This Form 10-Q contains forward-looking statements, which can be identified by
the use of words such as "believes," "expects," "anticipates," "estimates" or
similar expressions. Forward - looking statements include:
• Statements of our goals, intentions and expectations;


•         Statements regarding our business plans, prospects, growth and
          operating strategies;

• Statements regarding the quality of our loan and investment portfolios; and

• Estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors: • General economic conditions, either nationally or in our market area,


          that are worse than expected;

• The volatility of the financial and securities markets, including

changes with respect to the market value of our financial assets;

• Changes in government regulation affecting financial institutions and


          the potential expenses associated therewith;


•         Changes in the interest rate environment that reduce our interest
          margins or reduce the fair value of financial instruments;



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• Our ability to enter into new markets and/or expand product offerings

successfully and take advantage of growth opportunities;

• Increased competitive pressures among financial services companies;

• Changes in consumer spending, borrowing and savings habits;

• Legislative or regulatory changes that adversely affect our business;

• Adverse changes in the securities markets;

• Our continued ability to manage cybersecurity risks;




•         Our continued ability to successfully remediate our identified internal
          control weaknesses;

• Our ability to successfully manage our growth; and




•         Changes in accounting policies and practices, as may be adopted by the
          bank regulatory agencies, the Financial Accounting Standards Board or
          the Public Company Accounting Oversight Board.

No forward-looking statement can be guaranteed and we specifically disclaim any obligation to update any forward-looking statement.

Risks and Uncertainties



The outbreak of COVID-19 has caused significant disruptions in the U.S. economy
and has created disruption within the markets where the Company primarily
operates. While there has been no material impact to the Company's operations,
COVID-19 could potentially create a business continuity issue for the Company.
The Company was able to quickly and effectively deploy low cost resources to its
employees so that all employees, excluding branch personnel, could operate
remotely. Branch hours and operations were modified to best accommodate its
staff and customers and remain compliant with State Executive Orders. If the
global response to contain COVID-19 escalates further or is unsuccessful, the
Company could experience a material adverse effect on its business, financial
condition, results of operations and cash flows, specifically with regards to
the allowance for losses and related provision.

Congress, the President, and the Federal Reserve have taken actions to help with
the economic fallout. The Coronavirus Aid, Relief and Economic Security
("CARES") Act was signed into law at the end of March 2020 as a $2 trillion
legislative package. The goal of the CARES Act is to prevent a severe economic
downturn through various measures, including direct financial aid to American
families and economic stimulus to significantly impacted industry sectors. In
addition, Governor Murphy announced on March 28, 2020, that financial
institutions will provide mortgage forbearance and financial protections for the
people of New Jersey facing economic hardship as a result of COVID-19 which
could have a material impact on the Company's operations.

The Company implemented its business continuity plan quickly and effectively and
continued to operate without impact to its customers. Although it is still too
early to determine the ultimate impact of COVID-19 on the loan portfolio,
management reviewed all relevant data at the time, including communication with
its customers, to ensure the qualitative factors were appropriate. The Company
does not have a significant concentration in the hardest hit industries, such as
leisure, hospitality, and retail, within its commercial real estate and
commercial and industrial portfolios. The Company registered with the SBA in
order to provide assistance to its customers through the Payroll Protection
Program. Originations for this program surpassed $6 million in an effort to help
these businesses through these uncertain times. In addition, the Company
provided three month deferrals in accordance with the Governor's announcement
for 80 residential loans with outstanding balances totaling approximately $19
million and 25 commercial loans with outstanding balances totaling approximately
$54 million. All programs were implemented after March 31, 2020 and continued
through the filing date.

Critical Accounting Policies



In preparing the consolidated financial statements, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the dates of the consolidated statements of financial position
and revenues and expenses for the periods then ended. Actual results could
differ significantly from those estimates. A material estimate that is
particularly susceptible to significant change relates to the determination of
the allowance for loan losses.

The allowance for loan losses represents our best estimate of losses known and
inherent in our loan portfolio that are both probable and reasonable to
estimate. In determining the amount of the allowance for loan losses, we
consider the losses inherent in our loan portfolio and changes in the nature and
volume of our loan activities, along with general economic and real estate
market conditions. We utilize a two-tier approach: (1) identification of
impaired loans for which specific reserves may be established; and (2)
establishment of general valuation allowances on the remainder of the loan
portfolio. We maintain a loan review system which provides for a systematic
review of the loan portfolio and the early identification of potential impaired
loans. Such system takes into consideration, among other things, delinquency
status, size of loan, type of collateral and the financial condition of the
borrower. Specific loan loss allowances are established for identified loans
based on a review of such information

                                       22

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and/or appraisals of the underlying collateral. General loan loss allowances are
based upon a combination of factors including, but not limited to, actual loan
loss experience, composition of the loan portfolio, current economic conditions
and management's judgment.

In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to recognize additions to the allowance based
on their judgments about information available to them at the time of their
examinations.

Although specific and general loan loss allowances are established in accordance
with management's best estimates, actual losses are dependent upon future events
and, as such, further provisions for loan losses may be necessary in order to
increase the level of the allowance for loan losses. For example, our evaluation
of the allowance includes consideration of current economic conditions, and a
change in economic conditions could reduce the ability of our borrowers to make
timely repayments of their loans. This could result in increased delinquencies
and increased non-performing loans, and thus a need to make increased provisions
to the allowance for loan losses, which would be a charge to income during the
period the provision is made, resulting in a reduction to our earnings. A change
in economic conditions could also adversely affect the value of the properties
collateralizing our real estate loans, resulting in increased charge-offs
against the allowance and reduced recoveries, and thus a need to make increased
provisions to the allowance for loan losses. Furthermore, a change in the
composition of our loan portfolio or growth of our loan portfolio could result
in the need for additional provisions.

Comparison of Financial Condition at March 31, 2020 and December 31, 2019



General. Total assets were $600.4 million at March 31, 2020, compared to $593.1
million at December 31, 2019, an increase of $7.3 million or 1.2%. During the
period, the Company experienced an increase of $14.9 million, or 2.9%, in loans
receivable, net. Cash and cash equivalents decreased by $7.4 million, or 40.0%,
in order to finance the loan growth. Other assets decreased $949,000, or 25.1%,
primarily due to the cash received for the receivable set up for the timing of
the bank owned life insurance payment and a decrease in prepaid expenses during
the three months ended March 31, 2020.

The ratio of average interest-earning assets to average-interest bearing liabilities was 118.9% for the three month period ended March 31, 2020 as compared to 120.6% for the three months ended March 31, 2019.



Loans. Loans receivable, net, increased by $14.9 million, or 2.9%, from $508.0
million at December 31, 2019, to $522.9 million at March 31, 2020.  Loans
receivable, net, represented 87.1% of the Company's assets at March 31, 2020
compared to 85.7% at December 31, 2019. The commercial and industrial loan
portfolio increased by $19.9 million during the quarter ended March 31, 2020.
Additionally, the construction portfolio increased $6.5 million, while loans in
process increased $1.6 million, during the first quarter as a result of
borrowers starting new projects. Offsetting the increases, the Bank's commercial
real estate portfolio decreased approximately $8.5 million on weaker loan
demand, while the residential mortgage portfolio decreased $4.5 million to
$149.4 million as of March 31, 2020, compared to $153.8 million at December 31,
2019. All other loan portfolios were consistent with year-end levels.

Securities. Our portfolio of securities held to maturity totaled $35.1 million at March 31, 2020 and $35.8 million at December 31, 2019. There were no purchases during the three months ended March 31, 2020, while principal repayments totaled $711,000.



Deposits. Total deposits at March 31, 2020, decreased to $447.4 million from
$472.8 million at year-end 2019. Interest demand and certificates of deposit
(including IRAs) decreased $21.3 million and $3.9 million, respectively.
Interest demand deposit account balances decreased to $120.6 million at
March 31, 2020, compared to $141.9 million at December 31, 2019, while
certificates of deposit decreased to $152.2 million at March 31, 2020, compared
to $156.2 million at December 31, 2019. Additionally, non-interest demand
decreased $2.1 million to $45.9 million at March 31, 2020, compared to $47.9
million at year-end 2019, while money market balances decreased $1.3 million to
$26.4 million at March 31, 2020, compared to $27.7 million at year-end 2019.
Offsetting these decreases was an increase in savings deposit account balances
of $3.3 million to $102.3 million at March 31, 2020, from $99.0 million at
December 31, 2019.

Borrowings. Total borrowings at March 31, 2020 were $83.9 million compared with
$51.6 million at December 31, 2019. Overnight advances with the Federal Home
Loan Bank of New York at March 31, 2020, were $56.2 million while there were
$23.9 million outstanding at December 31, 2019.

Equity. Stockholders' equity was $66.0 million at March 31, 2020 compared to
$65.4 million at December 31, 2019, an increase of $658,000, or 1.0%. The
increase in stockholders' equity was primarily due to net income of $533,000 for
the three months ended March 31, 2020.

                                       23

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Comparison of Operating Results for the Three Months Ended March 31, 2020 and 2019



General.   The Company had net income of $533,000 for the three months ended
March 31, 2020, compared to $514,000 for the three months ended March 31, 2019.
The increase in net income was primarily due to a decrease in professional
services expenses of $864,000, partially offset by $525,000 in merger expenses
and an increase of $250,000 in the provision for loan losses. The increase in
the provision expense was related to a mix of higher loan growth and qualitative
factor changes the Company experienced during the three month period.

Net Interest Income.



The following tables provide information concerning the balances, yields and
rates on interest-earning assets and interest-bearing liabilities during the
periods indicated:

                                                  For the three months ended
                                      3/31/2020                                 3/31/2019
                                       Interest                                  Interest
Average Balance Sheet    Average       Income/                     Average       Income/
(In Thousands)           Balance       Expense        Yield        Balance       Expense        Yield
Interest-earning
assets:
Loans receivable       $ 525,506     $    5,929         4.51 %   $ 502,149     $    5,691         4.53 %
Securities held to
maturity                  35,476            228         2.57 %      37,899            285         3.01 %
Other interest-earning
assets                    14,491             71         1.96 %      15,157            132         3.48 %
Total interest-earning
assets                   575,473          6,228         4.33 %     555,205          6,108         4.40 %

Allowance for loan
loss                      (5,724 )                                  (5,656 )

Non-interest-earning


assets                    28,670                                    27,621

Total

non-interest-earning


assets                    22,946                                    21,965
Total Assets           $ 598,419                                 $ 577,170

Interest-bearing
liabilities:

Demand & money market $ 161,003 $ 455 1.13 % $ 135,018

   $      367         1.09 %
Savings and club
deposits                  99,599            176         0.71 %     102,209            172         0.67 %
Certificates of
deposit                  153,227            754         1.97 %     130,207            587         1.80 %
Total interest-bearing
deposits                 413,829          1,385         1.34 %     367,434

1,126 1.23 %

Federal Home Loan Bank
advances                  70,049            297         1.70 %      92,780            559         2.41 %
Total interest-bearing
liabilities              483,878          1,682         1.39 %     460,214

1,685 1.46 %



Non-interest-bearing
deposit                   44,950                                    46,962
Other
non-interest-bearing
liabilities                3,306                                     2,623
Total Liabilities        532,134                                   509,799

Equity                    66,285                                    67,371
Total Liabilities and
Equity                   598,419                                   577,170

Net Interest Income                       4,546         2.94 %                      4,423         2.94 %

Net Interest Margin                                     3.16 %                                    3.19 %

Ratio of Interest
Earning Assets to
Interest Bearing
Liabilities               118.93 %                                  120.64 %



The Company's net interest margin decreased 3 basis points to 3.16% for the
three months ended March 31, 2020 compared to 3.19% for the three months ended
March 31, 2019. The yield on interest-earning assets decreased by 7 basis points
year over year while the cost of interest-bearing liabilities decreased 7 basis
points.

Provision for Loan Losses.  The provision for loan losses was $250,000 for the
three months ended March 31, 2020 compared to a provision of $0 for the three
months ended March 31, 2019. The increased provision level during the current
year

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period is attributable to a mix of higher loan growth and changes to qualitative
factors during the quarter ended March 31, 2020 compared to the same period in
2019. The Company's management reviews the level of the allowance for loan
losses on a quarterly basis based on a variety of factors including, but not
limited to, (1) the risk characteristics of the loan portfolio, (2) current
economic conditions, (3) actual losses previously experienced, (4) the Company's
level of loan growth and (5) the existing level of reserves for loan losses that
are probable and estimable.  Although it is still too early to determine the
ultimate impact of COVID-19 on the loan portfolio, management reviewed all
relevant data at the time, including communication with its customers, to ensure
the qualitative factors were appropriate. Management will continue to monitor
the impact and make additional provisions as necessary. The Company had $3.4
million in nonperforming loans as of March 31, 2020, compared to $3.8 million as
of March 31, 2019.  The allowance for loan losses to total loans was 1.13% and
1.14% at March 31, 2020 and 2019, respectively, while the allowance for loan
losses to non-performing loans was 175.44% at March 31, 2020, compared to
147.38% at March 31, 2019.  Non-performing loans to total loans and net
charge-offs to average loans outstanding were at 0.65% and 0.01%, respectively,
at and for the three months ended March 31, 2020, compared to 0.78% and 0.00% at
and for the three months ended March 31, 2019.

Non-Interest Income. Non-interest income increased $46,000, or 24.2%, to
$236,000 during the three months ended March 31, 2020 compared to $190,000 for
the three months ended March 31, 2019. Non-interest income increased primarily
due to an increase in loan fees.

Non-Interest Expenses. During the three months ended March 31, 2020 and
March 31, 2019, non-interest expense were $3.7 million and $3.9 million,
respectively. Non-interest expense decreased $214,000 to $3.7 million for the
three months ended March 31, 2020, as compared to the same period ended
March 31, 2019. While professional services decreased by $864,000, the Company
incurred merger related expenses of $525,000 during the three months ended
March 31, 2020. Additionally, service bureau fees increased by $105,000 for the
three months ended March 31, 2020 compared to the same three months period a
year earlier. Service bureau fees increased primarily due to the reduction of
relationship credits utilized during the three month period.

Income Taxes. Income tax expense for the three months ended March 31, 2020 was
$346,000 or 39.4% of the reported income before income taxes compared to a tax
expense of $232,000 or 31.1% for the three months ended March 31, 2019. The
increase in tax rate was due to the nondeductible portion of the merger related
expenses.

Liquidity, Commitments and Capital Resources

The Bank must be capable of meeting its customer obligations at all times. Potential liquidity demands include funding loan commitments, cash withdrawals from deposit accounts and other funding needs as they present themselves. Accordingly, liquidity is measured by our ability to have sufficient cash reserves on hand, at a reasonable cost and/or with minimum losses.



Senior management is responsible for managing our overall liquidity position and
risk and is responsible for ensuring that our liquidity needs are being met on
both a daily and long term basis. The Financial Review Committee, comprised of
senior management and chaired by the President and Chief Executive Officer, is
responsible for establishing and reviewing our liquidity procedures, guidelines,
and strategy on a periodic basis.

Our approach to managing day-to-day liquidity is measured through our daily
calculation of investable funds and/or borrowing needs to ensure adequate
liquidity. In addition, senior management constantly evaluates our short-term
and long-term liquidity risk and strategy based on current market conditions,
outside investment and/or borrowing opportunities, short and long-term economic
trends, and anticipated short and long-term liquidity requirements. The Bank's
loan and deposit rates may be adjusted as another means of managing short and
long-term liquidity needs. We do not at present participate in derivatives or
other types of hedging instruments to meet liquidity demands, as we take a
conservative approach in managing liquidity.

At March 31, 2020, the Bank had outstanding commitments to originate loans of
$25.3 million, construction loans in process of $14.5 million, unused lines of
credit of $73.0 million (including $59.7 million for commercial lines of credit
and $12.9 million for home equity lines of credit), and standby letters of
credit of $513,000. Certificates of deposit scheduled to mature in one year or
less at March 31, 2020, totaled $99.9 million.

As of March 31, 2020, the Bank had contractual obligations related to the long-term operating leases for two branch locations that it leases (Loan Production Office and Martinsville branches).



The Bank generates cash through deposits and/or borrowings from the FHLBNY to
meet its day-to-day funding obligations when required.  At March 31, 2020, the
total loans receivable to deposits ratio was 116.9%.  At March 31, 2020, the
Bank's collateralized borrowing limit with the FHLBNY was $171.1 million, of
which $83.9 million was outstanding.  As of March 31, 2020, the Bank also had a
$13.0 million unsecured line of credit with one financial institution that it
could access if necessary.


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Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to maintain its status as a well-capitalized institution in accordance with regulatory standards. As of March 31, 2020, the Bank exceeded all applicable regulatory capital requirements.

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