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 MARCH 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                                                 March 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

                                                                            Page
                                                                            ----

PART I -  FINANCIAL INFORMATION                                               3

Item 1.   Financial Statements - Unaudited                                    3

          Consolidated Statements of Financial Condition at March 31,
          2001 and at September 30, 2000                                      4

          Consolidated Statements of Income for the three and six
          months ended March 31, 2001 and March 31, 2001                      5

          Consolidated Statements of Shareholders' Equity and
          Comprehensive Income for six months ended March 31, 2001            6

          Consolidated Statements of Cash Flows for the six months
          ended March 31, 2001 and 2000                                       7

          Notes to Consolidated Financial Statements                          9

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

PART II - OTHER INFORMATION                                                  17

Item 1.   Legal Proceedings                                                  17

Item 4.   Submission of Matters to a Vote of Security Holders                17

Item 6.   Exhibits and Reports on Form 8-K                                   18

                                       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) (Unaudited)

                                                                      March 31,    September 30,
                                                                        2001           2000
                                                                     ----------    -------------
<S>                                                                   <C>            <C>
ASSETS:
Cash and due from banks                                               $  1,311       $  1,528
Interest-bearing deposits with other financial institutions              1,439          1,860
Securities available-for-sale, at fair value                            18,734         11,368
Securities held-to-maturity (fair value of $3,454 at March 31, 2001
  and $4,204 at September 30, 2000)                                      3,428          4,263
Loans, net of deferred fees                                             55,111         54,960
Less: allowance for loan losses                                           (666)          (663)
                                                                      --------       --------
               Loans, net                                               54,445         54,297
Accrued interest receivable                                                472            496
Federal Home Loan Bank stock, at cost                                      820            590
Premises and equipment, net                                                309            298
Other assets                                                               205            200
                                                                      --------       --------
               Total assets                                           $ 81,163       $ 74,900
                                                                      ========       ========

LIABILITIES:
Deposits:  Demand                                                     $    551       $    621
           Savings and club                                             14,209         14,694
           Time certificates                                            25,965         24,867
           NOW and money market                                          6,413          6,618
                                                                      --------       --------
               Total deposits                                           47,138         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                                                        1,392          1,311
                                                                      --------       --------
               Total liabilities                                        64,930         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                                               4,546          4,550
Retained earnings                                                       12,163         11,943
Accumulated other comprehensive income                                     516            356
Unallocated shares of Management Recognition Plan (MRP)                   (107)            41
Unallocated shares of Employee Stock Ownership Plan (ESOP)                (366)          (382)
Treasury Stock, at cost, 107,281 shares                                   (543)          (543)
                                                                      --------       --------
               Total shareholders' equity                               16,233         15,989
                                                                      --------       --------
               Total liabilities and shareholders' equity             $ 81,163       $ 74,900
                                                                      ========       ========
</TABLE>

See accompanying notes to 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     Six Months Ended
                                                           March 31,             March 31,
                                                      ------------------    ------------------
                                                        2001       2000       2001       2000
                                                      -------    -------    -------    -------
<S>                                                   <C>        <C>        <C>        <C>
INTEREST INCOME:
Loans                                                 $ 1,196    $ 1,098    $ 2,381    $ 2,128
Securities                                                308        267        545        538
Other short-term investments                               19         19         48         40
                                                      -------    -------    -------    -------
               Total interest income                    1,523      1,384      2,974      2,706

INTEREST EXPENSE:
Deposits                                                  554        452      1,109        907
Borrowings                                                200        165        382        292
                                                      -------    -------    -------    -------
               Total interest expense                     754        617      1,491      1,199
                                                      -------    -------    -------    -------

Net interest income                                       769        767      1,483      1,507
Provision for loan losses                                  20         --         50         39
                                                      -------    -------    -------    -------
Net interest income after provision for loan losses       749        767      1,433      1,468

NON-INTEREST INCOME:
Service charges                                            24         24         51         46
Net gain on sale of securities                             92         67         92         67
Other                                                      30         26         68         68
                                                      -------    -------    -------    -------
               Total non-interest income                  146        117        211        181

NON-INTEREST EXPENSES
Salaries and employee benefits                            267        256        511        489
Directors fees                                             12         29         29         49
Building, occupancy and equipment                          58         50        110        108
Data processing                                            29         27         62         54
Postage and supplies                                       22         22         48         53
Professional fees                                          40         58         87        108
Real estate owned                                           7         32         15         39
Other                                                      79         83        149        177
                                                      -------    -------    -------    -------
               Total non-interest expenses                514        557      1,011      1,077

Income before income tax expense                          381        327        633        572
Income tax expense                                        154        126        253        222
                                                      -------    -------    -------    -------
               Net income                             $   227    $   201    $   380    $   350
                                                      =======    =======    =======    =======

Earnings per common share - basic (Note 3)            $  0.10    $  0.09    $  0.17    $  0.16
Earnings per common share - diluted (Note 3)          $  0.10    $  0.09    $  0.17    $  0.16
</TABLE>

See accompanying notes to consolidated financial statements

                                       5
<PAGE>
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                           (In thousands) (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, 2000                       $     24    $  4,550    $ 11,943   $    356   $     41    $   (382)   $   (543)   $ 15,989

ESOP shares released or committed
   to be released (3,294 shares)                            2                                            16                      18

Common stock acquired by MRP
   (30,600 shares)                                                                         (163)                               (163)
Amortization of MRP                                                                           5                                   5
MRP shares released                                        (6)                               10                                   4

Cash dividends declared
   ($.07 per share)                                                  (160)                                                     (160)
Comprehensive income:
   Change in net unrealized gain
      (loss) on securities available
      for sale, net of tax                                                       160                                            160

Net income                                                            380                                                       380
                                                                                                                           --------

Total comprehensive income                                                                                                      540
                                         --------    --------    --------   --------   --------    --------    --------    --------

Balance at March 31, 2001                $     24    $  4,546    $ 12,163   $    516   $   (107)   $   (366)   $   (543)   $ 16,233
                                         ========    ========    ========   ========   ========    ========    ========    ========
</TABLE>

                                       6
<PAGE>
<TABLE>
<CAPTION>
                     GOUVERNEUR BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASHFLOWS
                           (In thousands) (Unaudited)

                                                                         Six Months Ended
                                                                             March 31,
                                                                        -------------------
                                                                          2001       2000
                                                                        -------    --------
<S>                                                                     <C>        <C>
Cash flows from operating activities:
   Net Income                                                           $   380    $   350

   Adjustments to reconcile net income to net cash provided (used) by
      operating activities:
         Depreciation                                                        23         33
         Provision for loan losses                                           50         39
         Net gain on sales of securities                                    (92)       (67)
         Net amortization of premiums (discounts)                            30         28
         Allocation of MRP shares                                             9         10
         Allocation of ESOP shares                                           18          9
         Decrease in accrued interest receivable                             24         18
         Write down of real estate owned                                      7         32
         Proceeds from sale of real estate owned                             37         36
         Net loss on sale of real estate owned                               --          1
         (Increase) decrease in other assets                                 18        (23)
         Decrease in other liabilities                                      (25)      (408)
                                                                        -------    -------

            Net cash provided by operating activities                       479         58
                                                                        -------    -------

Cash flows from investing activities:
   Net increase in loans                                                   (265)    (4,895)
   Proceeds from sales of securities available for sale                      93         68
   Proceeds from maturities and principal reductions of securities
      available for sale                                                  2,145        827
   Purchases of securities available for sale                            (9,275)       (40)
   Proceeds from maturities and principal reductions of securities
      held to maturity                                                      834        773
   Additions to premises and equipment                                      (34)        (4)
   Purchase of Federal Home Loan Bank of New York stock                    (230)      (205)
                                                                        -------    -------

            Net cash used in investing activities                        (6,732)    (3,476)
                                                                        -------    -------

Cash flows from financing activities:

   Net increase (decrease) in deposits                                      338       (700)
   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                                                (160)      (114)
                                                                        -------    -------

            Net cash provided by financing activities                     5,615      3,043
                                                                        -------    -------

            Net decrease in cash and cash equivalents                      (638)      (375)
                                                                        -------    -------
</TABLE>

                                       7
<PAGE>
<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                             March 31,
                                                                        ------------------
                                                                         2001        2000
                                                                        -------    -------
<S>                                                                     <C>        <C>

Net decrease in cash and cash equivalents                                  (638)      (375)
Cash and cash equivalents at beginning of period                          3,388      3,490
                                                                        -------    -------

Cash and cash equivalents at end of period                              $ 2,750    $ 3,115
                                                                        =======    =======

Supplemental disclosure of cash flow information:

Non-cash investing activities:
   Additions to repossessed assets                                      $    67    $   123
Cash paid during the period for:
   Interest                                                               1,415      1,151
   Income taxes                                                              63        197
</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.

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 financial condition is presented as of March
     31, 2001 and September 30, 2000, and the results of operations are for the
     three and six-month periods ended March 31, 2001 and 2000. The statement of
     shareholders' equity and comprehensive income is for the six months ended
     March 31, 2001 and the statements of cash flows are for the six months
     ended March 31, 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.

4.   IMPACT OF NEW ACCOUNTING STANDARDS

     In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers
     and Servicing of Financial Assets and Extinguishment of Liabilities. SFAS
     No. 140 replaces SFAS No. 125. The Statement revises the standards for
     accounting for securitizations and other transfers of financial assets and
     collateral. SFAS No. 140 is effective for transfers and servicing of
     financial assets and extinguishment of liabilities occurring after March
     31, 2001.

     We believe the implementation of SFAS No. 140 will not have a material
     impact on our financial position.

                                       9
<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 $676,000 at March 31, 2001. The Company's principal business is the
ownership of the Bank. At March 31, 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 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:

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;

                                       10
<PAGE>
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.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2001 AND SEPTEMBER 30, 2000.

     During the six months from September 30, 2000 through March 31, 2001, we
increased our loan portfolio by $151,000, or 0.27%. This increase was the result
of an increase of $412,000 in real estate loans combined with decreases of
$17,000 in commercial loans, $216,000 in automobile loans and $28,000 in other
consumer loans. Scheduled principal and interest payments from our
mortgage-backed securities were used to fund the additional loans. We believe
that the small increase in real estate loans and the decreases in commercial,
automobile and other consumer loans are attributable to adverse weather
conditions in our geographic area. We believe it also reflects uncertainty on
consumers' part as to how the recent decreases in interest rates by the Federal
Reserve will affect them. Total assets increased $6,263,000, or 8.36% from $74.9
million at September 30, 2000 to $81.1 million at March 31, 2001. Our borrowed
funds from FHLB of New York increased to $16.4 million on March 31, 2001 from
$10.8 million on September 30, 2000. The new borrowings were invested in
securities available for sale as part of our leveraging strategy.

     The increase in borrowed funds associated with our leveraging strategy from
$3.9 million at September 30, 2000 to $10.0 million at March 31, 2001 had an
immediate impact on our earnings because we also changed from short-term
borrowings to callable advances from the FHLB offered at significantly lower
rates. 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 $338,000, or 0.72% during the six-month period. We believe this
increase can be attributed to our competitive interest rates on time
certificates.

     Our shareholders' equity rose by $244,000 during the six months as the
result of a $160,000 increase in other comprehensive income and our net income
of $380,000. The change in other comprehensive income was due to a rise in the
market value of "available for sale" securities we hold. Equity was reduced by
the payment of a cash dividend of $160,000 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 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 MARCH 31, 2001
AND 2000.

     General. Our net income for the three months ended March 31, 2001 was
$227,000, an increase of $26,000, or 12.9%, over our net income for the same
period last year. We recorded this increase because both net interest income and

                                       11
<PAGE>
non-interest income rose and we were able to reduce non-interest expense.
Interest income increased by $139,000, while interest expense increased by
$137,000 resulting in an increase in net interest income of $2,000. Non-interest
income increased primarily because the gain on sale of securities was $25,000
higher this year than for last year's quarter.

     Even though we increased the provision for loan losses by $20,000 over last
years' quarter, savings of $18,000 in professional fees and $25,000 in real
estate owned expenses resulted in a savings of $23,000 for the period. This
savings, combined with increases of $29,000 in non-interest income and $2,000 in
net interest income increased net income before income tax by $54,000.

     Interest Income. Interest income increased $139,000, or 10.0%, 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 $69.0 million
at March 31,2000, to $76.2 million at March 31, 2001. The $7.2 million increase
in average-earning assets was composed of a $4.9 million increase in the average
balance of loans plus an increase in the average balance in investment
securities and other short-term investments of $2.3 million.

     The average interest rate we earned on our interest-earning assets was 3
basis points (0.03%.) higher in this year's quarter than last year. This
resulted from increases in the average rate earned on loans of 1 basis point
(0.01%), on securities of 17 basis points (0.17%) and on other short-term
investments of 4 basis points (0.04%). We continue to offer mortgage loans in
which the borrower does not pay 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 $98,000. We estimate that the
increase in loan yields by 1 basis point increased our interest income by $1,000
while the increase in the average balance of loans increased our interest income
by $97,000.

     The increase in the average rates earned on securities was caused in part
by the upward adjustment of adjustable-rate mortgaged-backed securities in the
portfolio over the past year. The one-year adjustable-rate mortgage-backed
securities helped reduce the interest rate sensitivity effects of our long-term
fixed-rate mortgage portfolio. We estimate that the increase in the yield on our
investment portfolio by 17 basis points increased interest income by $7,000,
while an increase in the average balance of securities increased interest income
by $34,000, resulting in an increase in interest income of $41,000.

     Overall, we estimate that the increase in the average volume of
interest-earning assets caused a $131,000 increase in interest income, while the
increase in average interest rates resulted in a $8,000 increase in interest
income for a total increase of $139,000 in interest income.

     Interest Expense. Interest expense increased $137,000 in the second quarter
of fiscal 2001 versus fiscal 2000. We estimate that an additional interest cost
of $89,000, resulted from an increase in the average volume of interest-bearing
liabilities while a $48,000 increase in interest expense was caused by an
increase in the average rate we paid on these liabilities. The largest increase
in interest expense was $106,000 in certificates of deposit followed by a
$35,000 increase in the cost of our borrowed funds from FHLB. The increase in
the volume of interest-bearing liabilities was a result of increases in our
average balance of borrowings and time certificates we have used to provide
funds to grow our assets. The average balance of interest-bearing deposits was
$2.5 million more in the 2001 fiscal quarter compared to 2000.

     Our average cost of funds increased by 46 basis points (0.46%) from 4.54%
last year to 5.00% this year. The increased average rate we paid on time
certificates and money market accounts increased our cost of funds. Our cost of

                                       12
<PAGE>
borrowings decreased during the quarter because the Federal Reserve lowered
short-term interest rates by 1% in January. This helped to reduce our costs from
6.09% in last year's quarter to 5.44% in this year's quarter. We are using this
down turn in rates as an opportunity to extend some of the borrowings for terms
up to three years. 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%. We have an additional $2.5 million maturing during the next six months
that we expect to replace at lower rates.

     Net Interest Income. The net effect of the increases in interest income and
interest expense was a $2,000 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 43 basis points (0.43%). However, our net interest margin only
decreased by 38 basis points to 4.09% in 2001, from 4.47% for the second quarter
of 2000. Even though our spread decreased by 43 basis points, the reduction in
our net interest margin was 38 basis points because the calculation includes the
effect of increases in non-interest-bearing checking and average capital from
last year to this year as no-cost funding sources.

     The average yield on our loans and securities portfolio increased as
discussed above. The additional $139,000 in interest income on our
interest-earning assets was generated by a $7.2 million increase in loans and
investments and an increase of 3 basis points in our average rate. The
additional $137,000 in interest expense is attributable to the addition of $6.5
million to our interest-bearing liabilities and the increase in the average cost
of funds of 46 basis points. The net result was a $2,000 increase in net
interest income. We continue to offer attractive rates on our deposit products
to maintain market share, but we are seeing rates begin to 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 21.3% of average interest-earning assets for
the quarter ended March 31, 2001, while it represented 22.6% 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. Our analysis of
the adequacy of the allowance is always speculative, based upon the inherent
risk of loss in the current loan portfolio and our assessment of how future
circumstances will affect the ultimate realization of those losses. This
analysis considers, among other things, default rates and the level of losses
when our customers do not repay their loans. Estimates of future events, such as
future interest rates, the health of the local and national economies and the
effects of government policies, are also components of our analysis. If our
predictions are inaccurate, then increases in the allowance may be necessary in
future periods even if the level of our loan portfolio remains the same.
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 March 31, 2001, we provided $20,000 for loan
losses, compared to none in the same quarter last year. At March 31, 2001 and
2000, the ratio of our loan loss allowance to total loans was 1.21% and 1.27%
respectively. On December 31, 2000 the allowance was $682,000, or 1.23% 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 $39,000
and recoveries of $3,000, 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 $195,000 at March 31, 2001 compared to
$149,000 at December 31, 2000.

     Non-interest Income. Our non-interest income was $29,000 higher in the 2001
quarter versus the 2000 quarter, primarily since the gain on sale of securities
increased by $25,000 over last year's quarter. Service charges and other fee
income was $4,000 higher for this year's quarter. We continue to evaluate ways
to improve our non-interest income.

                                       13
<PAGE>
     Non-interest Expenses. Our non-interest expenses decreased by $43,000 from
the 2000 quarter to the 2001 quarter. This decrease was primarily due to reduced
costs of $18,000 in professional fees, $25,000 in real estate owned expenses and
$17,000 in directors' fees. The reduction in directors' fees was the result of
losses incurred on the investment of deferred fees indexed to stock market
results. At March 31, 2001and 2000 we had twenty-two full-time employees and one
part-time employee. At our main office, 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 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 end of May 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 increased by $28,000, or 22.2%,
comparing the second quarter of fiscal 2001 to the same quarter of fiscal 2000.
The increased expense was the result of higher net income before income tax of
$54,000, or 16.5%.

COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2001 AND
2000.

     General. Our net income for the six months ended March 31, 2001 was
$380,000, an increase of $30,000, or 8.6%, over our net income for the same
period last year. We recorded this increase because we were able to increase
non-interest income and reduce non-interest expense enough to more than offset a
reduction in net interest income. Net interest income decreased by $24,000 and
the provision for loan losses increased by $11,000. However, a $30,000 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 $66,000
from professional fees, real estate owned and directors' fees resulted in an
increase in income before income taxes of $61,000. Income taxes increased by
$31,000 so that net income increased by $30,000.

     Interest Income. Interest income increased by $268,000, or 9.9%, from the
six months ended March 31, 2000 to the six months ended March 31, 2001. We
generated the increase as a result of increasing our average level of
interest-earning assets. Average interest-earning assets increased $5.7 million,
from $68.3 million for the first six months of fiscal year 2000 to $74.0 million
for the same period this year. The increase was composed of a $6.0 million
increase in the average balance of loans offset by a decrease in the average
balance in securities and other short-term investments of $321,000. We continue
to actively solicit new loans.

     The average interest rate we earned on our loans and securities was 14
basis points (0.14%) higher in the first six months this year than last year.
The average rate earned on loans remained the same as last year, while the
average rate earned on securities increased by 24 basis points and the average
rate on other short-term investments increased by 59 basis points.

     Loans are our highest yielding asset category. We increased loans as a
percentage of total interest-earning assets from 71.2% for the six months ending
March 31, 2000 to 73.9% for the six months ending March 31, 2001. Due to the
increase in average loans, we estimate that loan interest income grew $253,000
for the first half of this year, 11.9% higher than 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 the rise in interest rates
between periods and are helping to increase the yield on the securities
portfolio. 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 rise in interest rates resulted in an increase
in interest income of $21,000, while a decrease in the average balance of
securities reduced interest income by $14,000 to net to a gain of $7,000 in
interest income.

                                       14
<PAGE>
     Overall, we estimate that the increase in the average volume of
interest-earning assets yielded a $242,000 increase in interest income, while
the increase in average interest rates resulted in a gain of $26,000 in interest
income for a total increase of $268,000 in interest income.

     Interest Expense. As in the case of interest income, interest expense also
increased from the first half of 2000 to 2001 as a result of an increase in
average interest-bearing liabilities. The increase in volume was the result of
an increase in time certificates and our increased average borrowings from the
Federal Home Loan Bank. We estimate that additional interest cost of $155,000,
resulted from an increase in the average volume of interest-bearing liabilities,
while a $137,000 rise in interest expense was primarily due to an increase in
the average rate we paid on time certificates resulting in a $292,000 increase
in interest expense. The average balance of interest-bearing liabilities was
$5.3 million higher in the first half of 2001 compared to 2000. Of this amount
$2.9 million represents increased borrowings from the Federal Home Loan Bank and
a $2.4 million increase in average deposits.

     Our average cost of funds increased from 4.45% to 5.05% from the first half
of fiscal 2000 to the first half of fiscal 2001. Our average rate on time
certificates increased from 5.16% to 6.22% due to market conditions. We estimate
that this increase in interest rates resulted in an additional $127,000 of
interest expense. The increased volume of certificates resulted in an additional
$80,000 of interest expense for a total increase of $207,000 related to
certificates. Our estimate shows that the higher level of borrowings caused a
rise in interest expense o $86,000, while increased rates caused a $4,000
increase in interest expense. We expect that our interest expense will fall in
the near future as decreased certificate rates and borrowing rates impact on our
cost of funds.

     Net Interest Income. The net effect of the increases in interest income and
interest expense was a $24,000 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 46 basis points (0.46%). However, our net interest
margin only decreased by 39 basis points to 4.02% in the first half of fiscal
2001, from 4.41% for the first half of fiscal 2000. We held the reduction in our
net interest margin to 39 basis points because we used an additional $428,000 in
average equity and non-interest-bearing deposits to grow our interest-earning
assets by $5.6 million, while our interest-bearing liabilities only increased by
$5.3 million.

     The average yield on our loans remained the same and increased on our
securities portfolio as discussed above. The increase in the rate earned on our
interest-earning assets of 14 basis points partially offset the increase in the
average cost of funds of 60 basis points to net to a reduction in our interest
rate spread by 46 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 21.8% of average interest-earning assets for
the six months ended March 31, 2001, while it represented 23.2% 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 six months ended March 31, 2001, we
provided $50,000 for loan losses, compared to $39,000 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 $195,000, or 0.4% of total loans at March 31, 2001 compared to
$221,000, or 0.4% of total loans at September 30, 2000. At March 31, 2001, our
allowance was $666,000, or 1.21% of total loans, compared to $663,000 or 1.21%
of total loans at September 30, 2000. The $3,000 increase for the year includes
the $50,000 provision and net charge offs of $47,000.

                                       15
<PAGE>
     Non-interest Income. Our non-interest income was $30,000 higher this year
for the first six months versus the 2000 period. The increase was 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 $66,000 from the
six months in 2000 to 2001. This decrease was primarily due to reduced costs of
$24,000 for real estate owned, $21,000 in professional fees and $20,000 in
directors' fees. 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 March, 2001 and 2000, 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 leased additional office
space at another location that will house administrative offices, including
those of both the President and the CFO.

     Income tax expense. Our income tax expense increased by $31,000, or 14.0%
compared to the first half of last year. The increased expense was the result of
higher net income before income tax of $61,000, or 10.7%.

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 six months ended March 31, 2001, we reduced our cash and
cash equivalents by $638,000. We used this reduction to fund additional loans.
We originated $5.7 million of new loans during the six months ended March 31,
2001. However, loans, net, after payments, charge-offs and transfers to real
estate owned, increased by $151,000 during the period.

     Deposits increased by $338,000 during the six months ended March 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 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 $1,114,000 in outstanding commitments to make loans at March 31,
2001, along with $762,000 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 March 31, 2001, we had $23.1 million
of time certificates scheduled to mature within one year. We anticipate that we

                                       16
<PAGE>
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 new
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 March 31, 2001, the Bank exceeded all
regulatory capital requirements of the OTS applicable to it, with Tier I capital
of $15.0 million, or 19.2% of average assets and with risk-based capital of
$15.7 million, or 36.8% of risk-weighted assets. The Bank also had tangible
capital of $15.0 million, or 19.2% of average tangible assets. The Bank was
classified as "well capitalized" at March 31, 2001 under OTS regulations.

     OTS regulations require that the Bank maintain liquid assets equal to 4% of
withdrawable accounts. This ratio is measured on a monthly basis. The Bank had a
liquidity ratio of 11.4% for March 31, 2001.


                           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 4.  Submission of Matters to a Vote of Security Holders

     At the annual meeting of stockholders held on February 20, 2001, the
stockholders of Gouverneur Bancorp, Inc. (i) elected two directors, Richard E.
Jones and Frank Langevin, each to serve for a three-year term to expire at the
annual meeting of the stockholders to be held in 2004, and (ii) ratified the
appointment of Fust Charles Chambers LLP as the independent public accountants.
The terms of office of directors Richard F. Bennett, Robert J. Leader, Timothy
J. Monroe, Joseph C. Pistolesi and Larry A. Straw all continued after the annual
meeting.

     Of the 2,276,759 shares entitled to vote at the meeting, a total of
1,990,606 shares (87.4%) voted as follows:

     ELECTION OF DIRECTORS:

                                For            %          Withheld         %
                                ---            -          --------         -

     Richard E. Jones        1,979,256        99.4         11,350         0.6
     Frank Langevin          1,979,556        99.4         11,050         0.6


     RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS:

          For            %          Against         %         Abstain         %
          ---            -          -------         -         -------         -

       1,980,506        99.5         9,050         0.5         1,050         0.1

                                       17
<PAGE>
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: May 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)


                                       18