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 June 30, 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                                       June 30, 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 1 - FINANCIAL INFORMATION
------------------------------

Item 1.     Financial Statements - Unaudited

            Consolidated Statements of Financial Condition at June 30, 2001 and
            at September 30, 2000

            Consolidated Statements of Income for the three and nine months
            ended June 30, 2001 and 2000

            Consolidated Statements of Shareholders' Equity and Comprehensive
            Income for nine months ended June 30, 2001

            Consolidated Statements of Cash Flows for the nine months ended June
            30, 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>

                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
                           (In thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                                             June 30,          September 30,
                                                                               2001                2000
                                                                          -------------        -------------
<S>                                                                       <C>                  <C>
Assets:
Cash and due from banks                                                   $       1,298        $       1,528
Interest-bearing deposits with other financial institutions                         851                1,860
Securities available-for-sale, at fair value                                     18,787               11,368
Securities held-to-maturity (fair value of $3,075 at June 30, 2001
  and $4,204 at September 30, 2000)                                               3,041                4,263
Loans, net of deferred fees                                                      56,619               54,960
Less: allowance for loan losses                                                    (666)                (663)
                                                                          -------------        -------------
                         Loans, net                                              55,953               54,297
Accrued interest receivable                                                         453                  496
Federal Home Loan Bank stock, at cost                                               820                  590
Premises and equipment, net                                                         302                  298
Other assets                                                                        163                  200
                                                                          -------------        -------------
                         Total assets                                     $      81,668        $      74,900
                                                                          =============        =============

Liabilities:
Deposits:          Demand                                                 $         566        $         621
                   Savings and club                                              13,733               14,694
                   Time certificates                                             26,256               24,867
                   NOW and money market                                           6,428                6,618
                                                                          -------------        -------------
                         Total deposits                                          46,983               46,800
Securities sold under agreements to repurchase                                    8,400                7,300
Advances from the Federal Home Loan Bank of New York                              8,000                3,500
Other liabilities                                                                 1,761                1,311
                                                                          -------------        -------------
                         Total liabilities                                       65,144               58,911
                                                                          -------------        -------------

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                                                        4,547                4,550
Retained earnings                                                                12,377               11,943
Accumulated other comprehensive income                                              579                  356
Unallocated shares of Management Recognition Plan (MRP)                            (103)                  41
Unallocated shares of Employee Stock Ownership Plan (ESOP)                         (357)                (382)
Treasury Stock, at cost, 107,281 shares                                            (543)                (543)
                                                                          -------------        -------------
                         Total shareholders' equity                              16,524               15,989
                                                                          -------------        -------------
                         Total liabilities and shareholders' equity       $      81,668        $      74,900
                                                                          =============        =============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                    Three Months Ended               Nine Months Ended
                                                         June 30,                         June 30,
                                              -----------------------------     -----------------------------
                                                  2001             2000            2001              2000
                                              ------------     ------------     ------------     ------------
<S>                                           <C>              <C>              <C>              <C>
Interest income:
Loans                                         $      1,176     $      1,133     $      3,557     $      3,261
Securities                                             332              260              877              797
Other short-term investments                            15               27               63               68
                                              ------------     ------------     ------------     ------------
              Total interest income                  1,523            1,420            4,497            4,126

Interest expense:
Deposits                                               552              473            1,661            1,380
Borrowings                                             198              192              580              484
                                              ------------     ------------     ------------     ------------
              Total interest expense                   750              665            2,241            1,864
                                              ------------     ------------     ------------     ------------

Net interest income                                    773              755            2,256            2,262
Provision for loan losses                               20               10               70               49
                                              ------------     ------------     ------------     ------------
Net interest income after
provision for loan losses                              753              745            2,186            2,213

Non-interest income:
Service charges                                         30               29               81               75
Net gain on sale of securities                          --               --               92               67
Other                                                   27               40               95              108
                                              ------------     ------------     ------------     ------------
              Total non-interest income                 57               69              268              250

Non-interest expenses

Salaries and employee benefits                         237              237              748              726
Directors fees                                           6               24               35               73
Building, occupancy and equipment                       53               51              163              159
Data processing                                         30               27               92               81
Postage and supplies                                    32               20               80               73
Professional fees                                       47               45              134              153
Real estate owned                                        5                9               20               48
Other                                                   64               38              213              215
                                              ------------     ------------     ------------     ------------
              Total non-interest expenses              474              451            1,485            1,528

Income before income tax expense                       336              363              969              935
Income tax expense                                     123              143              376              365
                                              ------------     ------------     ------------     ------------
              Net income
                                              $        213     $        220     $        593     $        570
                                              ============     ============     ============     ============

Earnings per common share -
basic (Note 3)                                $       0.10     $       0.10     $       0.27     $       0.26
Earnings per common share -
diluted (Note 3)                              $       0.10     $       0.10     $       0.27     $       0.26
</TABLE>

See accompanying notes to consolidated financial statements

                                       4
<PAGE>

                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                           (In thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                           Additional                            Other
                                            Common          Paid In           Retained       Comprehensive
                                            Stock           Capital           Earnings           Income
                                         ------------     ------------      ------------      ------------
<S>                                      <C>              <C>               <C>               <C>
Balance at
September 30, 2000                       $         24     $      4,550      $     11,943      $        356

ESOP shares released or committed
   to be released (5,003 shares)                                     4

Common stock acquired by MRP
   (30,600 shares)
Amortization of MRP
MRP shares released                                                 (7)

Cash dividends declared
   ($.07 per share)                                                                 (159)
Comprehensive income:
   Change in net unrealized gain
      (loss) on securities available
      for sale, net of tax                                                                             223

   Net income                                                                        593


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

Balance at June 30, 2001                 $         24     $      4,547      $     12,377      $        579
                                         ============     ============      ============      ============


<CAPTION>
                                          Unallocated      Unallocated        Treasury
                                              MRP             ESOP              Stock            Total
                                         ------------     ------------      ------------      ------------
<S>                                      <C>              <C>               <C>               <C>
Balance at
September 30, 2000                       $         41     $       (382)     $       (543)     $     15,989

ESOP shares released or committed
   to be released (5,003 shares)                                    25                                  29

Common stock acquired by MRP
   (30,600 shares)                               (163)                                                (163)
Amortization of MRP                                19                                                   19
MRP shares released                                                                                     (7)

Cash dividends declared
   ($.07 per share)                                                                                   (159)
Comprehensive income:
   Change in net unrealized gain
      (loss) on securities available
      for sale, net of tax                                                                             223

   Net income                                                                                          593
                                                                                              ------------

Total comprehensive income                                                                             816
                                         ------------     ------------      ------------      ------------

Balance at June 30, 2001                 $       (103)    $       (357)     $       (543)     $     16,524
                                         ============     ============      ============      ============
</TABLE>

                                       5
<PAGE>

                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASHFLOWS
                           (In thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                      June 30,
                                                                          --------------------------------
                                                                               2001               2000
                                                                          -------------      -------------
<S>                                                                       <C>                <C>
Cash flows from operating activities:
   Net Income                                                             $         593      $         570

   Adjustments to reconcile net income to net cash provided (used) by
      operating activities:
            Depreciation                                                             65                 51
            Provision for loan losses                                                70                 49
            Net gain on sales of securities                                         (92)               (67)
            Net amortization of premiums (discounts)                                 46                 42
            Allocation of MRP shares                                                 12                 25
            Allocation of ESOP shares                                                29                 15
            Decrease in accrued interest receivable                                  43                 37
            Write down of real estate owned                                           9                 45
            Proceeds from sale of real estate owned                                 103                139
            Net loss on sale of real estate owned                                    --                  1
            (Increase) decrease in other assets                                      43                (12)
            Increase (decrease) in other liabilities                                302                (23)
                                                                          -------------      -------------

                    Net cash provided by operating activities                     1,223                872
                                                                          -------------      -------------

Cash flows from investing activities:
   Net increase in loans                                                         (1,844)            (7,178)
   Proceeds from sales of securities available for sale                              93                 68
   Proceeds from maturities and principal reductions of securities
      available for sale                                                          4,758              1,180
   Purchases of securities available for sale                                   (11,850)                (1)
   Proceeds from maturities and principal reductions of securities
      held to maturity                                                            1,219              1,125
   Purchases of securities held to maturity                                          --                (50)
   Additions to premises and equipment                                              (69)               (32)
   Purchase of Federal Home Loan Bank of New York stock                            (230)              (205)
                                                                          -------------      -------------

                    Net cash used in investing activities                        (7,923)            (5,093)
                                                                          -------------      -------------

Cash flows from financing activities:

   Net increase in deposits                                                         183                486
   Net proceeds from borrowing                                                    5,600              4,400
   Purchases of common stock by Management Recognition Plan                        (163)                --
   Treasury stock purchased                                                          --               (543)
   Payment of cash dividend                                                        (159)              (114)
                                                                          -------------      -------------

                     Net cash provided by financing activities                    5,461              4,229
                                                                          -------------      -------------

                     Net decrease in cash and cash equivalents                   (1,239)                 8
                                                                          -------------      -------------

   Net decrease in cash and cash equivalents                                     (1,239)                 8
   Cash and cash equivalents at beginning of period                               3,388              3,490
                                                                          -------------      -------------

   Cash and cash equivalents at end of period                             $       2,149      $       3,498
                                                                          =============      =============

   Supplemental disclosure of cash flow information:

   Non-cash investing activities:
      Additions to repossessed assets                                     $         118      $         167
   Cash paid during the period for:
      Interest                                                                    2,143              1,812
      Income taxes                                                                  233                254
</TABLE>

See accompanying notes to consolidated financial statements.

                                        6
<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.

2.    Basis of Presentation

      The consolidated financial statements included herein reflect all
      adjustments, which are, in the opinion of management, of a normal
      recurring nature and necessary to present fairly the Company's financial
      condition and results of operations. The consolidated statements of
      financial condition are presented as of June 30, 2001 and September 30,
      2000, and the consolidated statements of income are for the three and
      nine-month periods ended June 30, 2001 and 2000. The consolidated
      statements of shareholders' equity and comprehensive income are for the
      nine months ended June 30, 2001 and the consolidated statements of cash
      flows are for the nine months ended June 30, 2001 and 2000.

3.    Earnings Per 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 the effects of common stock issuable upon
      exercise of dilutive stock options.

                                       7
<PAGE>

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 $660,000 at June 30, 2001. The Company's principal business is the
ownership of the Bank. At June 30, 2001, 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 common stock, and shareholders other than
Cambray MHC held 965,537 shares or 42.4% of the issued and outstanding common
stock. 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.
More recently, 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, such as deposits and borrowings. 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 addressing
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:

                                       8
<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;

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.

Certain current year events

    The bank's loan growth over the past two years is mainly the result of the
success of our loan production office in Alexandria Bay. We have entered into an
agreement to purchase a parcel of land in that nearby community for the purpose
of constructing a full branch office. This operation will open a new market for
our deposit products and offer an alternative to borrowing wholesale funds as we
grow. We have engaged an architect and developed a site plan in conjunction with
a property survey. We are currently seeking approval from the zoning
authorities. If received, we will complete the purchase and begin the processes
of bidding and constructing the new office. We anticipate an opening in the
first half of 2002.

Comparison of Financial Condition at June 30, 2001 and September 30, 2000.

    During the nine months from September 30, 2000 through June 30, 2001, we
increased our loan portfolio by $1,659,000, or 3.02%. This increase was the
result of increases of $1,540,000 in real estate loans and $27,000 in commercial
loans, $91,000 in automobile loans and $1,000 in other consumer loans. Scheduled
principal and interest payments from our mortgage-backed securities were used to
fund the additional loans. Total assets increased $6,768,000, or 9.04% from
$74.9 million at September 30, 2000 to $81.7 million at June 30, 2001. Our
borrowed funds from FHLB of New York increased to $16.4 million on June 30, 2001
from $10.8 million on September 30, 2000. The increase was the result of our
leveraging strategy, in which we grow our assets in relation to our capital by
using borrowings from FHLB and buying investment grade securities with a
positive spread.

    We replaced short-term borrowed funds with callable advances to fund our
leveraging strategy. The advances increased our borrowings for leveraging from
$3.9 million at September 30, 2000 to $9.6 million at June 30, 2001 and helped
our earnings by reducing borrowing costs. The callable advances are structured
as 10 year/ 1 year loans. This means that they can be called after one year or
quarterly thereafter at the FHLB of New York's option. If the advance is never
called, we have borrowed the funds for ten years. If rates rise and the loans
are called, we will evaluate borrowing options at that time and select the best
option for replacing the borrowing. If rates decrease, there is the risk that
the spread between the interest earned on the investments and the interest paid
on the loans will decrease, or even become negative. We experienced an increase
in deposits of approximately $183,000, or 0.39% during the nine-month period. We
believe this increase can be attributed to our competitive interest rates on
time certificates.

    Our shareholders' equity rose by $535,000 during the nine months, in most
part the result of a $223,000 increase in other comprehensive income and our net
income of $593,000 offset by the payment of a cash dividend of $159,000

                                       9
<PAGE>

to our shareholders and a charge of $163,000 for the purchase of 30,600 shares
of our common stock by the Management Recognition Plan ("MRP") Trust. The change
in other comprehensive income was due to a rise in the market value of
"available for sale" securities we hold. The MRP will purchase additional shares
in the future to reach its full allotment of 42,912 shares.

Comparison of Results of Operations for the Three Months Ended June 30, 2001 and
2000.

    General. Our net income for the three months ended June 30, 2001 was
$213,000, a decrease of $7,000, or 3.2%, over our net income for the same period
last year. We recorded this decrease because the $18,000 increase in net
interest income and $20,000 reduced income tax expense was not large enough to
offset a $10,000 increase in the provision for loan losses, combined with a
$12,000 decrease in non-interest income and a $23,000 increase in non-interest
expense.

    Interest Income. Interest income increased $103,000, or 7.25%, from the
three months ended March 31, 2000 to the three months ended March 31, 2001. We
generated the increase almost entirely as a result of increasing our average
level of interest-earning assets over the past twelve months from $70.9 million
at June 30, 2000, to $78.8 million at June 30, 2001. The $7.9 million increase
in average-earning assets was composed of a $3.3 million increase in the average
balance of loans plus an increase in the average balance in investment
securities and other short-term investments of $4.6 million.

    The average interest rate we earned on our interest-earning assets was 31
basis points (0.31%) lower in this year's quarter than last year due to lower
interest rates in general and an increase in ARM mortgages, which are priced to
start at a lower rate. This resulted from decreases in the average rate earned
on loans of 24 basis points (0.24%), on securities of 8 basis points (0.08%) and
on other short-term investments of 161 basis points (1.61%). We continue to
offer mortgage loans in which the Bank pays the closing costs. The amortization
of these costs is reflected as a reduction of loan interest income. However, we
have adjusted our pricing of this product to compensate for the additional
expense. These costs are amortized over the life of the mortgage, although the
borrower is responsible for the costs if the mortgage is paid off during the
initial five years.

    Interest income on loans increased by $43,000. We estimate that the decrease
in loan yields by 24 basis points decreased our interest income by $31,000 while
the increase in the average balance of loans increased our interest income by
$74,000.

    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 helps 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 8 basis points reduced interest income by $3,000, while
an increase in the average balance of securities increased interest income by
$75,000, resulting in an increase in interest income of $72,000.

    Overall, we estimate that the increase in the average volume of
interest-earning assets caused a $144,000 increase in interest income, while the
decrease in average interest rates resulted in a $41,000 decrease in interest
income for a net increase of $103,000 in interest income.

    Interest Expense. Interest expense increased $85,000 in the third quarter of
fiscal 2001 versus fiscal 2000. We estimate that an additional interest cost of
$103,000 resulted from an increase in the average volume of interest-bearing
liabilities while an $18,000 decrease in interest expense was due to a decrease
in the average rate we paid on our FHLB borrowings. The bulk of the increase in
interest expense was $82,000 in certificates of deposit. The increase in the
volume of interest-bearing liabilities was a result of increases in average
balances of borrowings and time certificates we have used to provide funds to
grow our assets. The average balance of interest-bearing liabilities was $7.0
million more in the 2001 fiscal quarter compared to 2000.

                                       10
<PAGE>

    Our average cost of funds was the same for both years at 4.76%. The
increased average rate we paid on time certificates and money market accounts
was offset by the reduced cost of our borrowings. Our cost of borrowings
decreased during the quarter because the Federal Reserve lowered short-term
interest rates by 1.25% during the quarter. This helped to reduce our borrowing
costs from FHLB of NY from 6.54% in last year's quarter to 4.84% in this year's
quarter. We have used this down turn in rates as an opportunity to structure our
borrowings for terms up to four years and lock in lower rates. As mentioned
earlier, we also used callable advances (10 year/ 1 year structure) to fund our
leveraging strategy at an average rate of 4.55%.

    Net Interest Income. The net effect of the increases in interest income and
interest expense was a $18,000 increase in net interest income. Our interest
rate spread (the difference between the average rate we earn and the average
rate we pay) decreased by 31 basis points (0.31%). However, our net interest
margin decreased by 35 basis points to 3.93% in 2001, from 4.28% for the third
quarter of 2000.

    The average yield on our loans and securities portfolio decreased as
discussed above. The additional $103,000 in interest income on our
interest-earning assets was generated by a $7.9 million increase in loans and
investments and a decrease of 31 basis points in our average rate. The
additional $85,000 in interest expense is attributable to the addition of $7.0
million to our interest-bearing liabilities. The net result was an $18,000
increase in net interest income. We continue to offer attractive rates on our
deposit products to maintain market share, but we are seeing our weighted
average rates slowly decrease. Our deposit rates are generally equal to or
higher than the rates offered by the two local commercial banks, except when
they offer special CD promotions, and are comparable to or at the high end of
rates offered by thrift institutions throughout the region.

    Average capital represented 20.8% of average interest-earning assets for the
quarter ended June 30, 2001, while it represented 22.2% of average
interest-earning assets for the same quarter last year. The decrease in the
capital ratio, which reflects an increase in leverage, is the result of the
growth of both our loan and investment portfolios. Our ratio of average
interest-earning assets to average interest-bearing liabilities decreased from
1.26 times in 2000 to 1.25 times in 2001.

    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 potential risks
in our loan portfolio and could require us to increase the allowance in the
future.

    For the three months ended June 30, 2001, we provided $20,000 for loan
losses, compared to $10,000 in the same quarter last year. At June 30, 2001 and
2000, the ratio of our loan loss allowance to total loans was the same at 1.18%.
On March 31, 2001 the allowance was $666,000, or 1.21% of total loans, and we
determined at the end of the quarter that the appropriate level for the
allowance was $666,000. We had charge-offs during the quarter of $41,000 and
recoveries of $21,000, so a $20,000 provision was necessary to reach the desired
level for the allowance. Our level of non-accruing loans (generally loans past
due 90 days or more) was $418,000 at June 30, 2001 compared to $149,000 at March
31, 2001. The increase was substantially attributable to the bankruptcy of one
commercial borrower with loans totaling $251,000 secured mainly by construction
equipment and some property.

    Non-interest Income. Our non-interest income was $12,000 lower in the 2001
quarter versus the 2000 quarter, primarily due to a $10,000 reduction in
management fees charged to Cambray MHC.

    Non-interest Expenses. Our non-interest expenses increased by $23,000 from
the 2000 quarter to this years' quarter. This increase was primarily due to an
accounting adjustment in last years' quarter resulting in a negative

                                       11
<PAGE>

$25,000 being booked to commission expense, thereby reducing last years' expense
by $25,000, combined with increased costs of $12,000 in postage and supplies,
and $5,000 in advertising. Directors' fees were reduced by $18,000 as the result
of losses incurred on the investment of deferred fees indexed to stock market
results. At June 30, 2001we had twenty-two full-time and three part-time
employees compared to a year ago when we had twenty-two full-time employees and
one part-time employee. At our main office, we have added two part-time
employees for the summer to help fill in during vacations and to allow us to
cross train some of our full-time staff. We need to add one or two people to our
support staff to continue the growth of the Bank. Since we have limited
availability in our current facility, the Board has decided to purchase a
building close to the Bank rather than to lease office space in another nearby
location as a temporary solution. For the long-term we need to evaluate whether
to expand the current facility or locate to new quarters. We are planning to
move four administrative employees, including both the President and the CFO
into the temporary offices by the middle of August this year. This will allow us
to continue the high level of service our growing customer base has come to
expect.

     Income tax expense. Our income tax expense decreased by $20,000, or 14.0%,
comparing the third quarter of fiscal 2001 to the same quarter of fiscal 2000.
The decreased expense was the result of lower net income before income tax of
$27,000, or 7.4%, and an adjustment to our effective tax rate.

Comparison of Results of Operations for the Nine Months Ended June 30, 2001 and
2000.

    General. Our net income for the nine months ended June 30, 2001 was
$593,000, an increase of $23,000, or 4.0%, over our net income for the same
period last year. We recorded this increase because an increase in non-interest
income combined with a reduction in directors' fees more than offset a reduction
in net interest income. Net interest income decreased by $6,000 and the
provision for loan losses increased by $21,000. However, an $18,000 increase in
non-interest income from service charges, net gains on sale of securities and
other fee income combined with decreases in non-interest expenses of $43,000
primarily from professional fees, real estate owned and directors' fees resulted
in an increase in income before income taxes of $34,000. Income taxes increased
by $11,000 so that net income increased by $23,000.

    Interest Income. Interest income increased by $371,000, or 9.0%, from the
nine months ended June 30, 2000 to the nine months ended June 30, 2001. We
generated the increase as a result of increasing our average level of
interest-earning assets. Average interest-earning assets increased $6.4 million,
from $69.2 million for the first nine months of fiscal year 2000 to $75.6
million for the same period this year. The increase was composed of a $5.1
million increase in the average balance of loans plus an increase in the average
balance in securities and other short-term investments of $1.3 million. We
continue to actively solicit new loans.

    The average interest rate we earned on our loans and securities was 1 basis
point (0.01%) lower in the first nine months this year than last year. The
average rate earned on loans decreased by 8 basis points, while the average rate
earned on securities increased by 14 basis points and the average rate on other
short-term investments decreased by 20 basis points.

    Loans are our highest yielding asset category. We increased loans as a
percentage of total interest-earning assets from 71.9% for the nine months
ending June 30, 2000 to 72.5% for the nine months ending June 30, 2001. Due to
the increase in average loans, we estimate that loan interest income grew
$308,000 for the first nine months of this year, while a decrease in the average
rate reduced interest income by $12,000 for a net increase of $296,000, or 9.1%
over last year.

    The increase in the average rates earned on securities was caused in part by
the addition of adjustable-rate mortgaged-backed securities to the portfolio two
years ago. These rates have improved due to higher interest rates last year and
are helping to increase the yield on the securities portfolio. However, since
rates have decreased this year these securities will be adjusting downward as
they reprice to the index. The one-year adjustable-rate mortgage-backed
securities help reduce the interest rate sensitivity effects of our long-term

                                       12
<PAGE>

fixed-rate mortgage portfolio. We estimate that the rise in interest rates
resulted in an increase in interest income of $19,000, while an increase in the
average balance of securities increased interest income by $61,000 for a total
gain of $80,000, or 10.0% over last year.

    Overall, we estimate that the increase in the average volume of
interest-earning assets yielded a $366,000 increase in interest income, while
the decrease in average interest rates resulted in a gain of $5,000 in interest
income for a total increase of $371,000 in interest income.

    Interest Expense. As in the case of interest income, interest expense also
increased from the first three quarters of 2000 to 2001 as a result of an
increase in average interest-bearing liabilities. The increase in volume was the
result of increases in time certificates, money market and NOW accounts and our
average borrowings from the Federal Home Loan Bank. We estimate that additional
interest cost of $227,000, resulted from an increase in the average volume of
interest-bearing liabilities, while a $150,000 rise in interest expense was
primarily due to an increase in the average rate we paid on time certificates
resulting in a $377,000 increase in interest expense. The average balance of
interest-bearing liabilities was $5.7 million higher in the first nine months of
2001 compared to 2000. Of this amount $3.5 million represents increased
borrowings from the Federal Home Loan Bank and a $2.2 million increase in
average deposits.

    Our average cost of funds increased from 4.56% to 4.96% from the first nine
months of fiscal 2000 to the same period of fiscal 2001. Our average rate on
time certificates increased from 5.27% to 6.17% due to market conditions. We
estimate that this increase in interest rates on certificates resulted in an
additional $162,000 of interest expense. The increased volume of certificates
resulted in an additional $126,000 of interest expense for a total increase of
$288,000 related to certificates. Our estimate shows that the higher level of
borrowings caused a rise in interest expense of $123,000, while decreased rates
caused a $27,000 decrease in interest expense resulting in a $96,000 net
increase. Effective July 1, 2001 we lowered our passbook and statement savings
rates by 75 basis points (0.75%). We expect that our interest expense will fall
in the near future as decreased certificate rates and savings rates impact our
cost of funds.

    Net Interest Income. The net effect of the increases in interest income and
interest expense was a $6,000 decrease in net interest income. Our interest rate
spread (the difference between the average rate we earn and the average rate we
pay) decreased by 41 basis points (0.41%). Our net interest margin decreased 38
basis points to 3.99% for the first three quarters of fiscal 2001, from 4.37%
for the same period of fiscal 2000.

    The average yield on our loans decreased while it increased on our
securities portfolio as discussed above. The decrease in the rate earned on our
interest-earning assets of 1 basis point combined with the increase in the
average cost of funds of 40 basis points to reduce our interest rate spread by
41 basis points. We continue to offer attractive rates on our deposit products
to maintain market share. Our deposit rates are generally equal to or higher
than the rates offered by the two local commercial banks and are comparable to
or at the high end of rates offered by thrift institutions throughout the
region.

    Average capital represented 21.5% of average interest-earning assets for the
nine months ended June 30, 2001, while it represented 22.8% of average
interest-earning assets for the same period in 2000. Our ratio of average
interest-earning assets to average interest-bearing liabilities decreased from
1.27 times in 2000 to 1.25 times in 2001.

    Provision for Loan Losses. For the nine months ended June 30, 2001, we
provided $70,000 for loan losses, compared to $49,000 in the same period last
year. We increased the provision because of the increase in the size of our loan
portfolio. Our level of non-accruing loans (generally loans past due 90 days or
more) was $418,000, or 0.7% of total loans at June 30, 2001 compared to
$221,000, or 0.4% of total loans at September 30, 2000. At June 30, 2001, our
allowance was $666,000, or 1.18% of total loans, compared to $663,000 or 1.21%
of total

                                       13
<PAGE>

loans at September 30, 2000. The $3,000 increase for the year includes the
$70,000 provision and net charge offs of $67,000.

    Non-interest Income. Our non-interest income was $18,000 higher this year
for the first nine months of this fiscal year versus the 2000 fiscal year. The
increase was primarily the result of a gain on the sale of shares of Federal
Home Loan Mortgage Corporation stock.

    Non-interest Expenses. Non-interest expenses decreased by $43,000 from the
nine months in 2000 to 2001. This decrease was primarily due to reduced costs of
$28,000 for real estate owned, $19,000 in professional fees and $38,000 in
directors' fees offset by increases of $22,000 in salaries and employee
benefits, $11,000 for data processing and $7,000 for postage and supplies. As
discussed earlier, the reduction in directors' fees was the result of losses
incurred on the investment of deferred fees indexed to stock market results. At
the end of June 2001 we had twenty-two full-time and three part-time employees
compared to the end of June 2000 when we had twenty-two full-time and one
part-time employee. As we mentioned previously in the discussion of non-interest
expenses under the Comparison of Results of Operations for Three Months, we need
to add personnel to our main office, but lack the space necessary. Therefore, as
a temporary solution, we have purchased a house for $85,000 close to the bank to
use as additional office space for administrative offices, including those of
both the President and the CFO.

    Income tax expense. Our income tax expense year-to-date increased by
$11,000, or 3.0% compared to the nine months of last year. The increased expense
was the result of higher net income before income tax of $34,000, or 3.6%.

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.

    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 nine months ended June 30, 2001, we reduced our cash and
cash equivalents by $1,239,000. We used this reduction to fund additional loans.
We have originated $11.2 million of new loans during the nine months ended June
30, 2001. Loans, net, after payments, charge-offs and transfers to real estate
owned, increased by $1,844,000 during the period.

    Deposits increased by $183,000 during the nine months ended June 30, 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 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.

                                       14
<PAGE>

    We had $1,563,000 in outstanding commitments to make loans at June 30, 2001,
along with $830,000 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 June 30, 2001, we had $23.2 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 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 June 30, 2001, the Bank exceeded all
regulatory capital requirements of the OTS applicable to it, with Tier I capital
of $15.2 million, or 18.8% of average assets and with risk-based capital of
$16.2 million, or 36.5% of risk-weighted assets. The Bank also had tangible
capital of $15.2 million, or 18.8% of average tangible assets. The Bank was
classified as "well capitalized" at June 30, 2001 under OTS regulations.

    Previously, OTS regulations required that the Bank maintain liquid assets
equal to 4% of withdrawable accounts. The ratio was measured on a monthly basis.
Using this formula, the Bank had a liquidity ratio of 9.7% at June 30, 2001.


                                       15
<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 result 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: August 9, 2001           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)


                                       16
<PAGE>

                                   Exhibit 11
                               Earnings per Share

Basic and diluted earnings per share were computed as follows:
(In thousands, except per share data)

<TABLE>
<CAPTION>
                                                       Three Months Ended    Nine Months Ended
                                                            June 30,              June 30,
                                                       -----------------     -----------------
Basic earnings per share:                               2001       2000       2001       2000
                                                       ------     ------     ------     ------
<S>                                                    <C>        <C>        <C>        <C>
Net income                                             $  213     $  220     $  593     $  570
Weighted average common shares outstanding              2,204      2,198      2,203      2,229
Basic earnings per share                               $ 0.10     $ 0.10     $ 0.27     $ 0.26

Diluted earnings per share:
Net income                                             $  213     $  220     $  593     $  570
Weighted average common shares outstanding              2,204      2,198      2,203      2,229
Additional potentially dilutive securities
   (equivalent in common stock)
          Stock options                                    14         --         10         --
                                                       ------     ------     ------     ------
Diluted weighted average common shares outstanding      2,218      2,198      2,213      2,229

Diluted earnings per share                             $ 0.10     $ 0.10     $ 0.27     $ 0.26
</TABLE>

                                       17