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


                                    FORM 10-K

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

       For the fiscal year ended September 30, 2000
                                       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, 2000, 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, 2000, was
approximately $24.1 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, 2000.
PART III of Form  10-K--Proxy  Statement for the Annual Meeting of  Stockholders
for the fiscal year ended September 30, 2000.

<PAGE>




                          YONKERS FINANCIAL CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                               SEPTEMBER 30, 2000

                                Table of Contents

--------------------------------------------------------------------------------

                PART I                                                    PAGE

Item 1          Business...............................................    3

Item 2          Properties.............................................   40

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     41
                Risk...................................................

Item 8          Financial Statements and Supplementary Data............   42

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

                                       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.

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.

                                       3
<PAGE>

     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.
Both originations and sales activity increased significantly in fiscal 1998. The
Company  also  offers   multi-family  and  commercial  real  estate,   consumer,
construction and land loans. During fiscal 1999 the Company expanded its lending
operations and increased originations of multi-family and commercial real estate
loans in order to enhance portfolio yield.

                                       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>
                                                                               At September 30,
                                      ----------------------------------------------------------------------------------------------
                                            2000               1999                  1998             1997                1996
                                      -----------------   ----------------    -----------------  -----------------  ----------------
                                              Percent             Percent             Percent            Percent            Percent
                                      Amount  of Total    Amount  of Total    Amount  of Total   Amount  of Total   Amount  of Total
                                      ------  ---------   ------  --------    ------  ---------  ------  ---------  ------  --------
                                                                              (Dollars in thousands)
<S>                                    <C>        <C>       <C>       <C>       <C>     <C>         <C>     <C>       <C>      <C>
Real Estate Mortgage Loans:
  One- to four-family (1)(2)(3)       $285,346   76.9%    $245,692   81.6%    $167,225  84.1%    $111,821  79.0%    $62,283   70.6%
  Multi-family                          34,352    9.3       16,264    5.4        7,846   3.9        5,658   4.0       5,471    6.2
  Commercial                            33,052    8.9       26,753    8.9       12,766   6.4       11,990   8.5       9,117   10.3
  Construction                           6,317    1.7        2,812    0.9        2,613   1.3        2,786   2.0       2,175    2.5
   Land                                    759    0.2        1,502    0.5          932   0.5        1,814   1.3       1,934    2.2
                                      --------  -----     --------  -----     -------- -----     -------- -----     -------  -----
    Total real estate mortgage loans   359,826   96.9      293,023   97.3      191,382  96.2      134,069  94.8      80,980   91.8
                                      --------  -----     --------  -----     -------- -----     -------- -----     -------  -----
Other Loans:
Consumer loans:
  Home equity                            5,532    1.5        4,574    1.5        3,678   1.9        3,217   2.3       2,911    3.3
  Personal                               1,911    0.5        1,483    0.5        1,447   0.7        1,666   1.1       1,632    1.8
  Other                                  2,952    0.8        1,117    0.4        1,224   0.6        1,237   0.9       1,310    1.5
                                      --------  -----     --------  -----     -------- -----     -------- -----     -------  -----
    Total consumer loans                10,395    2.8        7,174    2.4        6,349   3.2        6,120   4.3       5,853    6.6
Commercial business loans                  963    0.3        1,080    0.3        1,195   0.6        1,299   0.9       1,413    1.6
                                      --------  -----     --------  -----     -------- -----     -------- -----     -------  -----
    Total other loans                   11,358    3.1        8,254    2.7        7,544   3.8        7,419   5.2       7,266    8.2
                                      --------  -----     --------  -----     -------- -----     -------- -----     -------  -----
    Total loans                        371,184  100.0%     301,277  100.0%     198,926 100.0%     141,488 100.0%     88,246  100.0%
                                                =====               =====              =====              =====              =====
Less:
  Construction loans in process         (3,397)             (1,672)               (743)            (1,091)             (171)
  Allowance for loan losses             (1,703)             (1,503)             (1,302)            (1,093)             (937)
  Deferred loan origination costs
    (fees), net                            897               1,074                 478               (184)             (472)
                                      --------            --------            --------           --------           -------
    Total loans, net                  $366,981            $299,176            $197,359           $139,120           $86,666
                                      ========            ========            ========           ========           =======
</TABLE>
--------------------------------

(1)    Includes advances under home equity lines of credit of $2.5 million, $3.2
       million, $4.6 million,  $5.9 million, and $7.3 million  respectively,  at
       September 30, 2000, 1999, 1998, 1997, and 1996.
(2)    Includes cooperative  apartment loans of $3.5 million, $3.7 million, $4.5
       million, $4.8 million, and $5.5 million,  respectively,  at September 30,
       2000,  1999,  1998,  1997,  and 1996.
(3)    Includes  loans  held  for sale of $2.7  million,  $1.2  million  , $13.3
       million and $20.4  million at September  30, 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>

                                                                        At September 30,
                                       ---------------------------------------------------------------------------------------------
                                             2000                 1999             1998               1997             1996
                                       -------------------  -----------------  ----------------- ----------------  ----------------
                                                Percent             Percent            Percent           Percent            Percent
                                       Amount   of Total    Amount  of Total   Amount  of Total  Amount  of Total  Amount   of Total
                                       ------   ---------   ------  ---------  ------  --------- ------  --------  ------   --------
                                                                                              (Dollars in thousands)
<S>                                     <C>        <C>        <C>      <C>      <C>       <C>     <C>       <C>      <C>       <C>
Fixed-Rate Loans:
Real Estate Mortgage Loans:
  One- to four-family (1)(2)           $ 31,652    8.5%     $ 60,071   19.9%   $ 46,838   23.5%  $ 36,074   25.5%   $11,805    13.4%
  Multi-family                           24,438    6.6        10,320    3.4       1,529    0.8        108    0.1         47     0.1
  Commercial                             20,050    5.4        14,295    4.7       1,742    0.9         95    0.1        131     0.1
   Land                                     559    0.2           229    0.1         270    0.1        390    0.3         49     0.1
    Total real estate mortgage loans     76,699   20.7        84,915   28.1      50,379   25.3     36,667   26.0     12,032    13.7
Consumer loans                           10,395    2.8         7,174    2.4       6,349    3.2      6,120    4.3      5,853     6.6
                                       --------  -----      --------  -----    --------  -----   --------  -----    -------   -----
    Total fixed-rate loans              87,094    23.5        92,089   30.5      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)        253,694    68.3       185,621   61.7     120,387   60.6     75,747   53.5     50,478    57.2
  Multi-family                           9,914     2.7         5,944    2.0       6,317    3.2      5,550    3.9      5,424     6.1
  Commercial                            13,002     3.5        12,458    4.1      11,024    5.5     11,895    8.4      8,986    10.2
  Construction                           6,317     1.6         2,812    0.9       2,613    1.3      2,786    2.0      2,175     2.5
   Land                                    200     0.1         1,273    0.4         662    0.3      1,424    1.0      1,885     2.1
                                      --------   -----      --------  -----    --------  -----   --------  -----    -------   -----

    Total real estate mortgage loans   283,127    76.2       208,108   69.1     141,003   70.9     97,402   68.8     68,948    78.1
Commercial business loans                  963     0.3         1,080    0.4       1,195    0.6      1,299    0.9      1,413     1.6
                                      --------   -----      --------  -----    --------  -----   --------  -----    -------   -----
    Total adjustable-rate loans        284,090    76.5       209,188   69.5     142,198   71.5     98,701   69.7     70,361    79.7
                                      --------   -----      --------  -----    --------  -----   --------  -----    -------   -----
    Total loans                        371,184   100.0%      301,277  100.0%    198,926  100.0%   141,488  100.0%    88,246   100.0%
                                                 =====                =====              =====             =====              =====
Less:
  Construction loans in process         (3,397)               (1,672)              (743)           (1,091)             (171)
  Allowance for loan losses             (1,703)               (1,503)            (1,302)           (1,093)             (937)
  Deferred loan origination costs
    (fees), net                            897                 1,074                478              (184)             (472)
                                      --------              --------           --------          --------           -------
    Total loans, net                  $366,981              $299,176           $197,359          $139,120           $86,666
                                      ========              ========           ========          ========           =======
</TABLE>


(1)    Includes loans held for sale of $2.7 million ,$1.2 million, $13.3 million
       and  $20.4  million  at  September  30,  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 $27.5 million,
       $23.5  million,  $14.0  million  and  $23.6  million,   respectively,  at
       September 30, 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 $164.1 million, $157.0 million, $83.8 million, $35.7 million and
       $3.6 million,  respectively,  at September 30, 2000, 1999, 1998, 1997 and
       1996.
(4)    Includes advances under home equity lines of credit of $2.5 million, $3.2
       million,  $4.6 million,  $5.9 million, and $73 million  respectively,  at
       September 30, 2000, 1999, 1998, 1997, and 1996.

(5)    Includes cooperative  apartment loans of $3.5 million, $3.7 million, $4.5
       million, $4.8 million, and $5.5 million , respectively,  at September 30,
       2000, 1999, 1998, 1997, and 1996.


                                      6

<PAGE>
       The following table sets forth the contractual  maturity of the Company's
loan  portfolio at  September  30, 2000.  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
$33.1 million,  $38.5 million,  and $24.2 million for the years ended  September
30, 2000, 1999 and 1998, respectively.
<TABLE>

                                                                         At September 30, 2000
                               -----------------------------------------------------------------------------------------------------
                                                                                                                       Consumer and
                                  One-to                              Commercial                                       Commercial
                                Four-Family(1)     Multi-Family       Real Estate     Construction         Land        Business
                                ---------------- ----------------  ---------------  ---------------  ----------------- -------------
                                        Weighted         Weighted         Weighted         Weighted          Weighted       Weighted
                                        Average          Average          Average          Average           Average        Average
                                Amount  Rate     Amount  Rate     Amount  Rate      Amount Rate      Amount  Rate      Amount Rate
                                ------  -------  ------  -------  ------  --------  ------ --------  ------  --------- ------ ------
                                                                              (Dollars in thousands)
<S>                             <C>      <C>      <C>      <C>     <C>       <C>     <C>    <C>      <C>      <C>      <C>    <C>
Contractual maturity:
 One year or less (2)          $    450  10.17%  $    --    --%   $    --    --%    $6,317 10.46%    $153     10.66%   $  302 13.34%
                               --------          -------          -------           ------           ----              ------

 After one year:
  More than 1 year to 2 years       525  10.71        --    --      2,176  7.16         --    --       --        --       423 10.86
  More than 2 years to 3 years      688  10.25        --    --        676  7.65         --    --       --        --       841 10.42
  More than 3 years to 5 years    2,405   9.19        --    --        771  7.44         --    --       --        --     2,549  9.46
  More than 5 years to 10 years   8,129   7.71     7,270  8.33     10,662  8.09         --    --      339      8.63     4,860  8.93
  More than 10 years to 20 year  29,484   7.58    15,463  8.27     16,289  8.09         --    --      267      9.69     2,383  8.72
  More than 20 years            243,665   7.11    11,619  8.54      2,478  8.53         --    --       --        --        --
                               --------          -------          -------           ------           ----              -------
    Total after one year        284,896   7.21    34,352  8.38     33,052  8.04         --    --      606      9.09     11,056 9.19
                               --------          -------          -------           ------           ----              -------
  Total amount due             $285,346   7.06%  $34,352  8.38%   $33,052  8.04%    $6,317 10.46%    $759      9.41 %  $11,358 9.30%
                               ========          =======          =======           ======           ====              =======
</TABLE>

<TABLE>
                                                        At September 30, 2000
                                           ------------------------------------------------
                                                              Total
                                                        ----------------------
                                                                      Weighted
                                                                      Average
                                                         Amount       Rate
                                                         ------       --------
                                                        (Dollars in thousands)
<S>                                                      <C>        <C>
Contractual maturity:
 One year or less (2)                                    $ 7,222    10.57%
                                                         -------

 After one year:
  More than 1 year to 2 years                             3,124      8.26
  More than 2 years to 3 years                            2,205      9.52
  More than 3 years to 5 years                            5,725      9.07
  More than 5 years to 10 years                          31,260      8.18
  More than 10 years to 20 year                          63,886      7.93
  More than 20 years                                    257,762      7.19
                                                       --------
    Total after one year                                363,962      7.46
                                                       --------
  Total amount due                                     $371,184      7.52%
                                                       ========
</TABLE>

-----------------------------------

(1)    Includes $2.5 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  $2.7 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, 2000 that are  contractually  due after September 30, 2001, and
whether such loans have fixed interest rates or adjustable interest rates.
<TABLE>
                                                    Due After September 30, 2001
                                             -------------------------------------------
                                                Fixed        Adjustable         Total
                                             ------------   ------------    ------------
                                                           (In thousands)
<S>                                           <C>            <C>             <C>
Real estate mortgage loans:
  One- to four-family                         $31,638        $253,258        $284,896
  Multi-family                                 24,438           9,914          34,352
  Commercial                                   20,050          13,001          33,051
  Construction                                    --               --              --
  Land                                            559              48             607
                                              -------        --------        --------
   Total real estate mortgage loans            76,685         276,221         352,906
Consumer and commercial business loans         10,094             963          11,057
                                              -------        --------        --------
           Total loans                        $86,779        $277,184        $363,963
                                              ========       ========        ========
</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, 2000, based on the
15% limitation, the Company's loans-to-one-borrower limit was approximately $5.2
million.  On the same  date,  the  Company  had no  borrowers  with  outstanding
balances in excess of this amount.  As of September 30, 2000, the largest dollar
amount  outstanding  to one borrower,  or group of related  borrowers,  was $2.9
million  secured by six apartment  buildings  located in Mt. Vernon and Yonkers,
New York; one four family residence located in Yonkers,  New York and one single
family residence  located in Eastchester,  New York.. At September 30, 2000, 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, 2000.

       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.  In 1997,  the Company  instituted  an enhanced
process for quality control  reviews of residential  loan  originations,  and in
2000 instituted a commercial  review and grading  process.  In 2000, the Company

                                       8
<PAGE>

also employed a staff appraiser to inspect our  multi-family and commercial real
estate  loan  collateral.  The  quality  control  process  includes  reviews  of
underwriting decisions,  appraisals and 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 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 up to and  including  $750,000  require the approval of the
Chief  Lending  Officer  and the  President.  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.

       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, 2000, $285.3 million, or 76.9%, of
the  Company's  loan  portfolio  consisted of mortgage  loans secured by one- to
four-family  residences  (including  $2.7  million of loans held for sale,  $2.5
million of advances  under home equity lines of credit and $3.5 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  mortgage  loans  originated  by the Company are  generally  retained and
serviced  by it,  although  a  portion  of its  originations  were  sold  in the
secondary  market (with  servicing  released) in fiscal 2000.  At September  30,
2000,   approximately   $8.2  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
$218,000 compared to $204,000 at September 30, 1999. The increase in the average
outstanding  residential  loan balance  reflects the  origination  of loans with
larger loan balances.

       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

                                       9
<PAGE>
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  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, 2000 one- to  four-family  ARMs  (including
loans of $164.1 million  earning a fixed rate of interest for initial periods of
five, seven or 10 years) totaled $253.7 million, or 68.4% of the Company's total
loan portfolio.

       During  fiscal  1997,  the Company  began to offer 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, 2000,
the Company had  $27.5million 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, 2000  amounted  $2.7 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, 2000,  the Company had $2.5 million of  outstanding
advances  under  home  equity  lines and an  additional  $3.2  million  of funds
committed, but undrawn, under home equity lines of credit.

                                       10

<PAGE>
       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, 2000, the
Company had $30.5 million of condominium loans and $3.5 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  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.  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,  2000,   the  Company  had  $34.4  million  in
multi-family  loans, or 9.3% of the total loan  portfolio,  and $33.1 million in
commercial real estate loans, representing 8.9% 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,  2000.  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>
                                                                                 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                                            46        $15,730            --
    Office buildings                                                     10          3,268           219
    Health care facilities                                                5            858            --
    Mixed use                                                            33         13,112            --
    Industrial real estate                                                1             84            --
Multi-family                                                            111         34,352            --
                                                                        ===        =======          ====
    Total multi-family and commercial real estate loans                 206        $67,404          $219
                                                                        ===        =======          ====
</TABLE>
-----------------------
(1) See "- Delinquencies and Non-Performing Assets"

       At September 30, 2000, the Company's largest  commercial real estate loan
had an outstanding balance of $1.8 million. This loan was originated in December
1999 and is secured by six-retail stores and a free standing  restaurant located
in Millwood,  New York. At September 30, 2000, the largest multi-family loan had
a balance  of $1.6  million,  and is  secured  by a 60-unit  apartment  building
located in Bronx, 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, 2000, the Company's  construction loan
portfolio totaled $6.3 million, or 1.7% of the total loan portfolio. The Company
also  originates  a limited  number of land loans  primarily  for the purpose of
developing residential  subdivisions.  At September 30, 2000, the Company's land
loan  portfolio  totaled  $759,000,  or 0.2% of the  total  loan  portfolio.  At
September 30, 2000, all of the Company's land loans were made for the purpose of
developing  residential  lots except for two loans  totaling  $220,000 which was
secured by commercial real estate.

                                       12

<PAGE>
       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 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,
2000,  there  were  $524,000,  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,  2000,  the  Company  had  $2.4  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, 2000, all
of which are secured by properties located in the Company's market area.
<TABLE>
                                                                         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                       9        $2,962           $2,176         $ --
Other construction                               2         3,355              744           --
Residential land                                 3           200              200           --
Other land                                       2           559              559          220
                                                ==        ======           ======         ====
    Total construction and land loans           16        $7,076           $3,679         $220
                                                ==        ======           ======         ====
</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, 2000, consumer loans totaled $10.4 million,
or 2.8% 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

                                       14

<PAGE>
bankruptcy and  insolvency  laws, may limit the amount which can be recovered on
such  loans.  At  September  30,  2000,  there were  $14,000 of  consumer  loans
delinquent 90 days or more.  There can be no assurance that  delinquencies  will
not increase in the future.

       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). The Company may from time to time make a limited number of secured
and unsecured  commercial loans to local businesses.  At September 30, 2000, the
Company had $1.0 million of commercial business loans outstanding,  representing
0.3% 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
$119.1  million in fiscal  2000,  compared to $178.4  million in fiscal 1999 and
$151.7 million in fiscal 1998,  primarily  reflecting higher one- to four-family
loan originations.

       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 portion of its fixed-rate  residential
mortgage  originations.  In  addition,  certain  current  year  originations  of

                                       15

<PAGE>
adjustable-rate  loans are sold in the secondary  market.  Residential  mortgage
sales  amounted to $16.1  million in fiscal 2000,  compared to $37.4  million in
fiscal 1999 and $69.8 million in fiscal 1998.  When loans are sold,  the Company
typically retains the responsibility for collecting and remitting loan payments,
making  certain that real estate tax  payments are made on behalf of  borrowers,
and otherwise  servicing the loans. At September 30, 2000, the Company  serviced
$85.2 million of mortgage loans for others.

     The following  table sets forth the  Company's  loan  originations,  sales,
repayments and other portfolio activity for the periods indicated.

<TABLE>
                                                        For the Year Ended September 30,
                                                   -------------------------------------------
                                                        2000            1999           1998
                                                        ----            ----           ----
                                                                 (In thousands)
<S>                                                    <C>            <C>            <C>
Unpaid principal balances at beginning of year        $301,277       $198,900        $141,488
                                                      --------       --------        --------
Loans originated:
    Real estate mortgage loans:
        One- to four-family(1)                          77,016        141,648         139,325
        Multi-family                                    19,677          8,349           3,372
        Commercial                                       9,428         19,697           2,235
        Construction                                     6,609          4,597           3,734
        Land                                               345            732              50
    Consumer and commercial business loans               5,982          3,367           2,981
                                                      --------       --------        --------
      Total loans originated                           119,057        178,390         151,697
                                                      --------       --------        --------

Loans sold:
    One-to four-family real estate mortgage loans      (16,052)       (37,476)        (69,810)
                                                      --------       --------        --------

Principal repayments:
    Real estate mortgage loans                         (30,244)       (35,866)        (21,325)
    Consumer and commercial business loans              (2,834)        (2,637)         (2,856)
                                                      --------       --------        --------
      Total principal repayments                       (33,078)       (38,503)        (24,181)
                                                      --------       --------        --------

Net charge-offs                                            (20)           (34)           (166)
Transfers to real estate owned                              --             --            (128)
                                                      --------       --------        --------
Unpaid principal balances at end of year               371,184        301,277         198,900
Less:
   Construction loans in process                        (3,397)        (1,672)           (743)
   Allowance for loan losses                            (1,703)        (1,503)         (1,302)
   Deferred loan origination costs (fees), net             897          1,074             478
                                                      --------       --------        --------
Net loans at end of year                              $366,981       $299,176        $197,333
                                                      ========       ========        ========
</TABLE>
-------------------------
(1)    Consists of (i) adjustable-rate  loans of $55.9 million,  $107.8 million,
       and $89.0 million , and (ii)  fixed-rate  loans of $20.3  million,  $32.7
       million,  and $50.3 million for the years ended  September 30, 2000, 1999
       and 1998, 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>
                                             September 30, 2000                                 September 30, 1999
                               ------------------------------------------------   -------------------------------------------------
                                    60-89 Days              90 Days or More            60-89 Days               90 Days or More
                               -----------------------  -----------------------   ----------------------   ------------------------
                               Number      Principal    Number       Principal    Number      Principal    Number        Principal
                               of Loans      Balance    of Loans     Balance      of Loans     Balance     of Loans      Balance
                               --------    ----------   --------     --------     --------   ---------     --------      ----------
                                                                                   (Dollars in thousands)
<S>                             <C>          <C>         <C>           <C>         <C>          <C>          <C>           <C>
Real estate mortgage loans:
 One- to four-family             2           $70          1            $109          4           $20          4            $347
 Multi-family                   --            --         --              --         --            --         --              --
 Construction                   --            --         --              --         --            --         --              --
 Land                           --            --         --              --         --            --         --              --
 Commercial                     --            --         --              --         --            --          2             305
Consumer loans                  --            --          4              14          1             7          8             103
                                ==           ===         ==            ====         ==           ===         ==            ====
 Total                           2           $70          5            $123          5           $27         14            $755
                                ==           ===         ==            ====         ==           ===         ==            ====

Delinquent loans to total loans (1)          0.02%                     0.03%                     0.01%                     0.25%
                                             ====                      ====                      ====                      ====
</TABLE>
------------------------------------------------------

(1)    If loans held for sale are  excluded  from total loans,  the  percentages
       would have  remained the same for the 60-89 days category and the 90 days
       or more category at September 30, 2000 (0.01% and 0.25%, respectively, at
       September 30, 1999).

                                       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, 2000 the Company had classified  $839,000
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.  The  Company's   prospective  adoption  of  Statement  of  Financial
Accounting Standards ("SFAS") No. 114, Accounting by Creditors for Impairment of
a Loan,  effective  October 1, 1995, had no impact on the  comparability of this
information.

                                       18

<PAGE>
<TABLE>
                                                                            At September 30,
                                                   --------------------------------------------------------------------
                                                      2000           1999           1998          1997         1996
                                                                         (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                         $   109         $  347         $  515        $  389       $1,757
       Commercial                                       --            305            203           211          214
       Land                                             --             --             --           250          250
       Construction                                     --             --             --           279          511
  Consumer loans                                        14            103             35             9           43
                                                   -------         ------    -    ------        ------       ------
           Total                                       123            755            753         1,138        2,775
Real estate owned, net                                  --             --            305           379          603
                                                   -------         ------         ------        ------       ------
Total non-performing assets                        $   123         $  755         $1,058        $1,517       $3,378
                                                   =======         ======         ======        ======       ======

Allowance for loan losses                          $ 1,703         $1,503         $1,302        $1,093       $  937
                                                   =======         ======         ======        ======       ======
</TABLE>
<TABLE>
<S>                                                      <C>            <C>            <C>           <C>
Ratios:
  Non-performing loans to total loans receivable         0.03%          0.25%          0.41%         0.94%       4.15 %
  Non-performing assets to total assets                  0.02           0.16           0.28          0.48         1.30
  Allowance for loan losses to:
      Non-performing loans                            1384.55         199.07         172.91         96.05        33.77
      Total loans receivable                             0.46           0.50           0.70          0.90         0.84

</TABLE>


       For the year ended  September 30, 2000,  gross interest income of $11,000
would have been  recorded if the  non-accrual  loans at  September  30, 2000 had
remained current in accordance with their original terms. The amount of interest
income actually received on such loans in fiscal 2000 was $6,000.  See Note 3 of
the Notes to Consolidated Financial Statements.

       At September 30, 2000, the Company's  non-performing  loans  consisted of
one loan secured by a one- to  four-family  real estate located in the Company's
market area which  totaled  $109,000;  and five  consumer  loans  which  totaled
$14,000. At September 30, 2000, 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, 2000 there
were other loans of concern totaling approximately $716,000

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

                                       19

<PAGE>
       As of September 30, 2000, the Company's  other loans of concern  included
the following loans with principal balances in excess of $200,000:

       The  Company  has a  $220,000  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, 2000, although this loan was performing,  it
was classified  substandard due to 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  to  the  security  property  from  the  adjoining  lot,  the
contamination on the adjacent lot was subsequently  discovered and 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 $219,000  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
("TASCO").  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,
2000,  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
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.

                                       20

<PAGE>

         The  following  table sets forth  activity  in the  allowance  for loan
losses for the periods indicated.
<TABLE>
                                                                    For the Year Ended September 30,
                                                     ---------------------------------------------------------------
                                                       2000         1999          1998         1997         1996
                                                                         (Dollars in Thousands)
<S>                                                    <C>         <C>            <C>          <C>           <C>
Balance at beginning of year                          $1,503       $1,302       $1,093        $  937         $719
Provision for losses                                     220          235          375           300          462
Charge-offs:
     Real estate mortgage loans:
          One- to four-family                             --          (23)         (45)         (132)         (97)
          Multi-family (1)                                --           --           --            --         (203)
          Land                                            --           --          (17)           --           --
          Construction                                    --           --          (91)           --           --
     Consumer loans                                      (44)         (20)         (40)          (25)         (33)
                                                      ------       ------       ------        ------         ----
          Total charge-offs                              (44)         (43)        (193)         (157)        (333)
Recoveries                                                24            9           27            13           89
                                                      ------       ------       ------        ------         ----
          Net charge-offs                                (20)         (34)        (166)         (144)        (244)
                                                      ------       ------       ------        ------         ----

Balance at end of year                                $1,703       $1,503       $1,302        $1,093         $937
                                                      ======       ======       ======        ======         ====

Ratio of net charge-offs to average total loans         0.01%        0.02%        0.10%         0.15%        0.29%
</TABLE>
------------------------

(1)    Charge-offs   in  fiscal   1996   relate  to  the   Company's   purchased
       participation interests in a multi-family loan originated by TASCO.

                                       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>

                                       2000                              1999                            1998
                             --------------------------------- ---------------------------------- ---------------------------------
                                                    Percent of                        Percent of                         Percent of
                                                    Loans in                          Loans in                           Loans in
                                       Loan         Each                 Loan         Each                  Loan         Each
                                       Amounts      Category             Amounts      Category              Amounts      Category
                             Allowance by           to Total   Allowance by           to Total   Allowance  by           to Total
                             Amount    Category(1)  Loans      Amount    Category(1)  Loans      Amount     Category(1)  Loans
                             --------- -----------  ---------  --------- -----------  ---------  ---------  -----------  --------
                                                                    (Dollars in thousands)

<S>                           <C>       <C>          <C>         <C>       <C>       <C>          <C>         <C>         <C>
Real estate mortgage loans:
 One- to four-family        $  987     $282,603      76.7%     $  895    $244,466     81.5%      $  917     $153,891      82.9%
 Multi-family                  135       34,352       9.3          86      16,264      5.4           16        7,846       4.2
 Commercial                    352       33,052       9.0         297      26,753      8.9          160       12,766       6.9
 Construction                   29        6,317       1.7          11       2,812      0.9           23        2,613       1.4
 Land(2)                        85          759       0.2         118       1,502      0.5          128          932       0.5
Consumer and commercial
 business loans                115       11,358       3.1          96       8,254      2.8           58        7,544       4.1
                            ------     --------     ----       ------    --------    -----       ------     --------     -----
Total                       $1,703     $368,441     100.0%     $1,503    $300,051    100.0%      $1,302     $185,592     100.0%
                            ======     ========     =====      ======    ========    =====       ======     ========     =====
</TABLE>



<TABLE>

                                     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 $2.7 million,  $1.2
       million, $13.3 million and $20.4 million,  respectively, at September 30,
       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.

       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, 2000,  the Company had no
securities classified as trading. At September 30, 2000, $112.4 million or 87.4%
of  the  Company's  mortgage-backed  and  other  securities  was  classified  as
available for sale.  The remaining  $16.2 million,  or 12.6%,  was classified as
held to maturity.

       Mortgage-Backed   Securities.  The  Company  invests  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.  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, 2000,  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, 2000, the Company classified  mortgage-backed  securities of $15.7
million as held to maturity and $67.9 million as available for sale.  Consistent
with its  asset/liability  management  strategy,  at  September  30,  2000 $16.3
million,  or 19.0%, of the Company's  mortgage-backed  securities had adjustable
interest rates.

                                       23

<PAGE>

       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, 2000,  the Company  held $2.3 million of CMOs,  all 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.

       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

                                       24

<PAGE>


       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.
<TABLE>

                                                                            At September 30,
                                      ---------------------------------------------------------------------------------------------
                                          2000                           1999                            1998
                                      -----------------------------  ------------------------------  ------------------------------
                                       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           $13,344         $13,323        $ 16,897         $16,934        $ 24,704        $ 25,231
     CMOs                                2,348           2,266           4,539           4,531           9,104           9,165
                                       -------         -------         -------         -------         -------         -------
       Total                            15,692          15,589          21,436          21,465          33,808          34,396
                                       -------         -------         -------         -------         -------         -------

Available for Sale
     Pass-through securities            70,526          67,882          78,651          75,944          78,549          79,678
                                       -------         -------         -------         -------         -------         -------
       Total                            70,526          67,882          78,651          75,944          78,549          79,678
                                       -------         -------         -------         -------         -------         -------

Total mortgage-backed securities       $86,218         $83,471        $100,087         $97,409        $112,357        $114,074
                                       =======         =======        ========         =======        ========        ========
</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
$60,000,   $115,000,  and  $160,000  at  September  30,  2000,  1999  and  1998,
respectively.

       The  following  table  sets  forth  certain  information   regarding  the
amortized  cost,  fair  value  and  weighted  average  yield  of  the  Company's
mortgage-backed  securities at September 30, 2000. 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



<TABLE>
                                                                            At September 30, 2000
                                                -------------------------------------------------------------------------------
                                                              Held to Maturity                       Available for Sale
                                                -------------------------------------------------------------------------------
                                                                           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          $   253       $   257        7.90%        $    --      $    --          --%
   Due after 5 years but within 10 years             30            30        7.50              --           --          --
   Due after 10 years                            13,061        13,036        7.03          70,526       67,882        6.80
                                                =======       =======                     =======      =======
     Total                                      $13,344       $13,323        7.05%        $70,526      $67,882        6.80%
                                                =======       =======                     =======      =======

CMOs:
   Due after 1 year but within 5 years          $   181       $   182        8.00%        $    --      $    --          --%
   Due after 5 years but within 10 years              9             9        5.75              --           --          --
   Due after 10 years                             2,158         2,075        5.51              --           --          --
                                                =======       =======                     =======      =======
     Total                                      $ 2,348       $ 2,266        5.71%        $    --      $    --          --%
                                                =======       =======                     =======      =======
</TABLE>

                                       25

<PAGE>

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

<TABLE>

                                                                   For the Year Ended September 30,
                                                        -------------------------------------------------------
                                                             2000                1999               1998
                                                        ----------------    ----------------   ----------------
                                                                            (In thousands)
<S>                                                        <C>                  <C>                <C>
Amortized cost at beginning of year                        $100,087            $112,357           $ 92,954
                                                           --------            --------           --------
Purchases:
    Pass-through securities:
        Fixed rate                                               --              34,851             74,391
        Adjustable rate                                          --                  --                 --
                                                           --------            --------           --------
          Total pass-through securities                          --              34,851             74,391
    CMOs                                                         --                  --                 --
                                                           ---------           --------           --------
          Total purchases                                        --              34,851             74,391
                                                           ---------           --------           --------
Sales                                                            --             (15,377)           (16,667)
Principal repayments                                        (13,789)            (31,414)           (38,116)
Premium amortization, net of discount accretion                 (80)               (330)              (205)
                                                           --------            --------           --------
Amortized cost at end of year                              $ 86,218            $100,087           $112,357
                                                           ========            ========           ========
</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,  2000,  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. 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>
                                                       At September 30,
                                   ---------------------------------------------------------------------
                                             2000                     1999                    1998
                                   ---------------------------------------------------------------------
                                   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. Governmen                   $41,511        $39,655   $41,527        $40,156   $43,801        $44,810
  Corporate bond                   $ 3,952        $ 3,997       ---            ---       ---            ---
  Equity securit                       869            839       818            612       967            737
                                   -------        -------   -------        -------   -------        -------
     Total                          46,332         44,491    42,345         40,768    44,768         45,547

Held to Maturity
  U.S. Governmen                   $   500        $   492   $   500        $   494   $ 9,495        $ 9,553
                                   -------        -------   -------        -------   -------        -------

Total other securities             $46,832        $44,983   $42,845        $41,262   $54,263        $55,100
                                   =======        =======   =======        =======   =======        =======
</TABLE>



                                       26

<PAGE>




       The  following  table  sets  forth  certain  information   regarding  the
amortized cost,  fair value and weighted  average yield of other debt securities
at September 30, 2000, by remaining period to contractual maturity.
<TABLE>

                                                                               At September 30, 2000
                                                              Held to Maturity                          Available for Sale
                                                ------------------------------------------------------------------------------------
                                                                           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 and Agency securities:
   Due after 1 year but within 5 years             $500          $492       5.99%        $    --          $   --            --%
   Due after 5 years but within 10 years             --            --         --           3,998            3,943         7.58
   Due after 10 years                                --            --         --          37,513           35,712         7.23
                                                   ====          ====                    =======          =======
     Total                                         $500          $492       5.99%        $41,511          $39,655         7.25%
                                                   ====          ====                    =======          =======
</TABLE>


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.

                                       27

<PAGE>

       The  following  table sets forth the deposit  activity of the Company for
the periods indicated.
<TABLE>
                                                For the Year Ended September 30,
                                       ----------------------------------------------------
                                            2000              1999              1998
                                       ---------------   ---------------  -----------------
                                                     (Dollars in thousands)
<S>                                       <C>              <C>                <C>
Balance at beginning of year             $272,974          $231,181           $207,933
Deposits                                  803,282           738,157            593,174
Withdrawals                              (763,073)         (705,907)          (578,982)
Interest credited                          11,923             9,543              9,056
                                         --------          --------           --------
Balance at end of year                   $325,106          $272,974           $231,181
                                         ========          ========           ========

Net increase during the year:
    Amount                               $ 52,132          $ 41,793           $ 23,248
                                         ========          ========           ========
    Percent                                  19.1%             18.1%              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.
<TABLE>
                                                                       At September 30,
                            -------------------------------------------------------------------------------------------------------
                               2000                               1999                               1998
                            --------------------------------  ---------------------------------  --------------------------------
                                          Percent   Weighted                 Percent   Weighted                 Percent  Weighted
                                          of Total  Average                  of Total  Average                  of Total Average
                              Amount      Deposits   Rate        Amount      Deposits   Rate        Amount      Deposits  Rate
                            ------------  --------  --------  -------------  --------  --------  -------------  -------  --------
                                                                    (Dollars in thousands)
<S>                           <C>            <C>       <C>     <C>            <C>       <C>        <C>           <C>        <C>
Checking accounts            $ 11,669       3.6%      -- %     $ 10,769        4.0%       --%      $  5,423       2.0%       --%
NOW accounts                   29,379       9.0      1.05        24,708        9.1      1.06         21,123       7.7      1.00
Money market accounts          34,087      10.5      3.25        33,429       12.3      3.19         27,613      10.1      3.64
Regular savings accounts       55,122      17.0      2.42        50,776       18.6      2.23         43,492      15.9      2.43
Club accounts                   1,609       0.5      2.42         1,480        0.5      2.23          1,282       0.6      2.43
Savings certificate accounts  193,240      59.4      5.78       151,812       55.6      5.04        132,248      48.4      5.43
                             --------     -----                --------      -----                 --------      ----
    Total                    $325,106     100.0%    4.29 %     $272,974      100.0%     4.10%      $231,181      84.7%     4.10%
                             ========     =====                ========      =====                 ========      ====
</TABLE>

                                       28

<PAGE>

       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, 2000.

<TABLE>
                                                         At September 30, 2000
                            ------------------------------------------------------------------------------            Total at
                                                         Period to Maturity                                          September 30,
                            ------------------------------------------------------------------------------  ------------------------
                              Less than       One to         More than                         Percent
                              One Year      Three Years     Three Years        Total          of Total        1999          1998
                            -------------- --------------   -------------  ---------------  --------------  ----------   -----------
                                                                        (Dollars in thousands)
<S>                            <C>             <C>            <C>             <C>              <C>              <C>           <C>
4.00% and below               $  1,512                                      $  1,512            0.8%         $  2,619     $    --
4.01% to 5.00%                  31,444        4,262           1,148           36,854           19.1            74,162      29,677
5.01% to 6.00%                  57,968       18,451           2,301           78,720           40.8            66,586      82,960
6.01% to 7.00%                  43,135       19,959          11,319           74,413           38.5             8,234      19,611
7.01% and above                    507          801             433            1,741            0.9               211          --
                              --------      -------         -------         --------          -----          --------     --------
    Total                     $134,566      $43,473         $15,201         $193,240          100.0%         $151,812     $132,248
                              ========      =======         =======         ========          =====          ========     ========
</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, 2000.
<TABLE>

                                        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                    $ 17,390     4.97%     $ 3,381      5.28%      $ 20,771      5.02%
After three but within six months        33,406     5.48        6,519      6.07         39,925      5.58
After six but within 12 months           61,393     5.77       12,477      6.07         73,870      5.82
                                       --------               -------                 --------
    Total within one year               112,189     5.56       22,377      5.95        134,566      5.62
After one but within two years           29,854     5.96        5,968      6.38         35,822      6.03
After two but within three years          6,409     5.86        1,242      6.38          7,651      5.94
After three but within five years        12,505     6.42        2,696      6.58         15,201      6.45
                                       ---------              -------                 --------
    Total                              $160,957     5.71%     $32,283      6.10%      $193,240      5.78%
                                       =========              =======                 ========
</TABLE>


                                       29

<PAGE>
       Borrowings.  The  Company's  other  available  sources  of funds  include
securities  repurchase  agreements  and advances from the FHLB of New York.  The
Company uses  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,  2000,  the  Company  had  a  collateral  pledge
arrangement  with the FHLB of New York  pursuant to which the Company may borrow
advances of up to $130.1 million.  On such date,  $72.4 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, 2000,  the Company had $85.0  million of  outstanding  borrowings
under   securities   repurchase   agreements   which  were   collateralized   by
mortgage-backed  and other  debt  securities  with a total  fair  value of $95.0
million.

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

                                                                          At or for the Year
                                                                          Ended September 30,
                                                           --------------------------------------------------
                                                               2000             1999              1998
                                                           --------------  ----------------  ----------------
                                                                         (Dollars in thousands)
<S>                                                           <C>              <C>               <C>
Securities repurchase agreements:
    Balance at end of year                                   $ 85,012          $ 99,987          $107,790
    Average balance during year                                99,756            82,681            81,892
    Maximum outstanding at any month end                      114,088           100,962           119,890
    Weighted average interest rate at end of year                6.10%             5.53%             5.64%
    Average interest rate during the year                        5.92              5.48              5.76
FHLB advances:
    Balance at end of year                                   $ 72,400          $ 47,949          $     --
    Average balance during year                                71,052            14,475             4,139
    Maximum outstanding at any month end                       82,900            47,949            11,000
    Weighted average interest rate at end of year                6.42%             5.19%               --%
    Average interest rate during the year                        6.14              5.61              5.99
</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, 2000,  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 for
deposits 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, 1999, the latest date such
information  was  available,  there were 406 other thrift,  commercial  bank and
credit union offices in  Westchester  County which  compete for deposits.  As of
June  30,  1999,  the  Company  held  approximately  1.1% of total  deposits  in
Westchester County.

Employees

       At  September  30, 2000,  the Company had a total of 90 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 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.

                                       31

<PAGE>
       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 and the FDIC.  The last regular
OTS safety and soundness  examination of Yonkers Savings was as of July 1, 2000.
When these examinations are conducted by the OTS and the FDIC, 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,
2000 was approximately $98,000.

       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, 2000,  Yonkers Savings' lending limit under this
restriction  was  $5.2  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,  2000,  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, 2000, Yonkers
Savings had tangible capital of $34.6 million, or 6.6% of adjusted total assets,
which is $26.8 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, 2000, 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, 2000, 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, 2000, Yonkers
Savings had core  capital  equal to $34.6  million,  or 6.6% of  adjusted  total
assets,  which is $13.7 million above the minimum leverage ratio  requirement of
4% in effect on that date.


                                       33

<PAGE>
       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
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, 2000,  Yonkers  Savings
had no capital  instruments  that  qualify  as  supplementary  capital  and $1.7
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, 2000, Yonkers Savings had total capital of $36.3 million
(including  $34.6  million  in core  capital  and  $1.7  million  in  qualifying
supplementary  capital) and  risk-weighted  assets of $238.6 million  (including
$2.0 million in converted off-balance sheet items), or total capital of 15.2% of
risk-weighted  assets. This amount was $17.3 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.

                                       34


<PAGE>
       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.

       The Association may make a capital  distribution  without the approval of
the OTS  provided  we notify  the OTS,  30 days  before we declare  the  capital
distribution  and we meet the following  requirements:  (i) we have a regulatory
rating  in one  of the  two  top  examination  categories,  (ii)  we are  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 our net income for the
calendar  year-to-date  plus  retained  net income for the previous two calendar
years (less any dividends  previously  paid). If we do not meet the above stated
requirements,  we 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, 2000,  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."

                                       35

<PAGE>
       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  June  1999  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  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."

                                       36

<PAGE>
       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,   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, 2000,  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,  2000,  Yonkers  Savings  held $9.3
million in FHLB stock, which was in compliance with this requirement.  Dividends
paid by the FHLB of New York to the  Association  totaled  $716,000 for the year
ended  September 30, 2000,  representing  an increase of $266,000 from dividends
received in fiscal 1999.

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.

                                       38

<PAGE>
       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% 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.

<PAGE>
Item 2.   Properties

       The  following  table sets forth  information  concerning  the  Company's
properties  at September 30, 2000.  The Company's  premises had an aggregate net
book value of approximately $315,000 at that date

                                       39


<TABLE>
                                   Year                                                             Net Book Value at
Location                           Acquired/Leased                    Owned or Leased               September 30, 1999
------------------------------------------------------------------------------------------------------------------
                                                  (Dollars in thousands)
<S>                                <C>                                    <C>                            <C>
Corpoate Headquarters:

6 Executive Plaza                  1996                                    Leased                        $114
Yonkers, New York  10701-9858

Main Office:
One Manor House Square             1976                                    Owned                          112
Yonkers, New York  10701-2701

Full-Service Branches:

780 Palisde Avenue                 1989                                    Leased                          20
Yonkers, New York  10703

1759 Central Park Avenue           1977                                    Leased                          33
Yonkers, New York  10710-2828

2320 Central Park Avenue           1986                                    Leased                          36
Yonkers, New Yonkers  10710-1216

In-Store Branches:

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

3303 Crompond Road                 1998                                    Leased                          --
Yorktown Heights, New York

240 East Sanford Boulvard          1999                                    Leased                          --
Mr. Vernon, New York  10550

432 South Road, Route 9            1999                                    Leased                          --
Poughkeepsie, New York 12601

2094 East Main Street Route 6      1999                                    Leased                          --
Cortlandt Manor, New York  10567

</TABLE>


       Yonkers Savings has entered into an agreement for in-store branching with
BJ's  Wholesale  Club,  Inc. An 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. 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. 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 Company  believes  that its current  facilities  are adequate to meet
present  needs.  In the  future,  the  Company  intends to  continue  to explore
branching  opportunities  to the  extent  they  develop,  although  no  specific
proposals are  currently  under  consideration,  other than the  possibility  of
additional in-store branches under the agreement described above.

                                       40

<PAGE>
       The  Company  also has ATMs  located in eight  branch  offices  and three
offsite locations, one located in a hospital and two in supermarkets.

       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,  2000 was  approximately
$368,000.

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,
2000.


                                     PART II


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

       Page 43 of the  attached  2000 Annual  Report to  Stockholders  is herein
incorporated by reference.

Item 6.   Selected Financial Data

       Page 5 of the  attached  2000 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 17 of the attached 2000 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 14 and 15
of the attached 2000 Annual Report to  Stockholders,  is herein  incorporated by
reference.

                                       41

<PAGE>
Item 8.   Financial Statements and Supplementary Data

       Pages 18 through 40 of the attached  2000 Annual  Report to  Stockholders
are herein incorporated by reference.

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 January  2001,  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, 2000.

       Joseph L. Macchia.  Mr. Macchia, age 49, 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 48, 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.

                                       42

<PAGE>
       Philip Guarnieri. Mr. Guarnieri, age 43, 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 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, 2000  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,  1999,  Gould  Investors  failed to timely file a Form 3 upon its
becoming the beneficial owner of more than 10% of the outstanding  shares of the
Company's 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 January 2001, 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 January 2001, 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 January 2001, 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 2000 Annual Report
to Stockholders is herein incorporated by reference
<TABLE>

Item                                                                            Pages in Annual Report
----                                                                            ----------------------
<S>                                                                             <C>
Independent Auditors' Report                                                    Page 42

Consolidated Balance Sheets as of September 30, 2000                            Page 18
  and 1999

Consolidated Statements of Income for the Years                                 Page 19
  Ended September 30, 2000, 1999 and 1998

Consolidated Statements of Changes in Stockholders'                             Page 20
  Equity for the Years Ended September 30, 2000, 1999
   and 1998

Consolidated Statements of Cash Flows for the Years                             Page 21
  Ended September 30, 2000, 1999 amd 1998

Notes to Consolidated Financial Statements                                      Pages 22 through 40
</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.

                                       44

<PAGE>

         (a) (3)  Exhibits
<TABLE>

                                                                            Reference to
                                                                            Prior Filing
Regulation S-K                                                               or Exhibit
  Exhibit                                                                  Number Attached
  Number                    Document                                          Hereto
---------------             --------                                       ---------------
     <S>            <C>                                                       <C>
     3(a)           Certificate of Incorporation                                *
     3(b)           By-Laws                                                    **
      4             Instruments defining the rights of security holders,        *
                     including debentures
      9             Voting Trust Agreement                                    None
     10             Material Contracts
                     Employment Contract                                      ***
                     Management Recognition Plan and Stock
                      Option and Incentive Plan                                 *
                     Change-in-Control Severance Agreements                   ***
                     Amended and Restated Standstill Agreement                ****
     11             Statement re: computation of per share earnings         Not required
     12             Statement re: computation of ratios                     Not required
     13             Annual Report to Security Holders                          13
     16             Letter re: change in certifying accountants               None
     18             Letter re: change in accounting principles                None
     19             Previously unfiled documents                              None
     21             Subsidiaries of Registrant                                 21
     22             Published report regarding matters submitted to vote      None
                     of security holders
     23             Consents of Experts and Counsel                            23
     24             Power of Attorney                                       Not required
     27             Financial Data Schedule                                   None
     99             Additional Exhibits                                       None
</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 exhibit to the  Company's  Form 8-K filed on July 29, 1999
(File  No.  000-27716)  pursuant  to the  Securities  Exchange  Act of 1934,  as
amended.  Such  previously  filed  document  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  Exchange 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  Exchange 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,  2000,  the  Company  filed one
current Reports on Form 8-K. On July 25, 2000, the Company reported the issuance
of a press release  announcing the Company's earnings for the quarter ended June
30, 2000.


                                       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.


/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 29,2000                     Date:  December 29,2000
      ----------------                            ----------------

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

Date: December 29,2000                     Date:  December 29,2000
      ----------------                            ----------------


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

Date: December 29,2000                     Date:  December 29,2000
      ----------------                            ----------------


/s/ P. Anthony Sarubbi                    /s/ Joseph D. Roberto
-------------------------------------     --------------------------------------
P. Anthony Sarubbi, Director              Joseph D. Roberto, Vice President,
                                           Treasurer   and   Chief    Financial
                                             Officer
                                          (PRINCIPAL  FINANCIAL AND  ACCOUNTING
Date:  December 29, 2000                    OFFICER)
       -----------------
                                           Date:  December 29,2000
                                                  ----------------

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

Date:  December 29,2000

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