<Page>

================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

[ ]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

         For the fiscal year ended September 30, 2001
                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission file number 0-27716

                          YONKERS FINANCIAL CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

               Delaware                                          13-3870836
-------------------------------------                     -----------------
   (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                         Identification No.)

  6 Executive Plaza, Yonkers, New York                          10701
--------------------------------------------                  ---------
    (Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code: (914) 965-2500
                                                    --------------

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.01 per share
                     ---------------------------------------
                                (Title of Class)

         Indicate by check mark whether the Registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
twelve months (or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such requirements for the past
90 days. YES [X] NO [ ]

         Indicate by check mark if there is no disclosure of delinquent filers
in response to Item 405 of Regulation S-K contained in this form, and no
disclosure will be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]

         As of December 15, 2001, there were issued and outstanding 2,228,739
shares of the Registrant's Common Stock. The aggregate market value of the
voting stock held by non-affiliates of the Registrant, computed by reference to
the closing price of such stock on the Nasdaq National Market as of December 15,
2001, was approximately $63.6 million. (The exclusion from such amount of the
market value of the shares owned by any person shall not be deemed an admission
by the Registrant that such person is an affiliate of the Issuer.)

                       DOCUMENTS INCORPORATED BY REFERENCE

PARTS II and IV of Form 10-K--Annual Report to Stockholders for the fiscal year
ended September 30, 2001.
PART III of Form 10-K--Proxy Statement for the Annual Meeting of Stockholders
for the fiscal year ended September 30, 2001.

================================================================================

<Page>

                          YONKERS FINANCIAL CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                               SEPTEMBER 30, 2001

                                TABLE OF CONTENTS

<Table>
<Caption>

                        PART I                                                                               PAGE

<S>                     <C>                                                                                  <C>
Item 1                  Business........................................................................     3

Item 2                  Properties......................................................................     39

Item 3                  Legal Proceedings...............................................................     41

Item 4                  Submission of Matters to a Vote of Security Holders.............................     41

                        PART II

Item 5                  Market for Registrant's Common Equity and Related Stockholder Matters...........     41

Item 6                  Selected Financial Data.........................................................     41

Item 7                  Management's Discussion and Analysis of Financial
                           Condition and Results of Operations..........................................     41

Item 7A                 Quantitative and Qualitative Disclosures About Market Risk......................     41

Item 8                  Financial Statements and Supplementary Data.....................................     41

Item 9                  Changes in and Disagreements with Accountants on
                           Accounting and Financial Disclosure..........................................     42

                        PART III

Item 10                 Director, and Executive Officers of the Registrant..............................     42

Item 11                 Executive Compensation..........................................................     43

Item 12                 Security Ownership of Certain Beneficial Owners
                           and Management...............................................................     43

Item 13                 Certain Relationships and Related Transactions..................................     43

                        PART IV

Item 14                 Exhibits, Financial Statement Schedules and Reports on
                           Form 8-K.....................................................................     44

                        Signatures......................................................................     46
</Table>




                                       2
<Page>

                                     PART I

ITEM 1.   BUSINESS

GENERAL

         Yonkers Financial Corporation (the "Holding Company") was formed at the
direction of The Yonkers Savings and Loan Association, FA ("Yonkers Savings" or
the "Association") in December 1995 for the purpose of owning all of the
outstanding stock of the Association issued in the Association's conversion from
the mutual to stock form of organization (the "Conversion"). The Conversion was
completed on April 18, 1996. Concurrent with the Conversion, the Holding Company
sold 3,570,750 shares of its common stock for net proceeds of $34.6 million. The
Holding Company and the Association are collectively referred to herein as the
"Company."

         The Holding Company is incorporated under the laws of the State of
Delaware (and qualified to do business in the State of New York) and generally
is authorized to engage in any activity that is permitted by the Delaware
General Corporation Law. The principal asset of the Holding Company is its
investment in the stock of the Association, although it also holds certain other
investments and a loan to its Employee Stock Ownership Plan (the "ESOP"). The
Association has two wholly owned subsidiaries, Yonkers REIT, Inc., a real estate
investment trust. (the "REIT") and Yonkers Financial Services, Inc., a
subsidiary that sells savings bank life insurance, annuities, and mutual funds.

         As a community-oriented financial institution, the Association offers a
variety of financial services to meet the needs of communities in its market
area. The Association attracts deposits from the general public and uses such
deposits, together with borrowings, to originate mortgage loans secured by one-
to four-family residences, multi-family and commercial real estate and, to a
lesser extent, construction, land, consumer and commercial business loans in the
Association's primary market area. The Association also invests in
mortgage-backed and other securities permissible for a federally chartered
savings association. As a member of the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"), the
Association's deposits are insured up to applicable limits.

         The executive offices (corporate headquarters) and lending center of
the Company are located at 6 Executive Plaza, Yonkers, New York 10701, and its
telephone number at that address is (914) 965-2500.

ACQUISITION OF YONKERS FINANCIAL BY THE ATLANTIC BANK

         On November 13, 2001 Atlantic Bank of New York ("Atlantic Bank") and
the Company signed an Agreement and Plan of Merger ("Merger Agreement")
whereby Atlantic Bank will acquire the Company for an aggregate purchase
price of approximately $69.6 million in cash or $29.00 per share of the
Company's issued and outstanding common stock. Upon completion of the
transaction, the Association will merge into Atlantic Bank. Completion of the
transaction is subject to certain conditions including the appoval of the
Merger Agreement by the shareholders of the Company and the approval of the
transaction by the appropriate bank regulatory authorities.  The transaction
is expected to close in the first half of 2002. See "Management's Discussion
and Analysis of Financial Condition and Results of Operation -- Acquisition
of Yonkers Financial by Atlantic Bank"

                                       3
<Page>

MARKET AREA

The Company conducts its banking operations through its main office located at
One Manor House Square, Yonkers, New York and three full-service banking offices
located in Yonkers, New York. In addition, business is also conducted through
five in-store branches located in Wappingers Falls, Yorktown Heights, Mt.
Vernon, Poughkeepsie, and Cortlandt Manor. A corporate headquarters office and
lending center is also maintained in Yonkers, New York. The Company's primary
market area for deposits includes the City of Yonkers and the communities
surrounding its in-store branches. The Company's primary market area for its
lending activities consists of communities within Westchester County and
portions of Rockland, Putnam and Dutchess Counties, the five boroughs of New
York City, and Long Island.

         Yonkers is located in Westchester County approximately 10 miles north
of the Borough of Manhattan in New York City. Yonkers and the surrounding
communities include a diverse population of low- and moderate-income
neighborhoods as well as middle class and more affluent neighborhoods. The
housing in the low- and moderate-income neighborhoods consists mainly of
apartments while other areas consist primarily of single-family residences. The
Company's market area also includes substantial commercial areas containing
shopping areas, office and medical facilities and small- and medium-size
manufacturing and industrial facilities.

LENDING ACTIVITIES

         GENERAL. Historically, the Company originated 30-year, fixed-rate
mortgage loans secured by one- to four-family residences. Since the mid-1980s,
in order to reduce its vulnerability to changes in interest rates, the Company
has also originated adjustable-rate mortgage ("ARM") loans and home equity lines
of credit. Residential mortgage originations currently emphasizes products with
initial fixed-rate periods of five, seven or ten years with annual rate
adjustments thereafter. The Company engages in secondary market sales of a
portion of its residential mortgage originations, as market conditions warrant.
The Company also offers multi-family and commercial real estate, consumer,
construction and land loans. During recent years the Company has expanded its
lending operations and increased originations of multi-family and commercial
real estate loans in order to enhance portfolio yield. However, the Merger
Agreement imposes significant limits on the Company's non-one to four family
residential lending.


                                       4
<Page>

The following table sets forth the composition of the loan portfolio, by
category, in dollar amounts and as a percentage of the total portfolio at the
dates indicated.

<Table>
<Caption>

                                                                              AT SEPTEMBER 30,
                                             ---------------------------------------------------------------------------------
                                                         2001                       2000                        1999
                                             ------------------------    ------------------------    -------------------------
                                                            PERCENT                     PERCENT                      PERCENT
                                                AMOUNT      OF TOTAL        AMOUNT      OF TOTAL        AMOUNT      OF TOTAL
                                             -------------  ---------    -------------  ---------    -------------  ----------
                                                                          (DOLLARS IN THOUSANDS)
<S>                                              <C>           <C>           <C>           <C>           <C>            <C>
REAL ESTATE MORTGAGE LOANS:
  One- to four-family (1)(2)(3)                  $261,822       65.4 %       $285,346       76.9 %       $245,692        81.6 %
  Multi-family                                     67,013       16.7           34,352        9.3           16,264         5.4
  Commercial                                       43,809       10.9           33,052        8.9           26,753         8.9
  Construction                                     12,920        3.2            6,317        1.7            2,812         0.9
   Land                                               955        0.2              759        0.2            1,502         0.5
                                             -------------  ---------    -------------  ---------    -------------  ----------
       Total real estate mortgage loans           386,519       96.5          359,826       96.9          293,023        97.3
                                             -------------  ---------    -------------  ---------    -------------  ----------
OTHER LOANS:
Consumer loans:
  Home equity                                       4,259        1.1            5,532        1.5            4,574         1.5
  Personal                                          1,590        0.4            1,911        0.5            1,483         0.5
  Other                                             7,252        1.8            2,952        0.8            1,117         0.4
                                             -------------  ---------    -------------  ---------    -------------  ----------
       Total consumer loans                        13,101        3.3           10,395        2.8            7,174         2.4
Commercial business loans                             824        0.2              963        0.2            1,080         0.3
                                             -------------  ---------    -------------  ---------    -------------  ----------
       Total other loans                           13,925        3.5           11,358        3.1            8,254         2.7
                                             -------------  ---------    -------------  ---------    -------------  ----------
       Total loans                                400,444      100.0 %        371,184      100.0 %        301,277       100.0 %
                                                            =========                   =========                   ==========
Less:
  Construction loans in process                    (6,361)                     (3,397)                     (1,672)
  Allowance for loan losses                        (2,002)                     (1,703)                     (1,503)
  Deferred loan origination costs (fees), net         746                         897                       1,074
                                             -------------               -------------               -------------
       Total loans, net                          $392,827                    $366,981                    $299,176
                                             =============               =============               =============

<Caption>

                                                                             AT SEPTEMBER 30,
                                             ------------------------------------------------------    ----------------------
                                                          1998                        1997                      1996
                                             --------------------------   -------------------------    ----------------------
                                                              PERCENT                     PERCENT                   PERCENT
                                                 AMOUNT       OF TOTAL       AMOUNT       OF TOTAL       AMOUNT     OF TOTAL
                                             --------------   ---------   -------------   ---------    -----------  ---------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                               <C>            <C>          <C>            <C>        <C>           <C>
REAL ESTATE MORTGAGE LOANS:
  One- to four-family (1)(2)(3)                   $167,225        84.1 %      $111,821        79.0 %      $62,283       70.6 %
  Multi-family                                       7,846         3.9           5,658         4.0          5,471        6.2
  Commercial                                        12,766         6.4          11,990         8.5          9,117       10.3
  Construction                                       2,613         1.3           2,786         2.0          2,175        2.5
   Land                                                932         0.5           1,814         1.3          1,934        2.2
                                             --------------   ---------   -------------   ---------    -----------  ---------
       Total real estate mortgage loans            191,382        96.2         134,069        94.8         80,980       91.8
                                             --------------   ---------   -------------   ---------    -----------  ---------
OTHER LOANS:
Consumer loans:
  Home equity                                       3,678         1.9           3,217         2.3          2,911        3.3
  Personal                                          1,447         0.7           1,666         1.1          1,632        1.8
  Other                                             1,224         0.6           1,237         0.9          1,310        1.5
                                             -------------   ---------   -------------   ---------    -----------  ---------
       Total consumer loans                         6,349         3.2           6,120         4.3          5,853        6.6
Commercial business loans                           1,195         0.6           1,299         0.9          1,413        1.6
                                             -------------   ---------   -------------   ---------    -----------  ---------
       Total other loans                            7,544         3.8           7,419         5.2          7,266        8.2
                                             -------------   ---------   -------------   ---------    -----------  ---------
       Total loans                                198,926       100.0 %       141,488       100.0 %       88,246      100.0 %
                                                             =========                   =========                 =========
Less:
  Construction loans in process                      (743)                     (1,091)                      (171)
  Allowance for loan losses                        (1,302)                     (1,093)                      (937)
  Deferred loan origination costs (fees), net         478                        (184)                      (472)
                                             -------------               -------------                -----------
       Total loans, net                          $197,359                    $139,120                   $ 86,666
                                             =============               =============                ===========

<Caption>

                                             ---------------------
                                                     1995
                                             ---------------------
                                                         PERCENT
                                              AMOUNT     OF TOTAL
                                             ----------  ---------
                                             (DOLLARS IN THOUSANDS)
<S>                                           <C>          <C>
REAL ESTATE MORTGAGE LOANS:
  One- to four-family (1)(2)(3)               $ 63,282       74.4 %
  Multi-family                                   5,647        6.6
  Commercial                                     6,575        7.7
  Construction                                   2,205        2.6
   Land                                          2,112        2.5
                                             ----------  ---------
       Total real estate mortgage loans         79,821       93.8
                                             ----------  ---------
OTHER LOANS:
Consumer loans:
  Home equity                                    2,389        2.8
  Personal                                       1,734        2.0
  Other                                          1,092        1.3
                                             ----------  ---------
       Total consumer loans                      5,215        6.1
Commercial business loans                           56        0.1
                                             ----------  ---------
       Total other loans                         5,271        6.2
                                             ----------  ---------
       Total loans                              85,092      100.0 %
                                                         =========
Less:
  Construction loans in process                   (293)
  Allowance for loan losses                       (719)
  Deferred loan origination costs (fees), net     (401)
                                             ----------
       Total loans, net                       $ 83,679
                                             ==========
</Table>
--------------------
(1)   Includes advances under home equity lines of credit of $2.7 million, $2.5
      million, $3.2 million, $4.6 million, and $5.9 million respectively, at
      September 30, 2001, 2000, 1999, 1998, and 1997.
(2)   Includes cooperative apartment loans of $3.0 million, $3.5 million, $3.7
      million, $4.5 million, and $4.8 million, respectively, at September 30,
      2001, 2000, 1999, 1998, and 1997.
(3)   Includes loans held for sale of $5.6 million, $2.7 million, $1.2 million
      and $13.3 million at September 30, 2001, 2000, 1999, 1998 and 1997,
      respectively.


                                       5
<Page>

    The following table sets forth the composition of the loan portfolio, by
category and by type of interest rate (fixed or adjustable), in dollar amounts
and as a percentage of the total portfolio at the dates indicated

<Table>
<Caption>

                                                                          AT SEPTEMBER 30,
                                            ----------------------------------------------------------------------------
                                                      2001                      2000                       1999
                                            -----------------------   ------------------------   -----------------------
                                                          PERCENT                    PERCENT                   PERCENT
                                              AMOUNT      OF TOTAL      AMOUNT      OF TOTAL       AMOUNT      OF TOTAL
                                            ------------  ---------   ------------  ----------   -----------   ---------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                             <C>          <C>         <C>           <C>         <C>           <C>
FIXED-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (1)(2)                   $ 32,977        8.2 %     $ 31,652         8.5 %    $ 60,071        19.9 %
  Multi-family                                   42,376       10.6         24,438         6.6        10,320         3.4
  Commercial                                     28,230        7.0         20,050         5.4        14,295         4.7
   Land                                             525        0.1            559         0.2           229         0.1
                                            ------------  ---------   ------------  ----------   -----------   ---------
       Total real estate mortgage loans         104,108       25.9         76,699        20.7        84,915        28.1
Consumer loans                                   13,101        3.3         10,396         2.8         7,174         2.4
                                            ------------  ---------   ------------  ----------   -----------   ---------
       Total fixed-rate loans                   117,209       29.2         87,095        23.5        92,089        30.5
                                            ------------  ---------   ------------  ----------   -----------   ---------
ADJUSTABLE-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (3)(4)(5)                 228,845       57.2        253,694        68.3       185,621        61.7
  Multi-family                                   24,637        6.2          9,914         2.7         5,944         2.0
  Commercial                                     15,579        3.9         13,001         3.5        12,458         4.1
  Construction                                   12,920        3.2          6,317         1.6         2,812         0.9
   Land                                             430        0.1            200         0.1         1,273         0.4
                                            ------------  ---------   ------------  ----------   -----------   ---------
       Total real estate mortgage loans         282,411       70.6        283,126        76.2       208,108        69.1
                                            ------------  ---------   ------------  ----------   -----------   ---------
Commercial business loans                           824        0.2            963         0.3         1,080         0.4
                                            ------------  ---------   ------------  ----------   -----------   ---------
       Total adjustable-rate loans              283,235       70.8        284,089        76.5       209,188        69.5
                                            ------------  ---------   ------------  ----------   -----------   ---------
Total loans                                     400,444      100.0 %      371,184       100.0 %     301,277       100.0 %
                                            ------------  =========   ------------  ==========   -----------   =========
LESS:
  Construction loans in process                  (6,361)                   (3,397)                   (1,672)
  Allowance for loan losses                      (2,002)                   (1,703)                   (1,503)
  Deferred loan origination costs (fees), net       746                       897                     1,074
                                            ------------              ------------               -----------
       Total loans, net                        $392,827                  $366,981                  $299,176
                                            ============              ============               ===========

<Caption>

                                                                          AT SEPTEMBER 30,
                                            ---------------------------------------------------------------------------------
                                                       1998                        1997                     1996
                                            ------------------------   -------------------------   -----------------------
                                                           PERCENT                     PERCENT                   PERCENT
                                              AMOUNT      OF TOTAL        AMOUNT      OF TOTAL       AMOUNT     OF TOTAL
                                            ------------  ----------   -------------  ----------   -----------  ----------
                                                                        (DOLLARS IN THOUSANDS)
<S>                                            <C>           <C>           <C>            <C>        <C>          <C>
FIXED-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (1)(2)                   $ 46,838        23.5 %      $ 36,074        25.5 %    $ 11,805        13.4 %
  Multi-family                                    1,529         0.8             108         0.1            47         0.1
  Commercial                                      1,742         0.9              95         0.1           131         0.1
   Land                                             270         0.1             390         0.3            49         0.1
                                            ------------  ----------   -------------  ----------   -----------  ----------
       Total real estate mortgage loans          50,379        25.3          36,667        26.0        12,032        13.7
Consumer loans                                    6,349         3.2           6,120         4.3         5,853         6.6
                                            ------------  ----------   -------------  ----------   -----------  ----------
       Total fixed-rate loans                    56,728        28.5          42,787        30.3        17,885        20.3
                                            ------------  ----------   -------------  ----------   -----------  ----------
ADJUSTABLE-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (3)(4)(5)                120,387        60.6          75,747        53.5        50,478        57.2
  Multi-family                                   6,317         3.2           5,550         3.9         5,424         6.1
  Commercial                                    11,024         5.5          11,895         8.4         8,986        10.2
  Construction                                   2,613         1.3           2,786         2.0         2,175         2.5
   Land                                            662         0.3           1,424         1.0         1,885         2.1
                                            -----------  ----------   -------------  ----------   -----------  ----------
       Total real estate mortgage loans        141,003        70.9          97,402        68.8        68,948        78.1
                                            -----------  ----------   -------------  ----------   -----------  ----------
Commercial business loans                        1,195         0.6           1,299         0.9         1,413         1.6
                                            -----------  ----------   -------------  ----------   -----------  ----------
       Total adjustable-rate loans             142,198        71.5          98,701        69.7        70,361        79.7
                                            -----------  ----------   -------------  ----------   -----------  ----------
Total loans                                    198,926       100.0 %       141,488       100.0 %      88,246       100.0 %
                                            -----------  ==========   -------------  ==========   -----------  ==========
LESS:
  Construction loans in process                   (743)                     (1,091)                     (171)
  Allowance for loan losses                     (1,302)                     (1,093)                     (937)
  Deferred loan origination costs (fees), net      478                        (184)                     (472)
                                            -----------               -------------               -----------
       Total loans, net                       $197,359                    $139,120                  $ 86,666
                                            ===========               =============               ===========

<Caption>

                                               AT SEPTEMBER 30,
                                            -----------------------
                                                    1995
                                            -----------------------
                                                          PERCENT
                                              AMOUNT     OF TOTAL
                                            -----------  ----------
                                             (DOLLARS IN THOUSANDS)
<S>                                           <C>           <C>
FIXED-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (1)(2)                  $ 11,805        13.9 %
  Multi-family                                     715         0.8
  Commercial                                       396         0.5
   Land                                             49         0.1
                                            -----------  ----------
       Total real estate mortgage loans         12,965        15.3
Consumer loans                                   5,215         6.1
                                            -----------  ----------
       Total fixed-rate loans                   18,180        21.4
                                            -----------  ----------
ADJUSTABLE-RATE LOANS:
Real Estate Mortgage Loans:
  One- to four-family (3)(4)(5)                51,477        60.4
  Multi-family                                  4,932         5.8
  Commercial                                    6,179         7.3
  Construction                                  2,205         2.6
   Land                                         2,063         2.4
                                            ----------  ----------
       Total real estate mortgage loans        66,856        78.5
                                            ----------  ----------
Commercial business loans                          56         0.1
                                            ----------  ----------
       Total adjustable-rate loans             66,912        78.6
                                            ----------  ----------
Total loans                                    85,092       100.0 %
                                            ----------  ==========
LESS:
  Construction loans in process                  (293)
  Allowance for loan losses                      (719)
  Deferred loan origination costs (fees), net    (401)
                                            ----------
       Total loans, net                      $ 83,679
                                            ==========
</Table>
-----------------------
(1)   Includes loans held for sale of $5.6 million, $2.7 million , $1.2 million
      and $13.3 million at September 30, 2001, 2000, 1999, 1998 and 1997,
      respectively.
(2)   Fixed-rate totals include loans with an initial fixed-rate period of 15
      years, with annual rate adjustments thereafter, totaling $27.8 million,
      $27.5 million, $23.5 million, $14.0 million and $23.6 million,
      respectively, at September 30, 2001, 2000, 1999, 1998 and 1997.
(3)   Adjustable-rate totals include loans with initial fixed-rate periods of
      five, seven or ten years, with annual rate adjustments thereafter,
      totaling $168.3 million, $164.1 million, $157.0 million, $83.8 million and
      $35.7 million, respectively, at September 30, 2001, 2000, 1999, 1998 and
      1997.
(4)   Includes advances under home equity lines of credit of $2.7 million, $2.5
      million, $3.2 million, $4.6 million, and $5.9 million respectively, at
      September 30, 2001, 2000, 1999, 1998, and 1997.
(5)   Includes cooperative apartment loans of $3.0 million, $3.5 million, $3.7
      million, $4.5 million, and $4.8 million, respectively, at September 30,
      2001, 2000, 1999, 1998, and 1997.


                                       6
<Page>

     The following table sets forth the contractual maturity of the Company's
loan portfolio at September 30, 2001. The table reflects the entire unpaid
principal balance of a loan in the maturity period that includes the final
payment date and, accordingly, does not give effect to periodic principal
repayments or possible prepayments. Principal repayments and prepayments totaled
$53.0 million, $33.1 million, and $38.5 million for the years ended September
30, 2001, 2000 and 1999, respectively.

<Table>
<Caption>

                                                                         AT SEPTEMBER 30, 2001
                                   -----------------------------------------------------------------------------------
                                                                                                COMMERCIAL
                                    ONE- TO FOUR-FAMILY(1)       MULTI-FAMILY                  REAL ESTATE
                                   --------------------------------------------------   ---------------------------
                                                WEIGHTED                 WEIGHTED                      WEIGHTED
                                                 AVERAGE                 AVERAGE                       AVERAGE
                                      AMOUNT      RATE       AMOUNT        RATE           AMOUNT         RATE
                                   -------------  ------   ----------- --------------   -----------  --------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                     <C>        <C>           <C>            <C>        <C>                <C>
Contractual maturity:
   One year or less (2)               $   1,086    7.02 %     $    --             -- %     $ 2,096            7.13 %
                                    ------------           -----------                  -----------

   After one year:
     More than 1 year to 2 years            583    7.37            --             --           216            9.53
     More than 2 years to 3 years         2,429    7.27            --             --           696            7.25
     More than 3 years to 5 years           880    7.71            --             --           270            9.73
     More than 5 years to 10 years        8,405    7.29         6,520           8.32        10,575            7.99
     More than 10 years to 20 years      27,603    7.32        27,700           7.96        18,257            8.13
     More than 20 years                 220,836    7.09        32,793           7.97        11,699            8.17
                                    ------------           -----------                  -----------

         Total after one year           260,736    7.13        67,013           8.00        41,713            8.11
                                    ------------           -----------                  -----------

   Total amount due                   $ 261,822    7.13 %     $67,013           8.00 %     $43,809            8.06 %
                                    ============           ===========                  ===========

<Caption>

                                                                  AT SEPTEMBER 30, 2001
                                    ------------------------------------------------------------------------------------
                                                                                                    CONSUMER AND
                                          CONSTRUCTION                    LAND                   COMMERCIAL BUSINESS
                                    -------------------------   --------------------------    --------------------------
                                                  WEIGHTED                     WEIGHTED                     WEIGHTED
                                                  AVERAGE                      AVERAGE                       AVERAGE
                                     AMOUNT         RATE          AMOUNT         RATE           AMOUNT        RATE
                                    ----------  -------------   ------------ -------------    ----------- --------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                   <C>               <C>           <C>            <C>           <C>            <C>
Contractual maturity:
   One year or less (2)               $12,920           6.73 %        $ 384          6.75 %      $   185          12.67 %
                                    ----------                  ------------                  -----------

   After one year:
     More than 1 year to 2 years           --             --             --            --            551          10.53
     More than 2 years to 3 years          --             --             --            --            692          10.48
     More than 3 years to 5 years          --             --             --            --          3,330           8.77
     More than 5 years to 10 years         --             --            316          8.63          4,234           8.68
     More than 10 years to 20 years        --             --            255          9.68          4,933           8.70
     More than 20 years                    --             --             --            --             --             --
                                    ----------                  ------------                  -----------

         Total after one year              --             --            571          9.10         13,740           8.87
                                    ----------                  ------------                  -----------

   Total amount due                   $12,920           6.73 %        $ 955          8.15 %      $13,925           8.92 %
                                    ==========                  ============                  ===========

<Caption>

                                        AT SEPTEMBER 30, 2001
                                    -----------------------------

                                               TOTAL
                                    -----------------------------
                                                     WEIGHTED
                                                      AVERAGE
                                       AMOUNT          RATE
                                    -------------  --------------
                                        (DOLLARS IN THOUSANDS)
<S>                                     <C>                 <C>
Contractual maturity:
   One year or less (2)                 $ 16,671            6.87 %
                                    -------------

   After one year:
     More than 1 year to 2 years           1,350            9.01
     More than 2 years to 3 years          3,817            7.85
     More than 3 years to 5 years          4,480            8.62
     More than 5 years to 10 years        30,050            7.97
     More than 10 years to 20 years       78,748            7.83
     More than 20 years                  265,328            7.25
                                    -------------

         Total after one year            383,773            7.45
                                    -------------

   Total amount due                     $440,444            7.43 %
                                    =============
</Table>
------------------
(1)   Includes $2.7 million of advances under home equity lines of credit which
      require minimum interest-only payments for the first five to ten years the
      advance is outstanding, followed by a balloon payment thereafter. Also
      includes $5.6 million in loans held for sale on the basis of their final
      contractual maturity (all more than 20 years).
(2)   Includes demand loans, loans having no stated maturity, and overdraft
      loans.



                                       7
<Page>

         The following table sets forth the dollar amounts in each loan category
at September 30, 2001 that are contractually due after September 30, 2002, and
whether such loans have fixed interest rates or adjustable interest rates.

<Table>
<Caption>

                                               DUE AFTER SEPTEMBER 30, 2002
                                            ----------------------------------
                                             FIXED      ADJUSTABLE     TOTAL
                                            --------    ----------    --------
                                                     (IN THOUSANDS)
<S>                                         <C>          <C>          <C>
Real estate mortgage loans:
    One- to four-family                     $ 32,961     $227,775     $260,736
    Multi-family                              24,822       42,191       67,013
    Commercial                                26,151       15,562       41,713
    Land                                         525           46          571
                                            --------     --------     --------
       Total real estate mortgage loans       84,459      285,574      370,033
Consumer and commercial business loans        12,916          824       13,740
                                            --------     --------     --------
       Total loans                          $ 97,375     $286,398     $383,773
                                            ========     ========     ========
</Table>

         Pursuant to Federal law, the aggregate amount of loans that the Company
is permitted to make to any one borrower or a group of related borrowers is
generally limited to 15% of the Association's unimpaired capital and surplus
(25% if the security for such loan has a "readily ascertainable" value or 30%
for certain residential development loans). At September 30, 2001, based on the
15% limitation, the Company's loans-to-one-borrower limit was approximately $6.0
million. On the same date, the Company had no borrowers with outstanding
balances in excess of this amount. As of September 30, 2001, the largest dollar
amount outstanding to one borrower, or group of related borrowers, was $3.9
million secured by eight apartment buildings located in Mt. Vernon and Yonkers,
New York; one four family residence located in Mt. Vernon, New York and one
single family residence located in Eastchester, New York. At September 30, 2001,
the Company's next largest loan relationship or group outstanding was a $2.6
million construction loan project secured by 16 condominium units in Cold
Spring, New York. These loans were performing in accordance with their terms at
September 30, 2001.

         The Company's lending is subject to its written underwriting standards
and to loan origination procedures. Decisions on loan applications are made on
the basis of detailed applications submitted by the prospective borrower and
property valuations (consistent with the Company's appraisal policy) prepared by
independent appraisers. The loan applications are designed primarily to
determine the borrower's ability to repay, and the more significant items on the
application are verified through use of credit reports, financial statements,
tax returns and/or confirmations.

         Under the Company's loan policy, the individual processing an
application is responsible for ensuring that all documentation is obtained prior
to the submission of the application to a loan officer for approval. In
addition, the loan officer verifies that the application meets the Company's
underwriting guidelines described below. Also, each application file is reviewed
to assure its accuracy and completeness. The Company recently instituted an
enhanced process for quality control reviews of residential loan originations, a
commercial review and grading process and employed a staff appraiser to inspect
multi-family and commercial real estate loan collateral. The quality control
process includes reviews of underwriting decisions, appraisals and


                                       8
<Page>

documentation. The Company is using the services of an independent company to
perform the quality control reviews.

         The Company's lending officers have approval authority for one- to
four-family residential loans and cooperative apartment ("co-op") loans, up
to $350,000. One- to four-family residential loans over $350,000 to $500,000
require the approval of the Company's President or its Senior Vice President
and Chief Lending Officer. Co-op loans over $350,000 require the approval
and/or review of the Chief Lending Officer. The Company's Chief Lending
Officer has approval authority for multi-family, commercial real estate
loans, and for land loans up to $500,000. Loans in excess of these amounts
require the approval of the Company's Loan Committee or Board of Directors.
Various officers have approval authority ranging from $2,000 on secured
consumer loans, up to $50,000 on fixed-rate home equity loans and up to
$30,000 on commercial business loans. Approval authorities on unsecured
consumer loans range from $2,000 to $10,000. The Merger Agreement imposes
certain restrictions on the Company's ability to originate loans without the
approval of Atlantic Bank. Under the terms of the Merger Agreement, the
Company agreed to operate its business in the ordinary course and to certain
limitations on its business operations including to not, without the written
permission of Atlantic, make any (i) "no documentation" loans, (ii)
construction loans, (iii) loans secured by undeveloped land, (iv) loans
secured by real estate outside of the State of New York, (v) loans secured by
non-residential real estate and (vi) other loans in excess of $275,000; except
that the Company is permitted to make without permission the following loss
in amounts of up to $500,000; (i) multi-family loans, (ii) certain mixed use
loans, (iii) residential loans for sale.

         Generally, the Company requires title insurance or abstracts on its
mortgage loans as well as fire and extended coverage casualty insurance in
amounts at least equal to the principal amount of the loan or the value of
improvements on the property, depending on the type of loan. The Company also
requires flood insurance to protect the property securing its interest when the
property is located in a flood plain.

         ONE- TO FOUR-FAMILY RESIDENTIAL REAL ESTATE LENDING. Currently, the
Company is originating and selling the majority of its one-to-four family
mortgage loan originations. At September 30, 2001, $261.8 million, or 65.4%, of
the Company's gross loan portfolio consisted of mortgage loans secured by one-
to four-family residences (including $5.6 million of loans held for sale, $2.7
million of advances under home equity lines of credit and $3.0 million of co-op
loans). Substantially all of the residential loans originated by the Company are
secured by properties located in the Company's primary lending area. A majority
of the residential mortgage loans originated by the Company in fiscal 2001 were
generally sold in the secondary market with servicing released. At September 30,
2001, approximately $15.2 million of the Company's one- to four-family
residential real estate loans were secured by non-owner occupied properties. At
that date, the average outstanding residential loan balance was approximately
$223,000 compared to $218,000 at September 30, 2000.

         Since the mid-1980s, the Company has offered ARM loans at rates and on
terms determined in accordance with market and competitive factors. The Company
offers one-year ARMs for terms of up to 30 years at a margin (generally 275
basis points) over the yield on the Average Weekly One Year U.S. Treasury
Constant Maturity Index. The one-year ARM loans currently offered by the Company
generally provide for a 200 basis point annual interest rate change cap and a
lifetime cap of 600 basis points over the initial rate. The Company also offers
a three-year ARM loan which adjusts based on a margin (generally 275 basis
points) over the yield on the three-year Treasury Note. The Company's three-year
ARM loans have a 200 basis point interest rate cap per adjustment period and a
lifetime cap of 500 basis points over the initial rate. The Company has recently
emphasized ARMs which are fixed for the first five-, seven- or ten-year period
of the loan term and adjust annually thereafter based on a specified margin over
the yield on the Average Weekly One Year U.S. Treasury Constant Maturity Index
for the remaining


                                       9
<Page>

loan term. These loans are classified as ARM loans for reporting purposes and
currently provide for an annual interest rate cap not to exceed 300 basis points
for the initial adjustment period (and 200 basis points thereafter) and a
lifetime cap of 500 basis points.

         Initial interest rates offered on the Company's ARMs may be 100 to 350
basis points below the fully indexed rate. Although borrowers on such loans are
generally qualified at the fully indexed rate, the risk of default on these
loans may increase as interest rates increase. See "- Delinquencies and
Non-Performing Assets." The Company's ARMs do not permit negative amortization
of principal, do not contain prepayment penalties and are not convertible into
fixed-rate loans. At September 30, 2001 one- to four-family ARMs (including
loans of $168.3 million earning a fixed rate of interest for initial periods of
five, seven or 10 years) totaled $228.8 million, or 57.2% of the Company's total
loan portfolio.

         The Company also offers a 30-year residential mortgage loan product
with a fixed rate for the first fifteen years and annual rate adjustments
thereafter based on a specified margin over the Average Weekly One Year U.S.
Treasury Constant Maturity Index. In addition, the loan has a conversion option,
which allows the borrower to convert, during years sixteen through eighteen, to
a fixed rate for the remaining term. At September 30, 2001, the Company had
$27.8 million of such loans, all of which are classified, on the loan tables as
fixed rate loans.

         The Company also offers conventional fixed-rate loans with maximum
terms of up to 30 years, although the Company has recently emphasized
originations of fixed-rate loans with terms of 10 to 15 years. The interest rate
on such loans is generally based on competitive factors. The fixed-rate one- to
four-family loans described in this paragraph are typically underwritten in
accordance with Freddie Mac and Fannie Mae standards to permit their sale in the
secondary market. The Company engages in secondary market sales of a portion of
its residential mortgage originations, as market conditions warrant. Loans held
for sale at September 30, 2001 amounted $5.6 million and represented a variety
of fixed-rate and ARM one- to four-family loans.

         The Company originates home equity lines of credit secured by a lien on
the borrower's residence. The Company's home equity lines are generally limited
to $250,000. The Company uses the same underwriting standards for home equity
lines as it uses for one- to four-family residential mortgage loans. The
interest rates for home equity lines of credit float at a stated margin over the
lowest prime rate published in THE WALL STREET JOURNAL and may not exceed 15.75%
over the life of the loan. The Company currently offers home equity lines for
terms of up to 30 years with interest only paid for the first 10 years of the
loan term. At September 30, 2001, the Company had $2.7 million of outstanding
advances under home equity lines and an additional $2.7 million of funds
committed, but undrawn, under home equity lines of credit.

         The Company also originates loans secured by co-ops and condominiums
located in its market area. Condominium and co-op loans are made on
substantially the same terms as one- to four-family loans, except that co-op
loans are made only at adjustable rates of interest. At September 30, 2001, the
Company had $27.2 million of condominium loans and $3.0 million of co-op loans.

         In underwriting one- to four-family residential real estate loans, the
Company evaluates the borrower's ability to make principal, interest and escrow
payments, as well as the value of the property that will secure the loan and
debt-to-income ratios. The Company currently originates


                                       10
<Page>

residential mortgage loans with loan-to-value ratios of up to 80% for
owner-occupied homes (95% with private mortgage insurance to reduce the
Company's exposure to 80% or less); up to 70% for non-owner occupied homes; and
up to 90% for co-op loans. The Company's home equity lines of credit are
originated in amounts, which together with the amount of the first mortgage,
generally do not exceed 80% of the appraised value of the property securing the
loan.

         The Company's residential mortgage loans customarily include
due-on-sale clauses giving the Company the right to declare the loan immediately
due and payable in the event that, among other things, the borrower sells or
otherwise disposes of the property subject to the mortgage and the loan is not
repaid.

         MULTI-FAMILY AND COMMERCIAL REAL ESTATE LENDING. The Company has
increased its emphasis on the origination of permanent multi-family and
commercial real estate loans in recent years, in order to increase the interest
rate sensitivity and yield of its loan portfolio and to complement residential
lending opportunities. However, such lending is subject to significant
restrictions under the Merger Agreement. The Company's multi-family and
commercial real estate loan portfolio includes loans secured by apartment
buildings, office buildings, strip shopping centers and other income producing
properties located in its market area. At September 30, 2001, the Company had
$67.0 million in multi-family loans, or 16.7% of the total loan portfolio, and
$43.8 million in commercial real estate loans, representing 10.9% of the total
loan portfolio.

         The Company's permanent multi-family and commercial real estate loans
generally carry a maximum term of 20 years and have adjustable rates generally
based on a specific index, plus a margin. These loans are generally made in
amounts of up to 75% of the lesser of the appraised value or the purchase price
of the property, with a projected debt service coverage ratio of at least 125%.
Appraisals on properties securing multi-family and commercial real estate loans
are performed by an independent appraiser designated by the Company at the time
the loan is made. All appraisals on multi-family or commercial real estate loans
are reviewed by the Company's management. In addition, the Company's
underwriting procedures require verification of the borrower's credit history,
income and financial statements, banking relationships, references and income
projections for the property. Where feasible, the Company seeks to obtain
personal guarantees on these loans. For loans in excess of $250,000, Phase I
environmental studies are performed.

         The table below sets forth, by type of security property, the number
and amount of the Company's multi-family and commercial real estate loans at
September 30, 2001. Substantially all of the loans referred to in the table
below are secured by properties located in the Company's market area.


                                       11
<Page>

<Table>
<Caption>

                                                                       OUTSTANDING     AMOUNT NON-
                                                            NUMBER      PRINCIPAL      PERFORMING OR
                                                           OF LOANS      BALANCE       OF CONCERN(1)
                                                           ---------  ---------------  -------------
                                                             (DOLLARS IN THOUSANDS)
<S>                                                              <C>     <C>          <C>
Commercial real estate:
    Small business facilities                                     66     $ 27,180     $    --
    Office buildings                                              10        2,706          --
    Health care facilities                                         6        1,293          --
    Mixed use                                                     32       12,630          --
Multi-family                                                     164       67,013          --
                                                            --------     --------     -------
    Total multi-family and commercial real estate loans          278     $110,822     $    --
                                                            ========     ========     =======
</Table>


-----------------------
(1) See "- Delinquencies and Non-Performing Assets"

         At September 30, 2001, the Company's largest commercial real estate
loan had an outstanding balance of $1.9 million. This loan was originated in
March 2001 and is secured by a furniture store located in Yonkers, New York. At
September 30, 2001, the largest multi-family loan had a balance of $2.0 million,
and is secured by a 56-unit apartment building located in Manhattan, New York.

         Multi-family and commercial real estate loans generally present a
higher level of risk than loans secured by one- to four-family residences. This
greater risk is due to several factors, including the concentration of principal
in a limited number of loans and borrowers, the effects of general economic
conditions on income producing properties, and the increased difficulty of
evaluating and monitoring these types of loans. Furthermore, the repayment of
loans secured by multi-family and commercial real estate is typically dependent
upon the successful operation of the related real estate project. If the cash
flow from the project is reduced (for example, if leases are not obtained or
renewed), the borrower's ability to repay the loan may be impaired. There can be
no assurance that the Company will not experience increased credit problems as a
result of its increase in multi-family and commercial real estate loans.

         CONSTRUCTION AND LAND LENDING. The Company originates a modest amount
of construction loans to individuals and builders for the construction of
residential real estate. At September 30, 2001, the Company's construction loan
portfolio totaled $12.9 million, or 3.2% of the total loan portfolio. The
Company also originates a limited number of land loans primarily for the purpose
of developing residential subdivisions although future originations will be
restricted under the Merger Agreement. At September 30, 2001, the Company's land
loan portfolio totaled $955,000, or 0.2% of the total loan portfolio. At
September 30, 2001, all of the Company's land loans were made for the purpose of
developing residential lots.

         Construction loans to individuals for the construction of their
residences are structured to convert to permanent loans at the end of the
construction phase, which typically runs up to one


                                       12
<Page>

year. These construction loans have rates and terms comparable to one- to
four-family loans then offered by the Company, except during the construction
phase where the borrower pays interest only at a specified margin over the prime
rate. The maximum loan-to-value ratio of owner-occupied single-family
construction loans is 75%. Residential construction loans are generally
underwritten pursuant to the same guidelines used for originating permanent
residential loans. At September 30, 2001, there were $366,000 of construction
loans outstanding to persons intending to occupy the premises upon the
completion of the construction.

         The Company also originates construction loans to builders of one- to
four-family residences. Such loans generally carry terms of up to two years and
require the payment of interest only for the loan term. The maximum
loan-to-value ratio on loans to builders for the construction of residential
real estate is 75%. When practical, the Company seeks to obtain personal
guarantees on such loans. The Company generally limits loans to builders for the
construction of homes on speculation for sale to two homes per builder. At
September 30, 2001, the Company had $4.2 million of construction loans
outstanding to builders of one- to four-family residences.

         The Company's construction loan agreements generally provide that loan
proceeds are disbursed in increments as construction progresses. The Company
reviews the progress of the construction of the dwelling before disbursements
are made.

         The Company also makes loans to builders and developers for the
development of one- to four-family lots in the Company's market area. All of the
Company's land loans have been originated with adjustable rates of interest tied
to the prime rate of interest and have terms of five years or less. Land loans
are generally made in amounts up to a maximum loan-to-value ratio of 65% on raw
land and up to 75% on developed building lots based upon an independent
appraisal. When feasible, the Company obtains personal guarantees for its land
loans.

         The table below sets forth, by type of security property, the number
and amount of the Company's construction and land loans at September 30, 2001,
all of which are secured by properties located in the Company's market area.

<Table>
<Caption>

                                                                 OUTSTANDING  AMOUNT NON-
                                         NUMBER        LOAN       PRINCIPAL   PERFORMING OR
                                        OF LOANS     COMMITMENT    BALANCE    OF CONCERN(1)
                                        ---------    ----------  -----------  -------------
                                                     (DOLLARS IN THOUSANDS)

<S>                                            <C>    <C>         <C>         <C>
Single-family construction                     13     $ 7,950     $ 4,202     $    --
Other construction                              4       4,970       2,357          --
Residential land                                2         595         525          --
Other land                                      2         436         430          --
                                          -------     -------     -------     -------
    Total construction and land loans          21     $13,951     $ 7,514     $    --
                                          =======     =======     =======     =======
</Table>


-------------------
(1) See "- Delinquencies and Non-Performing Assets"


                                       13
<Page>

         Construction and land loans are obtained principally through referrals
from the Company's and management's contacts in the business community as well
as existing and walk-in customers. The application process includes a submission
to the Company of accurate plans, specifications and costs of the project to be
constructed/developed. These items are used as a basis to determine the
appraised value of the subject property. Loans are based on the lesser of
current appraised value and/or the cost of construction (land plus building).

         Construction and land lending generally affords the Company an
opportunity to receive interest at rates higher than those obtainable from
permanent residential loans and to receive higher origination and other loan
fees. In addition, construction and land loans are generally made with
adjustable rates of interest or for relatively short terms. Nevertheless,
construction and land lending is generally considered to involve a higher level
of credit risk than one- to four-family residential lending due to the
concentration of principal in a limited number of loans and borrowers, as well
as the effects of general economic conditions on development properties and on
real estate developers and managers. In addition, the nature of these loans is
such that they are more difficult to evaluate and monitor. Finally, the risk of
loss on construction and land loans is dependent largely upon the accuracy of
the initial estimate of the individual property's value upon completion and the
estimated cost (including interest) of construction. If the cost estimate proves
to be inaccurate, the Company may be required to advance funds beyond the amount
originally committed to permit completion of the property.

         CONSUMER LENDING. In order to increase the interest rate sensitivity of
the loan portfolio and provide a broader range of loan products to its retail
customers, the Company originates a variety of consumer loans, including
automobile, home equity, deposit account and other loans for household and
personal purposes. At September 30, 2001, consumer loans totaled $13.1 million,
or 3.3% of total loans outstanding.

         Consumer loan terms vary according to the type of loan and value of
collateral, length of contract and creditworthiness of the borrower. The
Company's consumer loans are made at fixed interest rates, with terms of up to
15 years. Home equity loans are made at fixed rates up to a maximum loan amount
of $100,000.

         The underwriting standards employed by the Company for consumer loans
include a determination of the applicant's payment history on other debts and
the ability to meet existing obligations and payments on the proposed loan.
Although creditworthiness of the applicant is a primary consideration, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount.

         Consumer loans may entail greater credit risk than residential mortgage
loans, particularly in the case of consumer loans which are unsecured or are
secured by rapidly depreciable assets, such as automobiles. In such cases, any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the outstanding loan balance as a result of the greater
likelihood of damage, loss or depreciation. In addition, consumer loan
collections are dependent on the borrower's continuing financial stability, and
thus are more likely to be affected by adverse personal circumstances.
Furthermore, the application of various federal and state laws, including
bankruptcy and insolvency laws, may limit the amount which can be recovered on
such loans. At September 30, 2001, there were $12,000 of consumer loans
delinquent 90 days or more. There can be no assurance that delinquencies will
not increase in the future.


                                       14
<Page>

         COMMERCIAL BUSINESS LENDING. Federally chartered savings institutions,
such as the Association, are authorized to make secured or unsecured loans and
letters of credit for commercial, corporate, business and agricultural purposes
and to engage in commercial leasing activities, up to a maximum of 20% of total
assets, provided that amounts in excess of 10% relate to small business loans
(as defined). Subject to the restrictions in the Merger Agreement, the Company
may from time to time make a limited number of secured and unsecured commercial
loans to local businesses. At September 30, 2001, the Company had $824,000 of
commercial business loans outstanding, representing 0.2% of the total loan
portfolio.

         The Company's commercial business lending policy includes credit file
documentation and analysis of the borrower's character and capacity to repay the
loan, the adequacy of the borrower's capital and collateral, and an evaluation
of conditions affecting the borrower. Analysis of the borrower's past, present
and future cash flows is also an important aspect of the Company's current
credit analysis.

         Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income, and which are secured by real property whose value tends to be
more easily ascertainable, commercial business loans are of higher risk and
typically are made on the basis of the borrower's ability to make repayment from
the cash flow of the borrower's business. As a result, the availability of funds
for the repayment of commercial business loans may be substantially dependent on
the success of the business itself. Further, the collateral securing the loans
may depreciate over time, may be difficult to appraise and may fluctuate in
value based on the success of the business.

ORIGINATIONS, PURCHASES AND SALES OF LOANS

         Loan applications are taken at each of the Company's offices as well as
through mortgage originators. Applications are processed and approved at the
Company's Loan Center which is located in the corporate headquarters. The
Company currently offers incentives to employees for loan referrals. The Company
also employs commissioned loan originators and utilizes mortgage brokers to
assist in the process of obtaining loans. Total loan originations amounted to
$131.1 million in fiscal 2001, compared to $119.1 million in fiscal 2000 and
$178.4 million in fiscal 1999.

         While the Company originates both fixed- and adjustable-rate loans, its
ability to originate loans is dependent upon the relative customer demand for
loans in its market. Demand is affected by the local economy and the interest
rate environment.

         Historically, most of the fixed-rate one- to four-family residential
loans originated by the Company were retained in its portfolio. However, in
order to reduce its vulnerability to changes in interest rates, the Company
currently sells in the secondary market a substantial portion of its fixed-rate
residential mortgage originations in addition to certain current year
originations of adjustable-rate loans. Residential mortgage sales amounted to
$48.8 million in fiscal 2001, compared to $16.1 million in fiscal 2000 and $37.4
million in fiscal 1999. At September 30, 2001, the Company serviced $75.5
million of mortgage loans for others.

         The following table sets forth the Company's loan originations, sales,
repayments and


                                       15
<Page>

other portfolio activity for the periods indicated.

<Table>
<Caption>

                                                          FOR THE YEAR ENDED SEPTEMBER 30,
                                                      ---------------------------------------
                                                        2001            2000           1999
                                                        ----            ----           ----
                                                                   (IN THOUSANDS)

<S>                                                   <C>            <C>            <C>
Unpaid principal balances at beginning of year        $ 371,184      $ 301,277      $ 198,900
                                                      ---------      ---------      ---------
LOANS ORIGINATED:
    Real estate mortgage loans:
        One- to four-family(1)                           61,529         77,016        141,648
        Multi-family                                     36,263         19,677          8,349
        Commercial                                       14,010          9,428         19,697
        Construction                                     12,028          6,609          4,597
        Land                                                915            345            732
    Consumer and commercial business loans                6,301          5,982          3,367
                                                      ---------      ---------      ---------
      Total loans originated                            131,046        119,057        178,390
                                                      ---------      ---------      ---------

LOANS SOLD:
    One-to four-family real estate mortgage loans       (48,834)       (16,052)       (37,476)
                                                      ---------      ---------      ---------

PRINCIPAL REPAYMENTS:
    Real estate mortgage loans                          (49,216)       (30,244)       (35,866)
    Consumer and commercial business loans               (3,735)        (2,834)        (2,637)
                                                      ---------      ---------      ---------
      Total principal repayments                        (52,951)       (33,078)       (38,503)
                                                      ---------      ---------      ---------

Net charge-offs                                              (1)           (20)           (34)
                                                      ---------      ---------      ---------
Unpaid principal balances at end of year                400,444        371,184        301,277

LESS:
   Construction loans in process                         (6,361)        (3,397)        (1,672)
   Allowance for loan losses                             (2,002)        (1,703)        (1,503)
   Deferred loan origination costs (fees), net              746            897          1,074
                                                      ---------      ---------      ---------
Net loans at end of year                              $ 392,827      $ 366,981      $ 299,176
                                                      =========      =========      =========
</Table>

----------
(1)   Consists of (i) adjustable-rate loans of $9.2 million, $55.9 million, and
      $107.8 million , and (ii) fixed-rate loans of $52.4 million, $20.3
      million, and $32.7 million for the years ended September 30, 2001, 2000
      and 1999, respectively.


                                       16
<Page>

DELINQUENCIES AND NON-PERFORMING ASSETS

         DELINQUENCY PROCEDURES. When a borrower fails to make a required
payment on a loan, the Company attempts to cure the delinquency by contacting
the borrower. A late notice is sent on all loans over 16 days delinquent.
Additional written and verbal contacts may be made with the borrower between 30
and 90 days after the due date. If the loan is contractually delinquent 60 days,
the Company usually sends a 30-day demand letter to the borrower and, after the
loan is contractually delinquent 91 days, institutes appropriate action to
foreclose on the property. If foreclosed, the property is sold at auction and
may be purchased by the Company. Delinquent consumer loans are generally handled
in a similar manner. The Company's procedures for repossession and sale of
consumer collateral are subject to various requirements under New York consumer
protection laws.

         Real estate acquired by the Company as a result of foreclosure or by
deed in lieu of foreclosure is classified as real estate owned until it is sold.
When property is acquired or expected to be acquired by foreclosure or deed in
lieu of foreclosure, it is recorded at estimated fair value less the estimated
cost of disposition, with the resulting write-down charged to the allowance for
loan losses. After acquisition, all costs incurred in maintaining the property
are expensed. Costs relating to the development and improvement of the property,
however, are capitalized.

         The following table sets forth certain information with respect to loan
portfolio delinquencies at the dates indicated.

<Table>
<Caption>

                                                         SEPTEMBER 30, 2001
                                           ------------------------------------------------
                                                 60-89 Days             90 Days or More
                                           -----------------------   ----------------------
                                            Number      Principal     Number     Principal
                                           of Loans      Balance     of Loans     Balance
                                           ---------    ----------   ----------  ----------
                                                        (Dollars in thousands)
<S>                                            <C>          <C>           <C>        <C>
Real estate mortgage loans:
   One- to four-family                         1            $ 151         2          $ 540
Consumer loans                                 2               12         2             12
                                             -------    ----------     --------  ----------
    Total                                      3            $ 163         4          $ 552
                                             =======    ==========     ========  ==========

    Delinquent loans to total loans (1)                     0.04%                    0.14%
                                                        ==========               ==========

<Caption>

                                                          SEPTEMBER 30, 2000
                                           ------------------------------------------------
                                                60-89 Days              90 Days or More
                                           ----------------------    ----------------------
                                            Number     Principal      Number     Principal
                                           of Loans     Balance      of Loans     Balance
                                           ----------  ----------    ----------  ----------
                                                       (Dollars in thousands)
<S>                                             <C>         <C>           <C>        <C>
Real estate mortgage loans:
   One- to four-family                          2           $ 70          1          $ 109
Consumer loans                                 --             --          4             14
                                             --------  ----------      --------  ----------
    Total                                       2           $ 70          5          $ 123
                                             ========  ==========      ========  ==========

    Delinquent loans to total loans (1)                    0.02%                     0.03%
                                                       ==========                ==========
</Table>

----------
(1) If loans held for sale are excluded from total loans, the percentages would
    have remained the same.


                                       17
<Page>

         CLASSIFICATION OF ASSETS. Federal regulations require that each savings
institution classify its own assets on a regular basis. In addition, in
connection with examinations of savings institutions, OTS and FDIC examiners
have authority to identify problem assets and, if appropriate, require them to
be classified. There are three classifications for problem assets: substandard,
doubtful, and loss. Substandard assets have one or more defined weaknesses and
are characterized by the distinct possibility that the institution will sustain
some loss if the deficiencies are not corrected. Doubtful assets have the
weaknesses of substandard assets, with the additional characteristics that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss. An asset classified loss is considered uncollectible and of
such little value that continuance as an asset on the balance sheet of the
institution is not warranted. Assets classified as substandard or doubtful
require the institution to establish prudent general allowances for loan losses.
If an asset or portion thereof is classified as loss, the institution must
either establish specific allowances for loan losses in the amount of 100% of
the portion of the asset classified loss, or charge off such amount. If an
institution does not agree with an examiner's classification of an asset, it may
appeal this determination to the Regional Director of the OTS. On the basis of
management's review, at September 30, 2001 the Company had classified $828,000
of loans as substandard.

         The Company's classified assets consist principally of non-performing
loans and certain other loans of concern discussed herein. As of the date
hereof, these asset classifications are substantially consistent with those of
the OTS and FDIC.

         NON-PERFORMING ASSETS. The table below sets forth the amounts and
categories of the Company's non-performing assets at the dates indicated. Loans
are placed on non-accrual status when the collection of principal or interest
becomes doubtful. Real estate owned represents properties acquired in settlement
of loans.


                                       18
<Page>

<Table>
<Caption>

                                                                              AT SEPTEMBER 30,
                                                               2001        2000      1999       1998       1997
                                                               ----        ----      ----       ----       ----
                                                                            (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>        <C>        <C>
        Non-accrual loans past due ninety days or more:
         Real estate mortgage loans:
                One- to four-family                           $  540     $  109     $  347     $  515     $  389
                Commercial                                        --         --        305        203        211
                Land                                              --         --         --         --        250
                Construction                                      --         --         --         --        279
           Consumer loans                                         12         14        103         35          9
                                                              ------     ------     ------     ------     ------
                    Total                                        552        123        755        753      1,138
         Real estate owned, net                                   --         --         --        305        379
                                                              ------     ------     ------     ------     ------
         Total non-performing assets                          $  552     $  123     $  755     $1,058     $1,517
                                                              ======     ======     ======     ======     ======

         Allowance for loan losses                            $2,002     $1,703     $1,503     $1,302     $1,093
                                                              ======     ======     ======     ======     ======

         Ratios:
           Non-performing loans to total loans receivable       0.14 %     0.03 %     0.25 %     0.38 %     0.81 %
           Non-performing assets to total assets                0.10       0.02       0.16       0.28       0.48
           Allowance for loan losses to:
               Non-performing loans                           362.68    1384.55     199.07     172.91      96.05
               Total loans receivable                           0.51       0.46       0.50       0.70       0.90
</Table>


         For the year ended September 30, 2001, gross interest income of $43,000
would have been recorded if the non-accrual loans at September 30, 2001 had
remained current in accordance with their original terms. The amount of interest
income actually received on such loans in fiscal 2001 was $31,000. See Note 3 of
the Notes to Consolidated Financial Statements.

         At September 30, 2001, the Company's non-performing loans consisted of
two loans secured by one- to four-family real estate located in the Company's
market area which totaled $540,000; and two consumer loans which totaled
$12,000. At September 30, 2001, there was no real estate owned.

         OTHER LOANS OF CONCERN. In addition to the non-performing loans and
real estate owned discussed in the preceding section, as of September 30, 2001
there were other loans of concern totaling approximately $604,000.

         These are loans with respect to which known information about the
possible credit problems of the borrowers or the cash flows of the security
properties have caused management to have concerns as to the ability of the
borrowers to comply with present loan repayment terms and which may result in
the future inclusion of such items in the non-performing asset categories.


                                       19
<Page>

Management has considered the Company's non-performing loans and other loans of
concern in establishing the allowance for loan losses.

         As of September 30, 2001, the Company's other loans of concern included
the following loans with principal balances in excess of $200,000:

             The Company has a $209,000 land loan, secured by a lot located in
    Patterson, New York. The borrower intended to build a commercial building on
    the security property. At September 30, 2001, although this loan was
    performing, it was classified substandard due to the existence of hazardous
    building materials on an adjacent lot which, may result in a decline in
    value of the security property. Although a phase I environmental study
    performed on the security property did not disclose any contamination from
    the adjoining lot, the contamination on the adjacent lot has prevented the
    borrower from using the security property for its intended purpose. As a
    result, the loan was extended and modified in January 1997 as a 15-year,
    self-liquidating loan with a market rate of interest. The borrower is
    continuing to make payments on this loan as required by the terms of the
    loan agreement and is waiting for the resolution of the problem with the
    adjacent property.

               The Company has a $216,000 participation interest in a $3.5
    million commercial mortgage loan secured by a two-story office building
    located in Queens, New York originated by the Thrift Association Service
    Corporation. This loan originally had a 30 year amortization schedule with a
    balloon payment which was due in December 1996. Prior to this scheduled
    balloon payment, the borrower had been unsuccessful in securing financing in
    order to payoff the loan. As a result, a short-term extension was granted at
    the original terms of the loan until December 1997. In December 1997 the
    loan was extended at market terms for an additional five-year term with
    principal payments based on a 25-year amortization schedule. Although the
    loan was current as of September 30, 2001, the Company considers this loan
    to be of concern due to its past performance and extended term.

         ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established
through a provision for loan losses charged to operations based on management's
evaluation of the risk inherent in the loan portfolio. The allowance is
established as an amount that management believes will be adequate to absorb
probable losses on existing loans. The allowance for loan losses consists of
amounts specifically allocated to non-performing loans and potential problem
loans (if any) as well as allowances determined for each major loan category.
Loan categories such as single-family residential mortgages and consumer loans
are generally evaluated on an aggregate or "pool" basis by applying loss factors
to the current balances of the various loan categories. The loss factors are
determined by management based on an evaluation of historical loss experience,
delinquency trends, volume and type of lending conducted, and the impact of
current economic conditions in the Company's market area.

         Management's evaluation of the adequacy of the allowance, which is
subject to periodic review by the Company's regulators, takes into consideration
such factors as the historical loan loss experience, known and inherent risks in
the portfolio, changes in the nature and volume of the loan portfolio, overall
portfolio quality, review of specific problem loans, estimated value of


                                       20
<Page>

underlying collateral, and current economic conditions that may affect borrowers
ability to pay. While management believes that it uses the best information
available to determine the allowance for loan losses, unforeseen market
conditions could result in adjustments to the allowance for loan losses, and net
earnings could be significantly affected, if circumstances differ substantially
from the estimates made in making the final determination.

         The following table sets forth activity in the allowance for loan
losses for the periods indicated

<Table>
<Caption>

                                                                  FOR THE YEAR ENDED SEPTEMBER 30,
                                                    -----------------------------------------------------------
                                                       2001        2000        1999           1998            1997
                                                       ----        ----        ----           ----            ----
                                                                               (DOLLARS IN THOUSANDS)

<S>                                                 <C>          <C>          <C>          <C>          <C>
Balance at beginning of year                        $ 1,703      $ 1,503      $ 1,302      $ 1,093      $   937
Provision for losses                                    300          220          235          375          300
Charge-offs:
     Real estate mortgage loans:
          One- to four-family                            --           --          (23)         (45)        (132)
          Land                                           --           --           --          (17)          --
          Construction                                   --           --           --          (91)          --
     Consumer loans                                     (31)         (44)         (20)         (40)         (25)
                                                    -------      -------      -------      -------      -------
          Total charge-offs                             (31)         (44)         (43)        (193)        (157)
Recoveries                                               30           24            9           27           13
                                                    -------      -------      -------      -------      -------
          Net charge-offs                                (1)         (20)         (34)        (166)        (144)
                                                    -------      -------      -------      -------      -------

Balance at end of year                              $ 2,002      $ 1,703      $ 1,503      $ 1,302      $ 1,093
                                                    =======      =======      =======      =======      =======

Ratio of net charge-offs to average total loans          -- %       0.01 %       0.02 %       0.10 %       0.15 %
</Table>






                                       21
<Page>

         The following table sets forth the allowance for loan losses allocated
by loan category, the total loan amounts by category, and the percent of loans
in each category to loans receivable at the dates indicated.

<Table>
<Caption>

                                                 2001                                         2000
                              -----------------------------------------   ------------------------------------------
                                                              PERCENT OF                                   PERCENT OF
                                                               LOANS IN                                     LOANS IN
                                                 LOAN           EACH                         LOAN             EACH
                                               AMOUNTS         CATEGORY                    AMOUNTS          CATEGORY
                              ALLOWANCE           BY           TO TOTAL    ALLOWANCE          BY            TO TOTAL
                                AMOUNT       CATEGORY(1)         LOANS       AMOUNT       CATEGORY(1)         LOANS
                              ----------- -------------------   -------    ----------- -------------------   -------
                                                                (DOLLARS IN THOUSANDS)
<S>                              <C>               <C>          <C>           <C>             <C>             <C>
Real estate mortgage loans:
   One- to four-family           $   812           $ 261,822      65.4 %      $   987           $ 282,603      76.7 %
   Multi-family                      254              67,013      16.7            135              34,352       9.3
   Commercial                        606              43,809      10.9            352              33,052       9.0
   Construction                       93              12,920       3.2             29               6,317       1.7
   Land(2)                            74                 955       0.2             85                 759       0.2
Consumer and commercial
   business loans                    163              13,925       3.5            115              11,358       3.1
                              -----------       -------------   -------    -----------      --------------   -------
Total                            $ 2,002           $ 400,444     100.0 %      $ 1,703           $ 368,441     100.0 %
                              ===========       =============   =======    ===========      ==============   =======

<Caption>

                                                 1999                                        1998
                              ------------------------------------------   ----------------------------------------
                                                               PERCENT OF                                 PERCENT OF
                                                                LOANS IN                                   LOANS IN
                                                  LOAN            EACH                       LOAN           EACH
                                                AMOUNTS         CATEGORY                   AMOUNTS        CATEGORY
                               ALLOWANCE           BY           TO TOTAL   ALLOWANCE          BY          TO TOTAL
                                 AMOUNT       CATEGORY(1)        LOANS       AMOUNT        CATEGORY         LOANS
                              ----------- -------------------   --------   ----------- -----------------   --------
                                                              (DOLLARS IN THOUSANDS)
<S>                                <C>             <C>             <C>          <C>           <C>           <C>
Real estate mortgage loans:
   One- to four-family           $   895           $ 244,466       81.5 %     $   917         $ 153,891       82.9 %
   Multi-family                       86              16,264        5.4            16             7,846        4.2
   Commercial                        297              26,753        8.9           160            12,766        6.9
   Construction                       11               2,812        0.9            23             2,613        1.4
   Land(2)                           118               1,502        0.5           128               932        0.5
Consumer and commercial
   business loans                     96               8,254        2.8            58             7,544        4.1
                              -----------       -------------   --------   -----------      ------------  ---------
Total                            $ 1,503           $ 300,051      100.0 %     $ 1,302         $ 185,592      100.0 %
                              ===========       =============   ========   ===========      ============   ========

<Caption>

                                                 1997                                        1996
                              ------------------------------------------   -----------------------------------------
                                                              PERCENT OF                                  PERCENT OF
                                                               LOANS IN                                    LOANS IN
                                                LOAN            EACH                        LOAN            EACH
                                              AMOUNTS         CATEGORY                    AMOUNTS         CATEGORY
                              ALLOWANCE          BY            TO TOTAL   ALLOWANCE          BY            TO TOTAL
                                AMOUNT         CATEGORY         LOANS       AMOUNT        CATEGORY          LOANS
                              ------------ -----------------   ---------   ----------- -----------------   ---------
                                                               (DOLLARS IN THOUSANDS)
<S>                                 <C>            <C>            <C>           <C>            <C>           <C>
Real estate mortgage loans:
   One- to four-family            $   608         $  91,367        75.5 %       $ 538          $ 62,283        70.6 %
   Multi-family                        11             5,658         4.7            11             5,471         6.2
   Commercial                         121            11,990         9.9            91             9,117        10.3
   Construction                        98             2,786         2.3            74             2,175         2.5
   Land(2)                            196             1,814         1.5           166             1,934         2.2
Consumer and commercial
   business loans                      59             7,419         6.1            57             7,266         8.2
                              ------------      ------------   ---------   -----------      ------------   ---------
Total                             $ 1,093         $ 121,034       100.0 %       $ 937          $ 88,246       100.0 %
                              ============      ============   =========   ===========      ============   =========
</Table>

----------
(1)   Excludes real estate mortgage loans held for sale of $5.6 million, $2.7
      million, $1.2 million, $13.3 million and $20.4 million, respectively, at
      September 30, 2001, 2000, 1999, 1998 and 1997.
(2)   The allowance principally represents an allocation to land loans "of
      concern." See "- Other Loans of Concern."



                                       22
<Page>

INVESTMENT ACTIVITIES

         GENERAL. The Company utilizes mortgage-backed and other securities in
virtually all aspects of its asset/liability management strategy. In making
investment decisions, the Board of Directors considers, among other things, the
Company's yield and interest rate objectives, its interest rate and credit risk
position, and its liquidity and cash flow.

         Yonkers Savings must maintain minimum levels of investments that
qualify as liquid assets under OTS regulations. Liquidity may increase or
decrease depending upon the availability of funds and comparative yields on
investments in relation to the return on loans. Cash flow projections are
regularly reviewed and updated to assure that adequate liquidity is maintained.
Under the Merger Agreement, the Company generally may not, except with the
approval of Atlantic Bank, make any investments other than U.S. Government and
U.S. Government agency securities with final maturities not greater than five
years and FHLB of New York stock.

         Generally, the investment policy of the Company is to invest funds
among categories of investments and maturities based upon the Company's
asset/liability management policies, investment quality, loan and deposit
volume, liquidity needs and performance objectives. SFAS No. 115, ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, requires that securities be
classified into three categories: trading, held to maturity, and available for
sale. Securities that are bought and held principally for the purpose of selling
them in the near term are classified as trading securities and are reported at
fair value with unrealized gains and losses included in earnings. Debt
securities for which the Company has the positive intent and ability to hold to
maturity are classified as held to maturity and reported at amortized cost. All
other securities not classified as trading or held to maturity are classified as
available for sale Available-for-sale securities are reported at fair value with
unrealized gains and losses included, on an after-tax basis, in a separate
component of stockholders' equity. At September 30, 2001, the Company had no
securities classified as trading. At September 30, 2001, $108.0 million or 86.8%
of the Company's mortgage-backed and other securities was classified as
available for sale. The remaining $16.4 million, or 13.2%, was classified as
held to maturity.

         MORTGAGE-BACKED SECURITIES. The Company has invested in
mortgage-backed securities in order to supplement loan production and achieve
its asset/liability management goals. The Company has also invested in
mortgage-backed securities, including collateralized mortgage obligations
("CMOs"), in order to take advantage of the spread between the yield on such
securities and the cost of borrowings from the FHLB and other "wholesale"
sources although the Company may either invest in shorter term investments or
allow the portfolio to decline in anticipation of completion of the Merger.
In a number of instances, the expected maturity of the securities purchased
has been significantly longer than the term of the related borrowings.

         Substantially all of the mortgage-backed securities owned by the
Company are issued, insured or guaranteed either directly or indirectly by a
federal agency or are rated "AA" or higher. As of September 30, 2001, the
Company did not have any mortgage-backed securities of a single issuer in excess
of 10% of the Company's stockholders' equity, except for federal agency
obligations. At September 30, 2001, the Company classified mortgage-backed
securities of $10.6 million as held to maturity and $72.0 million as available
for sale. Consistent with its


                                       23
<Page>

asset/liability management strategy, at September 30, 2001 $28.8 million, or
34.8%, of the Company's mortgage-backed securities had adjustable interest
rates.

         CMOs are securities derived by reallocating the cash flows from
mortgage-backed securities or pools of mortgage loans in order to create
multiple classes, or tranches, of securities with coupon rates and average lives
that differ from the underlying collateral as a whole. The term to maturity of
any particular tranche is dependent upon the prepayment speed of the underlying
collateral as well as the structure of the particular CMO. As a result, the cash
flows (and hence the values) of certain CMOs are subject to substantial change.

         Management believes that CMOs at times represent attractive investment
alternatives relative to other investments due to the wide variety of maturity
and repayment options available through such investments. In particular, the
Company has from time to time concluded that short and intermediate duration
CMOs (seven-year or less estimated average life) represent a better combination
of rate and duration than adjustable-rate mortgage-backed securities. At
September 30, 2001, the Company held $22.0 million of CMOs, $1.5 million of
which were classified as held-to-maturity.

         Prior to the purchase of a CMO, the Company conducts an analysis of the
security to assess its price volatility. The analysis is designed to show the
expected change in the value of the security that would result from immediate
parallel shifts in the yield curve of plus or minus 100, 200 and 300 basis
points. The Company establishes risk tolerance levels for its CMO activities on
a periodic basis based on its overall asset/liability management goals and
market conditions. Based on the restrictions contained in the Merger Agreement,
the Company's future investments in CMO's may decline.

         The fair value of the Company's mortgage-backed securities,
particularly those carrying fixed rates, would decline significantly in the
event of an increase in interest rates. In addition, a decrease in interest
rates could result in an increase in prepayments on the fixed-rate portion of
the Company's mortgage-backed securities portfolio. Funds from such prepayments
may be reinvested at a lower yield. Similarly, a decline in interest rates would
result in the downward adjustment of the rates earned on the Company's
adjustable-rate, mortgage-backed securities portfolio resulting in lower yields
and interest income in future periods.

         For additional information regarding the Company's mortgage-backed
securities portfolio, see Note 2 of the Notes to Consolidated Financial
Statements

         The following table sets forth the amortized cost and fair value of the
mortgage-backed securities portfolio, by accounting classification category and
by type of security, at the dates indicated.


                                       24
<Page>

<Table>
<Caption>

                                                                  AT SEPTEMBER 30,
                                     -------------------------------------------------------------------------
                                              2001                      2000                     1999
                                     ---------------------     ---------------------     ---------------------
                                     AMORTIZED      FAIR       AMORTIZED     FAIR        AMORTIZED     FAIR
                                       COST         VALUE        COST        VALUE         COST        VALUE
                                     --------     --------     --------     --------     --------     --------
                                                                  (IN THOUSANDS)
<S>                                  <C>          <C>          <C>          <C>          <C>          <C>
HELD TO MATURITY
     Pass-through securities         $  9,125     $  9,305     $ 13,344     $ 13,323     $ 16,897     $ 16,934
     CMOs                               1,510        1,520        2,348        2,266        4,539        4,531
                                     --------     --------     --------     --------     --------     --------
       Total                           10,635       10,825       15,692       15,589       21,436       21,465
                                     --------     --------     --------     --------     --------     --------

AVAILABLE FOR SALE
     Pass-through securities           51,549       52,677       70,526       67,882       78,651       75,944
     CMOs                              20,463       20,460           --           --           --           --
                                     --------     --------     --------     --------     --------     --------
       Total                           72,012       73,137       70,526       67,882       78,651       75,944
                                     --------     --------     --------     --------     --------     --------

Total mortgage-backed securities     $ 82,647     $ 83,962     $ 86,218     $ 83,471     $100,087     $ 97,409
                                     ========     ========     ========     ========     ========     ========
</Table>


         All mortgage-backed securities are guaranteed by, Ginnie Mae, Fannie
Mae or Freddie Mac, except for privately-issued securities with an amortized
cost of $2 million, $60,000, and $115,000 at September 30, 2001, 2000 and 1999,
respectively.

The following table sets forth certain information regarding the amortized cost,
fair value, weighted average yield and maturity of the Company's mortgage-backed
securities at September 30, 2001. The entire amortized cost and fair value of
such securities are reflected in the maturity period that includes the final
security payment date and, accordingly, no effect has been given to periodic
repayments or possible prepayments. In addition, under the structure of some of
the Company's CMOs, the Company's short- and intermediate-tranche interests have
repayment priority over the longer-term tranches of the same underlying mortgage
pool.


                                       25
<Page>

<Table>
<Caption>

                                                                            AT SEPTEMBER 30, 2001
                                             ----------------------------------------   ---------------------------------------
                                                           AVAILABLE FOR SALE                           HELD TO MATURITY
                                             ----------------------------------------   ---------------------------------------
                                                                           WEIGHTED                                  WEIGHTED
                                                AMORTIZED       FAIR        AVERAGE      AMORTIZED        FAIR        AVERAGE
                                                  COST          VALUE        YIELD          COST          VALUE        YIELD
                                               ------------  ------------  ----------   -------------  ------------  ----------
                                                                           (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>       <C>            <C>               <C>
PASS-THROUGH SECURITIES:
   Due after 1 year but within 5 years           $    --        $    --          -- %    $    31        $    32           6.88%
   Due after 5 years but within 10 years              --             --          --          172            184           8.05
   Due after 10 years                             51,549         52,677        6.76        8,922          9,089           7.06
                                                 -------        -------                  -------        -------
     Total                                       $51,549        $52,677        6.76 %    $ 9,125        $ 9,305           7.07%
                                                 =======        =======                  =======        =======

CMOS:
   Due within 1 year                             $    --        $    --          -- %    $    73        $    73           8.00%
   Due after 10 years                             20,463         20,460        4.77        1,437          1,447           4.53
                                                 -------        -------                  -------        -------
     Total                                       $20,463        $20,460        4.77 %    $ 1,510        $ 1,520           4.70%
                                                 =======        =======                  =======        =======
</Table>


The following table sets forth the activity in the mortgage-backed securities
portfolio for the periods indicated.

<Table>
<Caption>

                                                              FOR THE YEAR ENDED SEPTEMBER 30,
                                                       ---------------------------------------------
                                                          2001             2000              1999
                                                       ---------         ---------         ---------
                                                                      (IN THOUSANDS)

<S>                                                    <C>               <C>               <C>
Amortized cost at beginning of year                    $  86,218         $ 100,087         $ 112,357
                                                       ---------         ---------         ---------
Purchases:
    Pass-through securities:
        Fixed rate                                            --                --            34,851
        Adjustable rate                                       --                --                --
                                                       ---------         ---------         ---------
          Total pass-through securities                       --                --            34,851
    CMOs                                                  20,996                --                --
                                                       ---------         ---------         ---------
          Total purchases                                 20,996                --            34,851
                                                       ---------         ---------         ---------
Sales                                                     (5,445)               --           (15,377)
Principal repayments                                     (18,964)          (13,791)          (31,414)
Premium amortization, net of discount accretion             (158)              (78)             (330)
                                                       ---------         ---------         ---------
Amortized cost at end of year                          $  82,647         $  86,218         $ 100,087
                                                       =========         =========         =========
</Table>


         OTHER SECURITIES. In addition to mortgage-backed securities, the
Company also invests in high-quality assets (primarily government and agency
obligations) with short and intermediate terms (typically seven years or less)
to maturity. At September 30, 2001, the Company did not own any investment
securities of a single issuer, which exceeded 10% of the Company's stockholders'
equity, other than U.S. Government or federal agency obligations. From time to
time, the Company holds high-grade corporate debt securities, as well as common
stocks and mutual fund shares. Under the Merger Agreement, the Company has
agreed to discontinue making additional such investments.


                                       26
<Page>

See Note 2 of the Notes to Consolidated Financial Statements for additional
information regarding the Company's securities portfolio.

         The following table sets forth the amortized cost and fair value of
other securities, by accounting classification category and by type of security,
at the dates indicated:

<Table>
<Caption>

                                                                                   AT SEPTEMBER 30,
                                                      -------------------------------------------------------------------------
                                                                2001                     2000                      1999
                                                      -------------------------------------------------------------------------
                                                      AMORTIZED      FAIR       AMORTIZED      FAIR       AMORTIZED      FAIR
                                                         COST        VALUE        COST         VALUE        COST         VALUE
                                                      ---------     -------     ---------     -------      -------      -------
                                                                               (DOLLARS IN THOUSANDS)
<S>                                                    <C>          <C>          <C>          <C>          <C>          <C>
AVAILABLE FOR SALE
  U.S. Government and Agency securities                $15,999      $16,369      $41,511      $39,655      $41,527      $40,156
  Corporate & Preferred bonds                          $11,644      $11,976      $ 3,952      $ 3,997           --           --
  Equity securities                                      6,595        6,543          869          839          818          612
                                                       -------      -------      -------      -------      -------      -------
     Total                                              34,238       34,888       46,332       44,491       42,345       40,768
                                                       -------      -------      -------      -------      -------      -------

HELD TO MATURITY
  Obligations of state and political subdivisions      $ 5,730      $ 5,730      $    --      $    --           --           --
  U.S. Government and Agency securities                $    --      $    --      $   500      $   492      $   500      $   494
                                                       -------      -------      -------      -------      -------      -------
     Total                                             $ 5,730      $ 5,730          500          492          500          494

Total other securities                                 $39,968      $40,618      $46,832      $44,983      $42,845      $41,262
                                                       =======      =======      =======      =======      =======      =======
</Table>


         The following table sets forth certain information regarding the
amortized cost, fair value and weighted average yield of other debt securities
at September 30, 2001, by remaining period to contractual maturity.

<Table>
<Caption>

                                                                               AT SEPTEMBER 30, 2001
                                                           AVAILABLE FOR SALE                         HELD TO MATURITY
                                                 ---------------------------------------  --------------------------------------
                                                                             WEIGHTED                                 WEIGHTED
                                                  AMORTIZED       FAIR        AVERAGE      AMORTIZED       FAIR        AVERAGE
                                                    COST          VALUE        YIELD          COST         VALUE        YIELD
                                                 ------------  ------------ ------------  ------------- ------------  ----------
                                                                             (DOLLARS IN THOUSANDS)
<S>                                              <C>           <C>              <C>         <C>           <C>            <C>
U.S. GOVERNMENT AGENCY AND MUNICIPAL BONDS:
   Due after 5 years but within 10 years           1,998         2,165          7.07             --            --           --
   Due after 10 years                             11,000        11,149          6.92          5,730         5,764         4.75
                                                 -------       -------                      -------       -------
     Total                                        12,998        13,314                        5,730         5,764
                                                 -------       -------                      -------       -------

CORPORATE AND OTHER OBLIGATIONS:
   Due less than one year                        $   499       $   496          4.09 %      $    --       $    --           -- %
   Due after 1 year but within 5 years             1,993         2,071          7.46             --            --           --
   Due after 5 years but within 10 years           2,940         3,263          8.80             --            --           --
   Due after 10 years                              6,212         6,146          5.02             --            --           --
                                                 -------       -------                      -------       -------
     Total                                       $11,644       $11,976          6.50 %      $             $ 5,764         4.75 %
                                                 -------       -------                      -------       -------
Total debt securities                            $24,462       $25,290          6.50%       $ 5,730       $ 5,764         4.75 %
                                                 =======       =======                      =======       =======

</Table>



                                       27
<Page>

SOURCES OF FUNDS

         GENERAL. The Company's primary sources of funds are deposits,
borrowings, payments (including prepayments) of loan principal, interest earned
on loans and securities, repayments of securities and other funds provided from
operations.

         DEPOSITS. The Company offers a variety of deposit accounts having a
wide range of interest rates and terms. The Company's deposits consist of
regular savings (passbook) accounts, transaction (NOW and checking) accounts,
money market accounts, club accounts and certificate accounts. The Company only
solicits deposits in its market area and does not accept brokered deposits. The
Company relies primarily on competitive pricing policies, advertising and
customer service to attract and retain these deposits and provides incentives to
employees who refer new deposit customers to the Company.

         The variety of deposit accounts offered by the Company has allowed it
to be competitive in obtaining funds and to respond with flexibility to changes
in consumer demand. As certain customers have become more interest rate
conscious, the Company has become more susceptible to short-term fluctuations in
deposit flows. The Company manages the pricing of its deposits in keeping with
its asset/liability management, profitability and growth objectives.

         Management believes that the "core" portion of the Company's regular
savings, transaction, money market and club accounts can have a lower cost and
be more resistant to interest rate changes than certificate accounts and
therefore are relatively stable sources of deposits. The Company continues to
utilize customer service and marketing initiatives (including newspaper
advertisements) in an effort to maintain and increase the volume of such
deposits. However, the ability of the Company to attract and maintain these
accounts (as well as certificate accounts) has been and will continue to be
affected by market conditions.

         The following table sets forth the deposit activity of the Company for
the periods indicated.

<Table>
<Caption>

                                            FOR THE YEAR ENDED SEPTEMBER 30,
                                     -----------------------------------------------
                                        2001              2000                1999
                                     ---------          ---------          ---------
                                                 (DOLLARS IN THOUSANDS)

<S>                                  <C>                <C>                <C>
Balance at beginning of year         $ 325,106          $ 272,974          $ 231,181
Deposits                               903,036            803,282            738,157
Withdrawals                           (853,352)          (763,073)          (705,907)
Interest credited                       14,733             11,923              9,543
                                     ---------          ---------          ---------
Balance at end of year               $ 389,523          $ 325,106          $ 272,974
                                     =========          =========          =========

Net increase during the year:
    Amount                           $  64,417          $  52,132          $  41,793
                                     =========          =========          =========
    Percent                               19.8%              19.1%              11.2%
                                     =========          =========          =========
</Table>


The following table sets forth the distribution of the Company's deposit
accounts and the related weighted average interest rates at the dates indicated.


                                       28
<Page>

<Table>
<Caption>

                                                                                                AT SEPTEMBER 30,
                                   ------------------------------------------------------------------------------------------
                                                        2001                                          2000
                                   ------------------------------------------   ------------------------------------------
                                                        PERCENT     WEIGHTED                         PERCENT     WEIGHTED
                                                       OF TOTAL     AVERAGE                         OF TOTAL     AVERAGE
                                        AMOUNT         DEPOSITS       RATE           AMOUNT         DEPOSITS       RATE
                                   ------------------  ----------   ---------   ------------------  ----------   ---------
                                                                   (DOLLARS IN THOUSANDS)

<S>                                        <C>             <C>          <C>             <C>             <C>         <C>
Checking accounts                          $  16,416         4.2 %        -- %          $  11,669         3.6 %        -- %
NOW accounts                                  32,352         8.3        0.72               29,379         9.0        1.05
Money market accounts                         30,687         7.9        2.60               34,087        10.5        3.25
Regular savings accounts                      86,366        22.2        2.25               55,122        17.0        2.42
Club accounts                                  1,609         0.4        2.25                1,609         0.5        2.42
Savings certificate accounts                 222,093        57.0        5.13              193,240        59.4        5.78
                                           ---------       -----                        ---------       -----
    Total                                  $ 389,523       100.0 %      3.70 %          $ 325,106       100.0 %      0.00 %
                                           =========       =====                        =========       =====

<Caption>

                                              AT SEPTEMBER 30,
                                   -------------------------------------
                                                    1999
                                   -------------------------------------
                                                   PERCENT     WEIGHTED
                                                   OF TOTAL    AVERAGE
                                      AMOUNT       DEPOSITS      RATE
                                   --------------  ---------   ---------
                                              (DOLLARS IN THOUSANDS)

<S>                                    <C>            <C>          <C>
Checking accounts                      $  10,769        4.0 %        -- %
NOW accounts                              24,708        9.1        1.06
Money market accounts                     33,429       12.3        3.19
Regular savings accounts                  50,776       18.6        2.23
Club accounts                              1,480        0.5        2.23
Savings certificate accounts             151,812       55.6        5.04
                                       ---------   --------
    Total                              $ 272,974      100.0 %      4.10 %
                                       =========   ========
</Table>


         The following table sets forth, by interest rate ranges, the amount of
savings certificate accounts outstanding at the dates indicated and the period
to maturity of savings certificate accounts outstanding at September 30, 2001.

<Table>
<Caption>

                                                     AT SEPTEMBER 30, 2001
                            ----------------------------------------------------------------------            TOTAL AT
                                                     PERIOD TO MATURITY                                    SEPTEMBER 30,
                            ----------------------------------------------------------------------   ---------------------------
                             LESS THAN      ONE TO       MORE THAN                     PERCENT
                             ONE YEAR      THREE YEARS   THREE YEARS     TOTAL         OF TOTAL         2000           1999
                            ------------  -----------------------------------------  -------------   ------------  -------------
                                                                  (DOLLARS IN THOUSANDS)
<S>                            <C>            <C>         <C>             <C>             <C>          <C>            <C>
4.00% and below                $ 21,282       $ 3,108           --        $ 24,390         11.0 %      $   1,512      $   2,619
4.01% to 5.00%                   45,658        42,006        7,600          95,264         42.9           36,854         74,162
5.01% to 6.00%                   36,802         9,761        4,770          51,333         23.1           78,720         66,586
6.01% to 7.00%                   28,373        14,362        6,703          49,438         22.3           74,413          8,234
7.01% and above                   1,221            --          447           1,668          0.8            1,741            211
                               --------      --------     --------        ---------       -----        ---------      ---------
    Total                      $133,336      $ 69,237     $ 19,520        $222,093        100.0 %      $ 193,240      $ 151,812
                               ========      ========     ========        =========       =====        =========      =========
</Table>


         The following table sets forth the maturity distribution and related
weighted average interest rates for savings certificate accounts with balances
less than $100,000, accounts of $100,000 or more, and total savings certificates
at September 30, 2001.

<Table>
<Caption>

                                              LESS THAN $100,000           $100,000 OR MORE              TOTAL
                                         -----------------------------   ---------------------   -----------------------
                                                          WEIGHTED                      WEIGHTED                WEIGHTED
                                                           AVERAGE                      AVERAGE                 AVERAGE
                                           AMOUNT           RATE          AMOUNT         RATE       AMOUNT       RATE
                                           ------          ------         ------        --------    ------      --------
                                                                        (DOLLARS IN THOUSANDS)

<S>                                      <C>                <C>         <C>                <C>      <C>             <C>
Within three months                      $ 36,114           5.21 %      $  6,455           5.33 %   $ 42,569        5.23 %
After three but within six months          31,251           4.98           5,569           5.26       36,820        5.02
After six but within 12 months             43,352           5.01          10,595           5.24       53,947        5.12
                                         --------                       --------                    --------
    Total within one year                 110,717           5.10          22,619           5.27      133,336        5.13
After one but within two years             45,845           4.70           8,091           5.01       53,936        4.78
After two but within three years           12,789           5.97           2,512           6.22       15,301        6.01
After three but within five years          13,973           5.65           5,547           5.69       19,520        5.66
                                         --------                       --------                    --------
    Total                                $183,324           5.08 %      $ 38,769           5.34 %   $222,093        5.13 %
                                         ========                       ========                    ========
</Table>


         BORROWINGS. The Company's other available sources of funds include
securities repurchase agreements and advances from the FHLB of New York. Under
the Merger Agreement, the Company may generally not, without Atlantic Bank
approval, incur any borrowings other than non-callable short term (one year or
less) FHLB borrowings and reverse


                                       29
<Page>


repurchase agreements. The Company has used borrowings when the rate and or
maturities are believed to be more favorable than those available on deposits.

         As a member of the FHLB of New York, the Company is required to own
capital stock in the FHLB of New York and is authorized to apply for advances
from the FHLB of New York. Each FHLB credit program has its own interest rate,
which may be fixed, or variable, and a range of maturities. The FHLB of New York
may prescribe the acceptable uses for these advances, as well as limitations on
the size of the advances and repayment provisions. At September 30, 2001, the
Company had a collateral pledge arrangement with the FHLB of New York pursuant
to which the Company may borrow advances of up to $142.1 million. On such date,
$63.1 million of FHLB advances were outstanding. These advances were used to
fund mortgage loans and to a lesser extent securities.

         The Company enters into securities repurchase agreements with the FHLB
of New York utilizing mortgage-backed and other securities as collateral. At
September 30, 2001, the Company had $66.5 million of outstanding borrowings
under securities repurchase agreements, which were collateralized by
mortgage-backed and other debt securities with a total fair value of $69.4
million.

         The following table sets forth information concerning the balances and
interest rates on borrowings at the dates and for the periods indicated.

<Table>
<Caption>

                                                                         AT OR FOR THE YEAR
                                                                        ENDED SEPTEMBER 30,
                                                           -----------------------------------------------
                                                               2001            2000             1999
                                                           --------------  --------------   --------------
                                                                        (DOLLARS IN THOUSANDS)
<S>                                                             <C>             <C>               <C>
SECURITIES REPURCHASE AGREEMENTS:
    Balance at end of year                                      $ 66,512        $ 85,012         $ 99,987
    Average balance during year                                   74,018          99,756           82,681
    Maximum outstanding at any month end                          79,512         114,088          100,962
    Weighted average interest rate at end of year                   5.81 %          6.10 %           5.53 %
    Average interest rate during the year                           6.07            5.92             5.48
FHLB ADVANCES:
    Balance at end of year                                      $ 63,061        $ 72,400         $ 47,949
    Average balance during year                                   69,819          71,052           14,475
    Maximum outstanding at any month end                          89,900          80,800           47,949
    Weighted average interest rate at end of year                   6.84 %          6.42 %           5.19 %
    Average interest rate during the year                           6.70            6.14             5.61
</Table>


         See Note 7 of the Notes to the Consolidated Financial Statements for
further information concerning the Company's securities repurchase agreements
and FHLB advances.


                                       30
<Page>

SUBSIDIARIES

         At September 30, 2001, the Association had two subsidiaries, Yonkers
Financial Services Corporation, which offers life insurance, annuities, and
mutual funds on an agency basis to the Association's customers and Yonkers REIT,
Inc., See Note 8 of the Notes to Consolidated Financial Statements.

COMPETITION

         The Company faces extremely strong competition both in originating real
estate loans and in attracting deposits. Competition in originating loans comes
primarily from mortgage bankers, commercial banks, insurance companies, credit
unions and other savings institutions, which also originate loans secured by
real estate located in the Company's market area. The Company competes for loans
principally on the basis of the interest rates and loan fees it charges, the
types of loans it originates and the quality of services it provides to
borrowers.

         Competition for deposits is intense given the size of the New York
market and the fact that it is the home state for many large regional and money
center banks. Competition for deposits is principally from money market and
mutual funds, securities firms, commercial banks, credit unions and other
savings institutions located in the same communities. There is further
competition from institutions offering home and internet computer banking. The
ability of the Company to attract and retain deposits depends on its ability to
provide an investment opportunity that satisfies the requirements of investors
as to rate of return, liquidity, risk, convenient locations and other factors.
The Company is significantly smaller than most of its competitors, which due to
their size and economies of scale, generally offer a broader range of deposit
products than the Company. The Company competes for these deposits by offering
deposit accounts at competitive rates, convenient business hours, availability
of ATMs and a customer oriented staff. As of June 30, 2000, the latest date such
information was available, there were 332 other thrift, commercial bank and
credit union offices in Westchester County, which compete for deposits. As of
June 30, 2000, the Company held approximately 1.4% of total deposits in
Westchester County.

EMPLOYEES

         At September 30, 2001, the Company had a total of 98 full-time and 14
part-time employees. None of the Company's employees are represented by any
collective bargaining agreement. Management considers its employee relations to
be good.

REGULATION

         GENERAL. Yonkers Savings is a federally chartered savings and loan
association, the deposits of which are federally insured and backed by the full
faith and credit of the United States Government. Accordingly, Yonkers Savings
is subject to broad federal regulation and oversight extending to all its
operations. Yonkers Savings is a member of the FHLB of New York and is subject
to certain limited regulation by the Board of Governors of the Federal Reserve
System ("Federal Reserve Board"). As the savings and loan holding company of
Yonkers Savings, the


                                       31
<Page>

Holding Company also is subject to federal regulation and oversight. The purpose
of holding company regulation is to protect subsidiary savings associations.
Certain of these regulatory requirements and restrictions are discussed below or
elsewhere in this document.

         FEDERAL REGULATION OF SAVINGS ASSOCIATIONS. The OTS has extensive
authority over the operations of savings associations. As part of this
authority, Yonkers Savings is required to file periodic reports with the OTS and
is subject to periodic examinations by the OTS. The last regular OTS safety and
soundness examination of Yonkers Savings was as of July 1, 2001. When these
examinations are conducted by the OTS, the examiners may require Yonkers Savings
to provide for higher general or specific loan loss reserves. All savings
associations are subject to a semi-annual assessment, based upon the savings
association's total assets, to fund the operations of the OTS. Yonkers Savings'
OTS assessment for the fiscal year ended September 30, 2001 was approximately
$109,000.

         The OTS also has extensive enforcement authority over all savings
institutions and their holding companies, including Yonkers Savings and the
Holding Company. This enforcement authority includes, among other things, the
ability to assess civil money penalties, to issue cease-and-desist or removal
orders and to initiate injunctive actions.

         Yonkers Savings' general permissible lending limit for loans-to-one
borrower is equal to the greater of $500,000 or 15% of unimpaired capital and
surplus (except for loans fully secured by certain readily marketable
collateral, in which case this limit is increased to 25% of unimpaired capital
and surplus). At September 30, 2001, Yonkers Savings' lending limit under this
restriction was $5.8 million. Yonkers Savings is in compliance with the
loans-to-one borrower limitation.

         INSURANCE OF ACCOUNTS AND REGULATION BY THE FDIC. As insurer, the FDIC
imposes deposit insurance premiums and is authorized to conduct examinations of
and to require reporting by FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulation or order to pose a serious risk to the SAIF. The FDIC also has the
authority to initiate enforcement actions against savings associations, after
giving the OTS an opportunity to take such action, and may terminate the deposit
insurance if it determines that the institution has engaged in unsafe or unsound
practices or is in an unsafe or unsound condition.

         The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of
nine categories and assessed insurance premiums, based upon their level of
capital and supervisory evaluation. Under the system, institutions classified as
well capitalized (I.E., a core capital ratio of at least 5%, a ratio of Tier 1
or core capital to risk-weighted assets ("Tier 1 risk-based capital") of at
least 6% and a risk-based capital ratio of at least 10%) and considered healthy
pay the lowest premium, while institutions that are less than adequately
capitalized (I.E., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based capital ratio of less than 8%) and considered of substantial
supervisory concern pay the highest premium. Risk classifications of all insured
institutions are made by the FDIC for each semi-annual assessment period. At
September 30, 2001, the Association was classified as a well-capitalized
institution.


                                       32
<Page>

         The premium schedule for both Bank Insurance Fund ("BIF") and SAIF
insured institutions ranges from 0 to 27 basis points for each $100 in domestic
deposits. The Association's most recent assessment rate was 0 basis points.
However, SAIF-insured institutions are required to pay a Financing Corporation
(FICO) assessment, in order to fund the interest on bonds issued to resolve
thrift failures in the 1980s. Prior to January 2000, the assessment was about 6
basis points, while BIF-insured institutions paid an assessment equal to about
1.50 basis points for each $100 in domestic deposits. Effective January 1, 2000,
the assessment for SAIF-insured institutions was reduced to about 2 basis
points, when BIF-insured institutions were required to fully participate in the
assessment. These assessments, which may be revised based upon the level of BIF
and SAIF deposits, will continue until the FICO bonds mature in the year 2015.

         REGULATORY CAPITAL REQUIREMENTS. Federally insured savings
associations, such as Yonkers Savings, are required to maintain a minimum level
of regulatory capital. The OTS has established capital standards, including a
tangible capital requirement, a leverage ratio (or core capital) requirement and
a risk-based capital requirement applicable to such savings associations.

         The capital regulations require tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). At September 30, 2001, Yonkers
Savings had tangible capital of $38.4 million, or 6.8% of adjusted total assets,
which is $29.8 million above the minimum requirement of 1.5% in effect on that
date.

         In addition, all intangible assets, other than a limited amount of
purchased mortgage servicing rights and credit card relationships, must be
deducted from tangible capital for calculating compliance with the requirement.
At September 30, 2001, Yonkers Savings had no intangible assets.

         The OTS regulations establish special capitalization requirements for
savings associations that own subsidiaries. In determining compliance with the
capital requirements, all subsidiaries engaged solely in activities permissible
for national banks or engaged in certain other activities solely as agent for
its customers are "includable" subsidiaries that are consolidated for capital
purposes in proportion to the association's level of ownership. Debt and equity
investments in excludable subsidiaries are deducted from assets and capital. At
September 30, 2001, Yonkers Savings had two "includable" subsidiaries.

         The capital standards also require core capital equal to at least 4% of
adjusted total assets. Core capital generally consists of tangible capital plus
certain intangible assets, including a limited amount of purchased mortgage
servicing rights and credit card relationships. At September 30, 2001, Yonkers
Savings had core capital equal to $38.4 million, or 6.8% of adjusted total
assets, which is $15.6 million above the minimum leverage ratio requirement of
4% in effect on that date.

          The OTS risk-based capital regulations require savings associations to
have total capital of at least 8% of risk-weighted assets. Total capital
consists of core capital, as defined above and supplementary capital.
Supplementary capital consists of certain permanent and maturing capital


                                       33
<Page>

instruments that do not qualify as core capital and general valuation loan and
lease loss allowances up to a maximum of 1.25% of risk-weighted assets.
Supplementary capital may be used to satisfy the risk-based capital requirement
only up to the amount of core capital. At September 30, 2001, Yonkers Savings
had no capital instruments that qualify as supplementary capital and $2.0
million of general loan loss reserves, which was less than 1.25% of
risk-weighted assets.

         In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet items, are multiplied by a risk weight,
ranging from 0% to 100%, based on the risk inherent in the type of asset. For
example, the OTS has assigned a risk weight of 50% for prudently underwritten
permanent one- to four-family first lien mortgage loans not more than 90 days
delinquent and having a loan to value ratio of not more than 80% at origination
unless insured to such ratio by an insurer approved by Fannie Mae or Freddie
Mac.

         At September 30, 2001, Yonkers Savings had total capital of $40.4
million (including $38.4 million in core capital and $2.0 million in qualifying
supplementary capital) and risk-weighted assets of $289.0 million (including
$1.8 million in converted off-balance sheet items), or total capital of 14.0% of
risk-weighted assets. This amount was $17.2 million above the 8% requirement in
effect on that date.

         The OTS is authorized to impose capital requirements in excess of these
standards on individual associations on a case-by-case basis. The OTS and FDIC
are authorized and, under certain circumstances required, to take certain
actions against savings associations that fail to meet their capital
requirements. The OTS is generally required to take action to restrict the
activities of an "undercapitalized association" (generally defined to be one
with less than either 4% core capital ratio, a 4% Tier 1 risk-based capital
ratio (the ratio of core capital to risk weighted assets) or an 8% risk-based
capital ratio). Any such association must submit a capital restoration plan and
until such plan is approved by the OTS may not increase its assets, acquire
another institution, establish a branch or engage in any new activities, and
generally may not make capital distributions. The OTS is authorized to impose
the additional restrictions that are applicable to significantly
undercapitalized associations.

         The OTS is also generally authorized to reclassify the association into
a lower capital category and impose restrictions applicable to such category if
the institution is engaged in unsafe or unsound practices or is in a an unsafe
or unsound condition.

         The imposition by the OTS or the FDIC of any of these measures on the
Company or the Association may have a substantial adverse effect on operations
and profitability.

         LIMITATIONS ON DIVIDENDS AND OTHER CAPITAL DISTRIBUTIONS. OTS
regulations impose various restrictions on associations with respect to their
ability to make distributions of capital which include dividends, stock
redemptions or repurchases, cash-out mergers and transactions charged to the
capital account. OTS regulations prohibit an association from declaring or
paying any dividends or from repurchasing any of its stock if, as a result, the
regulatory capital of the association would be reduced below the amount required
to be maintained for the liquidation account established in connection with its
mutual to stock conversion.


                                       34
<Page>

         The Association may make a capital distribution without the approval of
the OTS provided it notifies the OTS, 30 days before it declares the capital
distribution and it meets the following requirements: (i) it has a regulatory
rating in one of the two top examination categories, (ii) it is not of
supervisory concern, and will remain adequately- or well-capitalized, as defined
in the OTS prompt corrective action regulations, following the proposed
distribution, and (iii) the distribution does not exceed its net income for the
calendar year-to-date plus retained net income for the previous two calendar
years (less any dividends previously paid). If it does not meet the above stated
requirements, it must obtain the prior approval of the OTS before declaring any
proposed distributions.

         QUALIFIED THRIFT LENDER TEST. All savings associations, including
Yonkers Savings, are required to meet a qualified thrift lender ("QTL") test to
avoid certain restrictions on their operations. This test requires a savings
association to have at least 65% of its portfolio assets (as defined by
regulation) in qualified thrift investments, primarily residential housing
related loans and investments. At September 30, 2001, Yonkers Savings met the
test and has always met the test since its effectiveness.

         Any savings association that fails to meet the QTL test must convert to
a bank charter, unless it requalifies as a QTL within one year, and thereafter
remains a QTL. If an association does not requalify and converts to a national
bank charter, it must remain SAIF-insured until the FDIC permits it to transfer
to the BIF. If such an association has not yet requalified or converted to a
national bank, its new investments and activities are limited to those
permissible for both a savings association and a national bank, and it is
limited to national bank branching rights in its home state. If such association
has not requalified or converted to a national bank within three years after the
failure, it must divest of all investments and cease all activities not
permissible for a national bank. If any association that fails the QTL test is
controlled by a holding company, then within one year after the failure, the
holding company must register as a bank holding company and become subject to
all restrictions on bank holding companies. See "- Holding Company Regulation."

         COMMUNITY REINVESTMENT ACT. Under the Community Reinvestment Act
("CRA"), every FDIC insured institution has a continuing and affirmative
obligation consistent with safe and sound banking practices, to help meet the
credit needs of its entire community, including low and moderate, income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires the OTS, in connection with the examination of Yonkers Savings, to
assess the institution's record of meeting the credit needs of its community and
to take such record into account in its evaluation of certain applications, such
as a merger or the establishment of a branch, by Yonkers Savings. An
unsatisfactory rating may be used as the basis for the denial of an application
by the OTS. Yonkers Savings was examined for CRA compliance by the OTS in July
2001 and received a rating of satisfactory.

         TRANSACTIONS WITH AFFILIATES. Generally, transactions between a savings
association or its subsidiaries and its affiliates are required to be on terms
as favorable to the association as


                                       35
<Page>

transactions with non-affiliates. In addition, certain of these transactions,
such as loans to an affiliate, are restricted to a percentage of the
association's capital. Affiliates of Yonkers Savings include the Holding Company
and any company which, is under common control with Yonkers Savings. In
addition, a savings association may not lend to any affiliate engaged in
activities not permissible for a bank holding company or acquire the securities
of most affiliates. Subsidiaries of a savings association are generally not
deemed affiliates; however, the OTS has the discretion to treat subsidiaries of
savings associations as affiliates on a case-by-case basis.

         Certain transactions with directors, officers or controlling persons
are also subject to conflict of interest regulations enforced by the OTS. These
conflict of interest regulations and other statutes also impose restrictions on
loans to such persons and their related interests. Among other things, such
loans must be made on terms substantially the same as for loans to unaffiliated
individuals.

         HOLDING COMPANY REGULATION. The Holding Company is a unitary savings
and loan holding company subject to regulatory oversight by the OTS. As such,
the Holding Company is required to register and file reports with the OTS and is
subject to regulation and examination by the OTS. In addition, the OTS has
enforcement authority over the Holding Company and its non-savings association
subsidiaries (if any) which also permits the OTS to restrict or prohibit
activities that are determined to be a serious risk to the subsidiary savings
association.

         As a unitary savings and loan holding company, the Holding Company
generally is not subject to activity restrictions. If the Holding Company
acquires control of another savings association as a separate subsidiary, it
would become a multiple savings and loan holding company, and the activities of
the Holding Company and any of its subsidiaries (other than Yonkers Savings or
any other SAIF-insured savings association) would become subject to such
restrictions unless such other associations each qualify as a QTL and were
acquired in a supervisory acquisition.

         If Yonkers Savings fails the QTL test, the Holding Company must obtain
the approval of the OTS prior to continuing after such failure, directly or
through its other subsidiaries, any business activities other than those
approved for multiple savings and loan holding companies or their subsidiaries.
In addition, within one year of such failure the Holding Company must register
as, and will become subject to, the restrictions applicable to bank holding
companies. The activities authorized for a bank holding company are more limited
than are the activities authorized for a unitary or multiple savings and loan
holding company. See "- Qualified Thrift Lender Test."

         The Holding Company must obtain approval from the OTS before acquiring
control of any other SAIF-insured association. Such acquisitions are generally
prohibited if they result in a multiple savings and loan holding company
controlling savings associations in more than one state. However, such
interstate acquisitions are permitted based on specific state authorization or
in a supervisory acquisition of a failing savings association.

         FEDERAL SECURITIES LAW. The stock of the Holding Company is registered
with the SEC under the Exchange Act. The Holding Company is subject to the
information, proxy solicitation,


                                       36
<Page>

insider trading restrictions and other requirements of the SEC under the
Exchange Act.

         Holding Company stock held by persons who are affiliates (generally
officers, directors and principal stockholders) of the Holding Company may not
be resold without registration or unless sold in accordance with certain resale
restrictions. If the Holding Company meets specified public information
requirements, each affiliate is able to sell in the public market, without
registration, a limited number of shares in any three-month period.

         FEDERAL RESERVE SYSTEM. The Federal Reserve Board requires all
depository institutions to maintain non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking accounts). At September 30, 2001, Yonkers Savings was in compliance
with these reserve requirements. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve Board may be used to satisfy
liquidity requirements that may be imposed by the OTS. See "- Liquidity."

         Savings associations are authorized to borrow from the Federal Reserve
Bank "discount window," but Federal Reserve Board regulations require
associations to exhaust other reasonable alternative sources of funds, including
FHLB advances, before borrowing from the Federal Reserve Bank.

         FEDERAL HOME LOAN BANK SYSTEM. Yonkers Savings is a member of the FHLB
of New York, which is one of 12 regional FHLBs that administer the home
financing credit function of savings associations. Each FHLB serves as a reserve
or central bank for its members within its assigned region. It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB System. It makes loans to members (I.E., advances) in accordance with
policies and procedures established by the board of directors of the FHLB, which
are subject to the oversight of the Federal Housing Finance Board. All advances
from the FHLB are required to be fully secured by sufficient collateral as
determined by the FHLB. In addition, all long-term advances are required to
provide funds for residential home financing.

         As a member, Yonkers Savings is required to purchase and maintain stock
in the FHLB of New York. At September 30, 2001, Yonkers Savings held $6.6
million in FHLB stock, which was in compliance with this requirement. Dividends
paid by the FHLB of New York to the Association totaled $596,000 for the year
ended September 30, 2001, representing an decrease of $120,000 from dividends
received in fiscal 2000.

TAXATION

         FEDERAL. The Association and the Holding Company currently file
consolidated federal income tax returns. These returns are filed on a fiscal
year basis, as of September 30, using the accrual method of accounting.


                                       37
<Page>

         Savings associations such as the Association are permitted to establish
reserves for bad debts and to make annual additions thereto which, may, within
specified formula limits, be taken as a deduction in computing taxable income
for federal income tax purposes. The amount of the bad debt reserve deduction
for "non-qualifying loans" is computed under the experience method. The amount
of the bad debt reserve deduction for "qualifying real property loans"
(generally loans secured by improved real estate) is also computed under the
experience method. Under the experience method, the bad debt reserve deduction
is an amount determined under a formula based generally upon the bad debts
actually sustained by the savings association over a period of years.
Historically, a percentage of taxable income method was also available in
computing the qualifying loan bad debt deduction; however, under 1996 federal
tax legislation, this method is no longer available to the Association for tax
years ending on or after September 30, 1997.

         The 1996 federal tax legislation also imposed a requirement to
recapture into taxable income the portion of the qualifying and non-qualifying
loan reserves in excess of the "base-year" balances of such reserves. For the
Association, the base-year reserves are the balances as of September 30, 1988.
Recapture of the excess reserves will occur over a six-year period which began
for the Association in the tax year ending September 30, 1999. The Association
previously established, and will continue to maintain, a deferred tax liability
with respect to its federal tax bad debt reserves in excess of the base-year
balances; accordingly, the legislative changes will have no effect on total
income tax expense for financial reporting purposes.

         Also, under the 1996 legislation, the Association's base-year federal
tax bad debt reserves are "frozen" and subject to current recapture only in very
limited circumstances. Generally, recapture of all or a portion of the base-year
reserves will be required if the Association pays a dividend in excess of the
greater of its current or accumulated earnings and profits, redeems any of its
stock, or is liquidated. The Association has not established a deferred federal
tax liability under SFAS No. 109 for its base-year federal tax bad debt
reserves, as it does not anticipate engaging in any of the transactions that
would cause such reserves to be recaptured.

         In addition to the regular income tax, corporations generally are
subject to a minimum tax. An alternative minimum tax is imposed at a minimum tax
rate of 20% on alternative minimum taxable income, which is the sum of a
corporation's regular taxable income (with certain adjustments) and tax
preference items, less any available exemption. The alternative minimum tax is
imposed to the extent it exceeds the corporation's regular income tax, and net
operating losses can offset no more than 90% of alternative minimum taxable
income. The Association and the Company have not been subject to the alternative
minimum tax.

         The Association has been audited by the IRS with respect to federal
income tax returns through September 30, 1992, and all deficiencies have been
satisfied. In the opinion of management, any examination of still open returns
would not result in a deficiency, which could have a material adverse effect on
the financial condition of the Company.

         NEW YORK STATE. The Association and the Holding Company currently file
combined New York State tax returns on a fiscal year basis. The Company is
subject to the New York State Franchise Tax on Banking Corporations in an annual
amount equal to the greater of (i) 9%


                                       38
<Page>

of "entire net income" allocable to New York State during the taxable year, or
(ii) the applicable alternative minimum tax. The alternative minimum tax is
generally the greater of (a) 0.01% of the value of assets allocable to New York
State with certain modifications, (b) 3% of "alternative entire net income"
allocable to New York State, or (c) $250. Entire net income is similar to
federal taxable income, subject to certain modifications (including the fact
that net operating losses cannot be carried back or carried forward). In
addition, New York also imposes a Metropolitan Commuter Transportation District
surcharge of 17% that is assessed on the amount of the New York State Franchise
tax.

         In July 1996, New York State enacted legislation to preserve the use of
the percentage of taxable income bad debt deduction for state tax purposes. In
general, the legislation provides for a deduction equal to 32% of the
Association's New York State taxable income, which is comparable to the
deductions permitted under the prior Federal tax law. The legislation also
provides for a floating base year, which will allow the Association to change
from the percentage of taxable income method to the experience method without
recapture of any reserve. Previously, the Association had established a deferred
New York State tax liability for the excess of its New York State tax bad debt
reserves over the amount of its base-year New York State reserves. Since the new
legislation effectively eliminated the reserves in excess of the base-year
balances, the Company reduced its deferred tax liability by $100,000 (with a
corresponding reduction in income tax expense) during the quarter ended
September 30, 1996.

         Generally, New York State tax law has requirements similar to federal
requirements regarding the recapture of base-year tax bad debt reserves. One
notable exception is that, after the 1996 legislation, New York continues to
require that at least 60% of the Association's assets consist of specified
assets (generally, loans secured by residential real estate or deposits,
educational loans, cash and certain government obligations). The Association
expects to continue to meet the 60% requirement and does not anticipate engaging
in any of the transactions, which would require recapture of its base-year
reserves (such as changing to a commercial bank charter). Accordingly, under
SFAS No. 109, it has not provided any deferred tax liability on such reserves.

          DELAWARE. As a Delaware company, the Company is exempted from Delaware
corporate income tax but is required to file an annual report with and pay an
annual fee to the State of Delaware. The Company is also subject to an annual
franchise tax imposed by the State of Delaware.

ITEM 2.   PROPERTIES

         The following table sets forth information concerning the Company's
properties at September 30, 2001. The Company's premises had an aggregate net
book value of approximately $257,000 at that date.

<Table>
<Caption>

                                                    Year                                       Net Book Value at
               Location                         Acquired/leased           Owned or Leased     September 30, 2000
------------------------------------- ---------------------------         ------------------- ------------------
                                                   (Dollars in thousands)
<S>                                                 <C>                         <C>                    <C>
CORPORATE HEADQUARTERS:

6 Executive Plaza                                   1996                        Leased                 $ 102

</Table>


                                       39
<Page>

<Table>
<S>                                                 <C>                         <C>                       <C>
Yonkers, New York  10701-9858

MAIN OFFICE:

One Manor House Square                              1976                        Owned                     99
Yonkers, New York  10701-2701

FULL-SERVICE BRANCHES:

780 Palisade Avenue                                 1989                        Leased                    --
Yonkers, New York  10703

1759 Central Park Avenue                            1977                        Leased                    23
Yonkers, New York  10710-2828


2320 Central Park Avenue                            1986                        Leased                    33
Yonkers, New York  10710-1216

IN-STORE BRANCHES:

  1357 Route 9                                      1997                        Leased                    --
  Wappingers Falls, New York  12590

  3303 Crompond Road.                               1999                        Leased                    --
  Yorktown Heights, New York  10598

  240 East Sanford Boulevard                        2000                        Leased                    --
  Mt. Vernon, New York  10550

  432 South Road, Route 9                           2000                        Leased                    --
  Poughkeepsie, New York  12601

  2094 East Main Street Route 6                     2000                        Leased                    --
  Cortlandt Manor, New York  105671
</Table>


         Yonkers Savings has entered into an agreement for in-store branching
with BJ's Wholesale Club, Inc. The first in-store branch opened in December 1997
in BJ's location in Wappingers Falls, New York; a second in-store branch opened
in October 1998 in Yorktown Heights, New York. In addition, in May 1999 a third
in-store branch was opened in a supermarket in Mt. Vernon, New York, in
September 1999 a fourth was opened in a supermarket in Poughkeepsie, New York,
and in October 1999 a fifth was opened in a supermarket in Cortlandt Manor, New
York. The Association's agreement gives it the right of first refusal to
establish an in-store branch in any of BJ's remaining or future clubs located in
Dutchess, Putnam, Rockland, and Westchester Counties, New York.

         The Company believes that its current facilities are adequate to
meet present needs. The Company is not permitted under the Merger Agreement
to establish, without Atlantic's Bank's approval, any more additional offices.

         The Company also has ATMs located in eight branch offices and two
offsite locations, one in a hospital and one in a supermarket.


                                       40
<Page>

         The Company's depositor and borrower customer files are maintained by
an independent data processing company. The net book value of the computer
equipment utilized by the Company at September 30, 2001 was approximately
$318,000.

ITEM 3.   LEGAL PROCEEDINGS

         The Company is involved as plaintiff or defendant in various legal
proceedings arising in the normal course of its business. While the ultimate
outcome of these various legal proceedings cannot be predicted with certainty,
it is the opinion of management that the resolution of these legal actions
should not have a material effect on the Company's financial position, results
of operations or liquidity.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended September 30,
2001.

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Page 53 of the attached 2001 Annual Report to Stockholders is herein
incorporated by reference.

ITEM 6.   SELECTED FINANCIAL DATA

         Page 5 of the attached 2001 Annual Report to Stockholders are herein
incorporated by reference.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

         Pages 6 through 20 of the attached 2001 Annual Report to Stockholders
are herein incorporated by reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The section "Interest Rate Risk Management", appearing on pages 17
through 19 of the attached 2001 Annual Report to Stockholders, is herein
incorporated by reference.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Pages 21 through 50 of the attached 2001 Annual Report to Stockholders
are herein incorporated by reference.


                                       41
<Page>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

         There has been no Current Report on Form 8-K filed within 24 months
prior to the date of the most recent financial statements reporting a change of
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

         Information concerning directors of the Registrant is incorporated
herein by reference from the Company's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held in March 2002, a copy of which will be filed
not later than 120 days after the close of the fiscal year.

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

         The following are the Company's executive officers who are not also
directors as of September 30, 2001.

         JOSEPH L. MACCHIA. Mr. Macchia, age 50, is the Senior Vice President
and Secretary to the Association and Senior Vice President and Secretary of the
Holding Company. Mr. Macchia has been the Secretary of the Holding Company since
its formation and was named Chief Operations Officer of the Association in
January 1997. Mr. Macchia is responsible for the Association's branch
administration and savings operations. He is also responsible for the
Association's Bank Secrecy Act compliance. Prior to such time, Mr. Macchia
served as the Association's Vice President. Mr. Macchia has been employed by the
Association since 1972.

         JOSEPH D. ROBERTO. Mr. Roberto, age 49, is the Senior Vice President,
Treasurer and Chief Financial Officer of the Holding Company and Senior Vice
President, Treasurer and Chief Financial Officer of the Association. Mr. Roberto
has been the Chief Financial Officer and Treasurer of the Holding Company since
its formation. Mr. Roberto was appointed the Association's Vice President and
Treasurer in 1991 and Chief Financial Officer in 1995. Mr. Roberto is
responsible for the Accounting Department, interest rate risk and
asset/liability management as well as financial reporting. Prior to 1991, Mr.
Roberto served as the Association's Secretary and Treasurer. Mr. Roberto has
been employed by the Association since 1973.

         PHILIP GUARNIERI. Mr. Guarnieri, age 44, is the Senior Vice President
and Chief Lending Officer of the Association. Mr. Guarnieri was appointed Vice
President and Chief Lending Officer in July 1996. Prior to joining the
Association, Mr. Guarnieri was the Vice President for


                                       42
<Page>

loan origination at Home Federal Savings Bank, Queens, New York. Mr. Guarnieri
is responsible for the administration of the Association's real estate lending
programs.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Holding Company's equity securities, to file with the SEC reports of
ownership and reports of changes in ownership of common stock and other equity
securities of the Holding Company. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.

         To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended September 30, 2001, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were met.

         During the fiscal year ended September 30, 2001, Mr. Roberto failed to
timely file a Form 4 upon the sale of 1,000 shares of common stock.

ITEM 11.  EXECUTIVE COMPENSATION

         Information concerning executive compensation is incorporated herein by
reference from the definitive Proxy Statement for the Annual Meeting of
Stockholders to be held in March 2002, a copy of which will be filed not later
than 120 days after the close of the fiscal year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information concerning security ownership of certain beneficial owners
and management is incorporated herein by reference from the definitive Proxy
Statement for the Annual Meeting of Stockholders to be held in March 2002, a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions is
incorporated herein by reference from the definitive Proxy Statement for the
Annual Meeting of Stockholders to be held in March 2002, a copy of which will be
filed not later than 120 days after the close of the fiscal year.


                                       43
<Page>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1)  FINANCIAL STATEMENTS

         The following information appearing in the Company's 2001 Annual Report
to Stockholders is herein incorporated by reference

<Table>
<Caption>

ITEM                                                                            PAGES IN ANNUAL REPORT
----                                                                            ----------------------
<S>                                                                             <C>
Independent Auditors' Report                                                    Page 51

Consolidated Balance Sheets as of September 30, 2001                            Page 21
 And 2000

Consolidated Statements of Income for the Years                                 Page 22
 Ended September 30, 2001, 2000 and 1999

Consolidated Statements of Changes in Stockholders'                             Page 23
 Equity for the Years Ended September 30, 2001, 2000
  And 1999

Consolidated Statements of Cash Flows for the Years                             Page 24
 Ended September 30, 2001, 2000 and 1999

Notes to Consolidated Financial Statements                                      Pages 25 through 50
</Table>

         (a)(2)  FINANCIAL STATEMENT SCHEDULES

         All financial statement schedules have been omitted as the required
information is not applicable or has been included in the Consolidated Financial
Statements.

         (a)(3)  EXHIBITS

<Table>
<Caption>

                                                                                                            SEQUENTIAL PAGE
                                                                                REFERENCE TO                  NUMBER WHERE
                                                                                 PRIOR FILING              ATTACHED EXHIBITS
  REGULATION S-K                                                                 OR EXHIBIT               ARE LOCATED IN THIS
      EXHIBIT                                                                  NUMBER ATTACHED                 FORM 10-K
       NUMBER                             DOCUMENT                                 HERETO                        REPORT
   -------------                          --------                              -----------                   -------------

<S>                <C>                                                             <C>                      <C>
       3(a)        Certificate of Incorporation                                       *                     Not applicable
       3(b)        By-Laws                                                           **                     Not applicable
         4         Instruments defining the rights of security holders,               *                     Not applicable
                    including debentures
         9         Voting Trust Agreement                                           None                    Not applicable
        10         Material Contracts
                     Employment Contract                                             ***                    Not applicable
                     Management Recognition Plan and Stock
                       Option and Incentive Plan                                      *                     Not applicable
</Table>


                                       44
<Page>

<Table>
<S>                <C>                                                          <C>                         <C>
                     Change-in-Control Severance Agreements                          ***                    Not applicable
                     Amended and Restated Standstill Agreement                      ****
        11         Statement re: computation of per share earnings              Not required                Not applicable
        12         Statement re: computation of ratios                          Not required                Not applicable
        13         Annual Report to Security Holders                                 13
        16         Letter re: change in certifying accountants                      None                    Not applicable
        18         Letter re: change in accounting principles                       None                    Not applicable
        19         Previously unfiled documents                                     None                    Not applicable
        21         Subsidiaries of Registrant                                        21
        22         Published report regarding matters submitted to vote             None                    Not applicable
                    of security holders
        23         Consents of Experts and Counsel                                   23
        24         Power of Attorney                                            Not required                Not applicable
        28         Information from reports furnished to state insurance            None                    Not applicable
                    regulatory authorities
        99         Additional Exhibits                                              None                    Not applicable
</Table>

----------------
         * Filed as exhibits to the Company's Form S-1 registration statement
filed on December 29, 1995 (File No. 33-81013) pursuant to Section 5 of the
Securities Act of 1933, as amended. All of such previously filed documents are
hereby incorporated herein by reference in accordance with Item 601 of
Regulation S-K.
         ** Filed as an exhibits to the Company's Form 8-K filed on July 29,
1999 (File No. 000-27716) pursuant to the Securities Act of 1934, as amended.
Such previously filed documents is hereby incorporated herein by reference in
accordance with Item 601 of Regulation S-K.
         *** Filed as exhibits to the Company's Form 10-K filed on December 28,
1999 (File No. 00027716) pursuant to the Securities Act of 1934, as amended. All
of such previously filed documents are hereby incorporated herein by reference
in accordance with Item 601 of Regulation S-K.
        **** Filed as exhibit to the Company's Form 8-K/A filed on February 29,
2000 (File No. 00027716) pursuant to the Securities Act of 1934, as amended. All
of such previously filed documents are hereby incorporated herein by reference
in accordance with Item 601 of Regulation S-K.

         (b)  REPORTS ON FORM 8-K

         During the quarter ended September 30, 2001, the Company filed no
current Reports on Form 8-K.



                                       45
<Page>

                                   SIGNATURES

         Pursuant to the requirements of Section 15(d) 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.

                                YONKERS FINANCIAL CORPORATION


                                By:      /s/ Richard F. Komosinski
                                         -------------------------
                                         Richard F. Komosinski, President,
                                         Chief Executive Officer and Director

                                         (DULY AUTHORIZED REPRESENTATIVE)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated.

<Table>
<S>                                                           <C>
/s/ Richard F. Komosinski                                     /s/ William G. Bachop
-----------------------------------------------------         -----------------------------------------------------
Richard F. Komosinski, President,                             William G. Bachop, Chairman
Chief  Executive  Officer  and  Director
(PRINCIPAL EXECUTIVE AND OPERATING OFFICER)

Date: December 28, 2001                                       Date: December 28, 2001
      -----------------                                             -----------------

/s/ Michael J. Martin                                         /s/ Charles D. Lohrfink
-----------------------------------------------------         -----------------------------------------------------
Michael J. Martin,  Director                                  Charles D. Lohrfink, Director

Date: December 28, 2001                                       Date: December 28, 2001
      -----------------                                             -----------------

/s/ Donald R. Angelilli                                       /s/ Eben T. Walker
-----------------------------------------------------         -----------------------------------------------------
Donald R. Angelilli, Director                                 Eben T. Walker, Director

Date: December 28, 2001                                       Date: December 28, 2001
      -----------------                                             -----------------

/s/ Susan Friend                                              /s/ Joseph D. Roberto
-----------------------------------------------------         -----------------------------------------------------
Susan Friend, Director                                        Joseph D. Roberto, Senior Vice President,
                                                              Treasurer and Chief Financial Officer
                                                              (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

Date:    December 28, 2001                                    Date:    December 28, 2001
         -----------------                                             -----------------

/s/ Fredric H. Gould
-----------------------------------------------------
Fredric H. Gould, Director

Date:    December 28,2001
         ----------------

</Table>

                                       46