UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark One)

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

         For the quarterly period ended December 31, 1999

OR

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

         For the transition period from                       to

                         Commission File Number 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 Identification Number)
incorporation or organization)

                    6EXECUTIVE PLAZA, YONKERS, NEW YORK 10701
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [x] No [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Classes of Common Stock          Number of Shares Outstanding, December 31, 1999
-----------------------          -----------------------------------------------

       $0.01 Par Value                             2,238,739



<PAGE>



                          YONKERS FINANCIAL CORPORATION
                                    FORM 10-Q
                    QUARTERLY PERIOD ENDED DECEMBER 31, 1999
                                                                         Page
                                                                        Number

                         PART I. FINANCIAL INFORMATION

Item 1.      Financial Statements (Unaudited)
             Consolidated Balance Sheets at December 31, 1999 and
               September 30, 1999                                           2
             Consolidated Statements of Income for the Three Months
               Ended December 31, 1999 and 1998                             3
             Consolidated Statement of Changes in Stockholders' Equity
               for the Three Months Ended December 31, 1999                 4
             Consolidated Statements of Cash Flows for the Three Months
               Ended December 31, 1999 and 1998                             5
             Notes to Consolidated Financial Statements                     6
Item 2.      Management's Discussion and Analysis of
               Financial Condition and Results of Operations                8
Item 3.      Quantitative and Qualitative Disclosures About
               Market Risk                                                  18

                           PART II. OTHER INFORMATION

Item 1.      Legal Proceedings                                              18
Item 2.      Changes in Securities                                          18
Item 3.      Defaults Upon Senior Securities                                18
Item 4.      Submission of Matters to a Vote of Security Holders            18
Item 5.        Other Information                                            19
Item 6.      Exhibits and Reports on Form 8-K                               19
             Signature Page                                                 20


<PAGE>

<TABLE>
<CAPTION>
                              YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                                      CONSOLIDATED BALANCE SHEETS
                                              (Unaudited)
                                   (In thousands, except share data)

                                                                      December 31,        September 30,
                                                                          1999                 1999
                                                                      ---------------    --------------
<S>                                                                     <C>                 <C>
ASSETS
Cash and cash equivalents:
    Cash and due from banks                                             $    5,666          $    4,651
    Short-term investments                                                      --                  --
                                                                        ----------          ----------
         Total cash and cash equivalents                                     5,666               4,651
                                                                        ----------          ----------
Securities:
     Available for sale, at fair value (amortized cost of $ 119,093 at
       December 31, 1999 and $120,996 at September 30, 1999)               112,920             116,712
     Held to maturity, at amortized cost (fair value of  $ 20,470 at
       December 31, 1999 and $21,959 at September 30, 1999)                 20,573              21,936
                                                                        ----------          ----------
          Total securities                                                 133,493             138,648
                                                                        ----------          ----------
Real estate mortgage loans held for sale, at lower of cost or
  market value                                                               2,108               1,226
                                                                        ----------          ----------
Loans receivable, net:
     Real estate mortgage loans                                            339,393             291,199
     Consumer and commercial business loans                                  8,770               8,254
     Allowance for loan losses                                              (1,557)             (1,503)
                                                                        ----------          ----------
          Total loans receivable, net                                      346,606             297,950
                                                                        ----------          ----------
Accrued interest receivable                                                  3,007               2,750
Federal Home Loan Bank stock                                                 9,298               7,397
Office properties and equipment, net                                         2,083               1,984
Other assets                                                                 3,912               3,089
                                                                        ----------          ----------
          Total assets                                                  $  506,173          $  457,695
                                                                        ==========          ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Deposits                                                           $  285,700          $  272,974
     Securities repurchase agreements                                      108,771              99,987
     FHLB advances                                                          77,194              47,948
     Other liabilities                                                       2,894               4,769
                                                                        ----------          ----------
          Total liabilities                                                474,559             425,678
                                                                        ----------          ----------

Commitments and contingencies

Stockholders' equity:
     Preferred stock (par value $0.01 per share; 100,000
        shares authorized; none issued or outstanding)                          --                 --
     Common stock (par value $0.01 per share: 4,500,000
        shares authorized; 3,570,750 shares issued)                             36                 36
     Additional paid-in capital                                             35,320             35,225
     Unallocated common stock  held by employee stock
        ownership plan                                                      (1,785)            (1,857)
     Unamortized awards of common stock under  management
        recognition plan                                                      (548)              (621)
     Treasury stock, at cost ( 1,332,011) shares                           (21,866)           (21,866)
     Retained income, substantially restricted                              24,161             23,652
     Accumulated other comprehensive (loss) income                          (3,704)            (2,552)
                                                                        ----------          ----------
          Total stockholders' equity                                        31,614             32,017
                                                                        ----------          ----------
                                                                        $  506,173          $  457,695
                                                                        ==========          ==========
</TABLE>

See accompanying notes to consolidated financial statements



<PAGE>
<TABLE>
<CAPTION>

                                YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                                      CONSOLIDATED STATEMENTS OF INCOME
                                                 (Unaudited)
                                    (In thousands, except per share data)

                                                                    For the Three Months
                                                                     Ended December 31,
                                                                 ---------------------------
                                                                    1999            1998
                                                                 ---------        ----------
<S>                                                              <C>              <C>
Interest and dividend income:
   Loans                                                         $   6,042        $    3,759
   Securities                                                        2,387             2,679
   Other earning assets                                                159               183
                                                                 ---------        ----------
     Total interest and dividend income                              8,588             6,621
                                                                 ---------        ----------
Interest expense:
   Deposits                                                          2,675             2,381
   Securities repurchase agreements                                  1,614             1,248
   FHLB advances                                                       847               136
                                                                 ---------        ----------
     Total interest expense                                          5,136             3,765
                                                                 ---------        ----------
       Net interest income                                           3,452             2,856

Provision for loan losses                                               35                75
                                                                 ---------        ----------
       Net interest income after provision for loan losses           3,417             2,781
                                                                 ---------        ----------
Non-interest income:
   Service charges and fees                                            269               141
   Net gain on sales of real estate mortgage
      loans held for sale                                               23               137
   Net gain (loss) on sales of securities                                4                 3
   Other                                                                14                 9
                                                                 ---------        ----------
      Total non-interest income                                        310               290
                                                                 ---------        ----------
Non-interest expense:
   Compensation and benefits                                         1,467             1,156
   Occupancy and equipment                                             338               228
   Data processing service fees                                        179               150
   Federal deposit insurance costs                                      38                33
   Other                                                               581               374
                                                                 ---------        ----------
      Total non-interest expense                                     2,603             1,941
                                                                 ---------        ----------

        Income before income tax expense                             1,124             1,130

Income tax  expense                                                    420               463
                                                                 ---------        ----------

       Net income                                               $      704        $      667
                                                                 =========        ==========
Earnings per common share (note 3):
       Basic                                                    $     0.35        $     0.27
       Diluted                                                        0.34              0.27
                                                                 =========        ==========
</TABLE>

See accompanying notes to consolidated financial statements



<PAGE>
<TABLE>
<CAPTION>
                                                           YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                                                    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                                           (Unaudited)
                                                          (Dollars in thousands, except per share data)

                                                          Unallocated    Unamortized
                                                             Common       Awards of                       Accumulated
                                               Additional     Stock        Common                            Other         Total
                                       Common   Paid-in       Held          Stock    Treasury Retained  Comprehensive  Stockholders'
                                       Stock    Capital      by ESOP       Under MRP  Stock    Income        Loss         Equity
                                      -------- ---------- ------------- ------------ --------- --------- ------------ -------------
<S>                                    <C>      <C>         <C>            <C>       <C>        <C>       <C>        <C>
Balance at September 30, 1999          $    36  $ 35,225    $   (1,857)    $  (621)  $(21,866)  $23,652   $  (2,552) $     32,017

   Net income                               --        --            --          --         --       704          --          704
   Dividends paid ($0.09 per share)         --        --            --          --         --      (195)          --        (195)
   Amortization of MRP awards               --        --            --          73         --        --          --           73
   Tax benefits from vested
   MRP awards                               --        40            --          --         --        --          --           40
   ESOP shares released for
      allocation (7,142 shares)             --        55            72          --         --        --          --          127
   Increase in net unrealized loss on
      available-for-sale securities,
      net of tax                            --        --            --          --         --        --     (1,152)        (1,152)
                                       -------  --------    ----------     -------   --------   --------  ---------  ------------
Balance at December 31, 1999           $    36  $ 35,320    $   (1,785)    $  (548)  $(21,866)  $ 24,161  $  (3,704) $     31,614
                                       =======  ========    ==========     =======   ========   ========  =========  ============
See accompanying notes to consolidated financial statements.

</TABLE>

                                       4

<PAGE>
<TABLE>
<CAPTION>

                                 YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (Unaudited)
                                               (In thousands)
                                                                                For the Three Months
                                                                                  Ended December 31,
                                                                          -------------------------------
                                                                               1999             1998
                                                                          ---------------   -------------
<S>                                                                        <C>              <C>
Cash flows from operating activities:
  Net income                                                                 $     704        $    667
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Provision for loan losses                                                      35              75
     ESOP and MRP expense                                                          200             169
     Depreciation and amortization expense                                         116              80
     Amortization of deferred fees, discounts and premiums, net                     35              80
     Net gain on sales of real estate mortgage loans held for sale                 (23)           (137)
     Net gain on sales of securities                                                (4)             (3)
     Other adjustments, net                                                     (2,155)            747
                                                                             ---------        --------
          Net cash (used in) provided by operating activities                   (1,092)          1,678
                                                                             ---------        --------
Cash flows from investing activities:
  Purchases of available-for-sale securities                                      (111)        (17,167)
  Proceeds from principal payments, maturities and calls of securities:
     Available-for-sale                                                          1,974          15,880
     Held-to-maturity                                                            1,379           8,918
  Proceeds from sales of available-for-sale securities                              19             102
  Disbursements for loan originations                                          (57,846)        (32,545)
  Principal collections on loans                                                 5,226          11,871
  Proceeds from sales of loans                                                   3,021          20,088
  Purchase of FHLB stock                                                        (1,901)             --
  Other investing cash flows                                                      (215)           (198)
                                                                             ---------        --------
          Net cash (used in) provided by  investing activities                 (48,454)          6,949
                                                                             ---------        --------
Cash flows from financing activities:
  Net increase in deposits                                                      12,726          17,396
  Net increase (decrease) in borrowings with
     original terms of three months or less:
       Securities repurchase agreements                                          3,784         (32,178)
       FHLB advances                                                            14,246          15,000
  Proceeds from longer-term securities repurchase agreements                    20,000              --
  Dividends paid                                                                  (195)           (201)
                                                                             ---------        --------
          Net cash provided by financing activities                             50,561              17
                                                                             ---------        --------

Net  increase in cash and cash equivalents                                       1,015           8,644
Cash and cash equivalents at beginning of period                                 4,195           4,195
                                                                             ---------        --------

Cash and cash equivalents at end of period                                   $   5,210        $ 12,839
                                                                             =========        ========

Supplemental information:
  Interest paid                                                              $   4,678        $  3,659
  Income taxes paid                                                                 --              --
                                                                             =========        ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5

<PAGE>


                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

(1)      Basis of Presentation

         Yonkers Financial  Corporation (the "Holding Company") was incorporated
under the laws of the State of Delaware and on April 18, 1996 became the savings
and loan holding  company of The Yonkers Savings and Loan  Association,  FA (the
"Association") in connection with the Association's  conversion from a federally
chartered  mutual savings and loan  association to a federally  chartered  stock
savings and loan association (the "Conversion"). Concurrent with the Conversion,
the Holding Company sold 3,570,750  shares of its common stock in a subscription
and community offering at a price of $10 per share, resulting in net proceeds of
$34.6  million.  The assets of the Holding  Company  consist of the stock of the
Association,  certain  short-term  and  other  investments,  and a  loan  to its
Employee Stock  Ownership Plan (the "ESOP").  Collectively,  the Holding Company
and the Association are referred to herein as the "Company".

         On March 31, 1999 the Association  established a real estate investment
trust, Yonkers REIT, Inc. (the "REIT"), a wholly owned subsidiary. On such date,
$119.3 million in real estate loans was transferred  from the Association to the
REIT. On December 31, 1999, $114.5 million in real estate loans were held by the
REIT. The assets transferred to the REIT are viewed by regulators as part of the
Association's assets in consolidation.

         The unaudited  consolidated  financial  statements included herein have
been prepared in conformity with generally accepted  accounting  principles.  In
the opinion of  management,  the  unaudited  consolidated  financial  statements
include all adjustments,  consisting of normal recurring accruals, necessary for
a fair presentation of the financial  position and results of operations for the
interim periods presented.  The results of operations for the three months ended
December 31, 1999 are not  necessarily  indicative  of the results of operations
which may be expected for the fiscal year ending September 30, 2000.

         Certain  financial   information  and  footnote   disclosures  normally
included in annual  financial  statements  prepared in conformity with generally
accepted  accounting  principles  have been  omitted  pursuant  to the rules and
regulations  of the Securities and Exchange  Commission.  The unaudited  interim
consolidated financial statements presented herein should be read in conjunction
with the annual consolidated  financial  statements of the Company as of and for
the fiscal year ended September 30, 1999, included in the Form 10-K.

(2)      Comprehensive Income

During the quarter ended  December 31, 1998,  the Company  adopted  Statement of
Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting  Comprehensive
Income," which establishes  standards for reporting and display of comprehensive
income (and its  components)  in financial  statements.  The standard  does not,
however,  specify  when  to  recognize  or how to  measure  items  that  make up
comprehensive  income.  Comprehensive  income  represents net income and certain
amounts reported  directly in stockholders'  equity,  such as the net unrealized
gain or loss on  securities  available  for sale.  While  SFAS No.  130 does not
require a specific  reporting  format, it does require that an enterprise report
an  amount  representing  total  comprehensive  income  for  the  period.  Total
comprehensive  loss  for the  quarter  ended  December  31,  1999  was  $448,000


                                       6

<PAGE>

consisting  of $704,000 in net income less a net increase of $1.2 million in the
after-tax net unrealized loss on available-for-sale  securities. For the quarter
ended December 31, 1998, total comprehensive income of $146,000 consisted of net
income  of  $667,000  less a net  decrease  of  $521,000  in the  after-tax  net
unrealized gain on available-for-sale securities.

(3)      Earnings Per Share

         The Company  reports both basic and diluted  earnings per share ("EPS")
in  accordance  with SFAS No.  128,  "Earnings  per Share".  Basic EPS  excludes
dilution and is computed by dividing income available to common  stockholders by
the weighted-average number of common shares outstanding for the period. Diluted
EPS reflects the  potential  dilution  that could occur if  securities  or other
contracts  to issue  common  stock (such as stock  options)  were  exercised  or
converted  into common  stock or resulted in the  issuance of common  stock that
then shared in the  earnings of the entity.  Diluted EPS is computed by dividing
net income by the weighted  average number of common shares  outstanding for the
period plus  common-equivalent  shares computed using the treasury stock method.
Unallocated  ESOP  shares  that  have  not  been  committed  to be  released  to
participants  are excluded from  outstanding  shares in computing both basic and
diluted EPS.

         The  following  is a summary  of the number of shares  utilized  in the
Company's  EPS  calculations  for the three months  ended  December 31, 1999 and
1998. For purposes of computing basic EPS, net income applicable to common stock
equaled net income for both periods presented.


                                                          For the Three Months
                                                           Ended December 31,
                                                          --------------------
                                                             1999     1998
                                                          ---------  ---------
                                                             (In Thousands)
Weighted average common shares outstanding
   for computation of basic EPS (1)                          2,006    2,447
Common-equivalent shares due to the dilutive effect of
   Stock options and MRP awards (2)                             66       18
                                                            ------   ------
Weighted average common shares for
   computation of diluted EPS                                2,072    2,465
                                                            ======   ======

(1) Excludes  unvested MRP awards and unallocated ESOP shares that have not
    been committed to be released.
(2) Computed using the treasury stock method.

                                       7

<PAGE>

PART I. ITEM 2.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

FORWARD-LOOKING STATEMENTS

         When used in this Form 10-Q or future  filings by the Company  with the
Securities  and Exchange  Commission,  in the Company's  press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result",  "are expected to",  "will  continue",  "is  anticipated",  "estimate",
"project",   "believe"   or  similar   expressions   are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995.  The  Company  wishes to caution  readers not to
place undue reliance on any forward-looking  statements,  which speak only as of
the date made, and to advise readers that various  factors,  including  regional
and national  economic  conditions,  changes in levels of market interest rates,
credit risks of lending  activities,  and  competitive  and regulatory  factors,
could affect the Company's financial  performance and could cause actual results
for future periods to differ materially from those anticipated or projected.

         The  Company  does  not  undertake,   and  specifically  disclaims  any
obligation, to publicly release the result of any revisions which may be made to
any  forward-looking  statements  to reflect the  occurrence of  anticipated  or
unanticipated events or circumstances after the date of such statements.

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 1999 AND SEPTEMBER 30, 1999

         Total  assets  at  December  31,  1999  amounted  to  $506.2   million,
representing  an increase of $48.5  million from $457.7 at  September  30, 1999.
Asset growth during the period related primarily to increased loan volume funded
by borrowings  and deposits  reflecting  the  continued  growth of the Company's
retail franchise.

         Overall,  total loans (loans  receivable  and  mortgage  loans held for
sale) increased $49.5 million to $348.7 million at December 31, 1999 from $299.2
million at September 30, 1999. The loan growth during the quarter ended December
31, 1999 primarily reflects loan originations net of repayments of $52.6 million
less loans sold of $3.0 million. Total Securities at December 31, 1999 decreased
$5.1 million to $133.5 million from $138.6 million at September 30, 1999.

         Total  borrowings  increased  by $38.1  million  to $186.0  million  at
December 31, 1999 from $147.9 million at September 30, 1999. Deposit liabilities
increased  $12.7  million to $285.7  million at  December  31,  1999 from $273.0
million at September  30, 1999.  The increase in deposit  liabilities  primarily
reflects  growth in the Company's  in-store  branch  network of $11.2 million as
well as aggressive  cross-selling programs.  Funds from increased borrowings and
deposit growth were primarily used to fund new loans.

                                       8

<PAGE>

         Stockholders' equity decreased by $403,000 to $31.6 million at December
31, 1999 from $32.0  million at September  30,  1999.  The decrease is primarily
attributable to a $1.2 million  increase in the after-tax net unrealized loss on
available-for-sale  securities,  partially  offset by net income  retained after
dividends  of  $509,000,  and a combined  increase of  $240,000  relating to the
employee stock ownership plan and the management  recognition plan. The ratio of
stockholders' equity to total assets decreased to 6.2% at December 31, 1999 from
7.0 % at September 30, 1999 reflecting the substantial  growth in assets coupled
with the net decrease in  stockholders'  equity.  Book value per share (computed
based on total shares  issued less  treasury  shares) was $14.12 at December 31,
1999,  compared to $14.30 at September  30,  1999.  See  "Liquidity  and Capital
Resources"  for  information  regarding  the  Association's  regulatory  capital
amounts and ratios.

ANALYSIS OF NET INTEREST INCOME

         The following  table sets forth the Company's  average  balance sheets,
average yields and costs (on an annualized basis), and certain other information
for the three months ended December 31, 1999 and 1998. The yields and costs were
derived by dividing  interest income or expense by the average balance of assets
or liabilities,  respectively,  for the periods shown. Substantially all average
balances were computed based on daily  balances.  Interest  income  includes the
effect of deferred fees,  discounts,  and premiums  which are  considered  yield
adjustments.

                                       9

<PAGE>
<TABLE>
<CAPTION>

                                                                         For the Quarter Ended December 31,
                                                      ---------------------------------------------------------------------
                                                                    1999                              1998
                                                      ------------------------------------ --------------------------------
                                                       Average                 Average      Average              Average
                                                       Balance     Interest    Yield/Cost   Balance   Interest  Yield/Cost
                                                      ----------  ----------- ------------ --------- ---------- -----------
                                                                              (Dollars in thousands)
<S>                                                  <C>          <C>             <C>     <C>         <C>         <C>
Assets
Interest-earning assets:
    Loans (1)                                        $ 328,672    $   6,042       7.35%   $ 196,071   $  3,759    7.67%
    Mortgage-backed securities (2)                      95,964        1,628       6.79      117,877      1,863    6.32
    Other securities (2)                                41,271          759       7.36       46,894        816    6.96
    Other earning assets                                13,045          159       4.88       14,647        183    5.00
                                                     ---------    ---------               ---------   --------
       Total interest-earning assets                   478,952    $   8,588       7.17      375,489   $  6,621    7.05
                                                                  =========                           ========

Allowance for loan losses                               (1,531)                              (1,329)
Non-interest-earning assets                             12,401                                8,057
                                                      --------                            ---------
       Total assets                                   $489,822                            $ 382,217
                                                      ========                            =========
Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
    NOW, club and money market accounts              $  60,073    $     327       2.18%   $  53,081   $    309    2.33%
    Regular savings accounts (3)                        53,275          239       1.79       46,410        247    2.13
    Savings certificate accounts                       168,854        2,109       5.00      134,118      1,825    5.44
                                                     ---------    ---------               ---------   --------
       Total interest-bearing deposits                 282,202        2,675       3.79      233,609      2,381    4.08

    Borrowings                                         172,092        2,461       5.72       97,902      1,384    5.65
                                                     ---------    ---------               ---------   --------
       Total interest-bearing liabilities              454,294    $   5,136       4.52      331,511   $  3,765    4.54
                                                                  =========                           ========

Non-interest-bearing liabilities                         3,495                                8,864
                                                     ---------                            ---------
       Total liabilities                               457,789                              340,375

Stockholders' equity                                    32,033                               41,842
                                                     ---------                            ---------
       Total liabilities and stockholders' equity    $ 489,822                            $ 382,217
                                                     =========                            =========
Net interest income                                               $   3,452                           $  2,856
                                                                  =========                           ========
Average interest rate spread (4)                                                  2.65%                           2.51%
Net interest margin (5)                                                           2.88%                           3.04%
Net interest-earning assets (6)                      $  24,658                            $  43,978
                                                     =========                            =========
Ratio of average interest-earning assets to average
    interest-bearing liabilities                                                105.43%                           113.27%

</TABLE>


(1) Balances  are net of  deferred  loan  fees  and  construction  loans in
    process,  and  include  loans  receivable  and  loans  held  for  sale.
    Non-accrual loans are included in the balances.

(2) Average balances represent amortized cost.

(3) Includes mortgage escrow accounts.

(4) Average  interest rate spread  represents  the  difference  between the
    yield  on  average  interest-earning  assets  and the  cost of  average
    interest-bearing liabilities.

(5) Net interest  margin  represents net interest income divided by average
    total interest-earning assets.

(6) Net interest-earning  assets represents total  interest-earning  assets
    less total interest-bearing liabilities.

                                       10

<PAGE>

         The  following  table  presents the extent to which changes in interest
rates and changes in the volume of interest-earning  assets and interest-bearing
liabilities  affected the Company's  interest income and interest expense during
the three  months  ended  December  31, 1999  compared to the same period in the
prior year. Information is provided in each category with respect to (i) changes
attributable to changes in volume (changes in volume  multiplied by prior rate),
(ii) changes  attributable  to changes in rate  (changes in rate  multiplied  by
prior  volume),  and (iii)  the net  change.  The  changes  attributable  to the
combined  impact of volume and rate have been allocated  proportionately  to the
changes due to volume and the changes due to rate.


                                              For the Quarter Ended December 31,
                                                     1999 Compared to 1998
                                              ---------------------------------
                                               Increase (Decrease)
                                                     Due to
                                              --------------------      Net
                                               Volume       Rate       Change
                                              --------- ----------  -----------

                                                        (In thousands)
Interest-earning assets:
  Loans                                       $2,446       $(163)      $ 2,283
  Mortgage-backed securities                    (366)        131          (235)
  Other securities                              (109)         52           (57)
  Other earning assets                           (20)         (4)          (24)
                                              ------       -----       -------
         Total                                 1,951          16         1,967
                                              ------       -----       -------
Interest-bearing liabilities:
  NOW, club and money market accounts             39         (21)           18
  Regular savings accounts                        34         (42)           (8)
  Savings certificate accounts                   441        (157)          284
  Borrowings                                   1,060          17         1,077
                                              ------       -----       -------
         Total                                 1,574        (203)        1,371
                                              ------       -----       -------
Net change in net interest income             $  377       $ 219       $   596
                                              ======       =====       =======

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND
1998

         GENERAL.  Net income for the three months  ended  December 31, 1999 was
$704,000 or diluted  EPS of $0.34  compared to net income of $667,000 or diluted
EPS of $0.27 for the quarter ended December 31, 1998.  Basic earnings per common
share were $0.35 for the quarter  ended  December 31, 1999 compared to $0.27 for
the same  period in 1998.  The  increase  in net income of $37,000  reflects  an
increase of $596,000 in net interest  income,  a $43,000  decrease in income tax
expense,  a $40,000  decrease in the  provision  for loan losses,  and a $20,000
increase in non-interest income, substantially offset by an increase of $662,000
in non-interest expense.

                                       11

<PAGE>

         NET INTEREST. Income Net interest income for the quarter ended December
31, 1999 was $3.5  million,  an increase of $596,000  from $2.9  million for the
prior  year's  period.  The  increase  primarily  reflects a rise in the average
interest  rate  spread,  partially  offset by a decline in net  interest-earning
assets (total interest-earning assets less total interest-bearing  liabilities).
The  increase in the  average  interest  rate spread is  primarily a result of a
higher yield on the securities  portfolio,  as well as a slight  decrease in the
cost of funds. The Company's average interest rate spread increased to 2.65% for
the quarter  ended  December 31, 1999 from 2.51% for the same quarter last year,
while the net interest margin decreased to 2.88% for the 1999 three month period
from 3.04% a year earlier.

         INTEREST INCOME.  Interest and dividend income totaled $8.6 million for
the three months ended  December 31, 1999, an increase of $2.0 million  compared
to $6.6  million for the three months ended  December  31, 1998.  This  increase
reflects   the  effect  of  a  $103.5   million   increase   in  total   average
interest-earning  assets  coupled with a 12 basis point  increase in the average
yield on such assets to 7.17% for the three months ended  December 31, 1999 from
7.05% for the same period in the prior year.

         Interest  income on loans  increased  $2.3 million for the three months
ended  December  31,  1999  compared  to the  same  period  in the  prior  year,
reflecting  the  effect of a $132.6  million  increase  in the  average  balance
partially offset by a 32 basis point decrease in the average yield. The increase
in the average  balance of loans was  primarily  attributable  to an increase in
one- to four-family residential mortgage loans. The decline in the average yield
was  primarily  attributable  to  the  origination  of  lower-yielding  one-  to
four-family  adjustable rate mortgage loans with initial  fixed-rate  periods of
five, seven, or ten years, with annual adjustments thereafter.

         On a combined basis,  interest and dividend  income on  mortgage-backed
and other  securities  decreased  $292,000 to $2.4  million for the three months
ended  December 31, 1999 from $2.7  million for the three months ended  December
31,  1998.  Interest  on  mortgage-backed   securities   decreased  by  $235,000
attributable  to the effects of a $21.9 million  decrease in the average balance
partially offset by a 47 basis point increase in the average yield.  Interest on
other securities declined by $57,000,  primarily  attributable to a $5.6 million
decrease  in the  average  balance  offset by a 40 basis  point  increase in the
average yield.

         Interest and dividend income on other earning assets decreased $24,000,
primarily  attributable to a $1.6 million  decrease in the average balance and a
12 basis point decrease in the average yield.

         INTEREST EXPENSE.   Interest expense totaled $5.1 million for the three
months  ended  December  31,  1999,  an increase of $1.3  million from the prior
year's quarter.  Interest expense on deposits increased $294,000 compared to the
same  period in the  prior  year,  reflecting  the  effect  of an $48.6  million
increase in the average balance partially offset by a 29 basis point decrease in
the average  rate on  interest-bearing  deposits  to 3.79% for the three  months
ended December 31, 1999 from 4.08% for the three months ended December 31, 1998.


                                       12

<PAGE>

The decrease in the average rate paid on deposits  primarily reflects a 44 basis
point decrease in the average rate paid on savings certificate accounts, coupled
with a 34 basis  point  decrease  in the  average  rate paid on regular  savings
accounts and a 15 basis point  decrease in the average  rate paid on NOW,  club,
and money market  accounts.  The increase in average  interest-bearing  deposits
consisted of a $34.7 million  increase in average savings  certificate  accounts
(to $168.8 million from $134.1 million), a $7.0 million increase in average NOW,
club and money market  accounts (to $60.1 million from $53.1 million) and a $6.9
million  increase in average  regular  savings  accounts (to $53.3  million from
$46.4 million).

         Interest  expense on borrowings  increased $1.1 million to $2.5 million
for the three  months  ended  December  31, 1999 from $1.4 million for the three
months ended December 31, 1998, as the Company continued to increase borrowings,
primarily Federal Home Loan Bank (FHLB) advances,  to leverage available capital
and support further loan growth.  Total  borrowings  averaged $172.1 million for
the three months ended December 31, 1999 at an average rate of 5.72% compared to
$97.9  million  and  5.65%,  respectively,   for  the  prior-year  quarter.  See
"Liquidity  and Capital  Resources"  for  further  discussion  of the  Company's
securities repurchase agreements.

         PROVISION  FOR LOAN LOSSES.  The Company  records  provisions  for loan
losses,  which are charged to earnings,  in order to maintain the  allowance for
loan losses at a level which is considered appropriate to absorb probable losses
inherent in the existing loan  portfolio.  The provision in each period reflects
management's  evaluation  of the  adequacy  of the  allowance  for loan  losses.
Factors  considered  include  the  volume  and type of  lending  conducted,  the
Company's  previous loan loss  experience,  the known and inherent  risks in the
loan portfolio,  adverse  situations  that may affect the borrowers'  ability to
repay,  the estimated value of any underlying  collateral,  and current economic
conditions.

         The  provision  for loan  losses was  $35,000 and $75,000 for the three
months ended December 31, 1999 and 1998,  respectively.  The lower  provision in
the quarter ended  December 31, 1999 reflects net  recoveries of $19,000 for the
period, compared to net charge-offs of $1,000 for the quarter ended December 31,
1998.  Non-performing  loans totaled $766,000 at December 31, 1999,  compared to
$755,000 at September  30, 1999 and $720,000  million at December 31, 1998.  See
"Asset Quality" for a further discussion of the Company's  non-performing assets
and allowance for loan losses.

         NON-INTEREST  INCOME.  Non-interest  income for the three  months ended
December  31,  1999  increased  $20,000  to  $310,000,  from  $290,000  for  the
comparable period in 1998. The increase is primarily  attributable to a $128,000
increase in service charges and fee income,  substantially  offset by a $114,000
decrease in the net gain on sales of real estate  mortgage  loans held for sale.
The increase in service charges and fee income primarily  results from increases
in transaction  volume,  in addition to $15,000 in income from Yonkers Financial
Services,  Inc, a  wholly-owned  subsidiary  of the  Association  that began its
operations to sell  annuities and mutual funds in the quarter ended December 31,
1999. In the three months ended  December 31, 1999,  mortgage loan sales totaled
$3.0 million  resulting in net gains of $23,000  (including  the  recognition of
mortgage  servicing  assets),  as compared to loan sales of $20.1 million in the
1998 quarter, which resulted in gains of $137,000.

                                       13

<PAGE>

         NON-INTEREST  EXPENSE.  Non-interest expense increased $662,000 to $2.6
million for the three months ended  December 31, 1999,  compared to $1.9 million
for the three months ended December 31, 1998.  Compensation and benefits expense
increased $311,000 from the prior-year primarily due to increased costs relating
to additional  staffing in three new in-store  branches and the loan department,
coupled  with  performance-based   increases  for  certain  staff  members.  The
increases of $110,000 in  occupancy  and  equipment  expense and $29,000 in data
processing  service fees primarily  reflects increased costs associated with the
establishment  of in-store  branches in May 1999,  September  1999,  and October
1999.  The  $207,000  increase  in  other  non-interest   expense  is  primarily
attributable  to  increased  costs  relating to: the three  additional  in-store
branches; increased production in the loan department and the establishment of a
real estate  investment trust,  Yonkers REIT, Inc. (the "REIT"),  a wholly-owned
subsidiary of the Association, in March 1999.

         INCOME TAX  EXPENSE.  Income tax  expense  was  $420,000  for the three
months ended  December 31, 1999 and  $463,000  for the  comparable  1998 period,
reflecting  effective tax rates of 37.4% and 41.0 %, respectively.  The decrease
in  the  effective   tax  rate   reflects  the   ancillary   benefits  from  the
aforementioned   REIT.  Under  current  law,  all  income  earned  by  the  REIT
distributed  to the  Association  in the form of a  dividend  has the  effect of
reducing the Company's New York State Income tax expense.

ASSET QUALITY

         Non-performing loans totaled $766,000 at December 31, 1999, compared to
$755,000 at  September  30, 1999 and $720,000  December  31, 1998.  The ratio of
non-performing  loans to total loans  receivable was 0.22% at December 31, 1999,
compared to 0.25% at  September  30, 1999 and 0.37% at December  31,  1998.  The
allowance for loan losses was $1.6 million or 0.44% of total loans receivable at
December 31, 1999,  compared to $1.5 million or 0.50% of total loans  receivable
at September 30, 1999 and $1.4 million or 0.70% at December 31, 1998.  The ratio
of the allowance for loan losses to non-performing loans was 203.26% at December
31, 1999,  compared to 199.07% at September 30, 1999 and 191.11% at December 31,
1998.

                                       14

<PAGE>

The following  table sets forth  certain asset quality  ratios and other data at
the dates indicated:
<TABLE>
<CAPTION>

                                                       December 31, 1999 September 30, 1999 December 31, 1998
                                                       ----------------- ------------------ -----------------
                                                                       (Dollars in thousands)
<S>                                                        <C>              <C>                 <C>
Non-accrual loans past due ninety days or more:
  Real estate mortgage loans:
       One- to four-family                                 $      342       $      347          $      505
       Commercial                                                 303              305                 201
  Consumer loans                                                  121              103                  14
                                                           ----------       ----------          ----------
           Total                                                  766              755                 720
Real estate owned, net                                             --               --                 183
                                                           ----------       ----------          ----------
Total non-performing assets                                $      766       $      755          $      903
                                                           ==========       ==========          ==========

Allowance for loan losses                                  $    1,557       $    1,503          $    1,376
                                                           ==========       ==========          ==========
Ratios:
  Non-performing loans to total loans receivable (2)          0.22%            0.25%               0.37%
  Non-performing assets to total assets                       0.15             0.16                0.24
  Allowance for loan losses to:
      Non-performing loans                                  203.26           199.07              191.11
      Total loans receivable                                  0.44             0.50                0.70

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

         The  Company's  primary  sources of funds are deposits and  borrowings;
principal and interest payments on loans and securities; and proceeds from sales
of loans and securities.  While  maturities and scheduled  payments on loans and
securities  provide an indication  of the timing of the receipt of funds,  other
sources  of  funds  such  as loan  prepayments  and  deposit  inflows  are  less
predictable due to the effects of changes in interest rates, economic conditions
and competition.

         The main sources of liquidity for the Holding  Company are net proceeds
from the sale of stock and dividends received from the Association,  if any. The
main cash flows are payments of dividends to shareholders and repurchases of the
Holding Company's common stock.

         The  Association  is required to maintain an average  daily  balance of
total liquid assets as a percentage of net  withdrawable  deposit  accounts plus
short-term  borrowings,  as defined by the  regulations  of the Office of Thrift
Supervision. The minimum required liquidity ratio at December 31, 1999 was 4.0%,
and the Company's actual liquidity ratio was 6.5%.

                                       15

<PAGE>

         The primary investing  activities of the Company are the origination of
real estate mortgage and other loans,  and the purchase of  mortgage-backed  and
other  securities.  At December  31,  1999,  the Company  had  outstanding  loan
origination commitments of $25.0 million, unadvanced home equity lines of credit
of $4.5 million and undisbursed  construction  loans in process of $3.7 million.
The Company anticipates that it will have sufficient funds available to meet its
current loan  origination  and other  commitments.  At December  31,  1999,  the
Company  had the ability to obtain  additional  FHLB  advances of  approximately
$48.7 million.  Certificates of deposit  scheduled to mature in one year or less
from December 31, 1999 totaled $93.9 million. Based on the Company's most recent
experience and pricing strategy,  management believes that a significant portion
of such deposits will remain with the Company.

         The  Company's  borrowings  at December  31, 1999  consisted  of $108.8
million in borrowings under securities  repurchase  agreements and FHLB advances
of $77.2  million.  FHLB  advances at December  31, 1999 had a weighted  average
interest rate of 5.42% and a weighted average term to maturity of 1.8 years with
a call date in 0.2 years. In the securities repurchase  agreements,  the Company
borrows funds  through the transfer of debt  securities to the FHLB of New York,
as counterparty,  and concurrently agrees to repurchase the identical securities
at a fixed price on a specified date. The Company  accounts for these agreements
as secured financing  transactions since it maintains effective control over the
transferred  securities.  Accordingly,  the transaction proceeds are recorded as
borrowings and the underlying securities continue to be carried in the Company's
debt  securities  portfolio.  Repurchase  agreements are  collateralized  by the
securities sold and, in certain cases, by additional margin  securities.  During
the three months ended  December 31, 1999,  the average  borrowings  under these
agreements  amounted  to  $111.3  million  and  the  maximum  month-end  balance
outstanding was $114.0 million.


                                       16

<PAGE>

Additional  information  concerning  outstanding  repurchase agreements with the
FHLB of New York as of December 31, 1999 is summarized as follows:


                                                 Accrued Weighted   Fair Value
                                                Interest  Average of Collateral
Remaining Term to Final Maturity (1)  Amount Payable (2)   Rate   Securities (3)
------------------------------------  ------ -----------   ----   --------------
                                               (Dollars in Thousands)

Within 30 days                       $     -- $        --     --% $        --
After 30 days but within one year      37,759          25   5.88       39,669
After one but within three years       17,500         158   6.07       17,525
After three but within five years       8,100           1   5.97        8,386
After five years                       45,412         342   5.68       46,150
                                     -------- -----------         -----------

     Total                           $108,771 $       526   5.83% $   111,730
                                     ======== ===========         ===========

(1) The weighted average remaining term to final maturity was approximately
    4.6  years  at  December  31,  1999.  Certain   securities   repurchase
    agreements are callable by the FHLB of New York,  prior to the maturity
    date. The weighted average remaining term to maturity, giving effect to
    earlier call dates, was approximately 1.6 years at December 31, 1999.
(2) Included in other liabilities in the consolidated balance sheet.
(3) Represents  the fair  value of the  mortgage-backed  securities  ($81.8
    million)  and  other  debt   securities   ($29.9  million)  which  were
    transferred to the counterparty,  including accrued interest receivable
    of  $1.1  million.   These  securities  consist  of  available-for-sale
    securities and  held-to-maturity  securities  with fair values of $97.1
    million and $14.6 million, respectively.

         At December 31, 1998, the Company's  "amount at risk" under  securities
repurchase agreements was approximately $2.4 million. This amount represents the
excess of (i) the carrying amount,  or market value if higher, of the securities
transferred to the FHLB of New York plus accrued  interest  receivable over (ii)
the amount of the repurchase liability plus accrued interest payable.

         At December 31, 1999,  the  Association  exceeded all of its regulatory
capital  requirements  with a tangible  capital level of 6.34% of total adjusted
assets,  which is above the  required  level of 1.5%;  core  capital of 6.34% of
total  adjusted  assets,  which is above the required  level of 4.0%;  and total
risk-based  capital of 14.92%,  which is above the required level of 8.0%. These
regulatory capital  requirements,  which are applicable to the Association only,
do not  consider  additional  capital  held at the Holding  Company  level,  and
require  certain  adjustments to  stockholder's  equity to arrive at the various
capital amounts.

YEAR 2000 CONSIDERATIONS

         As of  the  time  of  this  filing,  the  Company's  core  systems  are
functioning well with no known interruptions associated with the Y2K issues. The


                                       17

<PAGE>

Company is also not aware of any significant  events that have happened with any
of its vendors in  connection  with the Y2K issue,  however  there may have been
negative  effects  that we are not aware of. We plan to  continue to monitor our
systems as well as those of our vendors.  Costs  incurred  through  December 31,
1999 were  approximately  $150,000.  This includes Y2K  remediation  efforts and
planned system upgrades related to business expansion. Approximately $115,000 of
this cost was  recognized in fiscal 1999.  Management  estimates  that remaining
costs will be nominal.

Part I. Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the potential loss from adverse changes in market prices
and rates.  The Company's  market risk arises  primarily from interest rate risk
inherent in its lending,  investing and deposit taking activities. The Company's
real estate loan portfolio,  concentrated  primarily in Westchester  County, New
York,  and  portions of Putnam,  Rockland and Dutchess  Counties,  New York,  is
subject to risks associated with the local economy.

         The Company's  interest rate risk may have increased during the quarter
as the Company utilized  short-term  borrowings to fund its lending  operations.
Other types of market risk,  such as foreign  exchange  rate risk and  commodity
price  risk,  do not  arise  in the  normal  course  of the  Company's  business
activities.

PART II. OTHER INFORMATION

ITEM 1.  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 2.  CHANGES IN SECURITIES

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None


                                       18
<PAGE>


ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         (a)  Exhibits

          Exhibit No.                           Name
          -----------                   -----------------------
             27                         Financial Data Schedule

(b)  Reports on Form 8-K

         During the quarter  ended  December  31,  1999,  the Company  filed one
report on form 8-K. On October  28,  1999,  under Item 5, the  Company  issued a
press release  announcing the Company's earnings for the quarter and fiscal year
ended September 30, 1999.




                                       19
<PAGE>



                                   SIGNATURES

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


                                          YONKERS FINANCIAL CORPORATION
                                          (Registrant)


Date:  February 12, 1999                   /s/  Richard F. Komosinski
                                           --------------------------
                                          Richard F. Komosinski,
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)


Date:  February 12, 1999                   /s/ Joseph D. Roberto
                                          ----------------------
                                          Joseph D. Roberto
                                          Vice President, Treasurer and
                                          Chief Financial Officer
                                          (Principal Financial Officer)





                                       20