3).............................................                                          3.16%

NET INTEREST MARGIN (4).............................................                                          4.35%

<CAPTION>

                                                                                    Three Months Ended
                                                                                    September 30, 1999
                                                                       ----------------------------------------------
                                                                         Average          Interest         Average
                                                                         Balance          Income/Expense     Rate
                                                                       -------------     ---------------- -----------
                                                                             (In thousands, except percentages)
ASSETS
Interest Earning Assets:

          Federal Funds Sold........................................     $  15,374            $ 198           5.11%
          Investment Securities.....................................        10,274              142           5.53%
          Loans (net of unearned income) (1) (2)....................        68,091            1,404           8.18%
                                                                       -------------     ------------

                      Total Interest Earning Assets.................        93,739            1,744           7.38%
                                                                       -------------     ------------

Non-Interest Earning Assets:
          Loan Loss Reserve.........................................        (1,154)
          All Other Assets..........................................         8,793
                                                                       -------------

                      Total Assets..................................     $ 101,378
                                                                       =============

LIABILITIES & STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
          NOW Deposits..............................................     $  13,698               57           1.65%
          Savings Deposits..........................................        36,469              379           4.12%
          Money Market Deposits.....................................         2,585               23           3.53%
          Time Deposits.............................................        13,038              169           5.14%
          Short-term Borrowings.....................................             -                -           0.00%
                                                                       -------------     ------------

                      Total Interest Bearing Liabilities............        65,790              628           3.79%
                                                                       -------------     ------------

Non-Interest Bearing Liabilities:
          Demand Deposits...........................................        16,513
          Other Liabilities.........................................           723
                                                                       -------------

                      Total Non-Interest Bearing Liabilities........        17,236
                                                                       -------------

Stockholders' Equity................................................        18,352
                                                                       -------------

                      Total Liabilities and Stockholders'
                      Equity........................................     $ 101,378
                                                                       =============

NET INTEREST INCOME.................................................     $   1,116
                                                                        ============

NET INTEREST SPREAD (3).............................................                                          3.59%

NET INTEREST MARGIN (4).............................................                                          4.72%
</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.

                                       17

<PAGE>

CONSOLIDATED AVERAGE BALANCE SHEETS
With Resultant Interest And Average Rates

<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                          September  30, 2000
                                                                         ------------------------------------------------------
                                                                             Average              Interest          Average
                                                                             Balance          Income/Expense         Rate
                                                                         ---------------      --------------       ---------
                                                                                      (In thousands, except percentages)

ASSETS
Interest Earning Assets:
<S>                                                                            <C>                   <C>              <C>
             Federal Funds Sold ...................................            $ 13,235              $ 618            6.22%
             Investment Securities ................................              30,396              1,408            6.18%
             Loans (net of unearned income) (1) (2) ...............              92,494              5,931            8.54%
                                                                         ---------------      -------------

                             Total Interest Earning Assets ........             136,125              7,957            7.79%
                                                                         ---------------      -------------

Non-Interest Earning Assets:
             Loan Loss Reserve ....................................              (1,330)
             All Other Assets .....................................              11,047
                                                                         ---------------

                             Total Assets .........................           $ 145,842
                                                                         ===============

LIABILITIES & STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
             NOW Deposits .........................................            $ 15,836                207            1.74%
             Savings Deposits .....................................              43,442              1,383            4.24%
             Money Market Deposits ................................               4,619                156            4.50%
             Time Deposits ........................................              36,550              1,656            6.04%
             Short-term Borrowings ................................                   -                  -            0.00%
                                                                         ---------------      -------------

                             Total Interest Bearing Liabilities ...             100,447              3,402            4.51%
                                                                         ---------------      -------------

Non-Interest Bearing Liabilities:
             Demand Deposits ......................................              25,406
             Other Liabilities ....................................               1,474
                                                                         ---------------

                             Total Non-Interest Bearing Liabilities              26,880
                                                                         ---------------

Stockholders' Equity ..............................................              18,515
                                                                         ---------------

                             Total Liabilities and Stockholders'
                             Equity ...............................           $ 145,842
                                                                         ===============

NET INTEREST INCOME ...............................................                                 $4,555
                                                                                              =============

NET INTEREST SPREAD (3) ...........................................                                                   3.28%

NET INTEREST MARGIN (4) ...........................................                                                   4.46%


<CAPTION>

                                                                                               Nine Months Ended
                                                                                               September 30, 1999
                                                                         --------------------------------------------------------
                                                                              Average            Interest            Average
                                                                              Balance         Income/Expense          Rate
                                                                         ---------------      --------------        ---------
                                                                                     (In thousands, except percentages)
ASSETS
Interest Earning Assets:
<S>                                                                              <C>                <C>               <C>
             Federal Funds Sold ...................................              $14,168            $ 516             4.87%
             Investment Securities ................................               11,535              479             5.54%
             Loans (net of unearned income) (1) (2) ...............               59,185            3,617             8.17%
                                                                         ----------------     --------------

                             Total Interest Earning Assets ........               84,888            4,612             7.26%
                                                                         ----------------     --------------

Non-Interest Earning Assets:
             Loan Loss Reserve ....................................               (1,059)
             All Other Assets .....................................                8,132
                                                                         ----------------

                             Total Assets .........................              $91,961
                                                                         ================

LIABILITIES & STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
             NOW Deposits .........................................              $12,895               162             1.68%
             Savings Deposits .....................................               33,360             1,039             4.16%
             Money Market Deposits ................................                2,620                73             3.75%
             Time Deposits ........................................                9,108               353             5.19%
             Short-term Borrowings ................................                   11                 1             5.94%
                                                                         ----------------     --------------

                             Total Interest Bearing Liabilities ...               57,994             1,628             3.75%
                                                                         ----------------     --------------

Non-Interest Bearing Liabilities:
             Demand Deposits ......................................               14,989
             Other Liabilities ....................................                  602
                                                                         ----------------

                             Total Non-Interest Bearing Liabilities               15,591
                                                                         ----------------

Stockholders' Equity ..............................................               18,376
                                                                         ----------------

                             Total Liabilities and Stockholders'
                             Equity ...............................              $91,961
                                                                         ================

NET INTEREST INCOME ...............................................                                 $2,984
                                                                                              ==============

NET INTEREST SPREAD (3) ...........................................                                                    3.51%

NET INTEREST MARGIN (4) ...........................................                                                    4.70%
</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 September 30, 2000
                                                                   Compared to Three Months Ended
                                                                        September 30, 1999
                                                            -------------------------------------------
                                                                    Increase (Decrease) Due To
                                                            -------------------------------------------
                                                              Volume            Rate              Net
                                                            ----------       ---------       ----------
                                                                           (In thousands)
Interest Earned On:
<S>                                                              <C>             <C>             <C>
             Federal Funds Sold ..........................       $ 34            $ 67            $ 101
             Investment Securities .......................        313              61              374
             Loans (net of unearned income) ..............        689             140              829
                                                            ----------       ---------       ----------

                             Total Interest Income .......      1,036             268            1,304
                                                            ----------       ---------       ----------

Interest Paid On:
             NOW Deposits ................................         11               7               18
             Savings Deposits ............................        100              19              119
             Money Market Deposits .......................         45              30               75
             Time Deposits ...............................        404             131              535
             Short-term Borrowings .......................          -               -                -
                                                            ----------       ---------       ----------

                             Total Interest Expense ......        560             187              747
                                                            ----------       ---------       ----------

                             Net Interest Income .........      $ 476            $ 81            $ 557
                                                            ==========       =========       ==========

<CAPTION>

                                                                                Nine Months Ended September 30, 2000
                                                                                  Compared to Nine Months Ended
                                                                                       September 30, 1999
                                                                 --------------------------------------------------------------
                                                                                   Increase (Decrease) Due To
                                                                 --------------------------------------------------------------
                                                                   Volume            Rate             Time              Net
                                                                 ----------       -----------       --------       ------------
                                                                                         (In thousands)
Interest Earned On:
<S>                                                                  <C>               <C>              <C>              <C>
             Federal Funds Sold ..........................           $ (34)            $ 134            $ 2              $ 102
             Investment Securities .......................             784               146             (1)               929
             Loans (net of unearned income) ..............           2,043               258             13              2,314
                                                                 ----------       -----------       --------       ------------

                             Total Interest Income .......           2,793               538             14              3,345
                                                                 ----------       -----------       --------       ------------

Interest Paid On:
             NOW Deposits ................................              37                 7              1                 45
             Savings Deposits ............................             315                25              4                344
             Money Market Deposits .......................              56                26              1                 83
             Time Deposits ...............................           1,067               233              3              1,303
             Short-term Borrowings .......................              (1)                -              -                 (1)
                                                                 ----------       -----------       --------       ------------

                             Total Interest Expense ......           1,474               291              9              1,774
                                                                 ----------       -----------       --------       ------------

                             Net Interest Income .........         $ 1,319             $ 247            $ 5             $1,571
                                                                 ==========       ===========       ========       ============
</TABLE>

                                       19

<PAGE>

Provision for Loan Losses
-------------------------

The  provision  for loan losses  decreased  to $193  thousand for the first nine
months of 2000  compared to a provision of $267  thousand for the same period in
1999.  The provision is the result of our review of several  factors,  including
increased  loan  balances  and our  assessment  of economic  conditions,  credit
quality  and other  loss  factors  that may be  inherent  in the  existing  loan
portfolio.  Although we had no  non-accrual  loans at  September  30,  2000,  we
established  provisions for loan losses to create an adequate allowance based on
our 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 $1.4 million, or 1.36% of total loans, at September 30, 2000.

Non-Interest Income

Total  non-interest  income was $613  thousand for the first nine months of 2000
compared to $407 thousand for the first nine months of 1999, an increase of $206
thousand, or 50.6%. The increase was attributable to an increase in service fees
on  deposits  of $102  thousand,  or 61.8%,  and an  increase  in other fees and
commissions of $104 thousand,  or 43.0%.  The growth in service fees on deposits
reflects the growth in demand deposit account average balances,  which increased
to $25.4 million from $15.0 million, or an increase of 69.3% for the nine months
ended  September 30, 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 $49 thousand at September 30, 2000 compared
to the same prior year period.  The increase in non-yield  related fee income on
loans is primarily  attributable to an increase in loan  participations sold and
the fees and  commissions  generated on these  transactions.  Other increases in
other fees and commissions,  amounting to $55 thousand,  resulted primarily from
the continued growth of the Company.

Non-Interest Expense
--------------------

Total  non-interest  expense amounted to $4.23 million for the nine months ended
September 30, 2000, an increase of $1.47 million,  or 53.3%, 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 our growth.  Of this increase,  employment
costs increased $740 thousand,  or 59.8%, and reflected  increases in the number
of employees from 48 full-time  equivalents  for the period ended  September 30,
1999 to 70 full-time  equivalents  for the period ended  September 30, 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 $94 thousand,  or 49.7%, for the first nine 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 $98 thousand,  or 37.8%, for the first nine months of 2000 compared to
the first nine months of 1999 due  primarily to  depreciation  costs  associated
with  the new  facilities  and on  purchases  of  enhanced  computer  processing
equipment.

                                       20
<PAGE>

Other expenses  increased $534 thousand,  or 49.7%, for the first nine months of
2000 compared to the first nine months of 1999. The increase was attributable to
increased other expenses  resulting from our continued  growth, as costs of data
processing  services  paid  to our  third  party  processors  amounted  to  $461
thousand,  an increase of $203 thousand;  professional  and stockholder  related
costs  amounted to $249  thousand,  a decrease of $15  thousand;  marketing  and
advertising  costs  amounted to $240  thousand,  an  increase  of $95  thousand;
stationery,  supplies and printing costs amounted to $193 thousand,  an increase
of $40 thousand;  communications expenses amounted to $125 thousand, an increase
of $47 thousand;  and all other expenses amounted to $340 thousand,  an increase
of $164 thousand.

Income Tax Expense
------------------

For the nine months ended  September  30, 2000,  we  recognized  $12 thousand in
State income tax expense and did not recognize  any Federal  income tax expense.
Tax expense for the period has been offset by the benefit from the  reduction in
the Company's  valuation allowance on its deferred tax asset as of September 30,
2000. We would have reported income tax expense of approximately  $285 thousand,
without the benefit  from this  valuation  allowance  reduction.  Based upon the
current and projected  levels of profit,  it is anticipated that we will further
reduce the valuation  allowance to zero,  and begin to record Federal income tax
expense in the first quarter of 2001.

RESULTS OF OPERATIONS for the three months ended  September 30, 2000 compared to
the three months ended September 30, 1999

Net Income
----------

For the quarter ended  September  30, 2000, we earned $351 thousand  compared to
$160  thousand for the same period last year, an increase of $191  thousand,  or
119.4%. Basic and diluted net income per share for the third quarter of 2000 was
$0.18,  compared  to net income per share for both basic and  diluted  shares of
$0.08 for the third  quarter of 1999.  The increase in net income was  primarily
due to a $557 thousand,  or 49.9%,  increase in net interest  income,  and a $27
thousand,  or 16.0%, increase in non-interest income. These items were partially
offset by an  increase in the  provision  for loan  losses of $10  thousand,  or
22.2%, an increase in non-interest  expenses of $371 thousand, or 34.4%, and the
recognition  of $12 thousand in State tax expense for the third quarter of 2000.
Our net income for the three months ended  September  30, 1999 was  benefited by
the   application  of  net  operating  loss   carryforwards   to  eliminate  tax
liabilities.  For the three months ended  September 30, 2000, we recognized  $12
thousand in State income tax expense and did not  recognize  any Federal  income
tax expense.  Tax expense for the period has been offset by the benefit from the
reduction in the Company's  valuation  allowance on its deferred tax asset as of
September 30, 2000. We would have reported  income tax expense of  approximately
$145  thousand,  without the benefit from this  valuation  allowance  reduction.
Based upon the current and projected levels of profit, it is anticipated that we
will further reduce the valuation allowance to zero, and begin to record Federal
income tax expense in the first quarter of 2001.

                                       21
<PAGE>


Net Interest Income
-------------------

Net interest income increased $557 thousand,  or 49.9%, to $1.67 million for the
three months ended  September 30, 2000 from $1.1 million 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 $10.1 million, or 36.2%, for the third quarter of 2000
compared to the same prior year period.

Our net  interest  margin  (annualized  net interest  income  divided by average
interest  earning assets) for the three months ended September 30, 2000 declined
to 4.35%  from  4.72% 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. During December,  1998 and January, 1999,
we 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  nine  months of 1999.  In  addition,  during  July  2000,  a 12 month
certificate  of deposit  promotion  generated  $10.3 million in funds at a yield
cost of 7.15%,  resulting in  approximately a 25 basis point decrease in the net
interest margin for the quarter ended September 30, 2000.

Interest  income  increased  $1.30 million,  or 74.7%,  to $3.05 million for the
three months ended  September  30, 2000  compared to $1.74  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 $689  thousand,  volume
related  increases  in  income of $313  thousand  in the  investment  securities
portfolio,  and volume  related  increases  in income of $34 thousand in Federal
funds sold as our growth  resulted in an increase in average  earning  assets of
$58.8 million,  or 62.8%, to $152.5 million for the three months ended September
30, 2000 compared to $93.7 million for the same period in 1999.

In addition to the volume related  increase,  total interest income increased by
$268 thousand from rate related  increases as interest  rates on earning  assets
repriced to current higher yields.

Interest  expense for the third  quarter of 2000  increased  $747  thousand,  or
118.9%, 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 $560  thousand  of the expense  increase  and $187  thousand  was
attributable  to net rate related  increases.  The volume  related  increases in
interest  bearing  liabilities  and  expense  rate  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.

Provision for Loan Losses
-------------------------

The  provision  for loan losses was $55 thousand  for the third  quarter of 2000
compared  to a  provision  of $45  thousand  for the same  period  in 1999.  The
provision is the result of our review of several  factors,  including  increased
loan balances and our  assessment  of economic  conditions,  credit  quality and
other loss factors that may be inherent in the existing loan portfolio. Although
we had no non-accrual loans at September 30, 2000, we established provisions for
loan losses to create an adequate  allowance  based on our  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 $1.4 million, or
1.36% of total loans, at September 30, 2000.

                                       22
<PAGE>


Non-Interest Income
-------------------

Total  non-interest  income  was $196  thousand  for the third  quarter  of 2000
compared  to $169  thousand  for the third  quarter of 1999,  an increase of $27
thousand, or 16.0%. The increase was attributable to an increase in service fees
on  deposits  of $21  thousand,  or 31.3%,  and an  increase  in other  fees and
commissions  of $6  thousand,  or 5.9%.  The growth in service  fees on deposits
reflects the growth in demand deposit account average deposits,  which increased
to $27.7  million  from $16.5  million,  or an  increase  of 67.9% for the three
months ended  September  30, 2000  compared to the same prior year  period.  The
growth in other fees and commissions is primarily due to increases in other fees
and  commissions  such as safe  deposit  box rental  fees and ATM and debit card
fees, which increased by $21.0 thousand for the quarter ended September 30, 2000
compared  to the same  prior  year  period.  This  increase  was offset by lower
non-yield  related fee income on loans,  which decreased by $15 thousand for the
quarter ended  September  30, 2000  compared to the same prior year period.  The
decrease in non-yield related fee income on loans is primarily attributable to a
decrease  in  the  activity  of  loan  participations  sold  and  the  fees  and
commissions  generated  on  these  transactions.  Increases  in  other  fees and
commissions resulted primarily from our continued growth.

Non-Interest Expense
--------------------

Total non-interest  expense amounted to $1.45 million for the three months ended
September 30, 2000, an increase of $371 thousand,  or 34.4%, 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 our growth.  Of this increase,  employment
costs increased $213 thousand,  or 45.9%, and reflected  increases in the number
of employees from 48 full-time  equivalents  for the period ended  September 30,
1999 to 70 full-time  equivalents  for the period ended  September 30, 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 $5 thousand, or 6.2%, for the third quarter 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 the Manalapan branch office.

Depreciation  expenses  on  leasehold  improvements,  furniture,  and  equipment
increased $26 thousand,  or 28.6%, for the third quarter of 2000 compared to the
third quarter of 1999 due primarily to  depreciation  costs  associated with the
new facility and on purchases of enhanced computer processing equipment.

Other expenses increased $127 thousand,  or 28.6%, for the third quarter of 2000
compared  to the  third  quarter  of 1999.  The  increase  was  attributable  to
increased other expenses  resulting from our continued  growth, as costs of data
processing  services  paid  to our  third  party  processors  amounted  to  $184
thousand,  an increase of $89 thousand;  professional  and  stockholder  related
costs  amounted to $104  thousand,  a decrease of $12  thousand;  marketing  and
advertising  costs  amounted  to $67  thousand,  a  decrease  of  $12  thousand;
stationery, supplies and printing costs amounted to $69 thousand, an increase of
$19 thousand;  communications  expenses amounted to $64 thousand, an increase of
$20 thousand;  and all other expenses  amounted to $83 thousand,  an increase of
$23 thousand.

Income Tax Expense
------------------

Our net income for the three months ended  September  30, 1999 was  benefited by
the   application  of  net  operating  loss   carryforwards   to  eliminate  tax
liabilities.  For the three months ended  September 30, 2000, we recognized  $12
thousand in State income tax expense and did not  recognize  any Federal  income
tax expense.  Tax expense for the period has been offset by the benefit from the
reduction in the Company's  valuation  allowance on its deferred tax asset as of
September 30, 2000. We would have reported  income tax expense of  approximately
$145  thousand,  without the benefit from this  valuation  allowance  reduction.
Based upon the current and projected levels of profit, it is anticipated that we
will further reduce the valuation allowance to zero, and begin to record Federal
income tax expense in the first quarter of 2001.

                                       23
<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
            ---------------------------------------------------
            Not Applicable.


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 October 17, 2000  announcing
                      its   third   quarter   2000   results   of
                      operations.


                                       24

<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:    November 7, 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


                                       25