UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended December 31, 2001

                                       OR

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

         For the transition period from _______________ to ___________________

                        Commission file number 001-14910

                            GOUVERNEUR BANCORP, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

         United States                                           04-3429966
-------------------------------                              -------------------
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                  42 Church Street, Gouverneur, New York 13642
                  --------------------------------------------
                    (Address of principal executive offices)

                    Issuer's telephone number (315) 287-2600

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

                                                                Outstanding at
            Class                                              December 31, 2001
            -----                                              -----------------
Common Stock, par value $ .01                                      2,276,759

Transitional Small Business Disclosure Format (check one):
                                Yes [ ]   No [X]
<PAGE>

                            GOUVERNEUR BANCORP, INC.
                                   FORM 10-QSB
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
------------------------------

Item 1.  Financial Statements - Unaudited

         Consolidated Statements of Financial Condition at December 31, 2001 and
         at September 30, 2001

         Consolidated Statements of Income for the three months ended December
         31, 2001 and December 31, 2000

         Consolidated Statements of Changes in Shareholders' Equity for three
         months ended December 31, 2001

         Consolidated Statements of Cash Flows for the three months ended
         December 31, 2001 and 2000

         Notes to Consolidated Financial Statements

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

PART II - OTHER INFORMATION
---------------------------

Item 1.  Legal Proceedings

Item 6.  Exhibits and Reports on Form 8-K


                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         The financial statements presented in this Form 10-QSB, beginning on
the following page, reflect the consolidated financial condition and results of
operations of the Company and its subsidiary Gouverneur Savings and Loan
Association (the "Bank") operating in a mutual holding company structure since
the Bank's reorganization on March 23, 1999.


                                        3
<PAGE>

<TABLE>
<CAPTION>
                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                  (In thousands, except share data) (Unaudited)

                                                                    December 31,  September 30
                                                                        2001          2001
                                                                    ------------  ------------
<S>                                                                   <C>           <C>
Assets:
Cash and due from banks                                               $  1,225      $  1,679
Interest-bearing deposits in bank                                        1,350         1,173
Securities available-for-sale                                           20,269        19,077
Securities held-to-maturity (fair value of $2,436 at December 31,
   2001 and $2,696 at September 30, 2001)                                2,394         2,651
Loans, net of deferred fees                                             56,400        56,434
Less allowance for loan losses                                            (659)         (655)
                                                                      --------      --------
               Loans, net                                               55,741        55,779

Accrued interest receivable                                                404           485
Federal Home Loan Bank stock, at cost                                      820           820
Premises and equipment, net                                                932           899
Other assets                                                               250           300
                                                                      --------      --------
               Total assets                                           $ 83,385      $ 82,863
                                                                      ========      ========

Liabilities:

Deposits: Non interest-bearing demand                                 $    664      $    738
          NOW and money market                                           6,638         6,964
          Savings                                                       13,783        13,795
          Time                                                          27,430        26,186
                                                                      --------      --------
               Total deposits                                           48,515        47,683
                                                                      --------      --------

Securities sold under agreements to repurchase                           8,400         8,400
Advances form Federal Home Loan Bank of New York                         8,000         8,000
Other liabilities                                                        1,634         2,124
                                                                      --------      --------
               Total liabilities                                        66,549        66,207
                                                                      --------      --------

Shareholders' Equity:
   Preferred stock, $.01 par value, 1,000,000 shares
      authorized; none issued                                               --            --
   Common stock, $.01 par value, 9,000,000 shares
      authorized; 2,384,040 shares issued                                   24            24
   Additional paid-in capital                                            4,545         4,540
   Retained earnings                                                    12,656        12,463
   Accumulated other comprehensive income                                  580           610
   Unearned common stock held by MRP                                       (86)          (89)
   Unallocated common stock held  by ESOP                                 (340)         (349)
   Treasury Stock, at cost, 107,281 shares                                (543)         (543)
                                                                      --------      --------
               Total shareholders' equity                               16,836        16,656
                                                                      --------      --------
               Total liabilities and shareholders' equity             $ 83,385      $ 82,863
                                                                      ========      ========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                        4
<PAGE>

<TABLE>
<CAPTION>
                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                (In thousands, except per share data) (Unaudited)

                                                                  Three Months Ended
                                                                     December 31,
                                                                     ------------
                                                                    2001       2000
                                                                  -------    -------
<S>                                                               <C>        <C>
Interest income:
----------------
   Loans                                                          $ 1,163    $ 1,185
   Securities                                                         258        237
   Other short-term investments                                         7         29
                                                                  -------    -------
            Total interest income                                   1,428      1,451

Interest expense:
-----------------
   Deposits                                                           469        555
   Borrowings                                                         194        182
                                                                  -------    -------
            Total interest expense                                    663        737
                                                                  -------    -------

            Net interest income                                       765        714
Provision for loan losses                                              25         30
                                                                  -------    -------
            Net interest income after provision for loan losses       740        684

Non-interest income
-------------------
   Service charges                                                     24         27
   Other                                                               32         38
                                                                  -------    -------
            Total non-interest income                                  56         65

Non-interest expenses
---------------------
   Salaries and employee benefits                                     249        244
   Directors fees                                                       1         17
   Occupancy and Equipment                                             60         52
   Data processing                                                     29         33
   Postage and supplies                                                25         26
   Professional fees                                                   39         47
   Foreclosed assets, net                                              11          8
   Other                                                               63         70
                                                                  -------    -------
            Total non-interest expenses                               477        497
                                                                  -------    -------

            Income before income tax expense                          319        252

Income tax expense                                                    126         99
                                                                  -------    -------
            Net income                                            $   193    $   153
                                                                  =======    =======

Earnings per common share - basic (Note 3)                        $  0.09    $  0.07
Earnings per common share - diluted (Note 3)                      $  0.09    $  0.07
</TABLE>


See accompanying notes to the consolidated financial statements.

                                        5
<PAGE>
<TABLE>
<CAPTION>
                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                      Three months ended December 31, 2001
                (In thousands, except per share data) (Unaudited)

                                                                           Accumulated
                                                                              Other
                                                      Additional             Compre-
                                             Common     Paid In   Retained   hensive  Unallocated Unallocated Treasury
                                              Stock     Capital   Earnings    Income       MRP        ESOP      Stock    Total
                                            --------   --------   --------   --------   --------   --------   --------  --------
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>
Balance at
September 30, 2001                          $     24   $  4,540   $ 12,463   $    610   $    (89)  $   (349)  $   (543) $ 16,656

Comprehensive Income:
  Net Income                                                           193                                                   193
  Change in net unrealized gain (loss)
    on securities available for sale, net
    of taxes                                                                      (30)                                       (30)
                                                                                                                        --------

   Total comprehensive income                                                                                                163
                                                                                                                        --------

Allocation of ESOP shares (1,709 shares)                      5                                           9                   14


Amortization of MRP                                                                            3                               3
                                            --------   --------   --------   --------   --------   --------   --------  --------

Balance at December 31, 2001                $     24   $  4,545   $ 12,656   $    580   $    (86)  $   (340)  $   (543) $ 16,836
                                            ========   ========   ========   ========   ========   ========   ========  ========
</TABLE>

                                        6
<PAGE>

<TABLE>
<CAPTION>
                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands) (Unaudited)

                                                                 Three Months Ended
                                                                    December 31,
                                                                    ------------
                                                                   2001       2000
                                                                 -------    -------

<S>                                                              <C>        <C>
 Cash flows from operating activities:
   Net Income                                                    $   193    $   153

   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Depreciation                                                   20         20
       Provision for loan losses                                      25         30
       Net amortization of securities                                 27         15
       Allocated and earned shares of ESOP and  MRP                   17         13
       Decrease in accrued interest receivable                        81         10
       Decrease in other assets                                      109         33
       Increase (decrease) in other liabilities                     (468)        73
                                                                 -------    -------

            Net cash provided by operating activities                  4        347
                                                                 -------    -------

Cash flows from investing activities:
   Net increase in loans                                             (46)      (527)
   Proceeds from maturities and principal reductions AFS           2,206        518
   Purchases of securities AFS                                    (3,476)      (942)
   Proceeds from maturities and principal reductions HTM             256        439
   Additions to premises and equipment                               (53)       (23)
                                                                 -------    -------

            Net cash used in investing activities                 (1,113)      (535)
                                                                 -------    -------

Cash flows from financing activities:
   Net increase (decrease) in deposits                               832       (119)
   Purchases of common stock by Management Recognition Plan           --       (163)
                                                                 -------    -------

            Net cash provided (used) by financing activities         832       (282)
                                                                 -------    -------

            Net decrease in cash and cash equivalents               (277)      (470)
</TABLE>


                                        7
<PAGE>

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                               December 31,
                                                               ------------
                                                             2001         2000
                                                           -------      -------

<S>                                                        <C>          <C>
Net decrease in cash and cash equivalents                     (277)        (470)
Cash and cash equivalents at beginning of period             2,852        3,388
                                                           -------      -------

Cash and cash equivalents at end of period                 $ 2,575      $ 2,918
                                                           =======      =======

Supplemental disclosure of cash flow information:

Non-cash investing activities:
   Additions to foreclosed assets                          $    59      $    44
Cash paid during the period for:
   Interest                                                    707          772
   Income taxes                                                 12           --
</TABLE>


See accompanying notes to consolidated financial statements.

                                        8
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       Business
         --------

         Gouverneur Bancorp, Inc. (the Company) operates as a savings and loan
         holding company. Its only subsidiary is Gouverneur Savings and Loan
         Association (the Bank). The consolidated financial statements include
         the accounts of the Company and its wholly owned subsidiary, the Bank.
         All material intercompany accounts and transactions have been
         eliminated in this consolidation.

         Cambray Mutual Holding Company ("Cambray MHC"), the Company's parent
         mutual holding company, held 1,311,222 shares or 57.6% of the Company's
         issued and outstanding common stock, and shareholders other than
         Cambray MHC held 965,537 shares or 42.4% of such stock at December 31,
         2001.

2.       Basis of Presentation
         ---------------------

         The accompanying unaudited consolidated financial statements were
         prepared in accordance with instructions for Form 10-QSB and,
         therefore, do not include information or footnotes necessary for a
         complete presentation of financial position, results of operations, and
         cash flows in conformity with generally accepted accounting principles.
         However, in the opinion of management, all adjustments consisting of
         only normal recurring adjustments or accruals which are necessary for a
         fair presentation of the consolidated financial statements have been
         made at and for the three months ended December 31, 2001 and 2000. The
         results of operations for the three month period ended December 31,
         2001 are not necessarily indicative of the results which may be
         expected for an entire fiscal year or other interim periods.

3.       Earnings Per Common Share
         -------------------------

         Basic earnings per share is calculated by dividing net income available
         to common shareholders by the weighted average number of shares
         outstanding during the period. Unallocated shares held by the Company's
         ESOP are not included in the weighted average number of shares
         outstanding. Diluted earnings per share reflects additional common
         shares that would have been outstanding if dilutive potential common
         shares had been issued, as well as any adjustment to income that would
         result from the assumed issuance.

4.       Impact of New Accounting Standards
         ----------------------------------

         In June 2001, the FASB issued Statement No. 142, Goodwill and Other
         Intangible Assets, which requires acquired intangible assets (other
         than goodwill) to be amortized over their useful economic life, while
         goodwill and any acquired intangible asset with an indefinite useful
         economic life would not be amortized, but would be reviewed for
         impairment on an annual basis based upon guidelines specified by the
         Statement. The adoption of this statement is effective October 1, 2002.

         In June 2001, the FASB issued Statement No. 143, Accounting for Asset
         Retirement Obligations, which addresses the financial accounting and
         reporting for obligations associated with the retirement of tangible
         long-lived assets and the associated asset retirement costs. This
         Statement requires that the fair value of a liability for an asset
         retirement obligation be recognized in the period in which it is
         incurred if a reasonable estimate of fair value can be made. The
         associated asset retirement costs are capitalized as part of the
         carrying amount of the long-lived asset.

         In August 2001, the FASB issued Statement No. 144, Accounting for
         Impairment of Disposal of Long-Lived Assets, that replaces SFAS No.
         121, Accounting for the Impairment of Long-Lived Assets and for
         Long-Lived Assets to be Disposed Of. The provisions of SFAS No. 144 are
         effective October 1, 2002.

                                        9
<PAGE>

         The Company does not believe there will be a material impact on the
         Company's consolidated financial statements upon the adoption of these
         statements.

5.       Retained Earnings
         -----------------

         Cambray Mutual Holding Company (Cambray) waived receipt of its
         September 2001 dividend, in the amount of $118,010, from the Company.
         The dividend waived by Cambray is considered as a restriction on the
         retained earnings of the Company. As of December 31, 2001, the retained
         earnings restricted for cash dividends waived was $118,010.


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

         Gouverneur Bancorp, Inc. ("We" or the "Company") is a corporation
organized under the laws of the United States in March 1999, in connection with
the reorganization of its wholly owned subsidiary, Gouverneur Savings and Loan
Association (the "Bank"), into a mutual holding company structure. The Company's
assets consist primarily of all the outstanding capital stock of the Bank and
cash of $606,000 at December 31, 2001. The Company's principal business is the
ownership of the Bank. The Company is a savings and loan holding company
registered with the Office of Thrift Supervision ("OTS") and subject to
regulation under federal banking laws and regulations. In this document,
references to the Company include the Bank, unless the context denotes
otherwise. The terms "Registrant", "we", "our" or similar terms refer to
Gouverneur Bancorp, Inc.

         The Bank has been and continues to be a community oriented financial
institution offering a variety of financial services. The Bank attracts deposits
from the general public and uses those deposits together with funds borrowed
from the Federal Home Loan Bank ("FHLB") of New York, to make loans and other
investments. Most of the loans are one to four family residential mortgages. The
Company has diversified its lending by increasing the number of automobile loans
and real estate and non-real estate commercial loans. Most of the loans are made
to residents in the Bank's primary market area, which is southern St. Lawrence
and northern Jefferson and Lewis counties in New York State. The Bank's deposit
accounts are insured by the Savings Association Insurance Fund ("SAIF") of the
Federal Deposit Insurance Corporation ("FDIC"), and the Bank is subject to
regulation by the FDIC and the OTS.

         Our profitability depends, to a large extent, on our net interest
income, which is the difference between the interest we receive on our interest
earning assets, such as loans and investments, and the interest we pay on
interest bearing liabilities. Other categories of expenses generally include the
provision for loan losses, salaries and employee benefits costs, net expenses on
real estate owned and various categories of operational expenses. External
factors, such as general economic and competitive conditions, particularly
changes in interest rates, government policies and actions of regulatory
authorities, can have a substantial effect on profitability.

Forward-Looking Statements

         When we use words or phrases like "will probably result," "we expect,"
"will continue," "we anticipate," "estimate," "project," "should cause" or
similar expressions in this 10-QSB or in any press releases, public
announcements, filings with the Securities and Exchange Commission or other
disclosures, we are making "forward-looking statements" as described in the
Private Securities Litigation Reform Act of 1995. In addition, certain
information we will provide in the future on a regular basis, such as analysis
of the adequacy of our allowance for loan losses or an analysis of interest rate
sensitivity of our assets and liabilities, is always based on predictions of the
future. From time to time, we may also publish other forward-looking statements
regarding anticipated financial performance, business prospects, and similar
matters.

         The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. We want you to know that a variety of
future events could cause our actual results and experience to differ materially
from what was anticipated in our forward-looking statements. Some of the risks
and uncertainties that may affect our operations, performance, development and
results, the interest rate sensitivity of our assets and liabilities, and the
adequacy of our allowance for loan losses, include:

                                       10
<PAGE>

o    Local, regional, national or global economic conditions which could cause
     an increase in loan delinquencies, a decrease in property values, or a
     change in the housing turnover rate;

o    Changes in market interest rates or changes in the speed at which market
     interest rates change;

o    Changes in laws and regulations affecting us, including changes in
     accounting standards;

o    Changes in competition; and

o    Changes in consumer preferences.

         Please do not rely unduly on any forward-looking statements, which are
valid only as of the date made. Many factors, including those described above,
could affect our financial performance and could cause our actual results or
circumstances for future periods to differ materially from what we anticipate or
project. We have no obligation to update any forward-looking statements to
reflect future events which occur after the statements are made.

Comparison of Financial Condition at December 31, 2001 and September 30, 2001.

         During the three months from September 30, 2001 through December 31,
2001, total assets increased 522,000, or 0.60% from $82.9 million to $83.4
million. Our loan portfolio decreased by $34,000, or 0.06%. This decrease was
the result of an increase of $216,000 in real estate loans combined with
decreases of $69,000 in other commercial loans, $56,000 in automobile loans and
$125,000 in other consumer loans. We believe that the decrease in commercial,
automobile and other consumer loans is substantially attributable to the winter
season, when loan demand is traditionally weak, and the fact that we are working
to improve our interest margin by emphasizing service over offering the lowest
interest rates. The local economy continues to struggle as a temporary shutdown
of a local mining operation has caused the loss of more than 100 jobs. Due to
world prices, it is not profitable for that business to operate at this time.
Special low and no rate financing arrangements offered by automobile
manufacturers have also slowed demand for the Bank's automobile loans. Our
borrowed funds from FHLB of New York, consisting of advances and securities
repurchase obligations, were $16.4 million on December 31, 2001 and September
30, 2001. We experienced an increase in deposits of approximately $832,000, or
1.74% during the quarter. The increase can be attributed to an increase in time
deposits, offset in part by decreases in demand and savings account balances.

         Our shareholders' equity rose by $180,000 during the quarter through
the combination of our net income of $193,000 with $17,000 in Employee Stock
Ownership Plan (ESOP) share allocation and Management Recognition Plan (MRP)
amortization, being offset by a decrease in the market value of our
available-for-sale securities portfolio of $30,000.

Comparison of Results of Operations for the Three Months Ended December 31, 2001
and 2000.

         General. Our net income for the three months ended December 31, 2001
was $193,000, an increase of $40,000, or 26.1%, over our net income for the same
period last year. We recorded this increase because net interest income
improved, the provision for loan losses was decreased, and non-interest expenses
decreased over the same period last year. Our net interest income increased by
$51,000, as interest expense decreased $74,000 to more than offset a decrease of
$23,000 in interest income. Non-interest income fell by $9,000 over last year's
period. The provision for loan losses was lower by $5,000 for the first quarter
of this fiscal year versus last fiscal year primarily because loans decreased.
Decreases of $16,000 in directors fees and $8,000 in professional fees were
responsible for a decrease in non-interest expenses of $20,000. Income before
income tax expense rose $67,000, but was offset by a $27,000 increase in income

                                       11
<PAGE>

taxes to result in a $40,000 increase in net income. Basic and diluted earnings
per share were $0.09 for this year's quarter versus $0.07 for both measures in
last year's quarter.

         Interest Income. Interest income decreased $23,000, or 1.6%, from the
three months ended December 31, 2000 to the three months ended December 31,
2001. Declining interest rates, characterized by eleven prime rate reductions
from January through December in 2001, were primarily responsible for the
decrease. These reductions translated into a decrease in our interest income not
withstanding an increase of $7.3 million in our average interest earning assets.
This increase from $71.8 million to $79.1 million included a $1.3 million
increase in the average balance of loans and a $6.0 million increase in the
average balance of investment securities and other short-term investments.

         The average interest rates we earned on our interest-earning assets was
86 basis points (0.86%) lower in this year's quarter than last year's. The
decrease consisted of a 36 basis point decrease in the average rate earned on
loans, a 143 basis point (1.43%) decrease in the average rate earned on
securities and a 431 basis point (4.31%) decrease in the average rate earned on
other short-term investments. The average rate we earned on loans decreased as
adjustable rate commercial loans repriced, higher rate loans matured and
borrowers refinanced higher rate loans.

         Interest income on loans decreased by $22,000. We estimate that the
decrease in loan yields by 36 basis points decreased our interest income by
$49,000 while the increase in the average balance of loans increased our
interest income by $27,000.

         The decrease in the average rates earned on securities was caused in
part by the downward adjustment of adjustable-rate mortgaged-backed securities
in the portfolio over the past year. The one-year adjustable-rate
mortgage-backed securities help reduce the interest rate sensitivity effects of
our long-term fixed-rate mortgage portfolio. We estimate that the decrease in
the yield on our investment portfolio by 143 basis points decreased interest
income by $64,000, while an increase in the average balance of securities
increased interest income by $85,000, resulting in a net increase in interest
income of $21,000.

         Overall, we estimate that the increase in the average volume of
interest-earning assets caused a $107,000 increase in interest income, while the
decrease in average interest rates resulted in a $130,000 decrease in interest
income for a net decrease of $23,000 in interest income.

          Interest Expense. Interest expense decreased $74,000, or 10.0%, in the
first quarter of fiscal 2002 versus the same period in fiscal 2001. We estimate
that an additional interest cost of $100,000, resulted from an increase in the
average volume of interest-bearing liabilities while a $174,000 decrease in
interest expense was caused by a decrease in the average rate we paid on these
liabilities. The largest decrease in interest expense was $45,000 in time
deposits as higher rate certificates matured, followed by a $30,000 decrease in
the cost of savings accounts which the Bank has repriced downward. The increase
in the volume of interest-bearing liabilities was a result of increases in our
average balance of borrowings and time deposits we have used to provide funds to
grow our assets. The average balance of interest-bearing deposits was $1.5
million more in the 2002 fiscal quarter compared to 2001.

         Our average cost of funds decreased by 103 basis points (1.03%) from
5.15% last year to 4.12% this year. The decrease in the cost of borrowings and
the decreased average rates we paid on deposit accounts decreased our cost of
funds.

         Net Interest Income. The net effect of the decreases in interest income
and interest expense was a $51,000 increase in net interest income. Our interest
rate spread (the difference between the average rate we earn and the average
rate we pay) increased by 18 basis points (0.18%). However, our net interest
margin decreased by 11 basis points to 3.84% in 2002, from 3.95% for the first
quarter of 2001.

         The average yield on our loans and securities portfolio decreased as
discussed above. The decline in the rate earned on our interest-earning assets
by 86 basis points, was more than offset by the decrease of 104 basis points in
the average cost of funds and resulted in a $51,000 increase in net interest
income. We continue to offer attractive rates on our deposit products to
maintain market share, but we have seen rates decrease dramatically. We price
our deposits to be competitive with the two other local commercial banks.

                                       12
<PAGE>

         Average capital represented 21.2% of average interest-earning assets
for the quarter ended December 31, 2001, while it represented 22.4% of average
interest-earning assets for the same quarter in last year. The decrease in the
capital ratio, which reflects an increase in leverage, is the result of the
average growth in the size of our investment portfolio. Our ratio of average
interest-earning assets to average interest-bearing liabilities decreased from
1.26 times in 2001 to 1.24 times in 2002.

         Provision for Loan Losses. The provision for loan losses results from
our analysis of the adequacy of the allowance for loan losses. If we believe
that the allowance should be higher, then we increase it, with a charge to
provision for loan losses, which is an expense on our income statement. In
determining the appropriate provision for loan losses, management considers the
level of and trend in non-performing loans, the level of and trend in net loan
charge-offs, the dollar amount and mix of the loan portfolio, as well as general
economic conditions and real estate trends in the Company's market area, which
can impact the inherent risk of loss in the Company's portfolio. Furthermore,
the Office of Thrift Supervision may disagree with our judgments regarding the
risks in our loan portfolio and could require us to increase the allowance in
the future.

         For the three months ended December 31, 2001, we provided $25,000 for
loan losses, compared to $30,000 in the same quarter last year. At December 31,
2001 and 2000, the ratio of our loan allowance to total loans was 1.18% and
1.24%, respectively. At the beginning of this fiscal year the allowance was
$655,000, or 1.17% of total loans, and we determined at the end of the quarter
that the appropriate level for the allowance was $659,000. We had charge-offs
during the quarter of $48,000 and recoveries of $27,000, so a $25,000 provision
was necessary to reach the desired level for the allowance. Our level of
non-accruing loans, loans 90 days and still accruing and restructured loans was
$943,000 at December 31, 2001 compared to $437,000 at September 30, 2001.
Non-accrual consumer loans decreased by $15,000, while non-accrual loans secured
by one-to-four family residences increased by $215,000. These loans are
adequately secured and do not require any adjustment to the allowance for loan
losses. The other $306,000 of the increase is attributable to the loans of two
commercial borrowers. The collateral for these loans appears to be adequate so
that no specific provision to the allowance for loan losses is being made at
this time.

         Non-interest Income. Our non-interest income was $9,000 lower in this
fiscal 2002 quarter versus the same period for the fiscal 2001 quarter. Both
service charges and other income were less than last year.

         Non-interest Expenses. Our non-interest expenses decreased by $20,000
from the 2001 quarter to the 2002 quarter. This decrease was primarily due to
reduced costs of $16,000 in directors' fees and $8,000 in professional fees
expense. The reduction in directors' fees was the result of losses incurred on
the investment of deferred fees indexed to stock market results. At December 31,
2001, we had twenty-two full-time and two part-time employees, compared to
twenty-two full time and one part-time employees at the end of December 2000. We
expect to soon hire an additional employee as an administrative assistant to
work with the President, the Chief Financial Officer and the Treasurer.

         Income tax expense. Our income tax expense increased by $27,000, or
27.3%, comparing the first quarter of fiscal 2002 to the same quarter of fiscal
2001. The increased expense was the result of higher net income before income
tax of $67,000, or 26.6%.

Liquidity and Capital Resources

         Our primary sources of funds are deposits, borrowings from the Federal
Home Loan Bank, and proceeds from the principal and interest payments on loans
and securities. Scheduled maturities and principal payments on loans and
securities are predictable sources of funds. We can also control the funds
available from borrowings. However, general economic conditions and interest
rate conditions can cause increases or decreases in deposit outflows and loan
pre-payments, which can also affect the level of funds we have available for
investment.

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<PAGE>

         In general, we manage our liquidity by maintaining a sufficient level
of short-term investments so funds are readily available for investment in loans
when needed. During the three months ended December 31, 2001, we reduced our
cash and cash equivalents by $277,000. We used this reduction to fund additional
investments. We originated $4.0 million of new loans during the three months
ended December 31, 2001. However, loans, net, after payments, charge-offs and
transfers to real estate owned, decreased by $38,000 during the period.

         Deposits increased by $832,000 during the quarter ended December 31,
2001. In addition to factors within our control, such as our deposit pricing
strategies and our marketing efforts, deposit flows are affected by the level of
general market interest rates, the availability of alternate investment
opportunities, general economic conditions, and other factors outside our
control.

         We monitor our liquidity regularly. Excess liquidity is invested in
overnight federal funds sold and other short-term investments. If we need
additional funds, we can borrow those funds, although the cost of borrowing
money is normally higher than the average cost of deposits. As a member of the
Federal Home Loan Bank of New York, the Bank can arrange to borrow an additional
$12.8 million against our one to four family mortgage portfolio. We have used
borrowed funds to help us leverage capital we received from our stock sale, but
have not needed borrowings to cover liquidity shortfalls. In addition to
borrowings, we believe that, if we need to do so, we can attract additional
deposits by increasing the rates we offer.

         We had $533,000 in outstanding commitments to make loans at December
31, 2001, along with $778,000 of unused home equity, commercial and overdraft
lines of credit. We anticipate that we will have enough funds to meet our
current loan commitments and to fund draws on the lines of credit through the
normal turnover of our loan and securities portfolios. At December 31, 2001, we
had $22.2 million of time certificates scheduled to mature within one year. We
anticipate that we can retain substantially all of those deposits if we need to
do so to fund loans and other investments as part of our efforts to grow and
leverage our capital.

         The Bank measures liquidity using a modified version of the formula
that was formerly required by OTS regulation. Our formula classifies investments
in a fund, secured by mostly mortgage assets, as a liquid asset since the
investment can be converted to cash with one-day notice. The OTS calculation did
not consider this investment to be liquid because of the real estate collateral.
We measure liquidity on a monthly basis and want to maintain a liquidity ratio
of between 5% and 15%. At December 31,2001, the ratio is 22.2% because we have
generated excess funds as our loans have decreased while our deposits have
increased, and placed these funds in short term investments. We will continue to
monitor this situation and adjust deposit rates or pay off borrowed funds as
necessary.

         The OTS has minimum capital ratio requirements applying to the Bank,
but there are no comparable minimum capital requirements that apply to us as a
savings and loan holding company. At December 31, 2001, the Bank exceeded all
regulatory capital requirements of the OTS applicable to it, with Tier I capital
of $15.6 million, or 18.9% of average assets and with risk-based capital of
$16.6 million, or 37.1% of risk-weighted assets. The Bank also had tangible
capital of $15.6 million, or 18.9% of average tangible assets. The Bank was
classified as "well capitalized" at December 31, 2001 under OTS regulations.

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<PAGE>

                           PART II - OTHER INFORMATION

         Item 1.  Legal Proceedings

         In the ordinary course of business, the Company and the Bank are
subject to legal actions, which involve claims for monetary relief. Management,
based on the advise of counsel, does not believe that any currently known legal
actions, individually or in the aggregate, will have a material effect on its
consolidated financial condition or results of operation.

         Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  (11)     Calculation of Earnings per Share

         (b)      Reports on Form 8-K

                  No reports on Form 8-K have been filed during the quarter for
                  which this report is filed.


                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       Gouverneur Bancorp, Inc.


Date: February 13, 2002                By: /s/ RICHARD F. BENNETT
                                           ----------------------
                                           Richard F. Bennett
                                           President and Chief Executive Officer
                                           (principal executive officer and
                                           officer duly authorized to sign on
                                           behalf of the registrant)

                                       By: /s/ ROBERT TWYMAN
                                           ----------------------
                                           Robert Twyman
                                           Vice President and Chief Financial
                                           Officer
                                           (principal financial officer duly
                                           authorized to sign on behalf of the
                                           registrant)


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